Employment Law Update (August 2010)
Agricultural wages set to go in bonfire of the quangos
As part of its "bonfire of the quangos" the coalition government
announced on 22nd July 2010 that it proposed to abolish
the Agricultural Wages Board in England and to bring control of
agricultural wages within the National Minimum Wage (NMW)
structure. This is likely to mean abolition of separate
Agricultural Wage (AW) rates over the medium to long term.
The proposal does not apply to Scotland, which has devolved
powers, and will require agreement with the Welsh Assembly
Government for the changes to take effect in Wales.
What is the Agricultural Wages Board?
Protection of wage levels in agriculture is a leftover from the
period following the second world war. Protection of wage levels in
other industries was scrapped by the Thatcher government, and was
only re-introduced with the implementation of the NMW Act in 1999.
The special protection for wages for those working in agriculture
has so far run alongside the NMW structure, but it looks as if its
time is now up.
When will the change happen?
At the moment, all that the government has done is to announce
its intentions. The proposal will need legislation to amend
the NMW Act, so is likely to take at least a year or so to
implement.
What is the impact of the change likely to
be?
Although the proposal forms part of the coalition government's
plans to save money by reducing the number of state-funded quangos,
the ministerial statement announcing the abolition indicates that
this will be about more than that.
While proposing to bring agricultural wages "within the scope of
the NMW Act" - the NMW has a much simpler structure than the AW
structure - the announcement also says the AW is "outdated,
inflexible and burdensome", and that the changes will "allow the
agricultural industry to adopt flexible and modern employment
practices".
So, in the medium to long term, it looks likely that:
- The structure of wages and benefits in the agriculture sector
will be simplified;
- Agricultural wage levels will be brought into line with lower,
National Minimum Wage levels.
The announcement follows a previous announcement on the National
Minimum Wage, in which new terms of reference were set for the body
which makes recommendations on NMW levels, the Low Pay
Commission.
See previous news article (June 2010) "All change in store for the Minimum Wage"