Abolition of the Agricultural Wages Board

Posted 10/10/2013

The Enterprise and Regulatory Reform Act 2013 came into play in April this year and one of the changes it has brought about is the abolition of the Agricultural Wages Board (AWB).

Since 1948, the AWB, through the Agricultural Wages Order (AWO), has governed some of the key terms of employment in agriculture, setting minimum wage rates and other, more generous terms and conditions for its workers than those found in other sectors. Its abolition means employers will be able to become more involved in negotiating terms and conditions for new agricultural workers. Pay, holiday entitlement, working time and sick pay are some of the key areas affected. The intention is to simplify and remove regulatory and administrative burden from farmers, bringing agriculture in line with the wider employment market.The AWO provided minimum wage rates for different grades of agricultural worker which were determined according to responsibilities and qualifications. The Order also provided for other terms and conditions including specific rates for overtime, payable after 39 hours per week; enhanced annual leave entitlement (up to 31 days for the equivalent of a full-time five day worker); and entitlement to agricultural wages sick pay after 52 weeks’ service, at a rate which is at least a worker’s basic pay for normal hours worked.Any worker employed before 1 October 2013 will continue working under the same terms and conditions they currently have, unless the employer seeks to renegotiate those terms (subject to agreement and consultation). Employers should bear in mind that imposed changes to terms and conditions could give rise to claims for, amongst other things, breach of contract, unlawful deductions from wages and constructive unfair dismissal. Employees may have the benefit of additional protection if they have been subject to a TUPE transfer, for instance on the outsourcing of harvesting work to contractors.From 1 October 2013, new workers will no longer be entitled to the terms and conditions of the AWO and the default position will be the usual statutory minimum provisions, such as the National Minimum Wage and the Working Time Regulations. This means that farmers will need to familiarise themselves with relevant employment legislation. For example, unless other terms have been agreed, new starters will be subject to the default position of 28 days statutory holiday entitlement per year (pro-rated for part-time workers) and statutory sick pay. In addition, new starters will not automatically be entitled to overtime pay.Employers using AWO rates will not necessarily have to enter into pay negotiations straight away as many agricultural workers are currently paid more than the national minimum wage. However, employers should be aware that workers over the age of 21 are now entitled to £6.31 an hour (as of 1 October 2013).For employers who provide workers with accommodation on site there have been no changes – accommodation will continue to be dealt with separately under either a service occupancy or an Assured Shorthold Tenancy (AST). Employers should also be aware that there is still a requirement to serve a statutory notice when granting an AST to avoid giving a new secure tenancy.If you would like any advice on the implications of the abolition of the AWB, please contact a member of our Employment Team.* Please note that the security of tenure under the Rent (Agriculture) Act 1976 and the Housing Acts is to remain unchanged.