§ Order for Second Reading read.
§ THE SECRETARY OF STATE FOR THE HOME DEPARTMENT (Mr. ASQUITH,) Fife, E., in moving the Second Reading of this Bill, said: I shall ask the House to approve of an attempt to settle, on lines which are broad and simple, a long-standing controversy, in the adjustment of which both the employers and the wage-earning classes are equally interested. The Employers' Liability Act of 1880 was avowedly a compromise. We have now had 12 years' experience of its working, and hardly a single Session has passed without some attempt to amend its provisions and to place the law on a more logical 1944 and satisfactory footing. I do not at all agree with many of the criticisms passed upon the Act of 1880. Under the circumstances of the time and the state of opinion prevailing when it was passed, it marked a distinct step in advance, for though its value has not been great, measured simply by the number of actions brought and the amount of damages recovered for injuries sustained, there can be no question that the Act has had a most important and far-reaching effect in bringing about compromises and settlements on a just awl equitable basis between employers and workmen, and still more in promoting and establishing mutual insurance schemes which have in many cases, at any rate, been productive of the best results. Butt the workmen of this country have exhibited a great and a growing dissatisfaction with the principle of common employment, which that Act only modifies and does not abolish; and it is round that question—the question of the expediency and the scope of the doctrine of common employment—that controversy really rages. I have to ask the House to hear with me for a moment or two while I trace in the fewest possible sentences the history of the question. At Common Law the employer is liable both in England and in Scotland to his servants for injuries caused to them by his own negligence, and, according to a recent decision of the House of Lords, that is not confined merely to responsibility on the part of the employer for what I may call personal carelessness; he is bound to exercise care in the providing of machinery, in the selecting of servants, and in adopting proper methods and systems in his operations. That state of the law was sufficient as long as industry was carried on in this country upon a small scale. The employer was in direct personal relations with the workman; and it was a comparatively easy thing to prove the negligence of the employer in the case of injuries sustained by a workman in the course of his employment. But as time advanced, the scale of industry changed, and, in particular, we saw the growth of those great industrial corporations by which so large a part of the trade of this country is now organised and carried on, and the larger the scale the more difficult it became for the individual workman, injured in the course of his employment, to bring home to the 1945 person from whom he received his wages personal knowledge and personal responsibility for the loss which he had sustained. The consequence was that it became necessary for the workmen to consider whether they might not invoke in their favour another principle of our law—the principle that a master or principal is responsible for the acts of his agents or servants in the course and within the scope of their duty. When the Courts came to decide that question they decided that the case of a servant was an exception to the general rule. In England, not until 1837, and inn Scotland, so far, at any rate, as the higher tribunals are concerned, not until 1868, was it decided that the ordinary rule which makes a master liable for the acts of his servant is excluded in cases where the injury is sustained by a fellow-servant in the ordinary course of employment. The Courts invented—for it can only be described as an invention—an implied contract on the part of the workman to take upon himself all the risks of his employment, and amongst those risks the negligence of his fellow-servants. That principle, haying been once laid down, was applied from the top to the bottom of the industrial scale, and it was held that a workman occupying the lowest position in a factory or mine could not recover damages from his employer for injury sustained by him through the negligence of a foreman or manager at the other end of the scale. The exception has been defended mainly, if not exclusively, upon the ground or policy, on the ground, that is to say, that if the ordinary rule were enforced in such cases in the Courts of Law, it would operate to cheek the development of industry and the investment of capital. But the labouring classes of the country, and a large body of employers also, have never assented to this fictitious doctrine, and as soon as it comes to be examined the objections to it are manifold and overwhelming. In the first place, no such contract is ever, in fact, entered into between an employer and his workmen. The Common Law of this country does not, as a rule, imply contracts which are not expressed. It goes upon the sound and sensible principle that when two parties enter into an agreement they must he taken to have meant what they say, and that it is not the business of Judges to decide what they ought to have meant but did not say. 1946 In the second place, the doctrine of common employment places the servant in a worse position, as between himself and the employer, than any stranger. On a railway, to take a familiar instance, if a train is run off the line through the ignorance, inattention, or want of skill of the engine-driver, there is not a passenger in the train injured by the accident who cannot recover full compensation from the company; but the stoker and the guard travelling in the train are excluded from any remedy, because they and the engine-driver happen to be servants of the same master. Again, the rule works very unequally as between different classes of employers. The small employer who carries on his operations on a limited scale, and who personally supervises the operations of his Factory or workshop, can be made liable, because it is possible to bring home responsibility directly to him owing to his personal supervision. On the other hand, a large employer or a rich and powerful corporation which delegates its authority or supervision to others escapes that liability. Further, as the scaled industry is from time to lime enlarging, and as we all know its tendency awl direction in modern times is to increase in the magnitude of its operations, the employer is further and further removed from the individual workman, and his responsibility is proportionately diminished. And, lastly, the doctrine of common employment removes a great safeguard for carefulness on the part of the employer, and operates as a distinct temptation to him to neglect those precautions which his duty to his servants as well as to the public prescribes that he ought to take. On these grounds it soon came to be felt that some modification must be made in the law, and it was plain that the modification must take one or other of two forms. You must either, on the one hand, abolish the rule which makes the employer responsible to third persons for the acts of his servants, or, on the other hand, you must repeal or largely qualify the doctrine of common employment. The first was regarded, and, I believe, always will be regarded, as too heroic a remedy, and accordingly this House in 1880, after some preliminary inquiries and some abortive attempts at legislation, passed the Employers' Liability Act, which does not abolish, but makes considerable 1947 and substantial inroads upon the doctrine of common employment. I may remind the House that the Act of 1880 cuts to the root of the defence of common employment in five specified cases, but leaving out the special provisions made in the Act as regards railways these cases may, in substance, be reduced to two. Under that Act the master is, in the first place, liable to his workmen for injuries caused by negligence, just as he would be liable for them to a stranger, if the injuries were caused by defects in the plant or machinery, due to the negligence of the persons entrusted with the duty of keeping such machinery in proper condition; and, in the next place, the master is liable for any injury caused to a servant by the negligence of a superior in the same employment entrusted by the toaster with the duty of superintendence or the power of giving orders. Almost as soon as that Act was passed, or as soon as there had been time to obtain experience of its working, it gave rise not only to much litigation, but to a very considerable agitation for an amendment of the law. In 1886 a Select Committee of this House was appointed, and the Committee, after taking evidence, recommended that the definition of superintendent and superintendence in the Act of 1880 should be repealed. Superintendent had been defined in that Act as one whose principal duties were superintendence, and who was not ordinarily engaged in manual labour. Nothing was done at once to carryout the recommendations of the Select Committee; but in 1888, and again in 1890, the late Government brought forward Bills dealing with the matter, and carrying out (in this respect) the recommendations of the Select Committee. In both Bills the employer was liable for the negligence of the person to whom he had delegated the superintendence over that work, or, as they were amended by the Grand Committee on Law, for the negligence of a foreman or person in the like position. My hon. Friend the Secretary to the Board of Trade (Mr. T. Burt), as representing the Trade Unions of the country, brought in year after year Bills of a more drastic character, proposing to abolish altogether the doctrine of common employment.
