HC Deb 03 July 1940 vol 362 cc908-32

Order for Second Reading read.

7.5 p.m.

The Under-Secretary of State for the Home Department (Mr. Peake)

I beg to move, "That the Bill be now read a Second time."

This Bill comes before the House in pursuance of an undertaking given by the Home Secretary on 18th April last. Its terms have been the subject of discussion with representatives of the Trades Union Congress, who are satisfied that the course proposed by the Government is the right way, and they have given their blessing to the Bill. The origin of the Bill is the judgment of the House of Lords delivered last February in the case of Pratt versus Cook. This judgment reversed a majority judgment of the Court of Appeal and gave to the Truck Act, 1831, an interpretation which it had not previously been construed to bear and a construction which constitutes a source of embarrassment both to employers and employed and involves a risk of serious injury to good industrial relations. In introducing this Bill the Government must not be taken to be criticising in any way the judgment of the highest Court in the land. They only seek to deal with the practical consequences which ensue from that judgment. The case of Pratt versus Cook did not originate in any dispute between employers and employed in regard to terms of employment. Those terms had, in fact, been agreed upon between representatives of both parties and had been embodied in a written agreement. There was no dispute about the fact that those terms had been faithfully observed by both parties. The real source of the dispute lay in a struggle for trade union recognition which had resulted in the dismissal of Mr. Pratt.

The Truck Acts have a long history as part of our industrial legislation. The idea underlying them is familiar to us all. They were passed in order to prevent certain grave abuses which sprang up in the eighteenth and nineteenth centuries, and their main purpose was to provide that the worker obtained the full benefit of the remuneration to which he was entitled and was not deprived of part of it either through payment in kind or an obligation placed upon him to purchase necessaries of life and other goods through shops owned or controlled by his employer. While the basic idea is simple, the Acts themselves are complicated. In some particulars they are as obscure as the origin of the word "truck" itself. There is, in fact, still a nice number of questions, or, rather, a number of nice questions in relation to the interpretation of the Truck Acts waiting to be resolved at the instance of a keen and aspiring litigant.

Perhaps the House will bear with me if I endeavour to explain the position in the case of Pratt versus Cook. The main provision in the Act of 1831 is to be found in Section 3, which provides that the entire amount of the wages earned must be actually paid to the workman in the current coin of the realm, and that every payment made to him by the delivering of goods shall be declared illegal, null and void. Section 4 provides that the workman may recover from his employer so much of the wages earned by him as shall not have been actually paid in current coin of the realm. For the purpose of these two Sections wages are defined by Section 25 to include payments made in kind. The effect of Section 4, therefore, is that a workman may have accepted payment in kind, but may thereafter sue his employer for the value of the goods supplied and recover such value in cash.

So great was the mischief aimed at by the Act of 1831 that, in order to deter employers from the abuses of the truck system, the Legislature provided, as a remedy in the hands of the workmen, one of those rare cases in which one may both eat one's cake and have it. Section 23 provides for certain exceptions to the generality of the law laid down in Sections 3 and 4. It provides that nothing contained in the Act shall be construed to prevent an employer from supplying medicine or medical attendance, provender for the workmen's horse, or fuel and, in the case of miners, materials and tools to be used by the workmen. The Section also covers the letting of a house to a workman at a rent to be reserved and also the supply of victuals, that is to say, meals, dressed or prepared under the roof of the employer and there consumed by the workman. This Section goes on to provide that nothing contained in the Act shall prevent an employer from making a stoppage or deduction from the wages of a workman in respect of the goods or services previously enumerated, provided always that such stoppage or deduction shall not be made unless the agreement permitting it is in writing and signed by the workman.

The question decided by the House of Lords was as to the proper construction of Section 23, where goods or services of the kind mentioned in the Section were supplied by way of addition to and not by way of deduction from a money wage. The difficult nature of this question will be appreciated when it is realised that the Court of Appeal decided the issue by a majority in one sense and the House of Lords by a majority in the opposite sense. We are here today concerned only with the practical effects of the judgment, and these may be briefly stated as follow: It is perfectly legal for an employer to contract with a workman in a written agreement for the payment of a wage, say, of 63s. a week and for a deduction from that wage of 10s. a week in respect of meals provided. It is, however, illegal and a breach of the Truck Acts for an employer to agree with his workmen for a wage of 53s. plus meals to the value of 10s. The effect of these two forms of agreement on the workmen is precisely the same. In Pratt's case the agreement had been made in the form now held by the House of Lords to have been illegal, and the fortunate and persistent Mr. Pratt found himself entitled to a sum of nearly 400, being the value of the meals he had consumed, at his employers' expense and for his own convenience, over the last 20 years.

