This is known as the Swedish derogation because when the Agency Workers Directive was being negotiated in Europe, the Swedish government asked for a special exemption, to reflect normal practice in the use of agency workers in Sweden.
Some employers have been abusing the Swedish derogation exemption to escape their equal pay obligations. But not for much longer.
Following union campaigning, including a formal complaint brought by the TUC to the European Commission, the government has announced that the Swedish derogation loophole will be closed from April 2020. From this point, employers that try to avoid paying equal pay by using the “Swedish derogation” will be breaking the law. Speak to your union rep to find out more.