§ *MR. STUART WORTLEY (Sheffield, Hallam)He did not bring in any such Bill as that until 1888.
§ MR. ASQUITHThat may be. That, shortly stated, is the history of the question up to the present time. I will now call attention to the provisions of the present measure, so far as they relate to, the question I have been dealing with. The Bill proposes in the first clause, following, if not the terms, at any rate the substance of the measure introduced by my hon. Friend, to abolish altogether the doctrine of common employment. We think that the general rule of law that a toaster ought to be liable for the acts or omissions of his servants within the course of employment is a good rule, and that it is a rule which can be applied on the same grounds of justice and expediency in the case of a workman as in the case of a stranger. We do not think that this fictitious contract, by which a workman is supposed on entering into service of an employer to abandon once and for all, and without any substantial consideration, the right which any third person would possess against that employer, is a contract which has any foundation in fact or any justification in policy. Experience has shown it to be impossible to draw any satisfactory line between the different classes of servants in the employment of a single master; and the negligence which results in injury to a workman is negligence for which the master ought to be equally responsible, whether the servant from whose act that negligence arises is a servant in a higher or a lower grade of employment. To, state the matter shortly, the principle on which our Bill is founded is this: where a person on his own responsibility, and for his own profit, sets in motion agencies which create risk for others, he ought to be civilly responsible for the consequences of what he does. It will be asked, are there any limitations proposed by the Government upon the obligations which we propose to cast on the employer? In the first place, it will undoubtedly be open to au employer, if this Bill passes. into law, just as it is, open to him now, to raise the defence of contributory negligence—that the workman, by his own act or omission, is a. contributory cause to the injury he sustained. If without that act or omission either the accident would not have occurred or would not have been attended with the injurious consequences which 1949 followed it, then it would not be fair, and the law would not;Wow, that the master should be held liable. But there is another defence which is sometimes raised to actions of this kind—the defence of "acquiescence," which is commonly expressed in the somewhat bar-barons legal maxim, volenti non fit injuria. A short time ago, in a case well known to lawyers—"Thomas v. Quartermain"—it was held by the Court of Appeal in this country that the continuance by a workman in the service of his employer, with a knowledge of defective plant or machinery involving risk, was evidence of voluntary acquiescence on the part of that servant in that state of things, and, therefore, disentitled him to recover damages for an injury arising from such defect. That decision produced a certain amount of consternation among the workmen, and it has been followed by a succession of cases in which an almost scholastic subtlety has been exhibited—if one may say so with out disrespect—by Her Majesty's Judges in ringing the changes upon the words volens and sciens; and in drawing an almost imperceptible line of demarcation between that amount of knowledge which constitutes evidence of acquiescence and that amount of knowledge from which no such inference could be drawn. I am glad to say, however, that in a recent case —"Smith v. Baker"—the House of Lords has brushed away, to a considerable extent, the cobwebs spun over this principle. That case decided, and all the Courts in this country will now regard it to be the law, that mere continuance upon the part of the servant in his employment, with knowledge of a defect in plant or machinery or the arrangements under which the employment is carried on, is not to be regarded as evidence that he has acquiesced in that dangerous state of things, and is not to prevent him from recovering from his employer in the event of subsequent injury. That being the state of the law, we have not deemed it necessary to insert any express provision in the Bill; but we have thought it necessary, by way of a proviso in the first section, to re-enact a clause, which is found in the Act of 1880, to this effect—that where the workman knows of the defect, and where, having the opportunity of bringing it to the notice of his em- 1950 ployer or some person superior to himself in that employment, he fails to do so, he ought to be regarded as not in a position to make the employer responsible. But that is subject to this exception—the omission of the workman to give notice to the employer is not to disentitle him to recover, if he knows that the employer is aware of the detect.
§ MR. ASQUITHYes, that is so.
§ MR. J. CHAMBERLAIN (Birmingham, W.)Will the right hon. Gentleman quote the words in the Act which refer to the knowledge of the employer—which state that if the employer know of the defect the workman is not responsible to report?
