HC Deb 19 July 1950 vol 477 cc2424-34

11.23 p.m.

The Minister of Transport (Mr. Barnes)

I beg to move, That the Draft Controlled Bodies (Compensation to Employees) Regulations, 1950, a copy of which was laid before this House on 12th July, be approved. I would remind the House that on 28th June a similar set of Regulations was approved unanimously, and with support from all sides of the House. The Regulations which I am submitting tonight are similar in character to those which were then approved. These Regulations apply to the staffs of a number of controlled companies which were owned by the late railway and canal companies, before they were transferred to the British Transport Commission. Many of those controlled companies also controlled subsidiary organisations. They passed to the British Transport Commission on 1st January, 1948. As hon. Members are aware, under Section 101 of the Transport Act, the responsibility falls upon the Minister to make the necessary compensation Regulations. The Regulations which I am now submitting will apply to those controlled companies, and they are of the same pattern as those which as I indicated received the approval of the House, and applied to the road haulage undertakings.

To claim compensation, a man must have suffered loss of employment, diminution of emoluments or worsening of conditions as a result of the transfer of the company. The cause of the claim must arise within a period of 10 years, and the claim must be made within two years of the claimant's generally being aware of the circumstances. The qualifying period is the same as in the road haulage Regulations, namely, the period of eight years of service. War service is to count; and war service, as I have previously indicated, means not only service with the military arms, but National Service in its widest sense. The usual provisions apply, namely, that any claimant who is dissatisfied with the award of the British Transport Commission can apply to the appeal tribunals of the Ministry of Labour.

In this case all pension rights that may have been earned with previous employers are safeguarded by these Regulations, and provision is made for added years of service for those over 40 years of age, recognising that it does become more difficult for a person to find alternative employment later on in life. I want to emphasise that every person who qualifies secures the minimum award of 13 weeks, and over 45, an additional year is added up to a maximum period of 26 weeks; and further, as in the case of the previous Regulations, any employee, officer or servant who can prove further expectation can secure an appropriately increased award.

I trust that, as the House has already covered the ground in a fairly full Debate on the previous Regulations, and as I have secured the approval of the House for similar Regulations, applying to other aspects of the transport undertakings, I shall receive similar support tonight, and that the House will be prepared to approve the Regulations.

11.27 p.m.

Mr. Geoffrey Wilson (Truro)

We on this side of the House do not, of course, propose to divide against these Regulations, which, as the Minister has said, resemble in many respects Regulations which were so recently before the House. We welcome them. Our only comment, I think, would be that we should have preferred to have them a little earlier; but we appreciate the difficulty, and that the other Regulations came forward, perhaps, with priority because they deal with a rather more limited class of person. We do not consider the Regulations to be of a very controversial nature, but I should like to take the opportunity to make one or two comments, to put on record the point of view of hon. Members on this side of the House, and also, perhaps, to enable the Minister to answer one or two points and dispel some doubts that some hon. Members have in their minds with regard to these Regulations.

Now, as all hon. Members probably recollect, before 1945 there was a more or less established code of principles in legislation with regard to compensation. It was quite different from the usual code that is contained in recent legislation since 1945. Before 1945 it was the general principle that every person who was employed in an undertaking which was acquired compulsorily was safeguarded, and as a rule there was no qualifying period. In the calculation of compensation, additional years were added for special service, and in many cases an extra ten-sixtieths were added for each five years' service. We do not, of course, find any of those sorts of provisions in these Regulations, which closely follow the previous Regulations recently laid before the House.

We on this side of the House have always expressed the view that, from the point of view of the employee, the more modern code is not as good as the one that existed before 1945. In these Regulations there is a qualifying period, and not everybody is safeguarded. These Regulations do not provide compensation for anyone under the age of 18. Also, I understand that war service counts only if it follows employment and not if the war service started before the employment began. It could hardly arise now as we are in the year 1950, but there might be circumstances in which the person desiring to make a claim went straight into the Army and then took up employment with the firm concerned, and that period—

Mr. Harrison (Nottingham, East)

Is the hon. Gentleman suggesting that under agreements prior to 1945, a man not previously employed in any undertaking taken over was granted credit for such time before actually entering into employment in that particular firm?

