Time to get compensation settled for tenant farmers

One of the longest-running disputes between landlords and tenant farmers took a marginal step toward conclusion this week in the Court of Session with a decision that the Scottish Government is liable to compensate a specific group of tenants.

The Scottish Government has been urged to engage in mediation with affected tenants. Picture: Ian Rutherford

The dispute goes back to the Agricultural Holdings Act of 2003 following which a number of tenants moved to a new type of lease. The legislation proved to be defective and a remedial order was passed in 2014 but by this time several tenants had been forced out of farming through the loss of security of tenure.

• READ MORE: Scottish tenant farmers face eviction due to ‘legal error’

The ruling this week by Lord Clark states that the government is liable to compensate the tenants “for loss directly arising from reasonable reliance upon defective legislation passed by it, which was then remedied by further legislation which interfered with the individuals’ rights”.

However he rejected the tenants’ claims based on the value of the tenancy, only accepting compensation should be paid in respect of specific losses directly sustained by the tenants who had acted in good faith on defective legislation plus something for “for frustration and inconvenience”.

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Because the case had been brought to establish the principle of whether or not the tenants were entitled to compensation, Lord Clark said he was not in a position to quantify the scale of the compensation, which would vary according to individual circumstances.

Scottish Tenant Farmers Association director Angus McCall said it was unfortunate Lord Clark made no mention of the unnecessary suffering caused by the mishandling of the mediation process which did not get under way until it was too late.

“If mediation had been available in the immediate aftermath of the remedial order, when it should have been, it is highly that, some landlords and tenants would been able to reach agreement, with the government stepping in to assist where agreement was not going to be forthcoming,” he said.

“The time must now be ripe for the Scottish Government and the affected tenants to engage in mediation and reach a mutually agreeable settlement which will take away the need to spend yet more time and money in litigation where the only beneficiaries will be the legal profession.

“Let’s settle the matter and let the victims of this long-running tragic saga get on with their lives.”

• Farmers and other employers should be aware of the added resources being injected by government into checking that workers know how much they are legally entitled to be paid.

Jamie Younger, of accountant Saffery Champness, said a recent increase in HMRC’s enforcement budget to £20 million would make more officers available to investigate national minimum wage complaints.

“HMRC can ask to see records to ensure that the correct levels are being paid, and has the powers to instigate criminal prosecutions or fines where they suspect that an employer is refusing or wilfully neglecting to pay staff at least equal to the National Minimum Wage, where proper records are not being kept, or where false entries have been made in records.”

In Scotland, the minimum wage payable to agricultural workers is set by the Scottish Agricultural Wages Board.

Younger urged all employers in the rural sector to be aware of the correct minimum wage levels and to ensure that their records were correct and up to date.

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