Last reviewed 16 April 2019

As the Government publicised the recent move whereby payslips will now have to include the number of hours worked, it also revealed further “trailblazing reforms” which, it said, will give workers “ground-breaking new rights”.

These include the repeal of the so-called Swedish Derogation — a legal loophole that enabled some companies to pay agency workers less than permanent staff — and a new entitlement to a day one statement of rights setting out details of a new employee’s leave allowance.

The reforms are part of the Government’s Good Work Plan — the biggest package of workplace reforms for over 20 years. Announced in December 2018, the Plan is the Government’s response to the independent Taylor Review of the impact of modern working practices (available at https://bit.ly/2udwhLx).

Business Secretary Greg Clark said: “The UK has a labour market that it can be proud of and we are committed to continue leading the way in workers’ rights. That is why we have introduced a new right for all workers to a payslip ensuring workers are paid fairly. On top of this, the legislation approved by Parliament is a significant milestone in our concerted effort to deliver the largest upgrade in workers’ rights in over a generation.”

It is calculated that up to 120,000 agency workers will benefit from the scrapping of the Swedish Derogation. New agency workers will also benefit from a key facts page before signing up with an agency, which will provide clarity, particularly around their pay.

Mr Clark said that the Plan is the cornerstone of the Government’s commitment to build a labour market which rewards people for hard work, celebrates good employers and boosts productivity and earning power of workers across the UK.

Comment by Pay and Reward Manager at Croner, Clare Parkinson

While the payslip requirements create more administrative tasks for employers with workers in their workforce, the time taken to administer these is likely to be cancelled out by managers spending less time dealing with workers’ concerns, questions or misunderstandings over pay.

Should concerns be raised in the future, there will now be documentary evidence for both the worker and their line manager to refer to when seeking to resolve this which will be helpful in most cases.

Having advance warning of the changes to agency worker contracts allows businesses time to consider, and make changes to, their business models if necessary.

It will be a decision for employers going forwards whether they continue to use employment contracts where agency workers receive pay between assignments and equality of pay once they reach 12 weeks’ service in an assignment from April 2020, or if they start using worker contracts for their future workforce.

Existing staff already on Swedish Derogation contracts will continue to be entitled to remain on these, with the only practical effect being their eligibility to receive equality of pay.

It is key that employers are aware of the requirement to provide agency workers on these contracts with a notice of this change, by no later than 30 April 2020, as failing to do so could be challenged in an employment tribunal. As a likely remedy will be compensation, this could be an expensive administrative failure.