It is generally recognised that great mischief may ensue as the result of this decision. There are undoubtedly many spheres of employment where the past form of the contract between employer and workman may be invalid and the employer may be made liable to pay the value, over a period up to 20 years, of goods which, as part of the bargain, he has supplied to the workman. For example, I have heard of the case of an employé of a voluntary hospital employed to look after the boilers, and this man has been employed, to his own satisfaction and that of his employers, for a great many years. He has had his meals on the premises. As the result of the decision of the House of Lords, he has a claim against the hospital amounting to something between £600 and £700. Although for the most part, obviously, workpeople would not wish to proceed with claims of this kind against their employers, circumstances may arise in which such claims would be brought forward. A workman, for instance, who had got heavily into debt, or who had met with some exceptional misfortune, might at any moment be advised by his creditors that he had this claim against his employers, and in this way harmonious industrial relations, built up by good will on both sides over a long period, may be seriously prejudiced. Both the Government and representatives of the Trades Union Congress are, therefore, agreed as to the danger of leaving this form of dynamite in the hands of individuals.

The Bill does not attempt to deal with the general system of Truck Act legislation, nor does it seek to reverse the decision of the House of Lords. For the future, employers and workmen will have to follow the form which the House of Lords has shown to be legal. The Bill, however, deals with actions which have arisen, or may arise, out of the mistaken construction generally given to Section 23 hitherto.

Major Milner (Leeds, South-East)

Was it not the Home Office who were responsible for the mistaken construction?

Mr. Peake

It is true that the Home Office among other people had given a faulty interpretation of Section 23.

Major Milner

For 50 years.

Mr. Peake

Not 50, but 44 years. The Bill provides, therefore, that no action under Section 4, nor proceedings for a penalty under Section 9, of the 1831 Act can be instituted as the result of past arrangements for the supply of goods or services mentioned in Section 23 where a proper form of agreement might have been made between the parties, and any actions or proceedings now pending will be discharged on such terms as to costs as the court may think fit. It is obviously desirable, in my view, to give the court that discretion. A court of law—I shall be corrected by my right hon. and learned Friend if I am wrong—has at the end of judicial proceedings in the ordinary way a discretion as to costs, and all we are here doing is to provide that the same discretion which exists at the conclusion of proceedings may be exercised in the middle of proceedings which are stayed or discharged as a result of this Bill. I think that is clearly the right course to take, because some of the actions which are now pending have been instituted before the Home Secretary's declaration on 18th April, and it may be considered that they should receive their costs in full, either up to that date or possibly a later date. On the other hand, where an action has been instituted after the warning given by the Government that legislation of this sort was in contemplation, it might be held that the plaintiffs should to some extent be deprived of costs incurred in those circumstances.

Subsection 1(2) is a saving Clause for the benefit of the worker. It is feared that a situation might arise in which, if a contract of employment is null and void under the Truck Acts, that might vitiate the contract of employment for other purposes, such as the payment of contributions under the Contributory Pensions Acts. It would obviously be most unfortunate if a workman were to be deprived of his right to an old age pension because his contract of employment were held to be null and void for Truck Act purposes. The Sub-section therefore provides that if a contract of employment is illegal for purposes of the Truck Act it shall not be held to be illegal for other purposes as well.

Clause 2 makes it clear that the Parliament of Northern Ireland has power to legislate in this matter if it so desires. That Clause is inserted in order to remove some doubt which might arise as the result of Section 5 of the Government of Ireland Act, which prohibits the Parliament of Northern Ireland passing any legislation which in effect takes away anybody's property. I hope the House will be satisfied with the explanation of the Bill I have given; and in view of the fact that the passage of the Measure is a matter of great urgency and that the Bill has been in the hands of Members for about a fortnight, I trust that they will allow it to pass through all its stages without undue delay.

7.21 p.m.

Mr. Leslie (Sedgefield)

I am interested in this Bill by reason of the fact that it was a member of my union who brought the action which was finally settled in the House of Lords. The Minister has given one aspect of Pratt's position. It is quite true that he ate the food and got money for it as well, but he never wanted the food; he wanted the money.

