Working Time (Amendment) Regulations 2013

Baroness McIntosh of Hudnall Excerpts

Monday 22nd July 2013 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)]

My Lords, the Government are committed to providing an environment for all sectors of the economy in which private enterprise and businesses can flourish. A key objective is to simplify employment legislation and remove unnecessary burdens from businesses. As part of this, the Government have taken forward legislation through the Enterprise and Regulatory Reform Act 2013 to end the separate agricultural minimum wage regime in England and Wales and to bring employment in agriculture into line with other sectors of the economy.

The amendments which the Government are proposing to the Working Time Regulations 1998 are a necessary consequence of the abolition of the Agricultural Wages Board for England and Wales on 25 June 2013 and the end of the separate agricultural minimum wage regime after 30 September 2013. Agricultural workers are already protected by the main provisions of the Working Time Regulations, including those relating to the maximum 48 hour week. However, some minor technical amendments are needed to align the position for agricultural workers in England and Wales fully under the regulations with that of workers in other sectors of the economy. If approved, these amendments will come into force on 1 October 2013, when the current special regulatory framework for agricultural minimum wages will end.

The proposed amendments will remove some very specific exemptions in the 1998 regulations which apply only to workers employed in agriculture. These are in relation to the date of the commencement of the leave year and the arrangements for giving notice to take leave. Under the Working Time Regulations, the leave year for a worker begins on the date provided for in a relevant agreement. Where there is no provision in a relevant agreement, the date of commencement of the leave year for a new employee is the date or anniversary of the date of commencement of employment. For agricultural workers in England and Wales, the commencement of the leave year is governed by the provisions of the Agricultural Wages (England and Wales) Order 2012, which will remain in force until 1 October. The order requires that the leave year for all agricultural workers begins on 1 October. There are also specific arrangements in the Working Time Regulations for taking leave which require workers to give their employer advance notice of the intention to take leave and for the employer to give similar notice if either they require the worker to take leave or do not agree to a request for leave from the worker. These arrangements provide transparency and certainty for workers and employers, but do not currently apply to agricultural workers.

If approved, these amendments mean that where agricultural workers in England and Wales come into the industry and enter into employment contracts after 30 September, the arrangements in respect of commencement of the leave year and for leave-taking will be brought in line with the arrangements for other workers under the 1998 regulations. For agricultural workers already employed before 1 October, their existing arrangements will remain in place until the end of their current employment. This will ensure that there is no risk of loss of annual leave entitlement for agricultural workers during a period of employment. Any agricultural worker who is employed between now and 1 October must still be treated in accordance with the full terms and conditions set out in the agricultural wages order 2012. A worker in this position will similarly retain the arrangements for commencement of the leave year and leave-taking as provided for under the order until the end of their current employment.

If these amendments to the Working Time Regulations 1998 are not approved, once the agricultural wages order 2012 ceases to be in force after 30 September this year, there would be no default position for commencement of the leave year, nor arrangements for giving notice to take leave for new agricultural workers coming into the industry after that date. This could cause uncertainty and confusion for both agricultural workers and their employers.

It may be helpful here to say something more generally about the proposed application of the Working Time Regulations to agricultural workers after 30 September 2013. From 1 October, all new workers coming into the industry in England and Wales will be protected by the National Minimum Wage Act and the Working Time Regulations, as are other workers in different sectors of the economy. This means that agricultural workers will be entitled to at least the minimum requirements for annual leave entitlement and length of rest breaks as provided for by the 1998 regulations, although we would expect that many employers will agree terms which are more favourable to their workers than the minima set in the legislation.

Currently, under the terms of the agricultural wages order 2012, agricultural workers have enhanced entitlements for annual leave and rest breaks. The Government have made very clear during debates in Parliament on the amendment to the Enterprise and Regulatory Reform Act to abolish the agricultural wages board that agricultural workers will retain any existing contractual rights, including relating to leave and rest breaks. This has been enshrined in the relevant secondary legislation abolishing the board and the agricultural minimum wage regime.

Therefore, let me reassure noble Lords that the amendments we are now proposing to the Working Time Regulations will not have any impact on these existing contractual rights. Workers with pre-existing contracts at 1 October 2013 will retain the right to the annual leave entitlement and length of rest break determined in their contract of employment, unless either they agree with their employer to vary their contract or the contract comes to an end. These amendments are a necessary tidying-up exercise as the result of the abolition of the agricultural wages board and the agricultural minimum wage regime. Without them, for agricultural workers who take up new employment on or after 1 October 2013, there would be legal uncertainty and no clear provision as to the arrangements for the commencement of their leave year and leave-taking. I hope that your Lordships will accept these regulations.

