My Lords, when these amendments came to my attention, my first rather tongue-in-cheek reaction was, “Blimey, does the Agricultural Wages Board still exist? I thought it went out with the ark”. I say that as a farm employer. When setting a farm worker’s salary, I have to pitch it to reflect the salaries in the wider market outside of farming; that is, the competition.
Within the past year, we have employed two new farm workers and I will use one of them as an example. Previously, he had been working for a road haulage firm, on a salary of £16,000. It became clear in the interview that he was keen to take our job and he seemed exactly the right man for it from my point of view. Getting him to switch jobs all rested on his salary package. I was advised that the job equated to about £7 an hour, which is just above grade 2 on the latest agricultural wages order scale. Let us look at the practicalities of using the agricultural wages order scale in negotiations. The prospective employee said, “What is my salary going to be?”. I replied, “£7 an hour”, because the Agricultural Wages Board only works in pounds an hour. He said, “What does that mean in gross per annum?”, because he wanted to compare my offer to the £16,000 from his existing job. I said, “That is £7 an hour grossed up for the year”. So we got out the calculator: £7 an hour times seven hours a day, five days a week, 52 weeks a year is £12,740. That is what the Agricultural Wages Board is saying I should pay him. He wanted the job and I wanted to employ him but the Agricultural Wages Board pay scale does not cut the mustard because he would not move jobs for a £3,260 cut in pay. I offered, and he accepted, £16,000—the same that he was getting from the job outside farming. The important point here is that it was the competitive wider employment market that determined his salary, not the agricultural wages order pay scales, which we ignored as not being helpful.
I asked my firm of accountants in Norfolk whether other farmers ignored the Agricultural Wages Board rates when setting salaries. Was I alone, and was I breaking the law? I now know that it is not strictly legal to pay a salary to a farm employee under the agricultural wages order. Happily, the accountants’ answer to both questions was no—I was not alone and
it was not illegal. They said that few, if any, use the agricultural wages order rates nowadays because one has to pay over the odds to attract people into farming, especially if skills are involved, given, as my noble friend Lord Plumb said, the combine harvester worth £250,000—that is a big skill. I also asked my neighbouring farmers, who employ workers on their farms, and got the same answer.
Another point is that the Agricultural Wages Board works is archaic in that it sets pay rates per hour, rather assuming that we still hand out weekly wage packets. That is clearly impractical in today’s world. The preferred option for both parties is for a monthly standing order. If employers and their advisers are not using the rates set by the Agricultural Wages Board, what is the point of the board? Here is the rub because the practicality of today’s employment market has made the board obsolete. Also, the raft of modern employment law referred to just now has made the board irrelevant, not least by the national minimum wage that was just referred to, which currently stands at £6.19 an hour. The current minimum rate under the agricultural wages order is £6.21 an hour, a difference of a mere 2p, as has already been said. That 2p difference is not surprising because the board cannot set its minimum below the national minimum wage and it would look too simplistic to set it at the same rate—
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