Mr. Peake

But he ate the food.

Mr. Leslie

The rest of the staff also wanted the money. The firm at first refused to discuss it with the union which attempted to negotiate on their behalf. This man Pratt was the chief shop steward in the firm and was responsible for a petition to the firm asking that the supply of food should be discontinued and that the staff should receive the 10s. deducted in respect of meals. The firm were not satisfied about the petition and suggested that a ballot of the staff should be taken. A ballot was taken, and was even more successful than the petition, because by a huge majority the men showed that they would prefer the 10s. to the food which was being supplied. Unfortunately Mr. Pratt, who had been with the firm for 35 years and was recognised as a very efficient worker, was dismissed by the firm. He subsequently brought his action and we know the result. Other members of the staff were involved. They were locked out for declining to agree to the deduction, although the firm themselves had decided that a ballot should be taken and the staff had shown that they wanted the money instead of the food. After the decision in the House of Lords writs were issued on behalf of these other individuals, but I am pleased to inform the House that as a result of nego- tiations undertaken by the Trades Union Congress the firm agreed to compensate these men and the writs have now been withdrawn. We have received a cheque for the agreed amount and they have paid the solicitors' costs; so that is all right so far as the union and the firm are concerned.

As I understand it, the decision of the House of Lords makes it clear that the workers must be paid in the current coin of the realm before deductions can be made for supplies in kind. For a very long period distributive workers were outside the provisions of the Truck Act. In the early history of the distributive trades the shopkeeper acted as a guardian to his apprentices, who lived in his house and ate at his table; but with the growth of huge company concerns the old personal relationship died out and the living-in system had little or no merit to warrant its continuance. Assistants had no voice either in the quality or quantity of the food supplied, and naturally they often preferred to have the money to spend as they liked instead of being supplied with food for which they did not care. In many cases they were forced to spend money on buying other food. I remember a classic case which occurred in a Yorkshire town when I was organiser to my union. A very large employer there with a drapery establishment also had a farm. Some of his sheep had died of dropsy, and the carcasses were brought into the town, and the assistants were fed on the meat. The premises were raided, and the employer was brought before the local court and fined £5 by the stipendiary; but he appealed and—would you believe it?—he got off, on the plea that the food was not being exposed for sale. I suppose it did not matter whether the assistants were poisoned or not; the legal point was in his favour.

It was not until 1896 that the Truck Act was extended to shops. That was 65 years after the Truck Act was originally passed. When it was extended to shops it resulted in a dimunition in the number of fines imposed on the workers under a system which could only be described as bare-faced robbery of the assistants' earnings. For instance, there was a fine of 5s. for losing a duplicate costing 3d.; 2s. 6d. for losing a sale to a customer; 1s. for not calling the attention of the shop-walker; 2s. 6d. for smoking in the bedroom; and 2s. 6d. for sleeping out with- out permission. It is good to know that most of the abuses of the living-in system have died out. The last war did a great deal to kill the system by reason of the difficulties accompanying food rationing, and I am hoping that rationing in the present war may sound the death knell of a system which has very little to recommend it. Strangely enough, it is a system which is almost entirely confined to England. It does not exist across the Border, or in the British Dominions, or in the United States, and why should it exist here? It is a relic of the feudal system and ought to be abandoned. I hope that the decision of the House of Lords in the Pratt case will be an object lesson to employers and that they will abandon a system which has very little merit in it and leave the workers free to spend their earnings how and where they like.

7.29 p.m.

Sir George Broadbridge (City of London)

I welcome this Bill, and I do so because there are so many firms in the City of London who have been adversely affected by what is known as the House of Lords decision. It is also well known that that decision was of a purely technical character. But be it technical or not, it brought about an impossible position between employers and workers. There has been no merit in the men's claim. Even the appellant Pratt, in the House of Lords case, admitted that he had had value for money. Again, up to 1929 there existed an agreement with regard to this system between the Wholesale Textile Association and the National Amalgamated Union of Shop Assistants. In 1937, the Home Office issued a Memorandum upon the Truck Act. There is no doubt from that Memorandum that it had become an accepted fact that this system, which the House of Lords has now said no longer exists, was taken as an ordinary and common rule.

The best thing that one can do in regard to the position which has arisen is to wish the Bill every success. I thank my hon. Friend for introducing it and, if I may say so, for the extraordinarily lucid way in which he did so. I hope that it will find its way at no distant date on to the Statute Book and that, in future, it will enable the relationship between employers and workers to be carried on in the most cordial manner, as I am certain will be the case.

