Abolition of the Agricultural Wages Board - Update

We have already blogged twice about the abolition of the AWB. That’s because it matters to our clients, most of whom are in the camp that would welcome the removal of the Board and the opportunity for greater flexibility in employment packages. Some, though, are concerned that not having an annual Agricultural Wages Order (AWO) setting minimum rates might mean a difficult conversation with employees about wage levels and other terms.


Last week Defra announced that – following consultation – it planned to proceed with the abolition of the Board by including provisions to that effect in the Enterprise and Regulatory Reform bill that is currently making its way through parliament. If everything goes to plan, the 2012 AWO will be the last and the Board will be abolished before October 2013.

From a practical – and legal – point of view, employers will need to consider the effect of abolition. At its most basic it will mean that the statutory terms and conditions of agricultural workers will be governed by National Minimum Wage and other employment legislation. That leaves the question of employees’ contractual rights and, in particular, what the position is with regards to areas that are not covered in the same way by general employment legislation (e.g. overtime, sickness, bereavement leave).

It is helpful to consider four distinct groups of employees:-

• existing (perhaps long-standing) employees whose contracts cross-refer to the AWO;

(c) Agripicture Images

• existing (perhaps more recent) employees whose contracts do not cross-refer to the AWO;

• employees taken on between now and the abolition of the AWB (and expiry of the AWO); and

• employees taken on after the abolition of the AWB and expiry of the final AWO.

The position in relation to the first and last of these should – subject to the small print of the legislation that abolishes the Board – be relatively clear-cut, the two groups in the middle less so.

What employers will be keen to know is whether, and if so how, they can move out of AWO terms once there is no longer an AWO in force. We are, for the moment, keeping a watching brief on this – there may be some provisions in the legislation which affect what can and cannot be done following abolition. Future terms and conditions may well turn on the wording used in current employment contracts.

Having said that, and for immediate action, employers who are taking on workers between now and the abolition of the Board should contact us for advice about whether, and how, they should be amending their standard contracts in view of the upcoming move into an AWO-free landscape.

Contact Phil Cookson for further information.

Speak up on the future of the Agricultural Wages Board

This post follows one we wrote in July, in which we wondered out loud what was holding up the Government's plans to abolish the Agricultural Wages Board.

Almost three months on, there has been some movement. The Government has issued a consultation on the future of the AWB. A consultation was always likely; it does not mean that a U-turn is on the cards.

However, consultations have an uncanny knack of influencing decisions and timetables. That is the general idea, after all. So, whatever your views, let Defra know about them. The full consultation is here.

It asks just 4 questions:-

1. Do you agree that employment legislation in the agriculture sector should be simplified? If not, please give your reasons.

2. Do you agree that agricultural workers in England and Wales should be brought within the same minimum employment terms and conditions as workers in all other sectors of the economy? If not, please give your reasons why you believe there should still be a separate regime for agriculture.

3. Do you agree with the Government’s proposal to abolish the Agricultural Wages Board, Agricultural Wages Committees, Agricultural Dwelling House Advisory Committees, and the agricultural minimum wage regime? If not, please give your reason why you disagree?

4. Do you have any additional points or options you would like Ministers to consider before making their final decision?

Answers can be sent by e-mail to awbconsultation@defra.gsi.gov.uk. The deadline is 12 November.

Meanwhile, employers who are taking on workers between now and the abolition of the Board should definitely take advice about whether, and how, they should be amending their standard contracts in view of the likely move into an AWO-free landscape. Action now could mean greater flexibility further down the line.

Contact Phil Cookson for information. He's on 01733 898970.

Ag tags and adequate market testing

It can be frustratingly difficult to show that an agricultural occupancy restriction on a property is obsolete. A recent decision by the Upper Tribunal (Lands Chamber)* contains some useful pointers about what a rigorous market testing exercise would look like.

The application to the tribunal related to a Welsh property and the Welsh planning regime, but the lessons are equally valid this side of the border.

The property owners’ land agent came in for some criticism from the tribunal for not:

• offering the property to rent as well as to buy (that was the only way to establish whether a rental market existed);

• carrying out an objective analysis of comparables;

• advertising in specialist farming publications such as the Farmers’ Weekly/Farmers Guardian (thereby reaching the maximum potential market);

• making explicit adjustments to reflect general market movements (any adjustments were bundled in with the ag tag discount).

So, it is largely in the breach that we learn what good practice would look like. The overriding message for those looking to get ag tags removed is to take time to plan your market testing exercise. Be as thorough as possible, cover all the bases and keep meticulous records.


If you have any questions about the issues raised in this blog please contact Emily Barker. Emily advises on a range of housing and planning issues.

*Rasbridge, Re Cefn Betingau Farm [2012] UKUT 246 (LC) (23.08.2012)

When the grain hits the fan...