§ MR. ASQUITHI was quoting the words of the Act of 1880. The hon. Gentleman opposite has pointed out that the words "without reasonable excuse" have been substituted by us. I pass from that to the second question involved in this controversy, and which, I think, has perhaps given rise to as much feeling on the part of the workmen and to as strong a desire for a change in the law as the doctrine of common employment itself—it is the question whether, and within what limits, the workman ought to be permitted to contract himself out of the Act? The Act of 1880 did not forbid such contracts, and the Courts of Law decided that a contract whereby, for a good consideration, the workman relinquished his right to recover by the statutory remedy of the Act of 1880 was a valid contract, and could be enforced. The Select Committee of 1886, and the Bills introduced by the lute Government in 1888 and 1890, adopted a, middle course. They did not absolutely forbid a contract whereby this statutory right is taken away; but, on the other hand, they did not permit a contract under all circumstances, and for all purposes, and upon any terms by which that statutory right is abandoned. It was the recommendation of that Committee, and it was proposed in these Bills, that such contracts should not be valid unless some adequate consideration on the part of the employer were shown for the relinquishment by the workman of his statutory right. That consideration was defined, in some of these proposals at any rate, as 1951 being the contribution on the part of the employer to an insurance final. Very great difficulties arise, which must be apparent on a moment's consideration, in the interpretation and carrying out of such a provision as that. Who is to judge whether the consideration given by the employer is adequate or not? One proposal was that a Government Department—the Secretary of State or the President of the Board of Trade—should have the power to approve, as it were, in advance of contracts submitted to them on the part or employers and workmen, and to say that in their judgment such contracts were reasonable; and that the certificate of that Department should in any legal proceedings thereafter be considered conclusive evidence that the requirements of the Statute had been complied with. I do not hesitate to say that no Government Department possesses the knowledge or the machinery for discharging such duty; and it is impossible, in advance and without knowledge of the facts, upon a mere general survey of the conditions of a particular industry, for any Department, however intelligently officered, to give a judgment which would be satisfactory either to the persons concerned or to the public. The other proposal was that the question should be raised at the trial of the action in the Court which ultimately determined the workman's right to recover. That proposal is as objectionable as the other. No Court of Law, any more than a Government Deportment, has the requisite knowledge or the requisite power to determine whether a particular form of contract is reasonable, having regard to the infinitely complex conditions which regulate the relations between employers and workmen. There is no mode by which you can decide the question whether die contract was reasonable or not, or whether the consideration was adequate or insufficient, until you have actual litigation, and until the matter comes in to Court. The great object, in my judgment, of legislation of this kind should be on the one side to define clearly the statutory rights of employer and workmen, and on the other side, as far as possible, to prevent litigation. Well, Sir, so much for what I have called the middle course. Let me now ask the House, before I proceed to explain and vindicate the 1952 course the Government propose to adopt, to inquire how far workmen have, in fact, availed themselves of the Act of 1880. The investigation of the figures, which fluctuate considerably from year to year, shows that upon an average the amounts involved in the cases brought under the Act vary from £30,000 to £50,000 per annum.
§ MR. ASQUITHI am speaking of England alone. The amount actually recovered in the shape of damages in Court, speaking of a period of live or six years, if not longer, averages no more than £8,000 a year.
§ MR. JACKSON (Leeds, N.)That does not include private arrangements.
§ MR. ASQUITHI am speaking only of the amounts recovered in Court. I was going to mention that we had no figures whatever to show how many claims are actually made against employers and settled without litigation. I am not for a moment saying that the utility of the Act, or the extent to which people have taken advantage of it, is to be measured by these figures. No doubt a vast number of notices given under the Act are dealt with amicably without litigation.
§ MR. KNOWLES (Salford, W.)Do the figures given include the compromises?
§ MR. ASQUITHThe figures respecting the claims are taken from the plaints brought in the different county Courts and amount, as I have said, to from £:30,000 to £50,000. No doubt there would be a considerable number of compromises. I think the House will agree with me that the comparative smallness or these figures may be partly accounted for, first by the willingness of employers to settle without waiting for an action to be brought; secondly, by the fact that many compromises are effected in actions which are never brought into Court; and, thirdly, by the number of contracts entered into by workmen on going into the service of their employer—contracts whereby they relinquish their rights altogether under the Act. There is a fourth point, which I have not a shadow of doubt has a most deterrent effect in the use the working classes have made of this statutory remedy; I refer to the gross and indefensible technicalities which 1953 surround this action in the Courts. It is no exaggeration to say that au action under this Act in its present form consists of a series of pitfalls, into which the most wary may not infrequently fall. Then I come to the extent to which the power of contracting out of the Act has been taken advantage of. As a rule, the consideration for the contract has been an agreement by the employer to contribute to a mutual insurance fund. These insurance funds indemnify the persons insured in them, not only against accidents due to neglect, but against accidents arising from whatever cause. The evidence is very scanty, and I can only give the figures I have been able to ascertain. I take, first of all, the great industry of mining. The miners of England, at any rate, have as a rule not contracted themselves out of the Employers' Liability Act. The body called the Miners' National Association, which I am told has something like 200,000 members, objects to such contracts being made by its members. In Durham and Northumberland, where there are something like 100,000 miners, I am told that none have contracted themselves out of the Act. The men there have a Relief Society. The masters, as a rule, do not contribute to that society, but have a mutual insurance fund of their own. In Yorkshire again, where there are 60,000 miners, there is, as a rule, no contracting out of the Act; but, on the other hand, in Lancashire, and still more in South Wales, the practice among miners of contracting out of the Act is extremely common. In South Wales that may be due to the fact that the employers contribute as large a proportion as 25 per cent. of the miners' contribution to the Provident Societies in which the miners insure. I am told that something like one-half of the miners in South Wales contract themselves out of the Act. If we turn to the Railway Companies, we have among the great companies one remarkable instance in Which not only do men contract themselves out of the Act, but such contracting is made a necessary condition of their employment. I refer to vie London and North-Western Railway Company, which employs over. 50,000 men. The contribution of the Company to the insurance fund is on an extremely liberal scale indeed, amounting, as I am informed, to five- 1954 sixths of the men's contributions. It is not, therefore, to be wondered at that the men, who are undoubtedly in a better condition in 99 cases out of 100 when they rely upon the insurance fund than they would he if they brought an action at law, agree to the stipulation which the Railway Company insist upon. I do not go to other trades, as to which such information as I could give to the House would be both meagre and untrustworthy; but the general result of my inquiries, and such inquiries as have been made by the various Committees and by the Royal Commission on Labour, appears to me to be this: that there is a widespread objection on the part of the men to contract themselves omit of the Act, notwithstanding the superior chance Of compensation which, where the insurance fund is liberally contributed to by