'Working life grim' for agency staff as greedy firms underpay

'Working life grim' for agency staff as greedy firms underpay

Firms are keeping employees on agency contracts to avoid paying them equally to permanent staff; a new TUC report has found.

The report found that several employers are undercutting agency workers through the ‘Swedish derogation’ - a loophole in the law that allows agencies and employers to avoid paying agency workers the same rate as employees.

The union reports that many of employers “are deliberately paying them [agency staff] less than their permanent colleagues”, despite doing the same work.

They found evidence that agency workers are paid £1.50 less an hour, on average, than permanent staff. For some, the figure rises to £4 less per hour – with some earning as much as £7 less - than directly employed staff.

Trade unions have also found that agency workers receive fewer rights and fewer paid holidays. “As a result, for many agency workers working life is grim,” the report reads.

In 2014/15, the Recruitment and Employment Confederation (REC) estimated that there were 1.2 million temporary work placements in the UK. However, the TUC’s report suggests that these ‘temporary’ contracts are far from short-lived.

The report, which examined July to September’s 2017 labour market survey figures, found that six in 10 (422,000) agency workers are being employed for over a year in the same role at the same workplace.

One in three agency workers remained in the same role for over two years, while one in six worked in the same role for more than five years.

The TUC concluded that these statistics “suggests that many employers are using agency workers not as a stop gap when permanent workers aren’t available, but as a cost-cutting form of employment.”

It also found that certain industries were more likely to use the ‘Pay Between Assignment’ [PBA] contracts as a cost-cutting measure, such as distribution and manufacturing. This practice was also common in banking and finance and hotels and retail.

Argos distribution centres as well as BT call centres were two employers named in the report as using the loophole to cut costs.

In addition, large numbers of those in the public sector were found to be working on long-term agency contracts.

The report also suggested that the Swedish derogation is a popular tool for many hirers, agencies and umbrella companies as a means of reducing costs and avoiding equal pay.

Frances O’Grady, TUC general secretary, called on the Government to “scrap this loophole now” and for agency workers “to stop being treated like second-class citizens. Ministers must get on with ending the undercutters’ charter.”

Comments (1)

  • Sir
    Fri, 9 Mar 2018 12:54pm GMT
    ... and this is news to anyone because ?
    Exploitative employers have only been around for 300 years ............

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