HC Deb 06 December 1932 vol 272 cc1554-65

9.50 p.m.


I beg to move in page 75, line 19, to leave out the word "thirty-one" and insert in stead thereof the word "thirty-two."

I think this is a drafting Amendment. I am not sure whether there is any purpose in retaining "nineteen hundred and thirty-one" in the Bill and I do not see why it should not now become "nineteen hundred and thirty-two."That would only be the year preceding the year in which the Measure comes into force.

9.51 p.m.


I am afraid that this is not merely a drafting Amendment. It so happens that the 12th March, 1931, is the date upon which the Bill was first introduced and when its provisions became known and it was thought reasonable to date the rights of people in the service of the different undertakings as from that date, or rather to mark them by reference to that date. Thus the people who were in the service of the undertakings at that date are to have the advantages which Clause 71 gives. It was thought that people who came into the service of the undertakings after that date did so with a full knowledge of the proposed transfer to the board. They will of course have tile benefit of their contracts of service with the undertakings. They will not be thrown on the streets and be deprived of their existing rights, but they will not be placed in the advantageous position which everybody—I ask the Committee to mark that—employed up to 12th March, 1931, has. The Committee will realise that the proposals in the Bill in this respect are much more favourable than the corresponding proposals in similar Measures where these compensation benefits were only given to persons who "had been in some cases five years, in another case two years, in the service of the undertakings concerned. In this case if a person has only been in the service for a, week, before 12th March, 1932, he acquires the rights conferred by the Clause. I am afraid it would be departing from the intention of the Minister and the scheme of the Bill as originally introduced to accept the Amendment.

9.53 p.m.


Would the Attorney-General not consider the fact that the Bill has had a chequered career since it was introduced, and the possibility that some people may have entered the service since this date, thinking that possibly the Bill would never become an Act. In view of the very long intervening period which will now be over two years, would it not be fair to change the date to 1932? The Attorney-General will see the possibility that people who have been taken on and who thought they were getting permanent situations, may find themselves the first to be discarded, because they have no protection under this Clause. We are anxious that as many as possible should be protected, and I think that the right hon. and learned Gentleman should, at least, carefully consider this point.

9.54 p.m.


The hon. and learned Member for East Bristol (Sir S. Cripps) has got himself into an amazing position by moving this Amendment. Surely he must know that in any Bill of this kind it is necessary, for compensation purposes, to take the date when the Bill was introduced. He says that because the Bill has had a chequered career we ought to change the period of compensation and bring it forward a year. The Bill may have a still more chequered history in the future, and it may be years before it comes into operation. To change a date of this kind in Committee would lead to endless confusion. The Government have got into enough confusion already over this Bill, and I ask them, for goodness sake, to have nothing to do with the very bad advice tendered them by the hon. and learned Member.

Question put, "That the word 'thirty-one' stand part of the Clause."

The Committee divided: Ayes, 218; Noes, 37.

