QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| THE QUEEN
-on the application of-
MIDDLEBROOK MUSHROOMS LIMITED
|- and -
|THE AGRICULTURAL WAGES BOARD OF ENGLAND AND WALES
James Goudie QC (instructed by Hextalls) for the Defendant
Hearing dates: 9 and 10 June 2004
Crown Copyright ©
STANLEY BURNTON J :
The proceedings in outline
(a) That minimum wage regulations are outside the ambit of P1A1.
(b) That mushroom growers are not discriminated against on the basis of any "status" to which Article 14 applies.
(c) That mushroom growers cannot point to an appropriate comparator in order to establish discrimination.
(d) That the differential treatment of mushroom growers and harvesters as compared with those of other crops is objectively justified and proportionate having regard to the social aims of the legislation and the 2003 Order.
Permission to amend and further evidence
The legislation and its requirements
"An order of the Board under any provision of this Act may apply either universally to all workers employed in agriculture in the county to which the order relates or to any special class of workers (as defined in the order) so employed, or to any special area in that county or to any such special class in such a special area, subject in each case to any exceptions specified in the order; and an order of the Board fixing or varying a minimum rate of wages so as to secure that workers employed in agriculture receive remuneration calculated by reference to periods during the currency of their employment may make alternative provisions applying according to different circumstances arising during the currency of a worker's employment or in connection with the termination thereof."
Middlebrook does not suggest that the Board could not have lawfully excluded mushroom pickers from a class of workers in respect of whose pay provision is made by an order, assuming the facts justified their exclusion.
"1. Where the Board propose to make an order under any provision of this Act, the Board shall-
a) give, in such manner as appears to the Board requisite for informing persons concerned, public notice of the proposed order and of the manner in which and the time (not being less than fourteen days from the date of the notice) within which objections to the proposals may be lodged;
(b) serve a like notice by post on the agricultural wages committee for the county to which the order relates;
and shall consider any objections to the proposals which may be lodged in accordance with the notice.
2. After considering any such objections the Board may make an order in accordance with their original proposals or with those proposals modified in such manner as appears to the Board expedient having regard to any objections lodged:
Provided that where it appears to the Board that, having regard to the nature of any modifications which they propose to make in their original proposals, opportunity should be given for the consideration thereof by persons concerned, the Board shall again give and serve notice under the preceding paragraph, and this paragraph shall apply accordingly.
3. Notwithstanding anything in the foregoing paragraphs of this schedule, where the Board are satisfied that on the ground of the limited application of a proposed order it is unnecessary to comply with the provisions of those paragraphs and certify accordingly, the Board may, instead of complying with those provisions, give notice of the proposed order in such manner as appears to the Board expedient in the circumstances, and may make the order at any time after the expiration of seven days from the giving of the notice.
4. As soon as may be after the Board have made an order under any provision of this Act they shall give public notice of the making of the order and of the contents thereof in such manner as appears to the Board requisite for informing persons concerned, and serve a like notice by post on the agricultural wages committee for the county to which the order relates.
5. [See above.]
6. … an order of the Board made under any provision of this Act may be varied or revoked by a subsequent order made in the like manner and subject to the like conditions."
The relevant provisions of the Order
"whose employment is wholly and exclusively for the purpose of undertaking the specific task of harvesting consumable produce (other than mushrooms) to the point where that consumable produce has reached a condition which will allow it to be stored prior to the first point of sale; and
who is not under such employment, employed by the same employer (whether under one or more contracts) for more than a total of 30 weeks (excluding holiday taken), in any Manual Harvest Work Period;
who is not:
- at the time when any such contract is entered into, or
- before the work under any such contract is completed, or
- before any such contract is otherwise terminated,
offered further employment by the employer and is not required by the employer to offer himself or herself for further employment."
"Manual Harvest Work Period" is defined, essentially, as "the period of twelve months which commences on the worker's first day of employment as a Manual Harvest Worker with his/her employer and thereafter each subsequent period of twelve months."
The exclusion of mushrooms: the background
The exclusion of mushrooms: events prior to the confirmation meeting of June 2003
"The manual harvesting of crops to the point where the crop concerned has reached a condition which will allow it to be stored prior to marketing.
