DairyCo

Pay and Incentives

Published 31 August 10

Minimum levels of pay in agriculture in England and Wales are defined by the Agricultural Wages Board. This is an independent body which also has powers for setting other terms and conditions of employment, such as levels of holiday entitlement or sick pay.  Similar organisations exist in Scotland and Northern Ireland.

The AWB publishes a legally-binding Order, in which several grades of pay are defined.  An employee's grade is dependent upon their levels of experience, responsibility and qualification.

There are essentially six grades of employee defined in the Order, with further categories for full time or part-time workers defined as flexible workers (who have signed a Flexible Working Agreement) and also for trainees and apprentices engaged on recognised training schemes. The grading system is very comprehensive but the essence of it is thus:

• The first initial grade defines workers who fall into none of the subsequent categories.
• The second grade of standard worker is a default category for most workers engaged in livestock farming.
• The third grade of lead worker holds a basic level of responsibility or basic level of vocational qualification.
• The fourth grade of craft worker holds a higher level of responsibility, vocational qualification or experience.
• The fifth supervisory grade defines a worker with day-to-day responsibility for instructing and supervising staff members, including responsibility for disciplinary issues.
• The sixth farm management grade defines a worker with management responsibilities including the dismissal of staff.

The Order also defines overtime and night work rates.

Further information on the Agricultural Wages Order in England and Wales can be found here.

In Scotland:

In Northern Ireland:

TARGET-DRIVEN PAY

It must be borne in mind that the AWB defines minimum levels of pay: a farmer may wish to pay more in order to encourage a better standard of candidate or to encourage an employee to remain.

Alternatively, in order to encourage good levels of productivity, an employer may offer a target-driven wage, where the minimum wage is supplemented by a performance-related bonus. On a dairy unit this bonus could be related to any number of factors, such as overall milk yield or yield per cow, or related to fertility, milk quality or hygiene results.

Target-driven pay will not suit all employers, employees or circumstances. It is only effective where the employee has significant independent control of factors in the enterprise enabling adequate influence over productivity.