Mr. Wilson

Before 1945 the question of war service did not really arise. I am suggesting that it is rather a limitation that war service should apply only to men in the employment before their war service.

The major point at which these Regulations differ from the earlier ones is on the question of what it sometimes called the doctrine of customary practice; that is to say, the maximum compensation is only awarded to a man who can prove that in the employment which he was occupying at the time of nationalisation there was an established custom that he got compensation in respect of expectation of permanency of employment if his job proved to be redundant and he was removed from it. This doctrine of customary practice very much limits the compensation payable to some men; it depends entirely on the kind of employment they were previously occupying. In some cases it may not matter very much, because it is not difficult in some classes of employment to prove that there was such a customary practice. In other classes of employment, however, it is virtually impossible to do so, and, as I read these Regulations, unless a man can prove customary practice he is only entitled to the bare minimum of compensation under paragraph 5 (3) of the Second Schedule: that is, 13 weeks' compensation, and in certain circumstances if he is over 45 a maximum of 26 weeks. Well, that is not a very big sum, and I should like to know how many classes of people coming under these Regulations will be limited to the minimum sum.

We are trying to ascertain exactly to whom these Regulations apply. They seem to apply to an extraordinary variety of people. They apply to anybody, as far as I can understand, who is in the employment of a number of firms of all kinds which were controlled either by the railways or canals at the time of nationalisation. Some of these firms, whose employees are subject to these Regulations, such as Pickford's or Thomas Cook, are big concerns and although I do not know what are their terms of employment, I should think such men employed in, say, Carter Paterson's or Pickford's are probably not in a worse position by reason of the fact that the railways have been nationalised. Their employment still goes on, and I should think they are in just about the same position as they were in before, so these Regulations hardly affect them; but there are all sorts of other concerns which apparently come within their scope.

There is a railway undertaking in Northern Ireland which used to belong to the L.M.S. Railway, and even a swimming bath. I do not know where that comes in or the terms of employment at a swimming bath. We are curious to know how many classes of people will be entitled to receive the maximum compensation under these Regulations and not the bare minimum. Because if most of the people to whom these Regulations apply are only getting the bare minimum, they are not getting good terms and these are not generous terms to offer. It is no good offering a man elaborate compensation in circumstances which are never likely to arise, and I hope that is not the case in regard to these Regulations.

My second point is a small one and appears in the last line at the foot of the first page. Paragraph 1 of these Regulations finishes with a definition of "Current net emoluments" and says: furthermore, any amount by which emoluments exceed £4,000 shall he disregarded: Why £4,000? It seems to me rather a curious figure and that a curious principle is involved, because compensation is not a matter of ex gratia payment. Such a payment is one made simply as a gift, but compensation is presumably a right.

I assume that the principle is that the State has been forced, for reasons which are for the benefit of the whole community, to do damage to some individual. If that is so, there must be a just scale of compensation which is a right. And the mere fact that the man is damaged largely, and that the income he had was more than £4,000, seems to be a poor reason for limiting the amount of compensation which he will get. Surely the State will not say that it will disregard those people whom it has injured most—which seems to be the principle of the Regulations as at present drafted.

My last question is with regard to the end of paragraph 2 (1) where there is a proviso which refers to the duties that the people are required to perform. It reads: Provided that the duties which a person is required to perform shall not for the purposes of this paragraph, be deemed to be not reasonably comparable to those which (apart from any war service) he last performed before the relevant event by reason only that they are duties in connection with activities which did not form part of the activities of the controlled body by whom he was employed before the relevant event or that they involve a transfer of his employment from one place to another within Great Britain. Now, in transport affairs it has always been an accepted principle that men employed in transport might very well find themselves asked to move from one part of the country to another. In the days before the war, that did not matter so much, but nowadays it is often a very great hardship. Recently I met a man in the railway service who had been previously employed at Bristol but who was now transferred to Glasgow. He had a family in Bristol; he had a house there, and his children went to school in Bristol. There was no chance at all, at least certainly not for a long time, of his getting a house in Glasgow. So the effect of what I admit was the quite reasonable action of the Railway Executive was that this may was virtually, and almost permanently, separated from his wife.