Harvesting means manual severance of the crop from the land or plant on which it is growing. It would not include operations which are carried out in the field where harvesting occurs, riddling of potatoes, work in packing sheds and the like."
Mr Oatley commented:
"In our view this provides a clear cut off point for every commodity. There should be no doubts at all as to when employees will become entitled to the higher standard rate of pay. By definition almost all agricultural crops are seasonal and thus in every case there is an exact time when the harvesting of every crop ceases, with the exception of Mushrooms which are harvested all the year round and we shall comment upon this sector individually."
"We have made a specific study of this specialist non seasonal commodity. Mushroom pickers are employed throughout the year and whilst on some farms they may move from harvesting mushrooms to other work, in the great majority of cases the increasing demands placed upon mushroom pickers requires a total degree of specialization in that work and that work alone. Mushroom harvesting gangs by law rapidly become permanent workers, even if they are not employed in that capacity at inception. We have used as the basis of our study, mushroom harvest workers who are permanently engaged in that work.
We have analysed mushroom harvesting very closely. We find that this is very skilled and very specialist work, indeed far more skill is required than we have found to be necessary in the harvesting of any other crops. Hence mushrooms, uniquely, are harvested without continuous supervision. There is greater commitment in mushroom picking from employee and employer, which in turn increases the level of skill and eliminates the need for supervision. Pickers being year round employees, are trained and execute their job to skill and productivity levels not experienced in other crops because they are seasonal.
Mushroom harvesters must show levels of discipline and continuity and skill and commitment and training, that are not found in other crops. Mushroom harvesters are thus rewarded commensurate with their skills and in many cases are the subject of collective pay arrangements. They are a very different entity to those harvesting other horticultural crops."
"It was made quite clear to me by a "50" Club member of the NFU Employment Committee that "Mushrooms" were a sacred cow to the TGWU. I gathered that this was largely because they have collective agreements with some, if not all, growers. I was advised that this was the first and most adamant point TGWU raised in their firm objection to a "Manual Rate of Pay" … It was thus obvious if I could not find my way round mushrooms I would fall at the very first fence!
With some 60% of all other horticulturalist wages at stake it was really no contest, we were forced to distance ourselves from the harvesting of mushrooms in every way and have done so. As a result mushroom harvesting has been deliberately excluded from the new Manual Harvesting Rate of pay."
"I conclude that the nature and scope of mushroom pickers' work, viewed as a whole, excludes them from the harvest worker category."
Given the statements in the letter relating to mushroom pickers, Mr Hooper's conclusion was inevitable; but its correctness depended on the correctness of his instructions.
"3. The primary case for having such a definition is that the worker to be defined as a harvest worker
a. undertakes different work from the standard worker;
b. is less skilled than the standard worker and
c. is more transient in terms of engagement and thus with less commitment to the employer.
I now address the issues raised in my instructions dated 1 April.
The general definition of harvest worker; issue a
4. I do think that the proposed harvest worker definition is basically sound and robust. It addresses the four concerns raised in my previous advice. My primary residual concerns about the proposed definition are
a. Whether harvest workers are as clearly identifiable in practice as those proposing the definition contend;
b. That the current definition may give scope for a person who works the whole year round to be such a worker and thus not be of much help addressing the pro rata principle as defined under reg 1(2);
c. Whether there really is any such thing as wholly unskilled work, so that there may be some harvest workers (even outside of the special category of mushroom pickers) who do possess considerable skills;
d. Whether the commitment to the employer is as limited as suggested by the proponents of the harvest worker definition;
e. That there is still some ambiguity in respect of the person who one day may do harvest work and the next day standard work.
The proper resolution of these factual matters will be best known to members of the Agricultural Wages Board and I would suggest that the Board satisfies itself on each question before approving the harvest worker definition…"
"… clearly the paradigm case of a harvest worker is that of a person engaged for a particular season (or a shorter part thereof) but I understand that in the harvesting of tomatoes (as in mushrooms where special provisions will apply) the harvest is virtually all year round."
He suggested a maximum period of 30 weeks.