the employer, the men would possess if they id so. The cases in which employers have insisted as a condition of entering their service that their men should abandon, their statutory right are also comparatively rare. The conclusion which the Government have come to en a review both of these facts and of the general considerations of policy affecting the case is this: that for the future a general prospective agreement by which a workman contracts himself out of his statutory rights ought to be prohibited. I do not myself attach very great importance, to the language sometimes used about men being coerced into contracts against their will. I think that possibly that language sometimes savours of exaggeration. At the same time, I have not the least doubt—the experience of many of my hon. Friends will bear me out in this matter—that there are cases in which the men are not free agents, and in which advantage is taken, I will not say with improper motives, of the comparatively superior position the employers enjoy to persuade them to enter into a bargain from which otherwise they would shrink. But I confess I think that if the House believes that the right and the remedy given by the Act ale required upon the ground of justice and piddle policy, we shall be only acting in accordance with the spirit and method of our legislation for many years past if we make the right inalienable and indefeasible. I entirely agree that, where Parliament confers on all individual or 1955 class a particular pecuniary benefit for their own interest alone, there is much to be said for giving them, at the same time, for good consideration the right of abandoning that which has been conferred upon them. But there appears to me to be a broad line of distinction between cases of ant kind and cases where the Legislature interferes in the public interest and upon grounds of public safety and public policy. Where on such grounds Parliament has declared that a certain obligation should exist, I think it ought not to be placed in the power of individuals by a private bargain between themselves to destroy in a particular case a safeguard which Parliament has enacted, not in their interests alone, but in the interest of the community. In our view, this is a case which comes within that category. While we prohibit any contract whereby a workman prospectively relinquishes his right under the Act, at the same time we are fully sensible of the importance of not doing anything to discourage the growth of those insurance funds to which I have referred, or to remove the inducement to the employer to contribute to them. For it must be observed that such funds can be resorted to in most cases, whatever be the cause of the accident; so that the workman can receive his share out of the fund without there being any necessity for a particular inquiry into the circumstances of the case—there is no need for what may prove an elaborate and costly investigation into the causes of the accident, and thereby delay and expense are saved. In the case of many of these funds the sum payable to the injured workman is considerably more generous, besides being far more promptly paid, than any damages he could recover in an action. While, therefore, we forbid the workman from prospectively abandoning the statutory right once for all, we permit, in those cases where there is a fund to which workman and employer have contributed, the workman either to resort to the fund or to bring his action. We permit him to take his choice. [Opposition laughter.] I should like to hear what hon. Members have to say against this proposal. We are going at least as far as justice requires in protecting the interests of the employer. As I have said, the workman may take his choice; he may pursue his 1956 remedy under the Act, if he pleases. If he does so, it is only fair and right that the employer should be entitled to be indemnified as far as possible out of the fund to which he, as well as the workman, has contributed. Here I ought to point out that there has been an error of omission in drawing the 3rd clause—an error for which I am afraid I am responsible. The limiting words have been omitted, and the employer will be entitled to be indemnified out of the fund to the extent of the damages recovered.
§ MR. KNOWLESWill he be entitled to costs out of the fund?
§ MR. ASQUITHThat is a question which, in my judgment, does not admit of a categorical answer. It might very likely happen that actions were most unjustifiably defended, and where the costs to which the workman was put in pursuance of his statutory remedy were not reasonably incurred. It is, I think, open to consideration whether the employer is to be indemnified to that extent. However, that is a matter I shall be very happy to discuss on the Committee stage. This brings me to say one or two words with reference to an Amendment which the right hon. Gentleman the Member for West (Mr. Chamberlain) has put on the Paper. My right hon. Friend asks the House to assert—
That no amendment of the Law relating to Employers' Liability will be final or satisfactory which does not provide compensation to workmen for all injuries sustained in the ordinary course of their employment, and not caused by their own acts or default.The hon. Member for Aberdeen (Mr. Hunter), with a more severely logically mind, proposes to omit from my right hon. Friend's Amendment the concluding words, and asks the House to declare that no amendment of the law will be final or satisfactory which does not provide compensation to workmen for all injuries sustained in the ordinary course of their employment, whatever the cause. In whichever of the two forms this proposal is ultimately presented to the House its effect, if adopted, would be to substitute for the law of employers' liability, a law of industrial insurance. It is obvious that if the employer is to be made liable to workmen for all injuries sustained in the course of their employment, whether due to neglect of the employer or any other cause, he must pro- 1957 tect himself by insurance, and that it is only by a system of universal industrial insurance that such a proposal could be made consistent with justice. Therefore, the right hon. Gentleman's Amendment comes to this—I do not know whether he is going to press it to a Division; but if he does press it to a Division, he is asking the House to reject this Bill—that is to say, to postpone giving to the workmen of this country two amendments of the law upon which they are all united, and in support of which they have behind them a vast and preponderating body of public opinion until in course of time—it may be five or ten years hence—some statesman of ingenuity has succeeded in devising a system of industrial insurance. So far as my memory serves me, my right hon. Friend did not raise this question either by way of amendment to the Second Reading or in Committee to the extremely mild and tentative measure brought forward in 1888. It is only now, when we are abolishing the doctrine of common employment, when we are prohibiting contracting out of the Act, and are giving something substantial and practical to the working classes of this country, that toy right hon. Friend intervenes with his dilatory proposal. Why, if my memory serves me again, I seem to bear in mind how my right hon. Friend denounced the Parliamentary Secretary to the Board of Trade, and certainly Mr. Broadhurst, for having insisted upon the abolition of the doctrine of common employment, and so defeating the beneficent scheme of the late Government in relation to this subject. But my objection to this proposal does not take the form of au argumentum ad hominem. I am not prepared to deny that in the last resort the ultimate remedy for the deplorable liability of our industrial population to injury front accidents for which they themselves are not responsible will be found in some system of insurance. I think very probably that may turn out to be the case, but I must point,out—and I trust my right hon. Friend when he comes to move his Amendment will not fail to deal with this point—that while a general system of insurance against accidents of all kinds has a great many things to recommend it, yet it has this great drawback: that it affords no security and no incentive for the exercise 1958 of care on the part of the employer. A system of industrial insurance, unless it is supplemented and safeguarded by an ancillary law making the employer liable—I do not say whether by criminal or civil proceedings—for accidents due to his own negligence, would be rather a retrograde than a progressive measure. Again, I must point out that this matter of industrial insurance, as a remedy for the evils with which we have to deal, is one upon which the evidence is extremely scanty and conflicting. There is one great European country—the Empire of Germany—in which for the last nine years such a system has been in force.
