An agricultural worker provided with a self-contained home as part of their job on the farm may automatically be considered to be residing in the property under an ‘assured agricultural occupancy’. Assured agricultural occupancies have many potential pitfalls from the point of view of an agricultural employer and so housing farm workers should be approached with care.
An assured agricultural occupant whose employment is terminated is not automatically required to leave the property upon the termination of their employment. If the worker fails to vacate the property willingly, the employer will need to go to Court, and the Court will decide whether the worker has to go. If the worker is still a serving farm worker, the employer may have to provide alternative accommodation. Additionally, the spouse, and in some circumstances another family member, of an assured agricultural occupant who dies during his or her occupancy will be automatically entitled to take over the occupation of the property.
For these reasons, and others, agricultural employers will often look to house their farm workers in ways that avoid the worker qualifying for the security of tenure provisions associated with an assured agricultural occupancy.
The simplest alternative option is to require the farm worker to enter into an assured shorthold tenancy agreement (known as an AST). AST’s are the most common form of tenancy in England and Wales. They ensure the tenant does not have security of tenure – at the expiration of the initial fixed term, the landlord is entitled to vacant possession of the property, provided the correct notice has been validly served. For agricultural employees however this may not be practical, given that rent must be paid for the tenancy to qualify as being an AST. Demanding a low rent can open up taxable benefit and minimum wage issues, so professional advice should always be obtained before entering into an AST with a lower than market-value rent.
The most common alternative is a service occupancy agreement. An employer may want to create a service occupancy if they require an employee to reside in a property owned by the employer, to allow the employee to perform his or her duties more effectively. For example a herdsman will often be required to live as close to the herd as possible to ensure he or she is able to quickly attend the livestock in an emergency.
A genuine service occupancy creates a licence and not a tenancy and so there is no question of the occupier acquiring security of tenure. The occupancy is tied to the employment – when the employment terminates, so does their right to occupy. However, there are strict legal rules in place that must be satisfied to successfully prove that a genuine service occupancy is in place. In most circumstances, the agreement needs to be properly recorded in the contract of employment. If these rules are not satisfied, it is likely that a farm worker will be able to argue that they are in fact an assured agricultural occupant – and that they have security of tenure. It is therefore essential that you seek legal advice before granting a service occupancy to a farm worker to ensure that you obtain the result you are seeking to achieve.
Stefania Fulford, a member of our Food and Farming sector, specialises in advising on these issues and is able to give tailored advice to your business with regard to housing employees in the most practical way for your business. For more information, contact Stefania by calling 01905 677057 or emailing firstname.lastname@example.org.