The end of Swedish Derogation – What you need to know

Planing for Swedish Derogation Changes
Business financial concept. busines sman and partner pointing graph paper are meeting to plan sales to meet targets set in next year.

In December 2018, the Government published new draft employment legislation in response to the Matthew Taylor review, entitled “Agency Worker (Amendment) Regulations 2018”.

One of the many changes under this amendment was the removal of Regulation 10 contracts, otherwise known as “Swedish Derogation” or “Pay Between Assignment” contracts.

These contracts were introduced as part of the Agency Worker regulations in October 2011 and agreed between the Government, CBI and TUC. They made provision for Agency Workers to be offered a permanent contract of employment with their Agency in return for an opt-out of the equal pay that they would otherwise receive as a comparator of the Hirers permanent workforce.

In return, the Agency Worker would receive all of the benefits of employed status and, in addition, get paid between assignments when there was no work available.

This new legislation, if passed in its current form by Parliament, will remove the opt-out of pay comparison and pay between assignments options from 6th April 2020. For organisations reliant on a contingent workforce, the financial impact of increased costs both in terms of pay and employment on-costs could be significant as highlighted by a recent Impact assessment from Regulatory Policy Committee which estimates that the additional costs associated with the removal of Swedish Derogation contracts will be up to £380M to hirers across the UK.

What Does This Mean For Your Business?

In these current uncertain times, magnified by Brexit uncertainty, flexibility is key to a business’s success and this starts with its workforce. Agency labour is fundamental to provide the immediate resources required and allows businesses to remain agile in the face of change. As costs increase as a result of the new legislation, businesses must be prepared to adhere to the new regulations as seamlessly as possible in order to minimise the negative impacts associated with non-compliance.

The 6th April 2020 may seem a long way away, but so too did leaving the EU in March 2019 when the referendum result was confirmed. That went on to dominate the news agenda for the next 2 years, highlighting the importance that businesses start preparing now to ensure a smooth transition when removing employees from Swedish Derogation contracts.

At Gi Group, we have been working with our clients since the announcement of the Government changes to help them plan ahead, mitigate risks and minimise the impact of the new legislation as we appreciate the scale of these changes for organisations. This has included advising and supporting businesses through this process in an efficient and legally compliant manner, as well as working with our clients to start moving employees from these contracts at the earliest opportunity and to help streamline and simplify the process.

In addition to some of the more practical aspects of the removal of Swedish Derogation, it is no secret that moving to equality of pay will have financial implications, so it is vital that businesses consider the impacts now and discuss this across the organisation, making all relevant stakeholders aware of the impending changes. It is also crucial to ensure future budgets and business planning takes into account the potential for increased wage bills.

Getting ahead of the changes

To get on the front foot some areas to start considering include:

  • How will moving to equality of pay impact your business?
  • Has the calculation been done to estimate the cost impact? For example, if you currently engage around 100 temporary workers on the National Living wage and your permanent workforce is paid £9.85/hr, including employment costs, it is likely to increase your wage bill by at least £500K per annum.
  • Are your current permanent comparator pay rates fit for purpose in the way your business will need to change?
  • Is your current supplier aware of the upcoming changes and have they advised you of how and if they intend to change their current Swedish derogation workforce contracts to make sure they are compliant by April 2020?

Although it feels like we have all just completed this year’s budgeting exercise, the 2020 budgeting process is just around the corner and  the end of Swedish Derogation has significant implications. If the answer to some or all of the above is unknown Gi Group can help you to ensure you and your business are prepared and ready for this significant upcoming change.

If you are concerned about the new changes and need advice or guidance, please contact a member of the Gi Group team on 01246 267 000 or email infoUK@GiGroup.com

Share this article
Related articles

See our job offers

Check out our offers below and use our filters to find the job opportunity which best matches with your needs and skills.