"The proposed definition put before the Board for consideration excluded the harvesting of mushrooms because it was understood that mushrooms were harvested throughout 52 weeks of the year. Therefore, mushroom workers would not fall within the proposed category of Harvest Worker which would only cover harvesting for up to 30 weeks in any successive 12 month period."
This reasoning does not explain why other crops, the harvesting of which takes place over a period exceeding 30 weeks, were included in the proposal.
"This labour, is almost exclusively foreign, has a high turnover and despite intensive training, harvesting rates remain low resulting in unit costs which cannot be sustained. … Underpinning these short-term workers at the same minimum level as full-time experienced workers cannot be justified or sustained by the industry and we thus find ourselves in exactly the same position as the rest of the fresh produce sector employing casual/short-term workers."
The letter pointed out that the acute seriousness of labour availability within the industry had been recognised by the Home Office, who had included the industry in the Sector Based Scheme ("SBS"), permitting employers to import workers from outside the European Union on fixed short-term contracts. It was pointed out that this scheme is similar in nature to the Seasonal Agricultural Workers Scheme, in that turnover of harvesters is high and long-term retention of the skilled picking workforce impossible. The letter concluded:
"The proposal as it stands is potentially highly discriminatory and we strongly urge the Board to reconsider the specific exclusion of the Mushroom Industry."
" We understand that a major factor leading to our exclusion was that our crops were not seasonal.
While this is true it is incorrect then to assume that our labour force was permanent.
The recruitment of suitable people to harvest mushrooms at the times and on the flexible basis we require continues to be a major problem.
To meet our requirements we have been forced to use workers from labour agencies.
By their very nature we have to suffer high turnover and lower than expected levels of productivity.
However, the ability to underpin their pay at the £4.30 level would improve our ability to meet the unit cost of harvesting that we need to achieve.
Therefore, we do not accept that there is a significant difference between our business and one that is seasonal. On the contrary we see significant similarities.
We are left to conclude that the mushroom industry has been used as a 'sacrificial lamb' to secure acceptance of the Manual Harvest Worker category."
"argued that the main issue was that mushroom workers were of a more seasonal type than previously. Farms were currently having to resort to agencies if they employed between 10 to 20 people. Approximately 80% of the workforce is now composed of agency workers. Of these, between 65 to 70% stay (less) than a year. The average length of stay is 3 to 9 months. Workers are mainly foreigners…. The Home Office approves mushrooms in its new sector-based scheme."
Mr Evans stated that mushroom pickers had been excluded from the MHW category because it was aimed at seasonal harvest workers, and permanent workers, such as mushroom pickers, were deliberately excluded. He accepted that the Board had not considered that the mushroom industry was increasingly reliant on seasonal workers.
" It is not possible for us to recruit sufficient local labour to harvest mushrooms.
As a result we have no option but to use agency workers.
The use of agency workers has brought its own problems including low productivity, high labour turnover in addition to the costs of training and communication.
The difficulties faced by this industry have been recognised by the Home Office by its inclusion of the industry in the Sector Based Scheme.
The Sector Based Scheme, which commenced on 30/05/03, permits the industry to use foreign labour on a temporary basis.
The potential benefit of this scheme will be diminished if such labour cannot be considered under the 'Manual Harvest Worker' category.
Prior to the significant use of agency workers our labour costs were 40% of our total costs. This has now increased to 50%.
The use of the 'Manual Harvest Worker' category is appropriate for the mushroom industry as most of our harvesting employees will be on a temporary contract under the Sector Based Scheme.
We understand that one argument for our exclusion was that our crop was not seasonal. Surely there are other crops that fall into this category? (e.g. lettuce, herbs, cut flowers, chicory.)"
The note added:
"On the face of it, the global exclusion of employers engaged in the harvesting of mushrooms fails to take into account of the fact that some if not all mushroom producers will have employees which satisfy the criteria for inclusion in the MHW category."
The position immediately before the Confirmation Meeting
The confirmation meeting
"What is the justification for excluding mushroom harvesting from the Manual Harvest Worker category?"
The form of the question was, I think, deliberately tendentious, and in my judgment rightly so. It is clear from the transcript of the meeting that Mr Webdale, a civil servant from Defra who is described in the minutes as "secretariat", Mr Shulman, the Board's legal adviser, and Mr Evans, were concerned whether the exclusion of mushrooms was justifiable, and that the Board should consider the issue properly and as required by the Act.
