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Written Statement - The Welsh Government’s response to the consultation on an Interim Agricultural Wages Order

Rebecca Evans, Deputy Minister for Farming and Food

The statutory Agricultural Minimum Wage regime preserved under the Agricultural Sector (Wales) Act 2014 provides appropriate wage levels for different grades and categories of agricultural workers and also recognises the unique nature of agricultural work through agriculture related benefits and allowances. It also rewards skills and qualifications through a six grade career matrix. Finally, it underpins the Welsh Government’s vision of a modern, professional and profitable agriculture industry in Wales, and the importance of having well-motivated, well-trained and appropriately remunerated workers.

On 11 May 2015 I launched a consultation on whether an interim Agricultural Wages Order should be introduced and if so, the provisions it should contain. The consultation closed on 3 August and, having analysed the responses submitted, I can now confirm that this Government will be introducing an Interim Agricultural Wages Order for Wales this year. A summary of the consultation and the Welsh Government’s response is available on the Welsh Government website.

Agricultural workers in Wales have not received a statutory pay review since the last Agricultural Wages Order was issued by the now abolished Agricultural Wages Board for England and Wales in 2012. The new Order will increase statutory pay levels for agricultural workers by around 6%, representing an annual increase of 2% between 2012 and 2015.

As well as ensuring fair wages for all agricultural workers, the new Order will retain the provisions of the 2012 Order to ensure the proper and continued functioning of the Agricultural Minimum Wage regime.  These provisions include overtime rates, on-call allowance, night work supplement, dog allowance and housing offset. The six grade structure for standard and flexible workers will be retained to encourage upskilling and career development within the industry. Provisions for young workers and apprentices with increased pay levels will help combat skills and labour shortages in the sector, offering a young generation of workers more attractive career paths within agriculture.
In July, the Chancellor of the Exchequer announced the introduction of the new National Living Wage from April 2016. This will apply to all workers aged 25 and above, in contrast to the Agricultural Minimum Wage levels in Wales which are applicable to all workers over compulsory school age.  

Under the new agricultural wages order, Grade 1 will be set 2p above the current National Minimum Wage at £6.72. Traditionally, the Agricultural Wages Board set Grade 1 hourly pay at or just above the National Minimum Wage. Until 2007, this Grade was specified at National Minimum Wage, in 2008 and 2009 1p above and between 2010 and 2012, 2p above the statutory national Minimum Wage level. The approach applied in the new wages Order follows the method the Agricultural Wages Board applied while in existence.

If it should be introduced, the National Living Wage will impact on the wages of Grade 1 workers aged 25 and over. The wage levels for the other grades of workers will be specified above the currently proposed National Living Wage in the new Order.  

Under the Agricultural Minimum Wage regime Grade 1 is regarded as a transitional grade. The statutory provisions give rights to Grade 1 workers who have been employed continually for 30 weeks with the same employer to acquire qualifications that will allow them to move quickly to a higher grade. This serves as an incentive for skills development and progression within the sector. Available data shows that most workers in agriculture are actually employed at Grade 2 level.

It is expected that the interim agricultural wages Order will be introduced by the end of  2015 and remain in force until a new agricultural wages Order proposed by the Agricultural Advisory Panel for Wales is approved and made by the Welsh Ministers.  The Panel will play an important role in supporting the functioning of industry by considering matters related to employment and also skills and career development. Key stakeholders such as NFU Cymru, the FUW, CLA and UNITE the Union will have guaranteed places on the Panel while the independent Chair and independent experts will be selected via the Pubic Appointments process. The exercise to select the five members has opened and  I expect that the Panel will be fully operational by early 2016.

The implementation of the 2014 Act, which includes the introduction of a new wages Order and the establishment of a new Advisory Panel, contributes towards wider Welsh Government strategies, such as the Tackling Poverty agenda and the aspiration to improve the skills base of all people working in agriculture in line with the recommendations of the Professor Wynn Jones review of Learning Delivered by Further Education Colleges and the Relevance of that Delivery in Supporting Farm Businesses in Wales.  This work aims to ensure the long term viability and success of the agricultural sector in Wales, supporting the key goals of the Well-being of Future Generations Act, in particular achieving a prosperous, resilient and more equal Wales.

I would like to express my thanks to those who took the time to respond to the consultation on the proposals for the interim wages Order and I look forward to further collaboration between Welsh Government and our key stakeholders on creating a modern, fit for purpose  Agricultural Minimum Wage regime for Wales.