Abolition of the Agricultural Wages Board

How the abolition of the AWB will affect existing employment contracts and the negotiation of employment terms for agricultural workers.

If you employ agricultural workers, you will be interested to know that the Government abolished the Agricultural Wages Board (AWB). The abolition of the AWB took effect on 25 June 2013, subject to transitional provisions running until 1 October 2013.

As you may be aware, the AWB set minimum wages and other minimum terms and conditions for agricultural workers, and updated these annually by issuing a revised Agricultural Wages Order (AWO). This regulatory framework will disappear with the abolition of the AWB.

The Government’s view is that it is not right to continue to provide special protection for agricultural workers over and above the legal protections afforded to workers in other sectors of the economy.

The abolition of the AWB should, in the medium term, allow employers greater freedom to negotiate individual terms and conditions with agricultural workers. The only legal restrictions governing the employment of agricultural workers would be those restrictions that apply to all employees or workers regardless of the sector they work in.
In particular, employers of agricultural workers should note the provisions of the National Minimum Wage Act 1998 (NMWA) and the Working Time Regulations 1998 (WTR). These pieces of legislation set a national minimum wage (currently £6.19/hour for an adult aged 21 or older, which will rise to £6.31/hour with effect from 1 October 2013) and a national minimum holiday entitlement (currently 5.6 weeks paid annual holiday). They have not been especially significant to date because the wages and holiday entitlement that employers must offer workers under the AWB regime are more generous to agricultural workers than the minimum entitlements stipulated under the NMWA and the WTR.

However, entitlements such as a birth grant, entitlement to bereavement leave, a dog allowance and an on-call allowance are unique to the AWB regime. Employers will not be obliged to offer these benefits when offering new terms and conditions following the abolition of the AWB.

It is important to note the proposed abolition of the AWB will probably not affect existing contracts with agricultural workers. The terms of these contracts will continue unless and until the employer and worker enter into a new contract. However, if an existing contract only refers to the “statutory minimum” entitlement, there will be an argument that, after 1 October 2013, this refers to the NMWA/WTR regime rather than the now-repealed AWB regime.

There is nothing in the Enterprise and Regulatory Reform Act 2013, the legislation that effects the abolition of the AWB, that prevents employers from requiring agricultural workers to enter into new contracts. However, employers of agricultural workers should think carefully about the consequences of doing this, as an attempt to force an agricultural worker to enter into a new contract may well amount to an unfair dismissal. In order to bring a claim of unfair dismissal, an agricultural worker must be an employee and (in most instances) will need to have been employed a certain minimum amount of time. Employees who started work before 6 April 2012 need to have attained a years continuous service in order to have the right not to be unfairly dismissed, and employees who commenced work on or after 6 April 2012 need to have at least two years continuous service.

Although employers will have greater freedom to negotiate terms and conditions directly with new starters, or to those agreeing to enter into new contracts, the abolition of the AWB does not give employers carte blanche to offer whatever terms they see fit. In addition to the minimum entitlements provided under the NMWA and the WTR, employers should be alert to potential discrimination claims. For instance, men and women, or people of different nationalities or races, ought to be offered the same terms for the same work.

Employers of agricultural workers should also note that, if they recruit labour through a gangmaster, that gangmaster should be properly licensed. The gangmaster licensing regime will be unaffected by the abolition of the AWB. For employers, it will remain a criminal offence to use an unlicensed provider of labour.

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