7.32 p.m.

Mr. Oliver (Ilkeston)

I wish to raise my protest against the Second Reading of the Bill. I listened with very great care and attention to the Under-Secretary of State, and I noticed that he drew some very lurid pictures of the unfortunate employer or employers who might be mulcted by unscrupulous workmen who had eaten food that they did not desire to eat, and hospital attendants who were in the position of being able to claim £600 against their employers. That is all very nice, but one must not forget that there is another side to the picture. The Bill does not seek to amend the Truck Act of 1831. Apparently, the Act is quite satisfactory. Therefore, one has to inquire what is to happen to the bona fide claims that may come forward. What is to happen to the people, who must be present in the 16,000,000 or 17,000,000 of the industrial insured workers in this country, where they have a right of action vested in them now, which the Bill will destroy? It is quite true that the Bill will give another right of action, but it will be a limited one which will permit them to go back only to the date when the Bill becomes an Act. I want to know what provision has been made for the bona fide claimant, the person for whom the Truck Act of 1831 has been in operation for all these years, and whose position that Act was designed to safeguard. As I read the Bill, there is no provision for that person at all.

The Bill virtually amounts to an amendment of the Statute. I have heard it described as a mere technicality. Even the Pratt and Cook case was said to be a mere technicality. If the contract had been the other way about, this issue, it is said, would not have arisen at all. I do not think that is a fair description of that case. Even if the contract had been switched about, it would still have been necessary for the contract to have been in writing and signed by the worker, if I have understood correctly the judgment in this case. If it is a mere technicality I am rather surprised to see the following words in the principal Clause, which is Clause 1(1): Where before the commencement of this Act the whole or any part of the consideration for the hiring of a worker or for the performance of any labour by a worker was the supply or a contract for the supply of any thing or the demise of any premises in respect of which a stoppage or deduction from the wages of the worker might lawfully have been made under Section twenty-three of the Truck Act, 1831, if an agreement therefor had been made in writing and signed by him. If this is a mere technicality, why insert the words, in writing and signed by him"? I suggest that the reason why those words are not taken out is that they go to the root of the principle of Sections 1 and 23 of the Act of 1831. It is not a technicality. It is an important provision, and that provision still remains. No provision is made to safeguard the bona fide workman—not the blackmailer, because he desires to have the money as well—whom the Act was designed to protect, so far as I understand the Bill. Therefore I register my protest at the Second Reading of the Bill.

7.37 p.m.

Mr. Mander (Wolverhampton, East)

As one who is very much interested in industrial relations, I should like to give my support to the Second Reading of the Bill. I am very glad that, as a result of the decision of the House of Lords, part of what remains of the old system has been done away with. There is no doubt that, in the days when the Act was first brought forward, the workers were in a state of industrial slavery. They were chained to their employers in ways that were most unfair, but the position has been altered by subsequent legislation. There is still a good way to go. By trade union action, and by legislation such as I cannot refer to now, except in passing, we shall, in time, give the workers a charter of freedom which will enable them to hold their own in all respects, as regards their employers, and give them the right to be consulted and play their part to the full, in industrial matters.

I should be interested if the Minister would make one matter clear. I have no information as to how many Mr. Pratts there were altogether, and how many persons were involved and took proceedings. Were they all associated with this particular firm? From the account given by my hon. Friend just now, it would appear that this is a case of deliberate persecution and victimisation by a firm, and that it was wholly indefensible and reprehensible. As a result of the action taken by the trade union in supporting this man, justice has been obtained in the end. I should be interested to hear whether there are any other cases beyond those which have been referred to, where compensation has now been paid. I warmly welcome the Bill, because it takes us one little step towards the complete emancipation of the workers of this country.

7.39 p.m.

Mr. Silkin (Peckham)

I cannot help feeling some surprise that the Home Office, in the midst of the present situation, has been able to find time to introduce a Measure, which, as far as I can understand it, is intended, almost entirely, to relieve one firm in the City of London. I doubt very much with all respect to them, whether the Government would have found equal time, if a body of workers had been affected in a similar way. I can well understand my hon. Friend the Member for Sedgefield (Mr. Leslie) not opposing the Bill because, apparently, he has obtained on behalf of his members all the benefits which they might have obtained if they had instituted proceedings and successfully brought those proceedings to an issue.