[The Deputy Chairman of Committees]

My Lords, I should have said at the beginning of the Committee that, in view of the extreme heat, if anybody wishes to remove their jacket they are welcome to do so.

[Lord Whitty]

My Lords, the noble Lord, Lord De Mauley, might be pleased to hear that I will not remove my jacket.

I have vehemently opposed the whole principle in relation to the agricultural wages board. I am not in essence opposing the provision today because, as the noble Lord said, it is a logical tidying-up measure. However, serious questions arise about its timing and the way in which it has been introduced. He will recall that during the passage of the Enterprise and Regulatory Reform Act there were arguments about the impact assessment produced by the Government at that stage, which Ministers in effect discounted and put to one side. To some extent the Minister has repeated that today. That impact assessment produced for Defra showed a total detriment to agricultural workers of about £250 million over 10 years and a consequential benefit to farmers from that saving in their wages bill. I argued at the time that that was a notional benefit to farmers since, in effect, most of it would end up in the pockets of the supermarkets. Nevertheless, that was the Government’s argument at the time. During the course of deliberations, they disavowed that whole impact assessment.

The noble Lord has repeated today that many employers will improve the terms and conditions of agricultural workers. That, however, is totally contrary to the best expert advice available to the ministry at the time that the amendment to the Enterprise and Regulatory Reform Act was put through. In relation to limits on hours, I suspect there is not a big detriment. There may even be a benefit. However, we do not have another impact assessment. We do not have any indication of there being any analysis by the department as to which way that would work.

Obviously, the Government’s logic is to bring everything in line with general minimum terms and conditions legislation, whether in terms of the minimum wage Act or the working time directive and the legislation stemming from that. I think that that is logical. However, it is perhaps also interesting that Regulation 3 of this very short instrument enshrines the Government’s view that the conditions of the existing workforce, or those who are taken on before 1 October, will not be changed by this enactment. That is, of course, legally correct. However, the current terms and conditions will remain in place only until they are altered, until the employer gives notice of the end of their terms and conditions.

The totality of the Government’s approach here is to change the balance of power between the employee in the agricultural sector and the farmer or other employer. It is hardly worth the paper that it is written on to say that existing terms and conditions will continue to apply to those who are already in the workforce. It may take a few months or a few years for that to change. One of the reasons that the impact assessment was ultimately rejected by Ministers on the Floor of the House was that they recognised there would be a significant disbenefit to workers in the industry: not only new workers but existing workers would be faced with the likelihood of their terms and conditions being changed once the agricultural wages board disappears.

I think the Minister is probably right that this is relatively straightforward and unlikely to cause huge detriment. It is nevertheless part of the overall principle that we have opposed from these Benches. It is part of the attitude towards wages within the agricultural sector that this is being done without any meaningful underpinning even of the terms and conditions of people who are already in the industry.

Having said that, my main concern about the timing of this relates to the way in which it was written. It continues to provide for Scotland to be excluded from this measure because Scotland has always had its own agricultural wages board and still does. That means that it applies in England and Wales. Only last week, however, the Welsh Assembly passed legislation to establish a statutory body within Wales which would have the possibility of retaining the statutory force both of the substance and of the enforcement of the agricultural wages board. There would, therefore, be a new agricultural wages board for Wales.

Surely it would be more sensible to wait to introduce any consequential statutory instruments until it was clear how they would in theory apply to Wales—until it is clear how that new Welsh structure will evolve. The original proposition from Wales was that the legislation would not apply to Wales. They were, therefore, broadly content that the previous way in which the AWB had applied to the Welsh farming workforce would continue. However, we are now chipping away at that for workers in Wales as far as working time is concerned. That shows a serious disrespect for devolution, for the position of the Welsh Assembly and for the attitude that has been taken by the Welsh farming industry and the workers within it.

The timing—less than a week after Wales passed a clear indication that it did not want the changes to apply there—is, to say the least, unfortunate. I hope that the Minister will give us some guarantee that he has consulted with his Welsh colleagues and that this will not apply immediately to Wales, if it is still in the process of establishing its own statutory board as of 1 October.