National Minimum Wage

National Minimum Wage
Project title and
researchers
The Implications
For The National
Minimum Wage Of
The Abolition Of The
Agricultural Wages
Board In England
And Wales
Alastair Hatchett,
Anna Mayhew, Joe
O’Donnell and Louisa
Withers (IDS)
170
Aims and methodology Key findings and results
The Government intends to abolish the Agricultural
Wages Board for England and Wales (AWBEW),
bringing agricultural workers in the two countries solely
within the provisions of the NMW and other statutory
employment legislation. The Agricultural Wages Boards
in Scotland and Northern Ireland will be unaffected.
This project provided a comprehensive overview of
the AWBEW, its provisions, and the implications of
its abolition for the NMW. It included analysis on the
composition of the sector, the coverage and operation of
the Board, minimum rates in the sector and changes to
their structure over time. It looked at the key provisions
of the 2011 Wages Order, the contractual and statutory
employment provisions that will remain in force once
the Board is abolished, and the possible implications of
abolition. For completeness it also listed the key terms
of the separate Wages Orders in force in Scotland and
Northern Ireland.
The research was based on a review of the NMW
Regulations and the Agricultural Wages Orders, and on
interview and questionnaire responses from the main
parties in the sector. This was augmented by analysis
from the employment law and pay research teams
within IDS.
The main findings from this research study were:
●● The agricultural sector in England and Wales is
very diverse, both as to the nature of farming, and
to the size of establishment. Around two-thirds of
establishments do not have employees. In total,
around 350,000 people work in the sector in the
two countries, but only 40 per cent are employees.
Of these, around a third are seasonal or casual
employees.
●● The Board sets minimum pay rates for six grades,
along with other terms and conditions. Pay rates
exceeded the NMW rates, but, in the case of the
lowest (Grade 1) only by 2 pence from 1 October
2011. Other key differences compared with the
NMW are that the minimum rates in agriculture are
paid from age 16, and that agricultural minimum
apprentice rates were higher. With the exception of
the accommodation offset, many other terms and
conditions were not provided for at all under the
NMW Regulations.
●● Following abolition, agricultural employees will
continue to be covered by the minimum statutory
rights contained in other employment legislation,
and by the NMW. Existing employees will retain
a contractual entitlement to AWBEW terms and
conditions.
●● IDS noted that it was too early to be certain of
the effects of abolition, but based on previous
experiences of the removal of industry-wide pay
arrangements, it concluded that it was likely that
there would be greater divergence of pay practice;
lower rates of pay, and a downward drift in skills
differentials and/or the dilution of the skills base.
Other terms and conditions were also likely to be
eroded.
However, IDS noted that the agricultural sector was
not immune from external labour market pressures,
especially for skilled workers (some of whose rates
were still determined under other industry-wide
agreements) and young people (who had fewer ties and
more willingness to move).