§ MR. ASQUITHYes, in Austria also it is in force, but I am referring more particularly to Germany. Germany the law applies, as I understand it, only to industries declared to be dangerous—that is to say, that involve some risk in their ordinary operations. But undoubtedly it includes something like 10,000,000 of the labouring population. The German law applies to all accidents of any kind. There is no contracting out of it on the part either of workman or employer. The compensation payable is according to a tariff—a fixed tariff with a prescribed scale varying according to wages and the degree of disablement received. And lastly, all employers in a particular trade are compulsorily rated under this law to a Mutual Insurance Fund in proportion to the amount of wages paid by them to their workmen. That in outline is the system that prevails in Germany. The financial effect of that system is extremely doubtful, and some of its most intelligent critics believe that, from an actuarial point of view, it is in an extremely unsound position. It involves an amount of official interference upon the part of the State—Inspectors, Registrars, and clerks—that I do not think either the employers or workmen of this country could be readily brought to tolerate. It is exposed to all manner of difficulties where, as is often the case, the industrial population is of migratory habits. A workman may be for six months in the service of a particular employer; he may then go for three months into the service of another employer, 1959 and he may then go into the service of a third employer, and the difficulty of tracing him from one employer to another, and of finding out which employer is liable, is very considerable. The experience gained by this system, so far as it has yet been in operation, is certainly not of such a kind that any responsible politician would venture to embody it, in a Bill which he would ask this House to adopt. Therefore, I say the choice, so fur as the Amendment on the Paper is concerned, lies between adopting a plan which is practicable, which can come into operation at once, which would give the workmen the two remedies they desire, and expressing, on the other hand, an academic opinion in favour of a general system of industrial insurance, which nobody is prepared to put down upon paper, and which cannot come into operation for years to come. Under the circumstances, I do not think the House can hesitate as to what course to adopt. I will not detain the House more than a minute or two longer. There are only one or two subsidiary points to mention to complete my account of the measure as to the class of persons to whom it will apply. The Bill will be found to contain a new detinition—though the difference is not very substantial—of the word "workman," new as compared with the Act of 1880, but not substantially different from the definition in the Bills of the late Government. The difference is in the definition of the word "seamen." We have included seamen in British ships. I am aware that is a proposal which will give rise to considerable difference of opinion and some hostility on the part of ship owners. For my own part, I do not see that the liability which the Bill will impose upon ship owners is substantially different from, or greater than, that which will be imposed by this Bill on mine owners and persons in a similar position, or that the argument which is used that, a ship is often at a distance from an owner and from his control is an argument that is of much weight now with the largely-extended means of telegraphic communication. Nor can I in the least degree admit that the liability of the shipowner ought to be confined, as in the proposal of the late Government, to the defects of a ship at, the time when she leaves a British port. Take a simple but 1960 at the same time a common case. A ship is sent from here to Australia, and while she is in the Port of Sydney she takes on board a return cargo, and the master discharges some of the old hands and takes on new ones. If the ship starts from that port in a defective state of equipment, due to the negligence of the master or the failure to take proper precautions in the selection of the crew, I say the shipowner ought to be made liable for the injuries which thereby occur to any of the men on board. I shall be prepared in Committee to receive any suggestions that shipowners may wish to make to the Government on the subject. If they can satisfy us that by the Bill we are going substantially beyond that which justice or policy requires, we shall do our best to meet all reasonable objections. Now, Sir, lastly I will call attention to the great changes the Bill makes in the procedure for the recovery of damages. It abolishes notice of injury as a condition precedent to an action; it abolishes the limit of time within which under the old law an action could be brought; it abolishes the limitation of the amount of Wattages that may be recovered; in short, it assimilates an action in all respects to an ordinary County Court action; and it gives the right to bring an action in the County Court, and providing the damages claimed do not exceed £100, there is no power to remove it elsewhere. I notice indications of opinion that the figure named is too low, and I shall be happy to entertain suggestions that hon. Members may make, provided it turns out that the figure can be properly raised. I have explained to the House, necessarily I fear, at some length the provisions of this Bill. I have only to say, in concluding my remarks, that in the view of the Government the Bill contains three vital principles: The first is, that it abolishes the doctrine of common employment; the second is, that it prohibits contracts by a workman renouncing his statutory rights; and, thirdly, it simplifies the procedure by means of which the workman Call seek his statutory remedy. These are vital principles. The other provisions are more or less matters of detail on which we hope to arrive at a common agreement in all parts of the House, and so to reach the satisfactory solution of a question which, I hope, is now removed beyond the range of Party controversy, 1961 and in the settlement of which all Parties are equally interested. I move the Second Reading of the Bill.
§ Motion made, anti Question proposed, "That the Bill be now read a second time."—(Mr. Asquith.)
§ MR. J. CHAMBERLAINrose to move the following Amendment, which he had placed on the Paper:—
That no amendment of the Law relating to Employers' Liability will be final or satisfactory which does nut provide compensation to workmen for all injuries sustained in the ordinary course of their employment, and not caused by their own acts or default.
§ MR KNOX (Cavan, W.)I wish, Mr. Speaker, to ask you a question on a point of Order. It is this: Whether the Amendment of the right hon. Gentleman can he moved on the present stage of the Bill? An Amendment on a Second Reading would, in the ordinary course, if carried, be fatal to the principle of a Bill, and I venture respectfully to ask whether, as the object which the right hon. Gentleman wishes to attain can be achieved by an Amendment moved in Committee, that is not the proper course to adopt?
§ *MR. SPEAKERI see no objection to the Amendment, on the Paper. The right hon. Gentleman must take the responsibility of it.
§ *THE ATTORNEY GENERAL (Sir CHARLES RUSSELL,) Hackney, S.I should like, as a point of Order in this connection, to ask you, Mr. Speaker, whether, if this Amendment be carried, it does not prevent the Second Reading of the Bill?
