National Minimum Wage

Chapter 4: Compliance and Operation of the National Minimum Wage
4.70 The offset arrangements were last investigated in detail in 2006, when the Commission
undertook a review. That review concluded that if the rules were relaxed and accommodation
could be provided as an option, it would be difficult to determine whether or not workers had
a genuine choice. As it is six years since we last looked at the provisions in detail, and given
the shortfall in our evidence base on provision and other aspects of the offset, we intend as
part of our 2013 Report to fully review the offset arrangements, including the rationale for
them. As a result, this year we do not intend to change the way the level of the offset is
uprated.
Abolition of the Agricultural Wages Board for England
and Wales
4.71 In July 2010 the Government announced its intention to abolish the Agricultural Wages Board
for England and Wales (AWBEW). In our remit for this report the Government has asked us to
consider the implications of the proposed abolition of the Board, pending the outcome of the
legislative process. In fulfilling this aspect of the remit we have sought evidence from the
relevant parties and commissioned research on the operation of the Board and the potential
implications for us of its abolition. In addition, our Secretariat has spoken separately to the
various bodies representing employers and employees in the agricultural sector, and to
officials at the Department for Environment, Food and Rural Affairs (Defra), the sponsoring
department.
4.72 The proposed abolition does not apply to the Agricultural Wages Boards in Scotland and
Northern Ireland, which will continue as at present. In England and Wales, the Government
is required to consult before introducing secondary legislation to abolish the Board. The
consultation period will last three months and is due to commence early in 2012. At the time
of writing our report, therefore, the AWBEW is still in existence and its Orders still have
statutory effect. Following abolition, the statutory terms and conditions of agricultural
workers in England and Wales will be solely determined by the NMW Regulations and other
employment legislation. Existing employees will continue to have a contractual right to their
current terms and conditions.
4.73 The AWBEW dates from the 1948 Agricultural Wages Act. It consists of equal numbers of
employer and employee representatives, along with four independent members and an
independent chair. Its Wages Orders have statutory force and set out minimum pay rates and
a range of terms and conditions covering full-time and part-time employees in the sector.
It was unaffected by the abolition of the Wages Councils in 1993, and its status was
confirmed in 1995 following a separate review of the Agricultural Wages Boards.
4.74 The decision to abolish the Board is supported by the main employer bodies. NFU told us that
abolition will bring arrangements in agriculture into line with other sectors, and provide
employers and employees alike with the flexibility to consider the employment package as a
whole. It would also remove the confusions that can arise about whether certain employees
are covered by the NMW or the Agricultural Wages Order. It noted that most agricultural
employees already received pay rates above the statutory minima which, it argued,
suggested the market was already the main determinant of pay levels in the sector. ALP also
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