If nothing else, there looks like being a bumper crop of contract disputes this year. The difficulties with harvest have been reported on widely (see the BBC's bank holiday coverage) and the quality - particularly of wheat - is variable.

Many grain contracts require the grower to deliver an agreed tonnage at a specific quality even if that means buying product in from elsewhere in the UK to make up any shortfall. Failure to do so will generally mean the buyer going out into the market to find replacement supplies and claiming the additional cost from the grower. With wheat prices rising, that could be an expensive business.



It still may not be pretty...

We've commented on how to deal with disputes, or potential disputes, in the Farmers Guardian. The full FG article is here.

Whatever you do, once you've established what your contract - and any arbitration rules - say, follow them to the letter on timings, on where you send notices, on how you respond to claims. That way you won't end up being on the back foot because of purely procedural lapses; the arbitration or negotiation will be about the substance of the claim. It still may not be pretty, but at least you won't have added to everybody's costs (including your own) unnecessarily.

There's some room for negotiation, particularly if the end use of the grain doesn't need specific weights to be at the level set out in the contract. Relationships count for something, but make sure that any deal reached over the 'phone is confirmed in writing.

Get in touch with our experts as soon as possible. We will assess your options and look at how best to minimise your losses or challenge claims.

Contact Alan Plummer (01775 842551) or Caroline Gumbrell (01733 898962).

On rents and rules and ruing the day...

© Agripicture Images

The Tenant Farmers Association have put out a strongly-worded press release about the hard-line approach being taken by the Crown Estate on rents. The full press release is here.

The thrust of the TFA’s message is that the Crown Estate seems to be interested only in exacting the highest rent possible, whatever the consequences, and that this is pushing tenants into unsustainable positions.

It is hardly surprising if tenants – whether of the Crown or any other institutional landlord – are feeling nervous at the moment. Land prices are at their highest. As the TFA says, open-market rents being tendered are eye-wateringly high. Vacant possession, whether with a view to re-letting under an FBT or selling, must be an attractive prospect for most landlords.

The current climate makes it vital that Agricultural Holdings Act tenants are meticulous in following the rule book.

It should go without saying that it is inviting trouble to miss rent payment deadlines. If you fail to pay rent on time, the landlord can serve a formal Notice to Pay. Miss that two-month deadline and – even if you are only a day or two late – you don’t have a leg to stand on. To put that in legal-speak, the landlord can serve an incontestable notice to quit. All the tenant can do is demand arbitration on whether the rent was properly demanded and paid on time. And if the answer to the first question is yes, and to the second is no, that’s it - the loss of the farm. Or, if you’re lucky, a farm business tenancy at a significantly higher rent, making it even more of a stretch to meet payments.

The same goes for succession. Gone are the days (if they ever existed!) where succession to an AHA tenancy was nodded through without many questions asked about the successor’s sources of livelihood or occupation of other land. Tenants can now expect rigorous assessment of every aspect of their application.

And, yes, as specialist agricultural lawyers we would say that wouldn’t we! But seriously, the rules may not be much fun; losing your livelihood and your home, and the opportunity to pass that on to the next generation, is no fun either. It's a disaster.

Our Agricultural Holdings Act specialists are Alan Plummer and Caroline Gumbrell. Get in touch if we can help.





A never-ending AWB?

 





© Agripicture Images

Last Friday’s confirmation meeting brings to an end the current round of Agricultural Wages Board deliberations. The increases in hourly rates* will take effect from 1 October this year.

Will this be the last time the parties sit round the table to negotiate wages under the auspices of the AWB?

Before the Board can be abolished, a 12-week consultation has to take place, followed by the laying of draft legislation in parliament for between 40 and 60 days. Plans for abolition before the 2013 wages talks start are beginning to look optimistic.

A month ago, Defra minister Jim Paice gave assurances in parliament that the government was determined to abolish the board. He added that negotiations with the Welsh Government were “ongoing”. Those negotiations do seem to be taking some time (Defra was already “discussing” the consultation process with Welsh ministers back in February).

So, what we do know is that there'll be a new Agricultural Wages Order in place from 1 October 2012. What we don't know is whether it will definitely be the last of its kind. We -along with our farming clients - await developments.

What employers will be keen to know is whether, and if so how, they can move out of AWO terms once there is no longer an AWO in force – let’s say, being optimistic, from October 2013. There may be some provisions in the legislation which affect what can and cannot be done following abolition. Future terms and conditions may well turn on the wording used in current employment contracts.

Having said that, employers who are taking on workers between now and the abolition of the Board should definitely take advice about whether, and how, they should be amending their standard contracts in view of the likely move into an AWO-free landscape. Action now could mean greater flexibility further down the line.

Contact Phil Cookson for further information.

* 2.8% rise for workers on Grades 2 and above, 1.8% for Grade 1 workers.