§ MR. SPEAKEROf course, it traverses the Second Reading of the Bill.
§ MR. J. CHAMBERLAINI think the House is very much indebted to my right hon. Friend for his lucid exposition of the principles of the and also for his explanations of the objections to the present state of the law which have induced the Government to bring in the Bill. My right hon. Friend would hardly have been himself if he had not, in referring to me, made use of the argumentum ad hominem. As he himself has said, he does not rely upon it in criticism; and as I imagine toy conduct is not before the House, I also, I think, may pass it by. He is curious to know whether I propose to carry this Amend- 1962 ment to a Division. And my right Friend below me is anxious to know what the effect of my doing so would be if I were to secure a majority of the House. I will tell my right hon. Friend why I put the Amendment down, put down the Amendment chiefly with a view of explaining to the house an alternative proposal which I think would more satisfactorily settle the question. Whether I carry it to a Division or not depends, in some part, upon the course of the Debate. If my right hon. Friend is prepared to say that when this Bill goes into Committee he will give impartial consideration to any Amendment to carry out the views which have put on the Paper, then I agree that it would be better to reserve any Division to that period of the Debate. It be says that the Government hold it to be a vital part of their proposal that, any Amendment of that kind should be resisted at any stage of die Rill, then, its the object of a. Division would be to put on record the names of hon. Gentlemen in recording their opinions on this matter, it might, perhaps, be convenient to the house to take a Division at this stage. There are questions raised this House where there is no hope of taking away the majority of the House, and no one expects, in these circumstances, to be successful in a Division to reduce the normal majority of the Party that proposes the measure. At the same time, in many of these cases it is desirable and interesting, as a matter of record, to have the names of hon. Members on both sides who are in favour or who are against the proposition; and I imagine that this is not, as the right hon. Gentleman has told us, a Party question. I, therefore, can imagine that on all sides of the House there might be some division of opinion in reference to these matters. The right hon. Gentleman said that my Amendment was in reality a proposal to substitute industrial assurance for employers' liability. I do not entirely accept Ids language. In the first place. I do not call mine a proposal for industrial assurance. I may here state that one of the serious objections which applied to the difficulty of raising contributions from the workmen of the migratory class does Hot apply in the least to my proposal. I proposed that the compensation to which they are entitled should be 1963 paid to them through the channel of the employer without their making any contribution to the same themselves. Therefore, that objection does not apply, and the words "industrial assurance" do not quite correctly express my meaning. I should prefer "industrial compensation." I am not proposing to substitute anything for employers' liability; I am adding. industrial compensation to employers' liability. I object to the proposal of the Government on this ground: that it is not a proposal which would settle on lines broad and simple a long-standing controversy, and would place the law on a logical footing. That is precisely what the proposal does not do. It neither settles a long-standing controversy, nor does it putt the law en a logical footing. In the present law there are many anomalies; and a new law would only add a new crop of anomalies and give rise to difficulties more serious than any we have had to deal with. That is my position, which I shall endeavour to prove to the House. There are two principles in connection with the subject which may be put in operation concurrently, or which nutty be treated separately. They are: This principle of employers' liability—that is to say, the principle of the responsibility of employers for accidents which are directly or indirectly due to their own misconduct or neglect. That is the principle of the existing law. Under the existing law, if an accident occurs either owing to the direct neglect or lashes of the employer, owing to the faults of machinery of which he ought to have been aware, owing to misconduct or neglect of superintendence, the employer is held to be liable, and is, as it were, penalised for the consequences of his misconduct. But in the case of the present law what I may call the moral liability of the employer is the same as his legal liability. That is the principle of the law, and it is, to my mind, a perfectly logical and consistent principle. The Bill goes beyond that; and for the first time it proposes to make an employer liable in cases in which no one can say that he has any moral liability. He is to be legally liable in pocket for matters over which he cannot possibly exercise any practical control. Take one or two cases. The simplest case is that of an accident in a mine Under existing circumstances, if an accident in a mine 1964 takes place owing to defects in the ventilation which the employer ought to have prevented, he is liable for all the consequences of those defects; but in the Bill, if an explosion were to take place in a mine owing to the stupidity or misconduct, of a workman who had struck it light in a place where was an outlet of gas, and by that carelessness 200 or 300 workmen were killed or injured, the employer would be pecuniarly liable to the representatives of these men. You have entered on a new principle. You are no longer punishing an employer for a matter in which he is morally liable, but you are fining him in order to provide compensation in the case of deaths or injury of people where he has had no moral liability whatever. Take, again, the case of a ship at sea. You may easily suppose accidents which are distinctly due to the misconduct of the employer. He may have overloaded his ship, and sent her to the bottom as completely as if he had scuttled her in the deep sea, or he may not have taken proper care to have proper rigging. In all these cases by all means penalise the employer for his misconduct. But suppose when at sea a sailor who has gone up the rigging lets a pulley drop on the head of a sailor below, can it be pretended that the shipowner, perhaps thousands of miles away, is in any sense, directly or indirectly, answerable for the conduct of that sailor who lets the pulley drop on the head of his fellow sailor? That, again, is an illustration in which undoubtedly you have given up all idea of moral liability. I might put as a third case that of an engine-driver on the railway, who starts his engine while his mate is oiling the wheel. His mate is injured; you can hardly say that there was carelessness on the part of the engine-driver; the accident might have been purely accidental; but, in any circumstances, you cannot pretend that that accident was due to the fault of the Railway Company or that they ought to be held morally responsible for the consequences. Therefore, I say if you adopt the principle of the Bill you give up the idea of moral responsibility, and you take the ground of expediency. You say that when a luau is injured it is right that he should have compensation, and you are making the employer the channel for the payment of that compensation. That is my principle; but 1965 that is not adopted in its entirety by the right hon. Gentleman, becauses he only uses the employer for the purpose of paying compensation in those cases in which a fellow-workman is the cause of the injury, and thereby he leaves untouched more than a half of the whole of the accidents which occur in the United Kingdom. For my part, in this matter the persons whom the House ought to think are the