Scottish Government

ISBN 0 7559 2549 1

This document is also available in pdf format (188k)

Contents

Chairman's statement
Who We Are and What We Do
2004 Wage Award
Annex 1
Annex 2

Chairman's statement

The Scottish Agricultural Wages Board exists to set the minimum wages and conditions for people who work in agriculture and related industries in Scotland. It does this by publishing an Order which is legally enforceable after negotiations which bring together representatives of the workforce and of the employers together with a group of independent people whose task is to assist and facilitate the negotiation in the best interests of the parties. The present members of the Board are listed at Annex 1 of this report.

I have now been engaged with the work of the Board for 14 years, and over that time I have always been impressed by the way in which its members carry out their responsibilities. It is not easy to negotiate for a group whose places of work can be as diverse as a dairy farm, a hill sheep farm, a forestry enterprise, a fish farm (which is covered by the Order as long as it has a land base), a commercial mushroom growing undertaking, a chicken raising unit or a nursery garden regardless of scale. Some of these areas of activity are easy to see as "agriculture"; others are only the subject of the Wages Order because of the definition of agriculture in the Agriculture Wages (Scotland) Act 1949. People who work in all these areas deserve protection, secure wage rates and to be working in conditions which give them clear entitlement to holidays, sick leave, and all the other safeguards which we take for granted in the sophisticated world of work in the early 21st century.

Each year Board members receive a claim for adjustments in wages and conditions from the workers' representatives. The Workers' side on the Board has 6 members, some of whom are paid full-time officials of the recognised Trade Union, the T&G Agricultural section, and others of whom work directly in one or other of the aspects of agriculture. The Employers' representatives then respond in writing. There are 6 Employers' representatives drawn from the NFU Scotland and the Scottish Landowners' Federation.

When the Board meets, initially in August, the claim is put before the full Board which also includes 5 Independent members who are appointed by Scottish Ministers under the developing Nolan processes. The claim is then negotiated and decided, if need be, by a vote of the Board. This outcome is widely advertised, with an opportunity for all interested parties to make representation to the Board about the suggested alterations in the minimum wage rates and in conditions of employment. These representations are then considered by the Board at a meeting early in October when the Order is either confirmed, which has been my usual experience, or there is time to renegotiate and advertise revised alterations in the light of representations. The new Order normally comes into effect from 1 January each year. A Guide is produced each year to outline the effect of the Order in a less technical way than the formal, legal document.

In 2003 the negotiation for 2004 had 2 outstanding features. For the first time, the minimum wage rate reached £5 an hour; and for the first time the Board received no objections to the proposed Order. Both of these events were milestones for agriculture.

I am aware that this is the first time that the Board has prepared an Annual Report, and that it also marks my last year with the Board. It has been a pleasure to work with people from SEERAD and from the Sides who have taken such a thorough and responsible attitude to their work. Over the years I have been with the Board it has been well served by 3 excellent Secretaries and a reliable small back-up team. The Sides have nominated sound and helpful members who have worked well together despite their properly different interests. I owe a particular debt of gratitude to my Independent colleagues who have been just that - independent friends of all that agriculture means, willing to stand back and take the long view, while careful of the immediate detail too. My thanks go to all who have been involved in any way, and my good wishes to those who continue the Board's solid and reliable work, into its next review cycle and the future.

Who We Are and What We Do

Welcome to the first Annual Report of the Scottish Agricultural Wages Board ( SAWB), an Executive Non-Departmental Public Body set up under the Agricultural Wages (Scotland) Act 1949.

The Board's statutory remit enables it to make Orders fixing minimum wage rates, holiday entitlement and other terms and conditions of service for workers employed in agriculture having considered pay claims and proposed changes to other conditions of employment for agricultural workers submitted by representatives. Similar Boards operate for England and Wales and for Northern Ireland. The Board's Orders are legally enforceable and the Scottish Executive Environment and Rural Affairs Department has a duty to investigate complaints about non-compliance with the Orders. The Department also carries out random test inspections on agricultural holdings to ensure compliance with the Order and pursues recovery of arrears on behalf of workers.