"4. The Secretary [Mr McInerney] stated that the Board had received a total of 22 responses of which 21 were from employers and 1 from an agricultural worker. Of the representations received from employers, 8 were from those engaged with the growing and picking of mushrooms, 4 were displeased in varying degrees that the mushroom sector had been excluded from the new category of Manual Harvest Worker while 4 companies gave full support to the proposals.
5. The Chairman reported that he and the Secretary had met with the Managing Director of Monaghan Mushrooms (Middlebrook's trading name) and circulated a paper setting out an account of that meeting. …
6. The Board discussed the representations made by the respondents to the proposals including those made by Monaghan Mushrooms. In particular it discussed the exclusion of the mushroom sector from the category of Manual Harvest Worker. Mr Webdale suggested that the Board consider whether in the light of the information provided by the mushroom growers, and Monaghan Mushrooms in particular, its view of the scope of the definition of Manual Harvest Worker was altered. He advised the Board that it needed to consider whether or not it was appropriate to exclude mushrooms as was initially proposed. Mr Fiddaman said that the employers' side had attempted a dialogue with the Mushroom Growers Association to see whether it was an issue which caused them any concern. They were informed that it was not because mushroom growing was a year-round activity. He suggested that the issue be looked at again in 2004. Mr Allenson referred to the meeting with John Bowers QC where the question of the exclusion of mushroom industry was raised. The Opinion of Mr Bowers was that the mushroom sector should be excluded from the category of Manual Harvest Worker. Dr Billot raised the point that during the negotiations the Board excluded the mushroom sector on the basis that it was not a harvest-type industry but rather a year-round one. The Chairman noted that there was a general consensus that the Board should not change the scope of the definition to encompass the mushroom sector. Mr Shulman advised the meeting that it was under a legal duty to consider objections in response to the proposals. If it wished to make no change to the definition it would need to establish that there was a valid distinction between the harvesting of mushrooms and other types of harvesting. Should it fail to do so it risked facing an application for judicial review. Mr Fiddaman proposed that the Working Party include further consideration of the mushroom sector within its remit when it monitors the introduction and operation of the Manual Harvest Worker category. This was agreed. The Board also agreed to the definition of Manual Harvest Worker unamended as the underlying rationale was to address field work during a restricted harvesting season."
"Last year, from memory, we had almost 800 letters of representation which ended up with about a 12 second discussion about them. Today, we have 22 and, as far as I recall, in four days of substantive negotiations, the mushroom industry was excluded at the very start of it on the basis that it was not a harvest-type industry; it was a 12-month around the clock industry. I think that everybody worked in good faith on that basis.
There is scant evidence in any of the few documents that have been handed in here to the contrary. I am not sure how one can even take this forward if there is a very different view. Ought it to be brought back to a different negotiation? It is a bit late in the day to even contemplate any of this issue on the basis of one company."
Quite apart from the startling description of the summary treatment of objections to the 2002 Order, the objection to the exclusion of mushroom pickers from the scope of the definition of MHWs was not limited to one company. Mr Evans corrected this misunderstanding, emphasising that objections had been received from "quite a number" of firms including the Mushroom Growers' Association, and stated, "We do need robust evidence in case we might be challenged on this." Mr Allenson spoke again:
"Can I say that we had the evidence that we had before. We have had this consultation. This particular meeting has drawn out some evidence. We are not absolutely sure at this stage whether evidence is in reality justifiable or not. From our perspective it is not. The previous situation still exists where mushroom growing is still very different to the categories that we were talking about before. In those circumstances, we would ask for those representations to be dealt with in that particular way. Quite clearly, this is just one meeting and one letter and we have had a very lengthy set of negotiations when many of these questions were already considered. Indeed, we referred to legal opinion."
It is troubling, if not inexplicable, to see that he reverted to the impression that there had been only one reasoned objection from a mushroom grower. I have seen nothing to suggest that he had any grounds for doubting the information put forward by the mushroom growers. The reference to a legal opinion was flawed, for the reason I have mentioned above. What was the "particular way" in which the representations should be dealt with is unclear, but was probably that they should be rejected for the purpose of the 2003 Order and considered by the working party appointed to monitor the working of the MHW category.
