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ISSUE 70 page 6

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Hope for UK victims of ‘Swedish derogation’

Ed Miliband recently pledged that a newly elected Labour government would close a loophole that adversely affects employment agency workers. An apparently benign exemption in the EU directive has become the ‘Swedish derogation’ and a recent judgement by the Employment Appeals Tribunal (EAT) seems to have enshrined its malign effects.

Perhaps nothing illustrates better the fantastically diverse range of Member States in the EU than the way that two countries can treat the same piece of legislation in opposing ways. The implementation by the UK and Sweden of the Agency Workers Directive passed in 2008 is a case in point. Designed to protect employees of employment agencies and put them on an equal footing with comparable permanent workers at the ‘host’ company, several years of British-led objections to it were overcome after an intervention by the TUC (see issue 43). However a less-noticed amendment by the Swedish government has proved to have a larger effect in the U.K. In Sweden all agency employees are assumed to be permanent, and agencies must be members of an employers’ association which concludes agreements with the appropriate trade unions. Currently these stipulate that workers must be paid for a minimum of 133 hours per month and receive overtime, travelling time, unsocial hours pay, on-call time compensation, holiday and sick pay. Given this strong framework the EU authorities accepted the country’s proposal to exempt those permanently employed by an agency from the directive.
The situation in the U.K. was completely different: most agency workers did not qualify for the legal status of ‘employee’ and were paid solely for  the hours they put in at the client company. Although the Agency Workers Regulations 2010, which implemented the directive, gave them parity on pay, working time and holiday entitlement all other benefits given to permanent employees were forbidden to them. Therefore it might have seemed a better bet to be on a permanent contract with the agency until they found out that they had only to be paid for one hour a week outside assignments to attain this status. Now the EAT has made things worse by deciding that several agency cleaners who were payed less than their directly-employed co-workers, even though they had worked for the same client for between 6 and 25 years, were ‘permanently placed’ and, therefore, outside the directive.

 

Recent rulings from the European Courts

French soldiers can join union
Holiday pay must include commission
The European Court of Human Rights has ruled that a French ban on soldiers joining or forming trade unions violates article 11 of its convention. In 2008 Jean-Hugues Matelly, a gendarme in the Picardy region, founded an association called ‘Forum gendarmes and citizens’ which used a web site to stimulate communication between the police and the public. The French authorities considered that this organisation was prohibited by the general ban on unions and professional associations in the defence forces and demanded that M. Matelly resign. However the court held that the general right to freedom of assembly did not allow such a ban even if special bodies were put in place by the government to replace unions. Jan Willem Goudriaan, General Secretary of EPSU, which already organises military personnel in countries where this is legal, said the the ruling ‘means soldiers should have the same rights as any other citizens’.
Salaries for many sales jobs have a large element of commission. Now, following a related judgement in the case of British Airways pilots (see issue 57), the European Court of Justice has ruled that this must be reflected in holiday pay.  UNISON member Joe Lock was employed as a salesman by British Gas. About 60% of his salary was determined by the value of the contracts which he sold to clients. However when he took annual leave only his basic rate was used to calculate his holiday pay. The court found that the principle of paid annual leave was meant to allow a worker to receive adequate rest as there was no financial disadvantage in taking it. The practice of only paying basic rates breached this. It was up to national courts however to work out how to calculate the exact amount. In the case of Mr.Lock this is likely to be considered by the Leicester employment tribunal in March.




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