Mr. John Hynd (Sheffield, Attercliffe)

Will the hon. Member say if this was a compulsory transfer?

Mr. Wilson

No, he went voluntarily, but the fact is that he is very largely separated from his wife. My point is that if a man was asked to do such a thing—and in the case I mentioned, although he went voluntarily, he was asked to go—it would not be unreasonable if he should refuse. The last words of this particular paragraph mean, as I understand them, that if a man refuses alternative employment within Great Britain he can be debarred from compensation. I hope that will be moderately interpreted, because in modern days it is not reasonable to ask a man to transfer great distances. Hon. Members need not be reminded of the difficulty in finding a house, and the man may have reasons for rejecting the alternative employment. I am only putting forward the suggestion that a moderate interpretation should be placed upon these Regulations and that compensation should not be denied to a man merely because he was asked to do a thing rather hard to accept.

I do not wish to press any further any of the points with regard to these Regula- tions; they are, as I have said, quite uncontroversial, but I hope that the Minister will bear in mind the points which I have just made and assure us that these Regulations do do what they intend, and that is to provide compensation for a man who has suffered loss through nationalisation.

11.43 p.m.

Mr. Bell (Buckinghamshire, South)

I should like to mention one point which I think is important because, apart from other things, it was not directly raised on the similar Regulations which we discussed for road transport; and that is that working partners are not covered by these Regulations. Hardship and anomalies may arise in that if people turn their undertaking into a limited company, and become directors, they are treated as employees and get compensation for loss of employment. If they are actually working on the job, they get compensation for loss of employment; but a partner is not an officer or servant except for, perhaps, the taking over of the assets. In the case of a small concern, the directors are very frequently the sole owners and so they get compensation for the assets and for loss of employment if they come under the Reguations.

I should be grateful if the right hon. Gentleman would consider whether it would not be practicable to work out a method whereby persons who are really working partners—and it is not difficult to find out, because many of these are family concerns handed down—might have better treatment. There would not be, it is obvious, so many instances under these Regulations as under the Road Haulage Regulations. There might be—I do not know; but there is a clear case in equity, and the only reason the Minister has not covered this matter in the Regulations is, to my mind, that there is some practical difficulty. Cannot he at a later stage draft an amending Order to cover this point?

11.45 p.m.

Mr. Reader Harris (Heston and Isleworth)

Whenever I approach Regulations concerning compensation for loss of office, I do so with suspicion. I was not born with that suspicion, but it has grown into my breast ever since the day when the Home Secretary, whom I am very glad to see on the Front Bench tonight, produced his Regulations dealing with compensation for loss of emoluments in respect of the fire brigades. Now I look on all such Regulations, with some suspicion, and I am rather suspicious of these.

I am afraid that in some cases there will be some hardship. I should like to ask whether the Minister is prepared to watch how these Regulations operate and, if necessary, to produce amending Regulations if he is satisfied there is some hardship caused by them? There are two matters on which I would like to have assurances. One is to know what is included in the word "emoluments." On page 2 of these Regulations, there is a very full description of what emoluments cover, but I am still not clear on one or two points. Paragraph 1 (b) includes" all bonuses, allowances, commission, gratuities, special duty and overtime pay followed by the rather delightful words, whether obtaining legally or by customary practice; and it says, immediately after paragraph 1 (c), but does not include payments for travelling, subsistence, accommodation, engagement of assistance and other expenses incurred in the course of employment, overtime and other payments that do not reflect a permanent state of affairs. What is a payment that "reflects a permanent state of affairs"? In the Debate on Transport on 15th March, I mentioned the fact there were certain payments made to drivers of lorries; for instance, special payments such as an extra £1 a fortnight for having clear signatures on receipts or for having no accidents. Are these payments which "reflect a permanent state of affairs"? Presumably, if a man has any accidents, he loses a payment and may not qualify. A man may have been a very good employee and have qualified for these extra payments, and it is reasonable they should be taken into account in trying to work out his losses.

