Equal pay for equal work - nothing less will do
You quite often hear of trade unionists talk about a two tier workforce but at Marks and Spencer's depot in Swindon, they've gone one better. Thanks to their creative use of the Swedish Derogation – a technical term for what is an outrageous loophole in the law - they have a full three tiers of worker, each paid worse than the last.
The Swedish Derogation is Euro-jargon for a caveat placed in the Agency Workers Directive when the legislation was passed by the European Union.
The Directive – which is the basis for Britain’s own Agency Worker Regulations – guarantee an agency worker the right to the same pay and basic conditions as a permanent employee after 12 weeks with the same employer. The Derogation, however, allows the employment agency to give permanent contracts to their workers and then count them as employees of the agency – not the actual workplace where they are assigned at the time.
The main argument for the opt out at the time was that some countries like Sweden provide better conditions than the regulations stipulate – in other words, that it was intended to raise agency workers’ wages, not lower them.
Sadly, too many British employers have opportunistically used it to do the exact opposite, and get out of following the spirit of the law.
That's where Marks and Sparks comes in.
Over 75% of the workers at M & S Swindon are agency workers. The pay rates range from £8.57 an hour down to £6.50, even for workers who are stood side by side doing identical jobs.
There's quite a supply chain to follow as well. The Swindon distribution centre, which is owned by M & S, is used to supply their stores. But M & S contract out the running of the facility to DHL. DHL in turn contract recruitment agency 24-7 to provide agency workers, who are given employment contracts in the name of Tempay Ltd - which is registered at the same address as 24-7.
In order to get round the Agency Workers Regulations, Tempay/24-7 have their workers on 7 hour a week permanent contracts. We all know what comes next. The workers who are contracted for 7 hours are routinely working a full 37 hours a week, in reality for DHL and M & S even though they are counted as permanent employees of Tempay when it comes to their pay. Many have been stuck in this trap for years, but because their contract is permanent, the Swedish Derogation applies.
Even worse, because only the 7 hours a week are guaranteed, the company can remove the offer of work at any time. They can even turn staff away when turn up for work at what they thought was the start of their shift, and leave them out of pocket for the week.
With a global revenue topping £10bn it’s hardly like M & S can’t afford to do the right thing, certainly not if we contrast the huge pay and bonus package that CEO Marc Bolland has been awarded with the plight of the Swindon workers.
M & S like to tell us about their values in their PR. They famously started out as an equal partnership between its founders, one a refugee who set up a stall with a borrowed £5. Today, they point to a Code of Ethics and Global Sourcing Principles, including respect for basic labour protections. In fact, their social and environmental programme, marketed as Plan A “because there is no Plan B” promised partnership at work and improvements for workers in the supply chain.
So they’re not just breaching the spirit of the law but of their own policies – surely what applies to overseas suppliers must apply at home. Yet the staff at Swindon are very much living in Plan B and these days, Marks gets paid less than Sparks.
That is why the GMB are now taking legal action on behalf of our members. This is a blatant misuse of the legislation to make a quick profit off the backs of a desperate, exploited workforce. It’s time to take a stand, and the GMB’s position is clear: equal pay for equal work. Nothing less will do.