Swedish Derogation repeal (in wider gig economy overhaul)

Theresa May is planning measures to boost workers’ rights, including ending of the Swedish derogation model (that allows employers, in certain situations, to pay agency workers less than their permanent counterparts), and new legislation for gig economy workers.Swedish Derogation

Business secretary Greg Clark, is understood to have told the Cabinet recently that he is looking to implement several recommendations from the review of modern employment practices by Matthew Taylor in 2017.

It was announced in April 2019 that the Swedish Derogation will be abolished from 6th April 2020 – more information will follow when we know it!

The proposals include:

  • The key proposals, leaked to the Guardian, include the introduction of legislation to give workers in the gig economy the right to request a temporary or fixed-hours contract after 12 months and to reduce obstacles in building up continuous service.
  • New legislation to clarify the criteria determining whether people are classified as workers or as self-employed and bringing Tax and employment laws into alignment on this.
  • Following the advice of the low-pay commission who recommend compensation for cancelled shifts and action on notice periods.
  • Employers that fail to pay out after losing employment tribunals will be name and shamed. The Guardian states that more than a third of successful claimants never receive any of their compensation, and less than half are paid in full (according to government data).
  • Companies will be forced to pay holiday time to all workers, including agency workers, and be subject to financial penalties if they don’t.
  • A payslip will be required for all workers (although this is already legislated to come into effect in April 2019).

Many of the measures that have been reported were proposed by the director for labour market enforcement, Sir David Metcalf, (in a report that overlapped with many of Taylor’s recommendations) published on 9 May 2018.

We will wait to see what (if anything!) happens next!


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