Another point I should like to raise is about the compensation that is payable to a man who had no right or expectation under customary practice to the payment of compensation. That is laid down in the Second Schedule, paragraph 4, (1) (i). It is stated in paragraph 4 (2) (ii) of this Schedule that such persons are to receive compensation as set out in paragraph 5 (3) of the Schedule. Here we find how compensation is to be worked out and we find that it is to be payable only for a period of 13 weeks. That seems to me a very short period for which to receive compensation.

I know there is some addition for persons over the age of 45. But a period of only three months for payment of compensation is a very small period for a man aged 45 who loses a job and finds it very difficult to find another one. That is a matter we need not go into at this stage, however, because in a few minutes we shall be discussing it on the Motion for the Adjournment of the House; but it is another reason for asking the Minister to watch the operation of these Regulations carefully and to ask that he will issue amending Regulations if hardship is caused.

11.50 p.m.

Mr. Barnes

If I may have the leave of the House, I should like to answer the few points that have been raised. I should like also to express my appreciation of the fact that these Regulations are receiving general support from all sides of the House. The hon. Member for Truro (Mr. G. Wilson) recognised that we were beginning to cover a great deal of the ground covered under previous Regulations. I do not feel it is desirable to approach these compensation Regulations from the angle that a large number of people are concerned through loss of employment or loss of pension rights.

Possibly these circumstances are likely to operate less within the group of companies covered by these Regulations than within those covered by some of the previous ones, which received the assent of the House, because the majority of these controlled companies are running along just as they were before, and there are not likely to be immediate circumstances to disrupt the normal continuity of employment. Parliament, in the main, in approving such Regulations, has had to meet probably the exceptional cases, but even if such Regulations do not apply to a great number of individuals, it is our responsibility to see that they are reasonably covered.

I do not think that the minimum provision of 13 weeks for everyone is an inadequate one when one compares it with the general practice throughout industry. I am not aware from my experience in business life generally that any person who suffers loss of employment secures a minimum of 13 weeks' payment based on two-thirds of his net emoluments, less two-thirds of any sickness or unemployment benefit he receives. Parliament has endeavoured to satisfy itself that we make provision which gives a cushion, a period of time, to enable a man to look round for alternative employment. The circumstances of today do not present the same difficulties of alternative employment as those which arose in some difficult periods of the past.

With regard to the £4,000 limit, frankly I admit that I cannot say why the figure was not £5,000 or £3,000. A figure like that emerges as a result of discussion between the Departments and the Treasury. The figure presented to me in this case was for an award of £2,660 being two-thirds of £4,000. I do not think there would be many coming into that category, and I do not know whether that represents a very great hardship.

Mr. Boyd-Carpenter (Kingston-upon-Thames)

Sir Leslie Plummer got three times that amount.

Mr. Barnes

I did not quite catch that intervention, but I am sure that it was sensible and humourous.

I agree that in present circumstances the safeguard of requiring alternative employment must be looked at in a sensible and responsible way. My general experience from contact with the transport industry, the railways and others, is that I do not find them unreasonable in their approach to problems of this kind. The recommendations of and observations in this House, in this and in previous Debates, are interpreted as representing the views of Parliament.

With regard to the point raised by the hon. Member for Buckinghamshire, South (Mr. Bell) about working partners, we discussed that much more fully on the previous Regulations, and I stated the reason why such a provision could not be made. In this instance, I do not think this will apply. These companies, like Pickford's, Carter Paterson, Cooks', Dean and Dawson, were long-established companies, and do not represent the same changing circumstances that some of the smaller road haulage companies can pass through in the course of a year or two, and which would change the character of an owner or part-owner.

Mr. Bell

On the Road Haulage Regulations, was not the matter discussed, and the explanation given of the position of partners who incorporated themselves after the material date, so that at the material date they were limited companies and not partners? The point I have raised now is that they were still partners.

Mr. Barnes

I do not see how they could be partners in these undertakings, because they were already owned by the railway or canal companies. I think I have answered the main points, and I hope that now the House will agree to these Regulations.

Question put, and agreed to.

Resolved: That the Draft Controlled Bodies (Compensation to Employees) Regulations, 1950, a copy of which was laid before this House on 12th July, be approved.