I can also understand the hon. Member for the City of London (Sir G. Broadbridge) supporting this Bill, but I agree very largely with my hon. Friend who has just spoken that this Bill goes too far. Nobody wishes to support the person who has eaten his cake and who then wants to have it, but the Bill goes very much beyond dealing with that position. There are cases of people who have not eaten their cake. The Under-Secretary assumes that all the workers have consumed the food which was available for them, but there are cases where the food was so bad that it was quite uneatable, and the Truck Act makes no provision for that. I can assure the hon. Member that there are cases of men who have not eaten their food at all. There are cases where men have had to pay 10s. a week when their wages were quite incommensurate with a reduction of 10s. a week considering the food which was available for them. There was a case of a man getting 42s. 6d. a week. That man would never have spent 10s. a week on the few meals which were available to him. It was quite disproportionate to his earnings.

I submit that in cases such as that, the 10s. a week was really deducted as a form of duress. Many of the workers had no alternative but to accept the situation, but, as my hon. Friend the Member for Sedgefield has told the House, it was done under pressure and quite unwillingly. It is absurd to suggest that in a good many of these cases the arrangement was the result of a bargain freely entered into between the worker and the employer, the worker having complete freedom of choice in the matter. I suggest that in a large number of cases the worker had no choice at all. It was a case of taking the job on the terms which were offered to him, or not at all, and subsequently it was a case of accepting those conditions or going out of work entirely.

It is wrong to suggest that the merits are entirely on one side. The hon. Member for Sedgefield, I think, has made it quite clear to the House that in the case of Pratt there are merits on his side. There are other cases, which have not yet come before the courts and are not covered by the agreement which has been made, in which there are equal merits. I feel, therefore, that this Bill is going beyond what is proper and is penalising people who have some merits and who are entitled to receive some compensation. In the case which my hon. Friend mentioned men received, on an average, £400 each, together with their costs. There are other cases not referred to by him where the merits are at least as good. On the other hand, I recognise that the cases to which I have referred form, perhaps, a minority, and for that reason and in view of the critical situation I do not propose to oppose the Bill.

There was, however, one point which I wanted to make and which I hope the Under-Secretary will consider seriously. In Clause 1 of the Bill there is a reference to costs. A number of workers have instituted proceedings in consequence of the decision of the House of Lords. As the Under-Secretary has stated, it is the highest court in the country and makes law. As a result of the decision of the House of Lords a number of men considered, I think rightly, that they were legally entitled to recover this money and they instituted proceedings. Although the House may, on public grounds, frown on such proceedings and wish to bring them to a close, these men were within their legal rights in instituting these proceedings and there ought to be no doubt whatever that they will get their legal costs. The wording of Clause 1 certainly leaves it in considerable doubt, because it says: … subject to such order as to costs as the court or a judge thereof may think fit to make. I think it should be made quite clear that in a proper case, unless there are good reasons to the contrary, a plaintiff should get those costs, and I therefore propose at the proper time to put in a manuscript Amendment, which is the only form of Amendment now open to me, to put this point right. There may be cases in which a person is not entitled to his costs, but I think from the statement of the Under-Secretary that it is his intention that a person who has properly brought proceedings should get his costs up to the time when he is not permitted to proceed with his action. I, therefore, hope that the Under-Secretary will accept this Amendment when I move it at the proper time, and will make it clear that a plaintiff is entitled to his costs up to the date on which the Measure becomes law, unless there are, in the opinion of the judge, very good reasons to the contrary.

7.47 p.m.

Major Milner (Leeds, South-East)

The Under-Secretary, with his usual competent and charming manner, put a picture before us of the insignificant effect which this Bill would really have, but I was sorry that he did not say that the Home Office had a very great responsibility in this matter and that the object of the Bill was just as much to whitewash the Home Office as to right the difficulties which have arisen from the decision in the House of Lords. For over 40 years the Home Office, who claim omnipotence in so many of our public affairs today, have erroneously misled the commercial community of the country in this particular matter—

Mr. Peake

May I interrupt the hon. and gallant Member? I hope he will acquit me personally of any responsibility for the drafting of the Home Office Circular which was drawn up in 1896.

Major Milner

Certainly. I do not, however, know whether the hon. Gentleman was in the Government when the circular was re-issued in 1937. If he was, I cannot acquit him of responsibility, but in any event he is here as the representative of the Home Office to-day and it should be made clear that the Home Office is not always as omnipotent, or as accurate in its judgment as it professes to be. I think the Home Office bear a good deal of responsibility for the tangle which this matter has reached, resulting in the necessity, as the Government think, for the introduction of this Bill, and that fact should be made clear.