Division No. 20.] AYES. [9.56 p.m.
Acland-Troyte, Lieut.-Colonel Davies, Edward C. (Montgomery) Hope, Capt. Hon. A. O. J. (Aston)
Adams, Samuel Vyvyan T. (Leeds, W.) Dawson, Sir Philip Hornby, Frank
Albery, Irving James Dickie, John P. Horne, Rt. Hon. Sir Robert S.
Aske, Sir Robert William Dower, Captain A. V. G. Horobin, Ian M.
Baldwin, Rt. Hon. Stanley Drewe, Cedric Horsbrugh, Florence
Balfour, George (Hampstead) Duckworth. George A. V. Howard, Tom Forrest
Banks, Sir Reginald Mitchell Dugdale, Captain Thomas Lionel Howitt, Dr. Alfred B.
Beauchamp, Sir Brograve Campbell Duggan, Hubert John Hume, Sir George Hopwood
Beaumont, M. W. (Bucks., Aylesbury) Duncan, James A. L. (Kensington, N.) Hutchison, W. D. (Essex, Roml'd)
Beaumont. Hon. R. E, B. (Portsm'th, C.) Ellis. Sir R. Geoffrey Inskip, Rt. Hon. Sir Thomas W. H.
Beit, Sir Altred L. Elliston, Captain George Sampson Jackson, Sir Henry Wandsworth,. C.)
Bernays, Robert Emrys-Evans. P. V. James, Wing-Com. A. W. H.
Birchall, Major Sir John Dearman Erskine, Lord (Weston-super-Mare) Jennings. Roland
Blindell James Erskine-Bolst, Capt. C. C. (Blk'pool) Jesson, Major Thomas E.
Bossom, A. C, Essenhigh, Reginald Clare Johnston, J. W. (Clackmannan)
Boulton, W. W. Evans, David Owen (Carolgan) Jones, Sir G. W. H. (Stoke New'gton)
Bower, Lieut.-Com. Robert Tatton Evans. R. T. (Carmarthen) Jones, Henry Haydn (Merioneth)
Bowyer, Capt. Sir George E. VV. Flelden, Edward Brocklehurst Jones. Lewis (Swansea, West)
Boyce, H. Leslie Foot, Dingle (Dundee) Ker, J. Campbell
Braithwaite, Maj. A. N. (Yorks, E. R.) Ganzonl. Sir John Kerr, Lieut.-Col. Charles (Montrose)
Braithwaite, J. G. (Hillsborough) Gault, Lieut.-Col. A. Hamilton Kerr, Hamilton W.
Broadbent, Colonel John Gibson, Charles Granvllie Knatchbull, Captain Hon. M. H. R.
Brown, Ernest (Leith) Gillett, Sir George Masterman Lamb. Sir Joseph Quinton
Buchan-Hepburn, p. G. T. Glossop. C. W. H. Latham, Sir Herbert Paul
Burgin, Dr. Edward Leslie Gluckstein, Louis Halle Law, Richard K. (Hull, S.W.)
Burnett, John George Glyn, Major Ralph G. C. Leckie, J. A.
Campbell, Edward Taswell (Bromley) Goodman, Colonel Albert W. Leighton. Major B. E. P.
Caporn, Arthur Cecil Gower, Sir Robert Lewis, Oswald
Castle Stewart, Earl Grattan-Doyle, Sir Nicholas Liddall, Walter S.
Cazalet, Thelma (Islington, E.) Grentell, E. C. (City of London) Lindsay, Noel Ker
Chapman, Col. R.(Houghton-le-Spring) Griffith. F. Kingsley (Middlesbro'. W.) Lister. Rt. Hon. Sir Philip Cunliffe-
Chorlton, Alan Ernest Leofric Grimston, R. V. Llewellin, Major John J.
Christie, James Archibald Guest, Capt. Rt. Hon. F. E. Lockwood, John C. (Hackney, C.)
Clarry, Reginald George Hamilton, Sir George (Ilford) Loder, Captain J. de Vere
Clayton Dr. George C. Hanbury, Cecil Lovat-Fraser, James Alexander
Colfox, Major William Philip Hannon, Patrick Joseph Henry MacAndrew, Lieut.-Col. C. G. (Partick)
Colman, N. C. D. Harbord, Arthur MacAndrew, Capt. J. O. (Ayr)
Colville, Lieut.-Colonel J. Hartland, George A. McCorquodale, M. S.
Conant, R. J. E. Harvey, Major S. E. (Devon, Totnes) MacDonald, Malcolm (Bassetlaw)
Cook, Thomas A, Headlam, Lieut.-Col. Cuthbert M. McKie. John Hamilton
Crooke, J. Smedley Heligers, Captain F. F. A. McLean, Dr. W. H. (Tradeston)
Crossley, A. C. Heneage, Lieut.-Colonel Arthur P. Magnay, Thomas
Cruddas, Lieut.-Colonel Bernard Hills, Major Rt. Hon. John Waller Maitland, Adam
Mallalieu, Edward Lancelot Rankin. Robert Soper, Richard
Manningham-Buller, Lt.-Col. Sir M. Ray, Sir William Southby, Commander Archibald R. J
Margesson, Capt. Henry David R. Reed, Arthur C. (Exeter) Storey, Samuel
Marsden, Commander Arthur Reid, James S. C. (Stirling) Strauss, Edward A.
Martin, Thomas B. Reid, William Allan (Derby) Strickland. Captain W. F.
Mason, Col. Glyn K. (Croydon, N.) Remer, John R, Sueter, Rear-Admiral Murray F.
Mayhew, Lieut.-Colonel John Robinson, John Roland Thomas, James P. L. (Hereford)
Merriman, Sir F. Boyd Ropner. Colonel L. Thompson, Luke
Mills, Major J. D. (New Forest) Rosbotham, S. T. Thomson. Sir Frederick Charles
Molson, A. Hugh Elsdale Ross Taylor, Walter (Woodbridge) Thorp, Linton Theodore
Monsell, Rt. Hon. Sir S. Eyres Russell, Albert (Kirkcaldy) Titchfield, Major the Marquess of
Morris-Jones, Dr. J. H. (Denbigh) Russeil, Alexander West (Tynemouth) Touche, Gordon Cosmo
Morrison, William Shepherd Russell, Richard John (Eddisbury) Tryon. Rt. Hon. George Clement
Muirhead, Major A. J. Salmon, Major Isidore Vaughan-Morgan, Sir Kenyon
Nation, Brigadier-General J. J. H. Salt, Edward W. Wallace, Captain D. E. (Hornsey)
North, Captain Edward T. Samuel, Samuel (W'dsworth Putney) Ward. Irene Mary Bewick (Wallsend)
O'Connor, Terence James Sandeman, Sir A. N. Stewart Wardlaw-Milne, Sir John S.
Ormsby-Gore, Rt. Hon. William G.A. Sanderson, Sir Frank Barnard Warrender, Sir Victor A. G.
Palmer, Francis Noel Scone. Lord Watt, Captain George Steven H.
Pearson, William G. Selley, Harry R. Wells, Sydney Richard
Penny, Sir George Shakespeare. Geoffrey H. Weymouth, Viscount
Petherick, M. Shaw, Helen B. (Lanark, Bothwell) Whiteside, Borras Noel H.
Peto, sir Basil E. (Devon, Barnstaple) Shaw, Captain William T. (Forfar) Williams, Charles (Devon, Torquay)
Peto, Geoffrey K. (W'verh'pt'n, Bilst'n) Shepperson, Sir Ernest W. Williams, Herbert G. (Croydon, S.)
Potter, John Skelton, Archibald Noel Windsor-Clive, Lieut.-Colonel George
Powell, Lieut.-Col. Evelyn G. H. Slater, John Womersley, Walter James
Power, Sir John Cecil Smith, Sir Jonah W. (Barrow-ln-F.) Worthington, Dr. John V.
Pybus, Percy John Smith, R. W. (Ab'rd'n & Kinc'dlne, C.)
Ramsay, Capt. A. H. M. (Midlothian) Smith Carington. Neville W. TELLERS FOR THE AYES.—
Ramsay, T. a. W. (Western Isles) Somerveil, Donald Bradley Captain Austin Hudson and Lieut.-
Ramsbotham, Herwald Somervilie, Annesley A. (Windsor) Colonel Sir A. Lambert Ward.
Adams, D. M. (Poplar, South) Grundy, Thomas W. McEntee, Valentine L.
Banfield, John William hail, F. (York, W.R., Normanton) Maclean, Nell (Glasgow, Govan)
Batey, Joseph Hall, George H. (Merthyr Tydvil) Macmillan, Maurice Harold
Briant, Frank Harris, Sir Percy Milner, Major James
Brown, C. w. E. (Notts., Mansfield) Janner, Barnett Parkinson, John Alien
Cape, Thomas Jenkins, Sir William Price, Gabriel
Cocks, Frederick Seymour Jones, Morgan (Caerphilly) Thorne, William James
Cripps, Sir Stafford Kirkwood, David Tinker, John Joseph
Daggar, George Lansbury, Rt. Hon. George Williams, Edward John (Ogmore)
Davies, Rhys John (Westhoughton) Lawson, John James Williams, Thomas (York, Don Valley)
Edwards, Charles Llewellyn-Jones, Frederick
Grenfell, David Rees (Glamorgan) Logan, David Gilbert TELLERS FOR THE NOES.—
Groves, Thomas E. Lunn, William Mr D. Graham and Mr. John.

Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.

10.4 p.m.


I beg to move, in page 77, line 13, to leave out the word "three," and to insert instead thereof the word "six."

This is a proposal to give more time for the purpose with which Clause 71 deals. The Clause, as drafted, gives only three months, and it is thought to be desirable to have six months within which time the board will have the right to give notice to the late employés of transferred undertakings.

Amendment agreed to.


I beg to move, in page 78, line 21, at the end, to insert the words: () Where, for the purposes of agreeing or determining by arbitration under this Act the amount and nature of the consideration to be paid by the board for the transfer of an undertaking or part of an undertaking, any part of the remuneration or emoluments paid or payable to an existing officer or servant has been treated as part of the profits of the undertaking or part of the undertaking the part of the remuneration or emoluments so treated as part of the profits shall for the purposes of assessing the compensation, if any, payable to that officer or servant under this part of this Act or the Twelfth Schedule to this Act he deemed not to have formed or to form part of the remuneration or emoluments which the officer or servant was enjoying before the transfer to the hoard of the undertaking or part of the undertaking or would have enjoyed if that transfer had not taken place. 10.5 p.m.

There are some undertakings which remunerate their officers by giving them a share of the profits. In so far as those profits have been taken into account in fixing the consideration in the transfer of the undertaking, it will be manifestly improper to include them again in the computation of the compensation that has to be paid to an officer remunerated in that way. The point seems to have been overlooked when the Bill left the Joint Committee, and this Amendment provides that the computation shall not include the same item twice over.