The SAWB comprises 5 independent members (one of whom is chairperson) appointed by Scottish Ministers; 6 members representing workers' interests nominated by T& G Scotland; and 6 members representing employers' interests nominated by NFU Scotland and the Scottish Landowners' Federation (now the Scottish Rural Property and Business Association). Details of the Board Membership are listed at Annex 1.

Ad Hoc Committee

The 1949 Act also enables the Board to appoint one or more committees from within its ranks. In practice, one such "ad hoc" committee is normally appointed on an annual basis to consider issues remitted to it by the Board and to report back to the Board with recommendations. The committee is chaired by an Independent member and otherwise comprises equal representation from the employers' and workers' sides. The committee did not meet during the period of the Board's report.

Appointment to the Board

There are 2 distinct elements to Board appointments. One for the Independent members who are appointed by Scottish Ministers in accordance with the Commissioner for Public Appointments in Scotland's Code of Practice and the other for Representative members who are nominated to serve on the Board by their respective Sides. The term of office for an Independent member is 3 years with the possibility of re-appointment, subject to satisfactory performance and a maximum term of 10 years. Representative members are also appointed in the first instance for 3 years and can be nominated for re-appointment as often as their respective Sides wish subject to Scottish Ministers agreeing their suitability to serve on the Board.

Role of the Independent Members

The main role of the Independent members is to assist workers' and employers' representatives to reach fair and reasonable settlements on matters relating to relevant terms and conditions of service for agricultural workers.

Meetings

The Board met on 3 days between 1 April 2003 - 31 March 2004 to consider wages and other conditions of employment for agricultural workers.

General Arrangements

The table below sets out the main provisions under agricultural wages legislation and the corresponding provisions under general employment law, including the National Minimum Wage and Working Time measures.

2004 Wage Award

In April 2003 the Workers' Side gave notice of its claim.

• a minimum rate of £6 per hour;
• a 35 hour week without loss of pay;
• an increase in holiday entitlement;
• the introduction of a Pension Scheme; and
• abolition of the up to 10 week lower hourly rates of pay

A package of statistical information prepared by the Scottish Executive Environment and Rural Affairs Department was circulated to Board Members in August 2003.

The Negotiations

A written submission from the Workers' Side and the Employers' representatives response to the claim were presented to Board Members in August 2003.

The Workers' Side presented their claim. They reminded Members that agricultural workers' earnings were invariably lower than those of their counterparts in other industries and a reasonable pay increase was needed to attract suitably skilled people to the industry. They further submitted that there were positive signs the industry was recovering from the Foot and Mouth Disease outbreak and that it could afford to pay workers a competitive hourly rate.

Members were reminded of the 5 key aspects of the Workers' claim. The difference in the hourly rates of English and Scottish agricultural workers and the need to pay higher hourly rates to encourage workers, particularly younger workers to enter the industry were highlighted.

The Employers' Side responded pointing out that while there were signs the industry was recovering from the decline experienced over the past years it was recovering from a low base.

They reminded Members that there was an expectation that any percentage increase agreed would be paid to agricultural workers who were presently paid in excess of the current minimum rates and that there is frequently a "knock on" effect in allied areas of employment. They agreed in principle to the concept of a Pension Scheme and offered to explore this directly with the Workers' representatives.

Following a period of bilateral discussions with the Independent members in which common ground was explored the Employers' Side made an offer to increase current hourly rates by 2.5% on the understanding that there would be no other changes to existing terms and conditions.

The Workers' Side responded saying this was unacceptable. However, they agreed to amend their claim to:

• 5.5% increase on the basic rate, bringing it to £5.00 per hour for adult workers in the after 10 weeks category;
• a reduction in the overtime multiplier from 1.65 times to 1.5 times the appropriate minimum rate;
• current rates for agricultural workers employed on 31 December 2003 be conserved where these were more favourable; and
• no change to the current age bands in the Board's Orders.

