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New wages law presents a dilemma for employers
3:33pm Friday 30th August 2013 in Farming
THE recent abolition of the Agricultural Wages Board for England and Wales will render the current Agricultural Wages Order (AWO) void as far as new workers are concerned from October 1 this year.
The AWO sets minimum terms and conditions of employment for agricultural and horticultural workers, often more generous than those provided by national law and practice.
The abolition brings to an end an institution in farming.
Employers will have to get to grips with employment law, something they have not had to do recently, relying on the AWO.
New workers who start employment from October, will not be subject to an AWO. However, existing workers will remain bound by the current order unless their terms and conditions are varied.
The most notable areas affected are pay, holiday, hours and other benefits. Employers face a dilemma – do they have a two-tier workforce or do they harmonise terms and conditions?
A two-tier workforce can arise if new starters are subject to the national minimum requirements, while existing staff remain on AWO terms. The problem with this approach is the risk of discrimination and/or equal pay claims from new starters, and employers operating different regimes which could be an administrative headache.
Harmonising terms may avoid those issues but, depending on how they are harmonised, could create its own set of problems.
If all new starters are offered the equivalent of AWO terms and the employer continues to adopt the AWO regime, then this may placate the workforce for the time being, but will not avoid the eventuality of interacting directly with the workforce, for example, on pay negotiations if pay rates are to remain higher than the national minimum wage.
However, an employer may prefer a reduction in favourable terms and seek to vary existing workers’ terms and conditions. Put simply, if an employer seeks to alter terms, they should obtain the workers’ agreement and not make unilateral changes.
If variation is contemplated, legal advice is strongly recommended as getting it wrong can result in significant costs.
It will be a testing time for employers who will undoubtedly have to become employment-savvy. They will need an awareness of the national rules and regulations that govern the employment relationship and to keep abreast of mandatory updates, which usually occur twice a year in April and October affecting matters such as statutory payments.
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