I beg to move, as an Amendment to the proposed Amendment, at the end, to insert the words: Provided that any existing officer or servant whose remuneration or emoluments, or part thereof, have been treated as part of the profits of the undertaking, or part of the undertaking as aforesaid, shall be entitled to claim against the proprietor of the undertaking, or part of the undertaking, such sum as would but for this sub-section have been payable to him under this section, the amount thereof to be determined in the same manner as though the question had arisen between himself and the board. 10.6 p.m.

I believe that my words more clearly interpret the intention of the Government than the Amendment of the Attorney - General as it stands. I will ask the Attorney-General to consider the case of a small concern which is taken over by the board, and I will reduce the matter to its utmost simplicity by taking a concern consisting of two people, "A" and "B." "A" wishes to start a small motor omnibus company, but has not sufficient money, and gets hold of "B" to put up some money. "A" and "B" both put up money, but "A" also works. The position under the Attorney-General's Amendment is that the payment which the man who has worked receives will be written back into the profits of the undertaking, so that "A" and "B" will together share the compensation which "A" should have received himself for his loss of employment, as distinct from his loss on the capital. 'Under the Attorney-General's Amendment, "13," who is the mere financier, will share compensation which should go solely to "A," the man who has both worked and put up some of the capital. That cannot he the intention of the Government, and, if I am right, perhaps the Attorney-General will be able to accept my Amendment to his Amendment.

10.9 p.m.


I confess that but for the illustration which my hon. Friend gave, I thought that I understood the purpose of his Amendment to the proposed Amendment, but I was not quite sure whether it was in the proper form. The Amendment to the proposed Amendment has only appeared on the Paper in the last day or two, and I have not had the opportunity of considering the terms of it. I think that I appreciate my hon. Friend's point, but it goes a little further than the illustration which he gave, where, I should have thought, the two people were the joint proprietors of the undertaking. I understood the point of his Amendment to the proposed Amendment to be that where the man, so to speak, had his remuneration already computed in the consideration paid to the undertaking of which he was an officer, he should be entitled to get back from his employers that part of the consideration which really represents part of his remuneration. If that be so, my hon. Friend's Amendment covers a point that wants considering, and I will see whether an appropriate form of words can be designed to protect employés who may be in that position.


On that understanding, for which I am grateful to my right hon. and learned Friend, I will ask leave to withdraw the Amendment to the proposed Amendment.

Amendment to the proposed Amendment, by leave, withdrawn.

Proposed words there inserted.

Further Amendment made: In page 78, line 33, leave out the word "section" and insert instead thereof the words "part of this Act."—[Mr. Pybus.]

Commander MARSDEN

I beg to move, in page 78, line 34, at the end, to insert the words: a permanent director, a director employed in accordance with a contract for service, and a director actually employed in the conduct or management of any undertaking or part thereof, transferred. 10.11 p.m.

In endeavouring to put these words into Sub-section (10), I have not in mind the directors of bigger companies. My object is to improve the position of the directors of small independent undertakings. I ask the Committee to consider the position of these men. Most of these undertakings, the large number of which is shown in the Schedule to the Bill, did not start as limited companies. Some of them started with one or two men, some of them ex-service men, with one or two omnibuses, and they gradually worked up services which the large organisations were unable to provide, and created a demand which so far the independent undertakings have alone been able to supply. As time went on, these small undertakings formed themselves, for reasons which suited them, into limited liability companies, but I am sure that hon. Members will not picture the directors of these companies in the way that we are accustomed to picture directors and in the way which is usually shown in the cartoons of some of the Socialist papers. These men are much more often in the workshops in boiler suits than they are in the board room. Most of them are what we should call working men. They spend their whole time running these small undertakings, and of all the people taken over in this Combine who, I should have thought, were the most deserving, they are the one class which has been left out in the cold.

When these undertakings are taken over by the board, naturally the directors will get something of the purchase money which their holding of shares will entitle them to get, but that is only the purchase price of the undertaking on the value that will be arrived at by the arbitration. As far as I can see, it does not affect in the slightest the particular directors to whom I am referring. They will merely get money for something which has been bought from them compulsorily, under a sale which they had no desire to effect; but what is most important to them is their jobs. They will riot be left entirely without means, but they are men with initiative and enterprise who want a chance of work in the future; that is more important to them than receiving a few pounds for their share in the undertaking. If they can be brought into this Bill as officers or servants, and they have any complaint that they have not been taken over by the Combine, they will be able to proceed as laid down in Schedule 12. They will go before the arbitration board, which will consider their case. If they have no claim they will receive nothing, but, if it is thought they have a just claim, the board will be able to award compensation. It would be far fairer to these men to give them at least a chance of going before the board.

Personally, I should think the most sensible thing the Combine could do would be to take over the men. But imagine their position! They are directors of their little companies, and are very proud of the fact. They have been, as we may say, "bucking against" the big combines, forcing them to reduce their fares, putting on services which the bigger companies could not give, paying their employés larger wages than the big combines and, what is most important, charging lesser fares than the large combines. These are the men who, from my point of view ought to be encouraged to the highest degree. As far as I can make out, everybody else is to get something. Most of the losing companies will get considerably more than they are worth, and most of the companies which are making profits less than they ought to get. There cannot be many persons of this class. The list of undertakings is named in the Schedule, and there cannot be more than two or three men in each company. I ask the Minister and the learned Attorney-General to give way on this point, and to give a fair deal to a most deserving class of men.

10.18 p.m.


These words seem to me to be far too wide to cover my hon. and gallant Friend's purpose. The words: a permanent director would apply to people in a very different position from what he has described. The next words: a. director employed in accordance with a contract for service are, I understand, recommended to cover the case of a director who also has some contract of service in another capacity. If he is engaged under a contract of service he will be entitled to his compensation under the scheme, apart from being a director, and I cannot see that we should give him any better rights merely because he is a director. The next words are: a director actually employed in the conduct or management of any undertaking or part thereof. These words are rather obscure to me. I understand they are intended to cover the case of a director who is personally interested as an owner of the undertaking, and therefore goes about the daily work, as my hon. and gallant Friend says, in a boiler suit in the workshops or some other part of the undertaking. If the man is employed under a contract of service, he will get his compensation if he loses his position. I am afraid I cannot enlarge the word" officers" to cover the case of directors. Bearing in mind that everybody who owns the undertaking or has a share in the ownership will get his share back, and everybody who is employed under a contract of service will get his compensation if he is not employed by the board, I cannot quite see why, by reason of the fact that it happens to be a company, and he has become a director, he should be entitled to something more than a man who has not made his business into a company and has interested himself in maintaining the success of his little undertaking. I am afraid the words are not very apt to cover the cases, and the Government are unable to accept the Amendment.

10.20 p.m.


I am only seeking after truth. Perhaps the learned Attorney-General will tell us whether the director who is a full-time director of a company and in fact looks after a particular branch of the work of the company would get any compensation. I have read this Clause several times, and the only reference to a definition of "officer," as stated in this Clause, is a managing director. A large number of the people to whom the hon. and gallant Member for North Battersea (Commander Marsden) referred, are not managing directors; they are directors doing a full-time job. They are not officers or servants of companies. We are not quite clear, some of us, as to how they stand.

10.21 p.m.


I am afraid that I cannot deal with the situation which is described in the words of the last observation of the hon. Member for South Croydon (Mr. H. Williams). They are people whose position we cannot quite understand.


Under this Clause.


If the hon. and gallant Member for North Battersea (Commander Marsden) will define the position which the people occupy, I shall be able to deal with them. I have dealt with the people who have a contract of service, and with people who own an undertaking or part of an undertaking. I understand that the hon. and gallant Gentleman wishes to include some persons who work in businesses in a general way, but I do not see why they should be entitled to any compensation. I have said that already, and I do not wish to repeat my observations.


What is the legal definition of managing director? Is it defined in the Companies Act?


There is no precise definition. It remains to be decided by an arbitration tribunal, if there is any dispute. I think that a man who is the only director of an undertaking and who is remunerated for looking after the undertaking by some share in the profits, or by some official salary, is the managing director, even though he may not be appointed as managing director under the articles of the company.


May not that be held to cover a good many of these cases?


Yes, I think it would be. I think that a great many of these cases would probably be regarded as managing directors, the term in fact being an enlarged definition of "officer."

10.23 p.m.


Would the tribunal, in considering whether a director is or is not a managing director, he free to disregard the memorandum of association?


You mean the articles of the association?


Yes, the articles. In most companies the articles provide whether there should or should not be a managing director. If, with a particularly small company, it is provided that there should be a managing director paid a salary, he would be a managing director within the meaning of the Bill. Suppose that there is a director who is in fact paid a substantial salary, and gives his whole time employment in the management of the company, either as manager of the whole or of a branch of the company, I should like to know whether the Attorney General thinks that the tribunal under this Bill would be able to consider the claims of such a man.


I think that it would be.

Amendment negatived.

Clause 72 (Transfer and compensation rights of officers and servants occupied in certain other undertakings) ordered to stand part of the Bill.