injured persons are the family of the person who is injured or killed; and I do hold it to be the moral obligation of the House to provide in every such case that these persons should be compensated as far as pecuniary compensation can be afforded. That does not touch my equal conviction that you should maintain and preserve and, if necessary, extend and render more stringent, all those provisions of the law which are necessary to make the employer properly careful in all matters that are within his proper obligations. Therefore, do not let it be said that in proposing to extend this Bill I have the slightest idea of putting forward universal compensation for accidents. Wherever you can show that an employer is morally liable, by all means penalize him. I say that this Bill is incomplete, as it deals only with the minority of the questions with which we have to grapple. I am afraid that in this country we have no satisfactory statistics dealing with the subject, but the German official statistics are exceedingly complete, and, dealing as they do with an enormous mass of trade, they may be relied upon as accurate. According to the German statistics, of all the accidents that take place in all trades subject to the German law, 19.26 per cent.—that is, only 20 per cent.—are held to be due to the conduct or neglect of the employers; 7.73 per cent. are partly due to the conduct of the workmen and employers—that is, the statistics are unable to separate them accurately as between the two; 25.64 per cent. are entirely due to the fault of workmen; and that leaves 43.40 per cent., which I can only describe as accidents due to what we call the acts of God—that is, accidents which cannot be attributed to the personal action of workmen or employers. That leaves 3 per cent. unaccounted for. It follows from this that if you are able by law, as my right hon. Friend desires to do, to protect persons 1966 suffering from accidents caused by the employer's conduct or that of fellow-workmen, you would still leave over 40 per cent. absolutely unprovided for. Let me take the case of a mine explosion, which is probably caused either by the carelessness of the employer or the negligence of the workmen; but there are many other accidents in mines which cannot be attributed to any personal intervention. There are occasionally falls of roof, which are as unaccountable as an earthquake itself. I will next take the case of losses at sea, in which I have a special and rather exceptional interest. It is hardly ever possible to say the cause of a ship's foundering. You may attribute it to the misconduct of the employer or to carelessness on the part of the seamen or officers of the ship, but hardly in any case have you evidence to go upon, and in a great many cases it may be fairly assumed that the foundering, took place under circumstances which are practically beyond human control. These are among some of the most distressing of the cases that occur, and yet these are eases which are to be wholly unprovided for by this Bill. I would take the ordinary case of a factory boiler explosion. There is almost always an inquiry, and I am sure the President of the Board of Trade will bear me out that in the vast number of cases no explanation is given. In a great many cases it remains a mystery to the end of time how the explosion occurred. The present law provides for 20 per cent—that is, one-fifth of the total accidents which take place. The new law proposes to provide for one-third of the total—33 per cent.—and thus you have 53 per cent. provided for and 47 per cent. entirely left without any provision whatever. Now I come to point out a deliberate omission, for which my right hon. Friend has given no reason and no explanation. In the first place, under the Bill all cases will be taken out of compensation where the workman knew of the negligence which had caused the accident and did not within a reasonable time give information to his employer or some superior in his employ. So that the workman would have no ground of action unless he informed the employer of the defect he had discovered. I say that that is very hard on the workman. In the vast number of cases the workman will not dare to 1967 give information to the employer, knowing that he would cause expense to his employer, and that he would be looked upon probably as a troublesome fellow. I remember a case which happened when I was President of the Board of Trade, when a captain of a ship went out to sea and his ship foundered, under what circumstances nobody ever knew. But it did happen that after the ship foundered with the loss of the captain and 23 of the crew a letter was produced, written by the captain previous to starting on his last voyage to his wife. In that letter he said that the ship was so overloaded, and so ill-found, that he felt he was going to his death, but that he could not complain, for if he did so he would be a marked man. I do not say whether he was wrong or right, but that is a feature which must be taken into account. A great many workmen will not acquaint their employers with defects, and, therefore, I say that if this clause remains in the Bill, it is perfectly certain that a large number of persons for whom the Bill is intended to provide will not be provided for. That is one deduction, therefore, that has to be made from the 53 per cent, for which the Bill proposes to provide. You have to prove negligence, and how are you to do it? It is the workman who has to prove the negligence. Whence is the evidence to come? From his fellow-workmen, who depend for their employment on the continued good opinion of their employer? When a workman has to rely upon evidence of that kind, and the scene of the accident is in the possession of his employer, the difficulties which threaten to come his way will be almost insurmountable. There will be a number of cases under this Bill in which, although t he accident is due to negligence of one kind or another, it will be impossible for the workman to supply sufficient proof when the matter is brought to trial. My right hon. Friend said that his object in preparing this Bill was to prevent the possibility of litigation. Why, the Bill will make litigation certain in a vast number of cases, and will increase enormously the difficulties of the workman. What is the case now? Whenever there is litigation the workman who succeeds and recovers compensation has practically nothing left for himself, for 1968 what he recovers is absorbed in costs; and I am certain that under this Bill the expense of proving his case will be so great that when compensation is awarded to a workman it will be illusory compensation. There is another most curious limitation in the Bill. I use the word "curious," having regard to the intentions of my right hon. Friend to found his measure on a logical basis. The application of the Bill is confined under Sub-section A of Clause 6 to "every person engaged in manual labour." Why is this done? I cannot see why from the beneficent provisions of this Bill such persons as clerks, foremen, and managers should be wholly excluded. Is it because they have no Trade Unions to represent them? Men engaged in clerical work, which is often less highly remunerated than manual labour, may and sometimes do suffer when an accident occurs. Take the case of a boiler explosion. I have known clerks to be killed in their office at the same time that workmen have been killed in the mill. Why are clerks not to be compensated? The Bill shows a want of logical principle. In Sub-section B of Clause 6 the Bill is made to apply to every railway servant. This includes, I suppose, stationmasters and other people not actually engaged in manual labour. Why are such persons engaged under a Railway Company to be entitled to compensation when, if they left the railway and took other employment, they would not be entitled to it? Sub-section D includes every person employed on board a ship—the waiters in a passenger ship, the captain himself, the inferior