National Minimum Wage

National Minimum Wage
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supported abolition, pointing to the practical difficulties arising from definitions of ‘agricultural
work’ used in the Order. It said this raised particular problems with packing workers who
worked in facilities located away from where the produce was grown. It also argued that the
terms of the Orders were difficult to understand when compared with the NMW, and that
enforcement within the sector was minimal.
4.75 The employee bodies take a different view. The TUC said that abolition would lead to lower
rates of pay and an increase in rural poverty. It asked us to support continuation of the Board,
but, in the event of its abolition, to recommend that expertise and funding for enforcement
be transferred from the Defra Inspectorate to HMRC. It also believed that we should
research and monitor the impact of abolition on a range of issues. Unite thought that abolition
was being driven by horticultural employers under pressure from supermarkets to cut prices.
It was concerned that existing terms and conditions would be eroded over time. Usdaw and
UNISON also opposed abolition.
4.76 Incomes Data Services (IDS) (2011b) highlighted the diverse nature of the agricultural sector
in England and Wales, both in terms of farm type and size. Overall, there are about 144,000
holdings in the two countries, but only 44 per cent actually have employees. Farmers, their
partners, directors and spouses make up over half of the agricultural labour force, and over a
third of agricultural workers are casual or seasonal employees. In total, Defra figures suggest
that 140,000 agricultural workers will be directly covered by the NMW Act following abolition
of the Board.
4.77 It was also clear that there are marked differences in the respective terms of the AWBEW
Wages Order and the NMW. Broadly, these can be summarised as follows:
●● We recommend one minimum adult rate and other minimum rates for young people. The
AWBEW sets minimum rates for a six-grade structure and the appropriate grade minimum
applies to all workers irrespective of age, with one exception. All these minima have in
practice been higher than the NMW rates. The Wages Order also has a separate rate for
workers of compulsory school age for which there is no NMW equivalent. These workers
are exempt from the NMW. Both the NMW and AWBEW have different rates for
apprentices.
●● Under both the Wages Order and the NMW Regulations, where an employer controls a
worker’s hours then, irrespective of whether a piece rate system is in place, the worker
must be paid at least the appropriate minimum rate for each hour worked. However, under
the NMW Regulations, but not the Wages Order, where an employer does not control a
worker’s hours, and a piece rate system that conforms to Fair Piece Rates is in place,
pay can be determined by output rather than hours, and may therefore be lower than the
NMW.
●● Deductions for accommodation provided to agricultural workers depend on whether an
entire house is available or some other type of accommodation, and can be subject to the
employee having worked a minimum of 15 hours a week. The NMW does not have
different rates based on accommodation type or a minimum hours requirement.