U-turn on holiday pay will save farmers £14m

The Agricultural Wages Board has reversed its decision to change the way farm workers’ holiday pay is calculated after the NFU threatened to take legal action.

At an emergency AWB meeting last Friday (13 October), the NFU argued that farmers would face an additional ₤14m wage bill unless proposals to include voluntary overtime in holiday pay calculations were dropped.

In addition to spiralling wage costs, the union argued that pressing ahead changes in holiday pay calculations would be a huge administrative burden for employers and would damage labour relations.

“This is excellent news for the industry,” said NFU employment spokesman Bob Fiddaman. “Getting the emergency meeting was a win for the NFU – successfully reversing the decision is a huge victory.”

Under previous regulations, farm workers’ holiday pay was based on their basic pay plus any guaranteed overtime. But the AWB had decided it should be based on basic pay plus any overtime over the previous 12 weeks – including any voluntary overtime.

Mr Fiddaman said: “The situation was not tenable. It would have discriminated between workers and between employers, made it difficult for employers to calculate what each of their workers is entitled to in holiday pay, and added significantly to wage costs.”

The AWB will now consult on its decision to drop the new calculation before holding a “confirmation meeting” on 10 November, after which the amended Agricultural Wages Order is expected to be brought into force.

Mr Fiddaman said he hoped “common sense would prevail” in the intervening period and that no holiday pay calculations would include voluntary overtime over the previous 12 weeks, as required by the wages order that came into force on 1 October.