See all job offers
- Plant Hire Monday - Friday | 7:00am - 5:00pm (45 hours per week) We are currently recruiting for a to support operations across two busy plant hire depots ...
Professional
Engineering
Farnborough, Hampshire, Hampshire
Permanent
15/06/2026
Part-Time Kidderminster DY11 Mon - Fri 10 - 30 hours per week Temporary Contract We are looking for Part-Time s to join a global leader in the supply ...
Industrial
Warehouse Operatives
Kidderminster, Worcestershire, Worcestershire
Temporary
15/06/2026
Hams Hall Distribution Park, Birmingham, West Midlands, B46 Pay rate: £14.00 - £21.00 Full time hours *Immediate Starts Available* Are you ...
Industrial
FLT Drivers
Coleshill, Warwickshire, Warwickshire
Temporary
15/06/2026
Job Title: Location: Chesterfield, S44 5BL Salary: £12.71 ph Contract: Temporary on going role Hours: 26.5 hours per week - 4 days (to include weekends) ...
Catering & Hospitality
Catering Assistants
Chesterfield, Derbyshire, Derbyshire
Temporary
13/06/2026
Gi Group are looking for experienced 7.5 ton drivers in Crawley Pay rate for 7.5 ton drivers: * Day's £17.21 (including advanced holiday pay) Shift ...
Driving
7.5 Tonne Drivers
Crawley, West sussex, West Sussex
Temporary
12/06/2026
- Recycling Department Location: Bristol Head Office Hours: Full Time, Monday-Friday, 08:00-17:00 Salary: £30,000 per annum We are looking for a hands‑on ...
Industrial
Production Managers
Bristol, Bristol, Bristol
Permanent
12/06/2026
Location: South London Our client is seeking a motivated and professional to join their growing team on a Temporary to Permanent basis. This is an exciting opportunity ...
Driving
Van Drivers
London, London, London
Contract
12/06/2026
Gi Group are looking for experienced s in Crawley Pay rate for s: * Day's £17.21 (including advanced holiday pay) Shift pattern for s: * Monday ...
Driving
Class 2 Drivers
Crawley, West sussex, West Sussex
Temporary
12/06/2026
Location: Stowmarket Salary: £13.33 per hour (£14.93 with advanced holiday pay) Shift Pattern: Monday to Friday - 06:00 to 15:00 Contract: Temporary ...
Office & Commercial
Administrators
Stowmarket, Suffolk, Suffolk
Temporary
12/06/2026
- Washing Facilities (Plastic Trays) - RG12 Bracknell. Job opportunity has become available to join a busy washing facility specialising in plastic trays ...
Industrial
Warehouse Operatives
Bracknell, Berkshire, Berkshire
Permanent
12/06/2026
Location: North London Our client is seeking a motivated and professional to join their growing team on a Temporary to Permanent basis. This is an exciting opportunity ...
Driving
Van Drivers
London, London, London
Contract
12/06/2026
Stafford, ST18 Pay rate: £12.71 - £19.29 Full time hours **IMMEDIATE STARTS** This is a fantastic opportunity to join Gi Group as we are recruiting ...
Industrial
Warehouse Operatives
Stafford, Staffordshire, Staffordshire
Temporary
12/06/2026
Based in Ware, Hertfordshire Days and Nights rotational From £16.76 to £21.36 (depending on the shift) Our respected client, a global pharmaceutical ...
Industrial
Warehouse Operatives
Hertford, Hertfordshire, Hertfordshire
Temporary
12/06/2026
Location: Lutterworth (LE17) Contract: Ongoing Temporary (Year-round stability) Opportunity Join Gi Group as a supporting one of the UK's biggest ...
Driving
Class 1 Drivers
Lutterworth, Leicestershire, Leicestershire
Contract
12/06/2026
Location - Crewe CW1 Pay Rates: Standard: £12.71 per hour (rising to £12.79 after 12 weeks) Nights: £13.00 per hour (rising to £13.70 after 12 weeks) ...
Industrial
Warehouse Operatives
Crewe, Cheshire, Cheshire
Temporary
12/06/2026
Gi Group are looking for an experienced class 1 driver to join the team at a packaging company in Birmingham Class 1 rate : · Days £18.21 including ...
Driving
Class 1 Drivers
Birmingham, West midlands, West Midlands
Temporary
12/06/2026
Job description Yard Compound Driver Job Title: Yard Compound Driver Job Location: Burnaston, Derby Pay Rate per hour: £12.91 days ...
