‘Undercutters’ charter’ must go says Resolution Foundation

Written By: James Douglas
Published: February 24, 2018 Last modified: February 24, 2018

The Resolution Foundation declared that repealing the Swedish Derogation, which allows organisations to pay agency workers less than directly comparable employees, is vital to improving workplace rights.

Lindsay Judge, the think tank’s senior policy analyst, said: “With demand for staff high, now is the time for the government to follow through on its response to the Taylor Review and end the abuse of agency workers’ rights.”

Its demand had previously been voiced by the TUC which branded the Swedish Derogation the “Undercutters’ Charter”.

TUC general secretary Frances O’Grady argued that “two people working next to each other, doing the same job, should get the same pay rates. But too often agency workers are treated like second-class citizens”.

A survey commissioned by Resolution found that four in 10 (43 per cent) organisations had increased their use of agency workers over the last five years as they struggled to fill staffing gaps. One in three (34 per cent) of businesses currently using agency workers were doing so to fill as many positions as possible or provide staffing for particular parts of their workforce.

A quarter of the 500 HR professionals surveyed said they expected to increase their usage of agency workers over the next five years, with Brexit uncertainty and cost pressures cited as the main reasons for this. More than half (55 per cent) expected to maintain the level of agency workers they are currently using.

Resolution claimed that the use of agency workers has grown by 40 per cent in the last 10 years, with around 800,000 currently working across the UK. Construction firms in particular have seen a rise in the use of agency workers over the last five years, with 56 per cent using them to plug gaps in their workforce.

Three in 10 (29 per cent) said that agency workers were used because they were unable to fill vacancies, while a quarter said specialist skills were behind their reliance on agency staff. Almost a third (29 per cent) said using agency workers reduced their labour costs.