"The judicial review (threatened by Middlebrook) would consider the process of the decision which the Board had come to. There have been a number of representations by, or on behalf of, mushroom growers. They have put forward a number of points. I do think it would be prudent for the Board to consider those. They are duty-bound to consider those. If the Board is not to take on board those points, they would need, in my view, to record why those representations had been rejected."
"Like your fellow independent member, I think this is really dodgy ground. I have been a member of the Board for years and, rightly or wrongly, these meetings had become just a formality. Either they have some real substance or they do not. If we are saying that one representation is going to result in us having to do all sorts of things to justify our position, then that applies to all of them.
I notice that in the key issue, we do not even see any of the issues from the one letter which came from the farm worker. If we are going to do justice to representations, then we will have to do proper justice. We are going to need to set aside two or three days to go through all the letters and to answer all the points. It is inconceivable to me that if, as a result of this meeting, mushroom workers are subjected to the Manual Harvest Rate, there will be total uproar. I am not joking. I am not kidding you. There will be uproar from our side.
You have got to remember where we came from. We did not like what came out of these negotiations. We started them without yourselves, but with the NFU, with the issue of the Manual Harvest Worker. We agreed amongst ourselves that we would support the position that the NFU were at in a way to get over many of the problems that both sides could see in the industry. We were not very happy with it, but we agreed. Part of the deal, right from the start, was that mushroom workers were not included. If there is any chance of that changing, we should be saying that we reserve the right to have the whole of the negotiations again.
Please bear in mind that if we do go down that route, the easiest solution to the problem is to scrap the Manual Harvest Rate and to go back to the Starter Rate, which are two of the things that are asked for on here. Bear in mind that this is an absolute hotpot waiting to boil over."
"Can I support the proposals that you were making earlier, Chairman, and that is that we have considered the issue. We did, when we initially discussed this, recognise that the mushroom industry clearly was a 12-month production process. They admit that themselves anyway. It was on the basis that it was not seasonal and therefore was not particularly looking at peak opportunities where crops were at risk, which was why we were after a Manual Harvest Worker definition. These crops are at risk of harvesting because of the weather [conditions] and in the protected environment of mushrooms, they are not. I know that there are other sectors that are protected so one has to be cautious in how we raise that.
That was the issue on which we defined the Manual Harvest Worker. It was that those crops were at risk to be harvested. Mushrooms have a continual process and there was an indication certainly from the information that we were being given that the workers who were there to pick were less supervised than we would expect in most of the other manual harvesting conditions where there are quality standards which would require supervision from staff to achieve the necessary qualities required of the end produce. It was on that sort of basis that we recognised that the mushroom industry was different from the other areas that we were looking to try and support in the main harvest definition.
On the back of that, may I therefore suggest that as part of the Manual Worker Working Group, we actually look at the issue to see if this issue is real over the next 12 months. Therefore, we are not totally ignoring it, but we are prepared to consider if there are real issues over the points that we have used to actually justify why we picked it in the first place."
Other relevant facts
"There is (sic) certain to be different proficiencies between individual workers on the grounds of aptitude, dexterity, training and experience. This is true for harvesters of all horticultural crops."
Due consideration of the mushroom growers' objections and the lawfulness of the 2003 Order under domestic law
Article 14 of the European Convention on Human Rights and A1P1
"Protection of property
Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."
"The first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest…The three rules are not, however, 'distinct' in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule."
See, e.g., Case 38993/97 Stockholms Försäkrigns-Och Skadeståndsjuridik AB v Sweden, para 46.
"The majority of their Lordships accepted the test of 'substantial severability' and it was held that this could be achieved in the following two situations:
"(1) Where the text could be severed so that the valid part could operate independently of the invalid part, then the test of substantial severability would be satisfied when the valid part is unaffected by, and independent of, the invalid part.
(2) Where severance could only be effected by modifying the text, this can only be done "when the court is satisfied that it is effecting no change in the substantial purpose and effect of the impugned provision.""
What are the purpose and effect of the impugned provision is to be determined objectively, applying normal rules for its interpretation.