Abolition of the Agricultural Wages Board - Advice for Employers

"The Agricultural Wages Board for England and Wales is abolished."

With those ten words section 72 of the Enterprise and Regulatory Reform Act 2013 brings to an end almost a hundred years of agricultural wages board history. The first boards were set up in 1917 in tandem with the introduction of subsidies for cereals production.



"not without controversy"



The plan to abolish the board has not been without controversy (see our last update here), but the die is now cast and it only remains for the Secretary of State for Business Innovation and Skills to make the Commencement Order that brings section 72 into force.

 

When will this happen?

Not just yet, but our understanding is that the Agricultural Wages Order 2012 will be the last, and that from 1 October 2013 ag and hort businesses will be operating in a new, AWO-free, landscape. The latest news is that the necessary Order is expected be made on 25 June.

Just to give an idea of why things can't necessarily be pushed through overnight, over 60 amendments to existing legislation are needed in order to remove provisions that relate to the outgoing wages regime.

 

What are the implications for employers?

As in other sectors of the economy, agricultural employment will be covered by national minimum wage legislation and the working time regulations.

Where new, post-AWB employees are concerned, employers will be free to negotiate terms and conditions unbound by what many in the industry view as the outdated and sometimes rigid framework imposed by the old ag wages legislation.

Where existing workers are concerned, employers cannot simply ignore the old AWO terms. They should take specialist advice before seeking to amend contracts. Ignoring the general protection the law affords to employees could land employers on the wrong side of an employment tribunal claim.

Businesses planning to take people on between now and 1st October may be able to build some flexibility into their standard contracts that takes the upcoming change of regime into account.

Where can I find out more?

The NFU has a dedicated AWB page on which it posts updates and general advice. The NFU also plans to publish a set of indicators to help employers in future wage reviews.

From the Roythornes side, we are holding a breakfast seminar on Tuesday 10 September 2013 in Spalding, Lincs. It is for employers in the horticulture sector and will offer focussed, practical advice about how AWB abolition affects them.

We are expecting demand for the seminar to be high. To express your interest and reserve a place, please email us.

In the meantime, if you have any questions at all about the implications of AWB abolition for your business, please do give Phil Cookson a call on 01733 898970.

Update on CAP Reform: hot from the press conference

EU farm ministers met yesterday morning to discuss the new direct payments regulation. Simon Coveney, the Irish Farm Minister, held a press conference at lunchtime to give an update on progress. (The Irish hold the Presidency of the Council for the first half of 2013.)

This was against a background of intensive discussions between the three key players in these CAP reform negotiations: the Council (made up of farm ministers from member states), the EU Commission and the EU Parliament. The discussions - or trilogues - are aimed at hammering out a compromise on issues which still divide the parties (e.g. on how greening should be implemented).

What's new?

Nothing, as such, but there were some interesting indications of compromise in-the-making on one or two of the outstanding issues.

Both the Irish Presidency and the Agriculture Commissioner said they were optimistic that an overall CAP package would be agreed at the next Ag. Council in June. The aim of yesterday's session was to narrow down the number of issues on which there needs to be a 'political' negotiation and compromise in order to get a whole package agreed.

On young farmers, there is still not consensus about whether there should be a compulsory scheme under which young farmers receive a top-up payment. Some countries maintain that they don't have a problem as far as new entrants go (perhaps they have there own schemes) and should not be required to have a young farmers scheme. The UK is among those member states resisting the idea of a compulsory scheme.

One of the other areas up for discussion was the active farmer question. Again, the crux of the debate is whether measures to prevent what are effectively non-farming businesses receiving direct payments should be compulsory. The alternative is for member states to be left free to decide whether to implement a 'negative list'. Dacian Ciolos, the Agriculture Commissioner, is committed to an EU-wide approach; if a golf course or airport is banned from receiving CAP payments in one country, the same rule should apply in other countries too. The UK is, again, against a blanket approach.

One of the possible compromises mooted at the Council meeting yesterday was the idea of a shorter negative list that would be mandatory across the EU, with member states free to add further non-qualifying activites to the list.

Simplification, it seems, ends up being sacrificed in the search for consensus.

So now we wait. Trilogues between the Council of ministers, the EU Parliament and the EU Commission continue, with the final showdown on 24-25 June. We're not expecting firm details about the shape of the new package to arrive with any great certainty before then. But given what we heard about the solution mooted on active farmers, we envisage that a pick n mix solution may prevail over a hard-boiled approach on other questions too.

If you would like further information, or to discuss how the current CAP reform might affect your farm business, call Julie Robinson on 01775 842618.