Agency workers are being paid up to £135 a week less than permanent staff for doing the same job, despite EU rules saying they are entitled to equal pay, claims the TUC.
The union body is to launch a formal complaint on Monday against the government for failing to enforce European rules that are meant to guarantee equal treatment for temporary staff.
UK regulations implementing the EU's temporary agency workers directive entitle workers drafted in through agencies to the same pay and conditions as their permanent colleagues after 12 weeks. But the TUC says a widely used loophole means up to one in six agency workers are missing out.
The TUC general secretary, Frances O'Grady, said: "The recent agency worker regulations are being undermined by a growing number of employers who are putting staff on contracts that deny them equal pay. 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."
The TUC has become increasingly frustrated about the growing use of the loophole known as the Swedish derogation, which allows agency workers placed with companies to be paid less than direct employees, provided the agency agrees to continue paying them for at least four weeks at times when it is unable to find them work.
On Monday, it will to lodge a formal complaint against the government with the European commission in Brussels, saying the UK is failing to protect temporary workers properly in the way it has implemented the directive.
Billy Hayes, the general secretary of the Communication Workers Union, said: "Some of the lowest-paid workers in the UK are being cheated out of their rights to equal pay by cynical employers intent on keeping their wages low."
He added these "payment between assignment" contracts can often be even worse for workers than the much-criticised zero-hours contracts, which offer no guarantee of regular work.
"The whole point of the 2011 agency regulations was to bring the principle of equal treatment, including equal pay, into UK law. But the introduction of new contracts means many agency workers are signing away their rights to equal pay – which for most people is the most important element of the regulations. The irony here is that if you're on a zero-hours contract you're actually better off because you qualify for equal pay after 12 weeks," he said.
The business secretary, Vince Cable, ordered an investigation into zero-hours contracts earlier this year, and the Labour leader, Ed Miliband, has met business leaders to discuss the issue.
Zero-hours contracts have become increasingly controversial, with some firms, including retailer Sports Direct, employing up to 90% of their workforce in this way, with no sick pay or holiday pay.
But growing use of the Swedish derogation since the agency workers regulations were introduced in 2011 suggests some employers have been looking for other ways to try to cut the cost of hiring staff.
TUC research has found that call centres, food production companies and logistics firms are making widespread use of the loophole, and the Recruitment and Employment Confederation estimates that one in six agency workers are on such a contract.
The derogation was only introduced because Sweden already offered better protection for its workers than the directive provides. Countries implementing the agency workers directive promised to prevent employers abusing the opt-out.
O'Grady said: "Swedish derogation contracts are just one more example of a new and growing type of employment that offers no job security, poor career progression and often low pay."
The TUC has argued that while unemployment is falling, the headline statistics disguise the many thousands of workers who are "underemployed" – working fewer hours than they would like – or trapped in poorly-paid jobs.
Robert Halfon, the Conservative MP for Harlow, recently raised concerns about the Swedish derogation, suggesting supermarket group Tesco had been able to use it to hire agency workers on low pay.
Article Source : http://www.guardian.co.uk
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