I am accompanying a delegation of GMB trade unionists from Marks and Spencer distribution depot in Swindon, to visit the European Parliament on 21st January to explain how the “Swedish Derogation” loophole in the EU Agency Directive is abused by companies like Marks and Spencer to underpay staff.
The Marks and Spencer Distribution Centre is now run for M&S by DHL who took over from Chippenham based Wincanton on 3rd January 2015. The majority of staff are employed through an employment agency called 24-7 Recruitment, but given contracts by another company called Tempay Ltd.
Workers employed through Tempay earn the minimum wage of £6.50 per hour compared to the £8.50 per hour paid to workers doing exactly the same job but employed directly through DHL/Wincanton.
The delegation will meet a senior EU official from the Directorate for Employment, Social Legislation and Social Dialogue. They will also meet South West MEP Clare Moody (pictured with me above), and the leader of the Labour Party Group, Glenis Wilmott, MEP.
There is an increasing problem of bluechip companies outsourcing labour to a bewildering number of employment agencies and so-called “umbrella companies” using loopholes to evade paying a living wage, and to make it harder for workers to assert their employment rights. A particular problem are so-called “Swedish Derogation” contracts, where staff are only paid minimum wage of £6:50 per hour, but they are also guaranteed only 7 hours per week. They live in a state of permanent anxiety, not knowing whether they will get enough work in any week to pay their bills and feed their families.
Right across Wiltshire we see thousands of workers on zero hour contracts, or guaranteed only a few hours per week; and often earning just minimum wage. Not only is this bad for the individuals and their families, but it is bad for the economy. So we see a rise in the number of people employed, but no rise in wealth being created, no rise in tax receipts for the government, and no rise in demand to help local shops. Tax payers even subsidise the employers who pay these low wages through the state funding of working tax credit.
One of the biggest criticisms of the EU is that it is out of touch with the problems of ordinary people. We believe it is extremely useful to be able to facilitate a conversation between exploited low-paid workers and the MEPs who are able to help shape employment law. We also want to let companies like Marks and Spencer know that they cannot behave like sharks, and then pretend to be angels