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Abolition of the Agricultural Wages Board - Advice for Employers

View profile for Phil Cookson
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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.

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 to 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 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concerned, employers will be free to negotiate terms and conditions unbound by what many in the industry view as the outdated and sometimes rigid framework imposed by the old ag wages legislation.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 take 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 focused, 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.