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AWR - The Swedish Derogation Model

Following extensive consultation with specialist employment solicitors, Blake Lapthorn, Contractor Umbrella Ltd will be adopting the Swedish Derogation Model to meet the requirements of the Agency Workers Regulations (AWR).  The legislation aims to protect vulnerable workers from exploitation. It ensures that 12 weeks after starting a placement, they are afforded the same basic employment rights as their permanent counterparts – including the right to equal pay, working hours and holidays.

  • Recruiters referring to ContractorUmbrella will be assured that their candidates will be working under a contract of employment and receiving a salary, even when between assignments.
  • Contractor Umbrella, in collaboration with our Recruiter partners, will be making every effort to ensure that on completion of an assignment further suitable employment is sourced.
  • Furthermore, ContractorUmbrella will obtain detailed site specific information including location, hours & nature of every assignment. Stringent checks and controls are being put in to place to ensure that the 12 week qualifying period is being evidenced in each and every case.

The Swedish Derogation Model is a natural evolution for Umbrella Companies; the employees of compliant umbrella companies have been working under a contract of employment for several years, this legislation merely reinforces this position. All employees will be paid a regular salary and will have full employment rights with regard to all Statutory payments relating to sickness, maternity/paternity, adoption and holiday. Potentially damaging equal pay claims will not be a consideration for any Recruiter working with a SDM Umbrella Company and relationships will be strengthened by the requirements within the legislation to maintain continuity of employment.

Additionally it should be noted that if a Contractor is working through a Limited Company (or PSC), unless they are genuinely in business on their own account, their working practices will fall inside of the IR35 legislation and will also fall inside the scope of the AWR. – if individuals are found to be inside IR35, any attempt to manipulate a contract to say that contractors are outside IR35 when they are in-fact inside will be viewed as avoidance.

As a demonstration of its position as market leader; ContractorUmbrella have been very diligent in swiftly implementing the changes and ensuring absolute compliance with the new regulations.

In a recent interview, Lisa Keeble, Managing Director at Contractor Umbrella Ltd was quoted as saying:

“This is an excellent way to go forward and an amazing opportunity for both Agencies & Contractor Umbrella Companies to formulate closer working relationships. Given the tight deadlines, we have been industrious in implementing the new changes to ensure that we continue the exceptional Customer Service that we have always provided.”

If you would like to discuss the above with one of our expert advisors, you can contact us on 01206 713 680 or email at