• They would not press for a industry wide Pension Scheme provided the Sides consider this outwith the negotiations.

The Employers' Side rejected the workers' revised proposals claiming that the industry could not afford it and reaffirmed its offer of 2.5% on the current hourly rates with no change to other terms and conditions.

These proposals were put to the vote. The Workers' proposal was carried by 10 votes to 5.

Confirmation of Proposals

The Board met again on 6 October 2003 to:

• consider the representation which had been received;
• decide whether to confirm the proposals;
• agree the text of the 2003 Wages Order.

The sole written representation applauded the proposed changes. As no written objections were received to its initial proposals the Board confirmed these and the text of the new Order was formally adopted.

The new Order, the Agricultural Wages (Scotland) Order (No 51) 2003 took effect from 1 January 2004.

Minimum Rates

Details of the minimum rates fixed by the Board from 1 January to 30 September 2003; 1 October 2003 to 31 December 2003 and 1 January 2004 are at Annex 2.

Enforcement of the Agricultural Wages Order

As at 1 April 2003 the National Minimum Wage enforcement procedures have been applied to the Agricultural Minimum Wage. The Scottish Executive Environment and Rural Affairs Department ( SEERAD) is responsible for dealing with queries about provisions in the Wages Order and for handling complaints (this is not a direct responsibility of the SAWB). The Department also has responsibility for handling enquiries and complaints from employers and workers.

When a complaint is received and it appears that the worker has been underpaid, SEERAD staff attempt to resolve matters by writing to, or in some cases telephoning, the employer and explaining the requirements of the legislation. The aim is to persuade the employer to pay the worker at the correct rate and to pay arrears. If the employer agrees to put matters right by a specific date and SEERAD receives confirmation from the worker that this has been done and that he or she is content, the case is closed. If the employer refuses to co-operate or fails to pay the arrears considered to be due, the case is passed to an Agricultural Wages Inspector ( AWI) to investigate.

A visit from an AWI may be sufficient to prompt the employer to put matters right. Where this fails, an Enforcement Notice may be served. A schedule of arrears is attached to the Notice. The Schedule shows the sum due to the worker for the hours worked, holiday taken etc in each pay reference period and sets this against the sum received. The arrears due in each pay reference period are calculated and the total sum due is stated in the Enforcement Notice. An employer may appeal to an Employment Tribunal against an Enforcement Notice. Provided the Notice is upheld, the employer is required to pay the arrears due and, if he or she fails to do so, a Penalty Notice may be served.

Subsequent Developments

As with other Non-Departmental Public Bodies, the SAWB is subject to review at least once every 5 years. As the last review of the Board was carried out in 1999-2000 a fresh review to consider whether it is appropriate to continue to set minimum rates of pay and conditions for agricultural workers will commence in September 2004. It is envisaged that Scottish Ministers will give consideration to the evidence gathered around May 2005.

Finance

Unlike most NDPBs the SAWB has no budget, staff or accommodation of its own. SEERAD staff provide secretariat services to the Board and Board meetings are normally held in Scottish Executive premises.

The associated costs of running the Board and enforcing its Orders amount to around £110,000 per year of which approximately £30,000 is attributable to the direct expenses of the Board and the rest to staff costs in connection with enforcement.

Annex 1
Membership of the Board as at 1 April 2003

Employers' Side

Workers' Side

Independents

Secretariat

Annex 2

Minimum Rates of Pay in force from 1 January 2003 - 30 September 2003

Minimum Rates of Pay in force from 1 October 2003 - 31 December 2003

Minimum Hourly Overtime Rates of Pay in force from 1 January 2003 - 31 December 2003

Minimum Rates of Pay in force from 1 January 2004

When a worker commenced employment after 31 December 2003:

For workers employed on or before 31 December 2003: