Are you aware of changes to the Agricultural Wages Order?
The Agricultural Wages Board has been in existence since the First World War in order to end rural poverty and provide protection for workers.
However, the terms and conditions for agricultural workers, as defined by the Agricultural Wages Board (AWB), will come to an end this October, which will give farmers much more flexibility when it comes to new contracts.
The AWB had set the minimum wage and other terms and conditions, including holidays and sick pay, for agricultural workers in England and Wales. The last agricultural wages order made in October 2012 set the framework for wages and remained in place until 1 October 2013.
Recruits employed after 1 October 2013 no longer have to be offered terms which reflect the 2012 order. They can be offered far more flexible, and, in many respects, less generous terms and conditions provided minimum statutory employment terms are complied with.
The main changes are:
- Reduced hourly rates. Employers will have to comply with the National Minimum Wage rates, but these are lower than the minimum wages prescribed by the 2012 order.
- No overtime rates. There is no obligation on employers to pay overtime at a higher rate, which constitutes a major change. Employers will only need to pay the national minimum wage, which is lower than the overtime rates presented by the 2012 order.
- Less holiday. Under statute full-time workers are entitled to 28 days annual holiday (including bank holidays). Again, this is lower than the 2012 order which allows full-time workers 31 days annual holiday (including bank holidays).
- Lower sick pay. Employers will be able to pay significantly less sick pay to employees. Employees are only entitled to statutory sick pay of £86.70/week (provided they earn at least £109/week) for up to a maximum of 28 weeks. This contrasts with the 2012 order which gives employees with one year’s service up to 13 weeks sick pay at their basic rate, increasing to 26 weeks if they have service of more than 59 months.
Existing workers will continue to have the contractual rights reflected in the 2012 order, with regards to pay, overtime rates, holiday, and sick pay, until their contract is changed by mutual agreement or finishes.
Employers wanting to change existing employees’ terms and conditions will have to tread carefully to avoid breach of contract and constructive unfair dismissal claims, if they seek to impose changes to contractual terms.
It is important to note that there are no changes to terms and conditions for workers in Wales after 1 October 2013.
If you would like any further advice regarding this subject, please contact Green & Co on 01633 871122.