Driving
Van Drivers
Derby, Derbyshire, Derbyshire
Permanent
11/06/2026
Location: Grimsby (DN31) | Pay: £16.75 per hour | Shifts: 4 on 4 off | Hours: 06:00-18:00 Contract: Temp to Perm after 12 weeks (subject to performance and ...
Driving
3.5 Tonne Drivers
Grimsby, Lincolnshire, Lincolnshire
Temporary
11/06/2026
HGV Class 1 (C+E) Driver - Grimsby/Immingham £14-£17 per hour | Ad-hoc shifts GI Group are recruiting experienced HGV Class 1 (C+E) Drivers to support our ...
Driving
Class 1 Drivers
Grimsby, Lincolnshire, Lincolnshire
Temporary
11/06/2026
Vehicle SMART Repair Technician Location: Grimsby (DN31) | Pay: £16.72 per hour | Shifts: 4 on 4 off | Hours: 06:00-18:00 Contract: Temp to Perm after 12 weeks ...
Driving
3.5 Tonne Drivers
Grimsby, Lincolnshire, Lincolnshire
Temporary
11/06/2026
Gi Group are recruiting Class 1 and Class 2 to work for a well-known delivery company, based in Thurrock. There are a mixture of days and night shifts available. ...
Driving
Class 2 Drivers
Thurrock, Essex, Essex
Temporary
11/06/2026
(Nights) Our client based in Basingstoke are currently looking for to join their team on a temporary to permanent basis. A (nights) plays a key role ...
Industrial
Logistics Operative
Basingstoke, Hampshire, Hampshire
Permanent
11/06/2026
Discharge - Grimsby GI Group are recruiting Discharge s for our client based in Grimsby. In this role, you'll be responsible for carefully driving brand-new ...
Driving
3.5 Tonne Drivers
Grimsby, Lincolnshire, Lincolnshire
Temporary
11/06/2026
Dayshift Due to high demand, our client based in Andover are looking for s to join their team to support them during their busy period. There may even be an ...
Industrial
Production Operatives
Andover, Hampshire, Hampshire
Temporary
11/06/2026
Churchover, Rugby, CV23 We're hiring s to join our team in Churchover, Rugby! Salary: £12.71 per hour, rising to £12.92 after 12 weeks Overtime: ...
Industrial
Warehouse Operatives
Rugby, Warwickshire, Warwickshire
Temporary
11/06/2026
Warehouse Operative Needed!!! Churchover, Rugby, CV23 Salary: £12.71 per hour, rising to £12.92 after 12 weeks Shifts Available: * 06:00 - 14:00 * 07:00 ...
Industrial
Warehouse Operatives
Rugby, Warwickshire, Warwickshire
Permanent
11/06/2026
- Ferrying Work Location: Stallingborough Pay: £12.91-£25.82 per hour (shift dependent) Shifts: 08:00-20:00 (12-hour shifts) Contract: Ongoing (subject ...
Driving
3.5 Tonne Drivers
Stallingborough, Lincolnshire, Lincolnshire
Temporary
11/06/2026
GI Group are currently recruiting multiple s for our internationally known client in Maidstone (ME20). This company provides courier services worldwide, focusing ...
Driving
7.5 Tonne Drivers
Maidstone, Kent, Kent
Temporary
11/06/2026
- Nights £15.24 per hour | Sunday-Thursday | 21:30-06:30 | 12-week Temp to Perm Location: Hedge End, Southampton (Site-based - driving licence preferred due ...
Industrial
Warehouse Operatives
Southampton, Hampshire, Hampshire
Temporary
11/06/2026
/ Remote / £30 per hour GI Group is recruiting on behalf of a leading global provider of advanced analytics, technology solutions, and clinical research services ...
Professional
Corporate Services
London, London, London
Temporary
11/06/2026
per Location: Grimsby (DN31) | Pay: £16.05 per hour | Shifts: 4 on 4 off | Hours: 06:00-18:00 Contract: Temp to Perm after 12 weeks (subject to performance ...
Driving
3.5 Tonne Drivers
Grimsby, Lincolnshire, Lincolnshire
Temporary
11/06/2026
/ Bournemouth / £15 - £17 per hour GI Group is recruiting on behalf of a busy and fast-moving organisation for an to join a lean finance team in Bournemouth. ...
Office & Commercial
Accounts Clerks
Bournemouth, Dorset, Dorset
Temporary
11/06/2026
Stanton under Bardon, LE67 Ongoing position Start Date: ASAP duties will include: * 2-3 drops/collections of high vaule recyclable goods * Loading ...
Driving
Class 2 Drivers
Stanton under bardon, Leicestershire, Leicestershire
Contract
10/06/2026