The TUC has lodged a complaint with the European Commission against the UK government for failing to implement the Temporary Agency Workers Directive properly.
It claims the UK government's flawed implementation of the EU Directive allows the abuse of so-called 'Swedish derogation' - where employment agencies routinely pay agency workers less than permanent staff doing the same job.
Angela Coleshill, director of employment and skills at the Food and Drink Federation told FoodProductionDaily maintaining flexibility within the workforce is hugely important for food and drink businesses, which often have to respond quickly to unpredictable requirements such as short-term peaks in demand.
Peak production times
"One of our own surveys shows just over 40% of all companies use agency workers to provide short-term sickness or holiday cover for permanent employees and to bolster their workforce during seasonal production peaks,” she said
“Since the introduction of the Agency Workers Regulations, many food and drink manufacturers have developed constructive working relationships with agencies to manage their use of agency workers and to ensure compliance with the regulations.
"In some cases, the pay and conditions of employment of agency workers have been increased whilst others have made use of the so-called Swedish derogation, which is an important flexibility that is provided for employers in the regulations.
“Agency work can also be a useful route into permanent employment for many people and our survey shows nearly half of food and drink manufacturers use agency workers to recruit permanent employees and expand their workforce.”
Evidence gathered by the TUC shows Swedish derogation contracts are used in food production, logistics firms and parts of manufacturing.
Toughen the law
“When even Conservative MPs complain about the 'Swedish derogation' you know it is time for the government to toughen the law,” said Frances O'Grady TUC General Secretary
“That's why we are calling on the European Commission to investigate the problem and take steps to prevent the abuse of agency workers in the UK.”
The TUC gathered evidence from workplaces where agency staff were paid up to £135 a week less than permanent staff, despite working in the same place and doing the same job.
Under the UK's regulations, agency workers are entitled to the same pay and conditions as permanent staff doing the same job after 12 weeks.
Regulations are undermined
However, a Swedish derogation contract exempts the agency from having to pay the worker the same rate of pay, as long as the agency directly employs individuals and guarantees to pay them for at least four weeks during the times they can't find them work.
“The regulations are being undermined by a growing number of employers who are putting staff on contracts that deny them equal pay,” said O’Grady.
“Most people would be appalled if the person working next to them was paid more for doing the same job, and yet agency workers on these contracts can still be treated unfairly.
“Swedish derogation contracts are just one example of a Growing type of employment that offers no job security, poor career progression and often low pay. People are often unable to plan and budget from one month to the next, energy bills are a struggle and home ownership is a pipe dream.”
No equal pay rights
In Sweden, workers still receive equal pay once they are in a job and 90% of normal pay between assignments. However in the UK workers have no equal pay rights and are paid half as much as they received in their last assignment, or minimum wage rates, between assignments.
The Temporary Agency Workers Directive was implemented in the UK in 2011 as part of Europe-wide legislation to give equal treatment to agency workers.
Agency working in the UK has increased by 15% since the recession, faster than any other form of employment.