There are one or two other matters which have not been made clear to the House. In the first place, I should like to ask the Under-Secretary what is the origin of this Measure. I am aware of the decision of the House of Lords, but am I to understand that the Home Office of its own volition brings forward this Bill in order to deprive, as in fact it does, those who have acquired rights, bona fide or otherwise, or is it that some pressure from some quarter has been brought to bear upon the Home Office to introduce it? I do not know the answer to that question. In these strenuous times, when we are in the midst of the greatest war this country, or possibly any other country, has ever fought, how does it come about that a Bill of this sort, dealing with what is really a small matter—at any rate, if it is a serious matter more note should have been taken of it than has been taken—is introduced, and at whose instance?

The second matter on which I should like information is as to the number of cases which are now before the courts or of which the Home Office has knowledge. It is true that there have been only three cases, and that those have been bona fide cases, where people's rights have been interfered with. But if there are a great number of other cases before the courts or of which the Home Office have knowledge, the House ought to be told. I hold no brief for claims in which, so to speak, there are no merits. I am not referring to the House of Lords cases, but if there be cases in which a man has willingly acquiesced in the receipt of meals or anything else over a period of years, and he now seeks to take advantage of the decision of the House of Lords to obtain money for them, there are no merits in such cases, and it would be entirely proper to pass legislation to prevent such an advantage being taken of the House of Lords decision. But we must be clear as to the number of people who may be concerned and the extent to which this Bill would affect individuals.

I understand that the Trades Union Congress have had the opportunity of looking through this Bill. They are, in my view, the best judges of the desirability of passing it, or otherwise. I understand that the Bill applies only to a very limited class of cases, that henceforth the Truck Acts will remain in full force, and that the real intention of the Government is to ensure that in cases which are not bona fide, in the sense in which my hon. Friend used the term, there shall be no claim up to date, but that in all cases in future the Truck Acts shall have application. In that case, I do not propose to offer objection to the Second Reading, provided that we have full information on the questions that I have asked.

I am in favour, however, of the Amendment which I understand my hon. Friend the Member for Peckham (Mr. Silkin) is to move in Committee, to provide that the Bill should not be left, as at present drawn, so that the costs may go as the judge thinks fit, but that if the workman has presented his case properly and has not succeeded in his claim, he shall be entitled to his costs. I was sorry to hear the Under-Secretary say—and this is a matter on which he must bear responsibility—that in the normal course the judge exercises discretion as to the costs. He was not corrected by his right hon. and learned Friend. I have always understood that, in the normal case, the costs follow the event, and that it is only for exceptional reasons that the court may deprive the successful party of his costs. Where, by reason of this Measure, someone is to be deprived of a right that he has hitherto enjoyed, he should be entitled to his costs as a matter of course. If my hon. Friend moves his Amendment I shall certainly support it; but, subject to satisfactory answers to the questions I have asked, I do not propose to offer any objection to the Second Reading of this Bill.

7.55 p.m.

Mr. James Griffiths (Llanelly)

The discussion this evening is an echo from the days before trade unionism, the period of the industrial history of this country when the worker was, almost body and soul, in the possession of the employer. When proposals are brought forward to amend the Truck Acts every trade unionist rises to his feet to defend the workers. It is our business to see that no change is made which weakens in any sense or to any degree the real protection which the worker has in the Truck Acts. We are deeply concerned to maintain that protection, and we approach this Bill from that standpoint. The first thing we are concerned to secure is that there shall be nothing in the Measure which in any way weakens the general protection which the Truck Acts give to the workers of this country. We understand that this Bill is brought because of an action in the House of Lords. My hon. Friend the Member for Sedgefield (Mr. Leslie), who is a member of the trade union responsible for bringing that action, has said that this system ought to be brought to an end. I hope that this discussion will bring to the notice of the employers of the City of London and elsewhere the fact that the workmen of this country are citizens with full rights, and that the days of savagery are over.

As I understand, it was discovered in the courts that, in all these cases, the way in which the agreement had been made constituted a technical breach of the Truck Acts. I understand that the agreement was that those workmen and others were to be paid 53s. "in coin of the realm," to use the words of the Truck Acts, and, that in addition, they were to have food, consumed on the employer's premises, which was jointly agreed to represent 10s. a week. I understand that that was discovered to be illegal, and therefore, not binding. On the other hand, if the agreement had been for the payment of £3 3s. a week, and, by agreement in writing, 10s. a week had been deducted for food, that, I understand, would have been legal. I and others, in making agreements of this kind, have accepted the common interpretation of the Truck Acts, an interpretation which the Home Office themselves have issued for the guidance of employers and workers. There is, in consequence, a large number of bona fide agreements between employers and workers on the commonly-accepted interpretation.

By this decision in the House of Lords, those agreements become null and void, because they are illegal. In the industry with which I am most familiar, there are agreements in every pit, in every district, and in all the coalfields of the country, as the Under-Secretary, who used to be connected with the industry, knows. Some element of payment in kind has always entered into our agreements. For example, part of the payment of the miner, by signed agreement, is the right to receive either free or cheap coal for his own domestic purposes, and in fixing and settling the wage structure of the industry we have had regard to the fact that there is this old-established custom, going back to the very early days of mining. In addition to that, in some of the districts, there is also provision by which the rent of certain cottages is taken into account. We know that these agreements, technically, are null and void by this decision, but there are large numbers of agreements in other trades and industries. The Trades Union Congress has been at some pains to discover the views of the trade unions about this decision. When the proposals of the Home Secretary, now embodied in this Bill, were first announced in this House they were made known to the trade unions of the country whose observations were sought upon them. We are assured by Trades Union Congress representatives that the trade unions of this country have raised no objection to this Bill.

The trade unions have been deeply concerned to find out whether the provisions of the Bill would prevent bona fide claims from being made. I do not claim that the trade unions speak for every workman in this country, but they do speak for the mass of the workmen. We can claim that they speak for the working men in this country who are most alive to their duties and privileges. Without trade unions no workman would have any rights at all; therefore, I think the trade unions can be accepted as speaking for the workers of this country. They have made every effort to find out whether any bona fide claims will be prejudiced by this Bill and they cannot find any. If there were bona fide claims they would become known through the machinery of the trade unions.

It is because the unions believe that, that they have accepted this Measure. We have, generally, in industry made agreements, and there may be thousands of them. An action of this kind takes place and as a result a decision is given which causes a re-examination of the position. It is possible that some employer at some time may take a case to court and get a decision adversely affecting and seriously prejudicing the workmen, and the trade unions would have to go to the Government and ask them to take the earliest possible opportunity of putting the matter right. I want to get this on record. Cases of that kind may occur. If they do, I hope that the Government of the day, whatever Government it is, will act with the same tact as the present Government. It is on the assurance that that will be done, if such a case crops up, and such a decision is made, that we support the Bill. We have built up and are strengthening—earlier this evening we heard the speech of the Minister of Labour, who has played an important part in building it up—a splendid system of collective agreements and security for the workers of this country, and we are anxious that nothing should be done to disturb that system. We approach the Bill from that standpoint.

We understand that this Bill applies only to those cases where legal agreements could have been made for payment in kind, such as are permissible under the Truck Act, 1831, but were not made either because of misapprehension or misunderstanding. I want to get from the Attorney-General a definite assurance by which our reading of the Bill and that of laymen and trade unions, on that point, is made doubly sure. All that the Bill prevents is retrospective action in such cases as I have indicated, and only in those cases. This decision has shown that we ought to look afresh at the question of the Truck Acts. One hundred and ten years have passed since the first Truck Act was passed. We are living in a new era, a new industrial regime. In 1831 there were no trade unions and none of the present magnificent organisation of the workers of the country. This magnificent organisation is playing its part, and it is part of the bulwark of this country in these days of stress and strain.

I put this point earnestly on behalf of my colleagues and of the trades unions. Surely the time has come when consideration ought to be given to the possibility of passing a consolidating Truck Act, bringing the legislation up to date and relating it to the conditions and in- dustrial circumstances of our time. Can we have an assurance that in spite of the difficulties of the time, the Government will consider the possibility of bringing forward a consolidating Measure? It may be that the initial steps ought to be consultations with the Trades Union Congress and with the employers. If that is the first step to take, I invite the Government to initiate discussions with the Trades Union Congress to discover whether agreement can be found for the passing of a consolidating Measure. In any case it is very essential that these first steps and other steps should be taken in order that we may bring this important legislative bulwark of the workers up to date and give the protection to the worker in these days which the Truck Act gave in 1831. Subject to assurances on those points, we do not propose to offer any objection to the Second Reading of this Bill. That is on the understanding that the assurance for which I have asked and the interpretation I have put upon this Bill—and it is the interpretation of the trades unions—shall be agreed to by the Attorney-General when he comes to reply. If we get assurances on these points, we shall agree to giving the Bill its Second Reading.

8.10 p.m.

The Attorney-General (Sir Donald Somervell)

The hon. and gallant Gentleman the Member for South-East Leeds (Major Milner) directed some criticism against those responsible for the Home Office in 1898, and not in 1896 as he thought. I think it worth while to say that in that circular it was pointed out that these were only opinions obtained on advice and that only courts of justice could finally decide the meaning of the law. I do not think that Government Departments should be discouraged from giving what help they can in a complicated and legal matter because, 30 or 40 years later, on one small, complex and rather technical point they were wrong. The view taken in the circular was not something which was declared by all judges as plainly to be taken as being wrong; it was the view taken by a majority in the Court of Appeal and by one of the Lords of Appeal in the House of Lords. It was obviously, therefore, a difficult point. The hon. and gallant Gentleman the Member for East Wolverhampton (Mr. Mander) and, I think, one or two other speakers, asked me how many other cases were affected. To some extent that was answered by the hon. Gentleman who has just sat down in his reference to the coal trade, some of which may be affected by this House of Lords judgment. Our information is that there are many other cases, and the hon. Gentleman the Member for Peckham (Mr. Silkin) will be interested to know that the London County Council have many cases, of agreements which are probably invalid under the decision in the House of Lords. Other local authorities also are in the same position. I understand that there are agreements agreed to by unions concerned in the textile trade. It is not an isolated case at all.

With regard to the question which the hon. Gentleman opposite put, the Bill does apply only to cases where the substance of the agreement could have been legally obtained if the form of deduction had been adopted, whether you adopt the form of deduction or adopt deduction partly in cash and partly in kind. It is also relevant to say that under Section 23 an agreement is invalid in spite of this Bill if what is deducted is more, in the case of food, than the fair value of the food suplied. Where the food is not eaten because it is unpalatable it may be that more than the fair value was deducted. In answer to the question whether this affects retrospective cases, the answer is "Yes." It may put a certain burden on employers in altering the form of these agreements, but in future everybody must adopt the form which the House of Lords has declared to be the legal form, and the only legal form, on which this result can be obtained. That point will be welcomed by the hon. Member for East Wolverhampton, because he thinks that if there is a distinction in form, he would prefer the deduction form—

Mr. Mander

The right hon. and learned Gentleman has not yet answered my point about the number of persons involved in these cases.

The Attorney-General

I am told that there are some thousands in the London County Council area and many others in other areas.

Mr. Mander

Who have actually brought actions?

The Attorney-General

I cannot give the number of those who have started actions. I do not think it will be possible to obtain statistics, but I have heard informally that a very considerable number of actions were started before the Home Secretary's statement on 18th April. Obviously, unless this matter was remedied you might have had many actions. In dealing with costs I propose to wait until an Amendment is moved so that I shall not have to say the same thing twice over. Another question put to me was whether the Government were prepared to look at the Truck Act anew and consider a consolidating Measure. I am sure the hon. Gentleman opposite agrees that at this time especially it would be impracticable to do that. Everybody, including trade union leaders, has many matters to attend to, and I cannot think that anyone would want at this moment to turn aside from them—

Mr. J. Griffiths

If they do want to do so, are you prepared to reconsider the matter?

The Attorney-General

One has, of course, to consider priority of demands which the war makes on all sides in a matter of this kind, but I can say that note has been, and will be, taken by us and our successors of the importance which the trade union movement attach to the overhaul of this part of our legislation. In happier and easier times, so far as we can bind our successors, I think they would be willing to enter into discussions to see whether agreement could not be arrived at. I am sure the hon. Gentleman opposite will not expect me to go further than that tonight, and I hope the House will give the Bill its Second Reading.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time.

Resolved, "That this House will immediately resolve itself into the Committee on the Bill."—[Mr. J. P. L. Thomas.]

Bill accordingly considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

  1. CLAUSE 1.—(Restraint on proceedings under 1 & 2 Will. 4. c. 37, and removal of doubts as to effect of illegality of contracts.) 1,375 words