officers, the boatswain, &c. All these persons holding positions which are not the positions of persons doing manual labour will be compensated for accidents, but persons holding analogous positions on land will not be compensated. When you have made all these deductions you will not be dealing with 53 per cent. of the total accident cases. I very much doubt whether you will be dealing with more than 40 per cent. There is one other exclusion. Why are domestic servants who are engaged in manual labour and who are at least as deserving of consideration as any other class of persons? Why are they left outside the purview of the Bill? As long as they are excluded you exclude the largest class of those who are engaged in manual 1969 labour. Having shown what is the state of the case under the Bill, I turn to the alternative which I propose. I take the principle of t he German law, and I. hold that the right to compensation of any person injured in the ordinary course of his employment is a public right and a natural obligation, and, therefore, I would provide that in every case of accident, with one exception, the person injured or his representative should receive compensation. The one case excepted is the case of a man's own act or default. It does not seem to me reasonable and logical that an exception should be made in that particular case; for if you give compensation to a man whose accident has resulted from his own act or default, you take away one very strong ground for precaution and carefulenss on the part of workmen. It would be monstrously illogical to say that you ought to punish the employer in order to make him careful, and that you ought to reward the workman who is not careful. With that exception my Amendment would provide for every case. By its adoption you would get rid of litigation. All a workman would have to do would be to show that the accident was not the result of his own negligence. If it was not the result of such negligence he would have an indefeasible right to compensation in whatever way the accident occurred. Now I have to deal with the position of the employer in this matter. In dealing with compensation, I should he inclined to treat the employer merely as a convenient channel through which the compensation should be paid. I should expect that, if the liability to pay compensation were made universal, every employer would insure, and I should not object to the Amendment put down by the hon. Member for the Blackfriars Division of Glasgow, which seeks to make it the duty of the employer to insure his men. Let me deal with the matter from the point of view of the employer. It may be interesting to the House to know that an old Member of the House, now dead—Mr. Knowles—who was noted for the intense interest he took in these questions, and who certainly understood the case of the employer, although he would have been opposed to many provisions of this Bill, he was prepared to accept this universal liability, and he was of opinion that it would be 1970 the only thoroughly satisfactory settlement of the question. He foresaw that the case would be met by universal insurance, and that the insurance, if extended over the whole country, and over every trade, would only be a very small matter indeed. I have made a calculation as to what the cost would be to the Coal-Mining Associations, and I find that the cost of providing for every accident to every miner throughout the country would be 595 of a penny, or little more than halfpenny a ton of coal. But then I have to deal with objections on the part of the workpeople to the principle of insurance. Under the present system there is nothing to prevent insurance, and under the Bill of my right hon. Friend there is nothing to prevent insurance. In fact, he has made insurance an absolute necessity. I am not proposing any alteration in the law as it stands, nor do I believe that any way by which insurance could be effectively prohibited could be discovered. The objection to insurance that workmen take is twofold. They object that in the long run it would be deducted from their wages. To that I answer that the employer now insures his machinery and his buildings, and am I to be told that that comes out of the wages of his work-people? If it does not, why should the insurance of his men against accident come out of their wages? At any rate, if everything else comes out of the wages, this would not make any practical difference, seeing, as I have shown, that the cost of providing against accident in coal mines would only be ½d. per ton, and that it would all go back to the workmen as compensation. Therefore, I do not treat that as a serious objection. But what I do treat as a serious objection on the part of the workmen is, that if you refrain from penalising the employer you remove the pressure upon him to take proper care and precaution. In answer to that objection, I would say that almost every accident is already the subject of loss to the employer. It cannot be possible for an accident involving the loss of life or limb to take place without pecuniary loss to the employer, and the fear of that pecuniary loss is, I think, sufficient to promote carefulness on the part of the employer. But, if you disagree with me in that, I am willing to go with you in 1971 any provision for penalising the employer who is found guilty of negligence. What would be the effect if you could prevent insurance? Take a case which might happen under the Bill of my right hon. Friend, the case of a mine explosion. In such an explosion, caused, as I imagine, by the negligence of a workman, 200 or 300 workmen are killed. The compensation due to the families of those men under this Bill would amount to an enormous sum, and I venture to say that no capitalist after this Bill would go into mining and undertake that risk without either insuring against it or taking measures to turn his business into a Limited Liability Company. Of cases in which there is no insurance von will find a large proportion in which the firm or employer will he unable to meet these charges. The employer becomes bankrupt, if you like; but what advantage is that to the family of the injured workman? They have no redress, because by the Bill you will have created a lot of needy employers who will be totally unable to bear the expense of compensation. Now, I think I have gone through all the points. At all events, I am content to have stated my alternative case to the House. If the House were disposed to deal with it in a favourable sense, I am quite prepared to agree with my right hon. Friend that it would be most desirable that this Bill should be the vehicle for the reform, and I should be content if it were amended in Committee. Meantime, I beg the House to consider whether it is worth while to deal with this subject in a partial way, and whether it would not be better once for all to settle the right of every workman to compensation. You could do it at a very small cost, and the law would he placed on that logical and satisfactory basis which it is the desire of my right hon. Friend to attain.
§ Motion made, and Question proposed, "That the Debate be now adjourned."—(Mr. Bousfield.)
§ MR. GOSCHEN (St. George's, Hanover Square)Will this Bill be taken first on Thursday? Perhaps the right hon. Gentleman will inform us.
§ THE CHANCELLOR OF THE EXCHEQUER (Sir W. HARCOURT,) DerbyI am afraid I cannot give the right hon. Gentleman any undertaking that the 1972 Bill will be the first Order on Thursday. The Government hope it will not be treated as a contentious measure, and that when it is again taken up it will be pushed forward and disposed of by hon. Gentlemen.
§ MR. GOSCHENI may inform the right hon. Gentleman that there is immense interest in the measure on both sides of the House, and we should like to know when it is again to come on.
§ SIR W. HARCOURTI cannot give any undertaking at the moment; but I will consider the point, and see what can be done.
§ Motion agreed to.
§ Debate adjourned till Thursday.