Agency drivers pay rule opt out

London,UK:  Many food and logistics companies are expected to follow Tesco’s lead and ask driver recruitment firms to hire staff directly so that they do not have to comply with the recently introduced Agency Workers Rights directive.

That is the view of leading employment lawyer Stefan Martin, from Allen & Overy, who says that companies could use the Swedish derogation model to remain distanced from the regulations and have the agencies employ the workers directly: “I think a large number of companies and groups that use large numbers of agency workers may well look at this,” says Martin.  “And of course agencies may see this as having a competitive advantage, to say to employers ‘we will handle all the administration and take this off your hands so that the regulations do not apply to you’.”

Under the terms of the new regulations temporary workers are entitled to the same pay and benefits as permanent staff after 12 weeks in a job.

The furore over the regulations was sparked by a news story in the Sunday Telegraph that said Tesco had asked Kent agency firm Mainstream to hire drivers for Tesco directly and put them on different contracts “waiving their rights”.  It was suggested that the drivers would lose out to the tune of £150 a week because of the change.

In a written statement Tesco said: “The derogation is being used very widely across the economy by the agencies as a way of ensuring that agency work remains competitive and flexible.  The approach has been recognised by the government, the British Retail Consortium and the CBI.”  DHL is also considering the derogation route, according to the Financial Times.  Agency firm Driver Hire told Cold Chain News that it is “still unclear” as to how AWR will affect drivers.

Driver Hire’s IT and quality director Jeremy Neale said:

“Until AWR really starts to really take effect it will be a changing situation.  Driver Hire’s approach is to conduct a simple ‘AWR impact assessment’ with each customer.  We have found many instances (I would say the majority) where our drivers are paid the same, or indeed more, than their directly employed equivalents.  Where the temporary worker is being paid less than their directly employed comparator), we are dealing with this on a case-by-case basis.”

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