HC Deb 30 March 1960 vol 620 cc1354-69
Mr. P. Thomas

I beg to move, in page 5, line 32, to leave out from "not" to the end of line 33 and to insert: confer any right of recovery in respect of so much of those wages as has been paid in those circumstances, or as represents a lawful deduction taken into account in calculating that payment". This is a somewhat technical Amendment. When the Bill was looked at again, at the end of the Committee stage, it was felt that it was not quite clear whether a deduction from wages which is lawful under the Truck Acts would be allowed under the Bill and would not give rise to a right of recovery on the part of a worker from whose wages a lawful deduction had been made. Therefore, these words are inserted and are designed expressly to allow an employer to make deductions which are legal under the Truck Acts and to ensure that he is not exposed to an action for their recovery.

Mr. Skeffington

This is a very useful safeguard, because the Bill prevents the Truck Acts operating in a special set of circumstances. There would be real doubt, when the Bill becomes an Act and operates, whether, in that case, all the provisions of the Truck Acts were not being excluded. This puts it beyond any doubt that things which were legal under the Truck Acts will still be legal under the Bill. That is very reasonable, because some such safeguards are certainly required.

Amendment agreed to.

Mr. P. Thomas

I beg to move, in page 7, line 4, at the end to insert: and, in relation to any payment made in any of the ways authorised by this Act, nothing in this Act shall be construed as rendering lawful a deduction which would not be a lawful deduction if the payment had been made to the employed person in cash". This is a somewhat similar technical Amendment. When the Bill was considered, it was thought that, if the Amendment was not made, it might be possible for an employer to argue that Clause 1 (1, b) would allow him to make deductions which would be illegal under the Truck Acts. The Amendment is designed to ensure that an employer who pays wages in one of the ways authorised by the Bill may not make deductions which would be illegal under the Truck Acts.

Mr. Skeffington

In fact, it is the reverse of the previous case.

Amendment agreed to.

Mr. Skeffington

I beg to move in page 7, line 6, after "person" to insert: or a prospective employed person". Hon. Members will remember that we had a discussion on this point in Committee. We withdrew our Amendment so that the position could be looked at again. It is right that, before the House parts with the Bill, and while we still have a chance, we should reconsider the position of, and possible pressures on, a prospective employed person. It is true that, having regard to the form which the Bill now takes, many of the fears which my hon. Friends and I had have now disappeared. But we still have a fear in connection with subsection (7) of the Clause, which we regard as being of the greatest importance to the employed person.

The subsection safeguards his rights and status as a freely contracting party to any agreement, because it states clearly that Nothing in this Act shall operate so as to enable an employed person to be required, by the terms or conditions of his employment or otherwise, to make such a request … Obviously, if there were any pressures then all the safeguards built into the Bill so far would be torpedoed.

This provision is satisfactory and is reasonably watertight for the employed person, but when we come to persons who are being considered for a job the position is not so clear. I realise that it is difficult to apply the same watertight arrangements to a person who is not yet a party to any contract, but we want to be assured that advantage is not taken, even during an interview, to put any pressure on a person applying for employment whereby, if he wants the job, he must, in advance, agree to a request for payment to be made by cheque or in other ways authorised under the Bill.

During the Committee proceedings I said that I thought this matter should not even be discussed during an engagement interview, but, on reflection, I realise that this would be too prohibitive a condition. It may be necessary that the employer shall state that such schemes are in operation; we are only anxious to ensure that a mere discussion would not lead to pressure being put upon a prospective employee.

In answering our fears on this matter, the Parliamentary Secretary said that the remedy of an aggrieved person is simple: the protection is there because any person, subsequently employed, who could say that he had been induced to make a request to get the job, could immediately take advantage of the Truck Acts, which would not be excluded by Clause 1 of the Bill, and he could therefore claim, as it were, compensation by double wages, that is to say, the wages he got by virtue of the agreement and the wages which ought to be paid under the authority of the Truck Acts.

This is true with regard to the fortunate—or unfortunate, as the case may be—man or woman who gets the job. We must realise, however, that there may be a number of applicants, and that those who do not want to make such a request will have no remedy because they would not be employed. So the Parliamentary Secretary's safeguard applies only to a successful applicant.

We still feel that so that there shall be no shadow of doubt that any person seeking employment shall not be subject to pressure, the words "or a prospective employed person" should be inserted in the subsection. This would make it clear beyond any doubt, not only to the employer but also to the prospective employee, that it is not right to induce him to request that his wages shall be paid in a particular manner. This applies also to the employee's agent, the trade union, who might be negotiating on his behalf at any time and who could certainly inform members of their rights.

This Amendment could be a practical way of dealing with our fears. It makes little difference to the obligations of the employer and good employers would not mind the addition of those words. We must remember, however, that not all employers are as careful in this matter as they should be. They may want to have all their wage-earners paid in a special manner, and there may be inducements to exercise pressure on prospective employees. The introduction of these four words would make that an offence, and would, therefore, be a reasonable safeguard. I hope that even at this stage the Government will feel able to accept the Amendment.

4.45 p.m.

Mr. J. T. Price

I support the Amendment for rather a different reason than the one advanced by my hon. Friend the Member for Hayes and Harlington (Mr. Skeffington). This legislation and the proposed Amendments represent an effort to limit the existing statutory and common law rights.

I could not quote a better parallel to the legislation represented in this Clause than the position under the Shop Clubs Act, 1902. Under that Measure it was considered illegal for any employer, under a contract of service, to require any servant in his employment to submit to any deduction from his wages by a payment to a works club or even to a superannuation fund. This has become significant in the last decade or so because of the tremendous development of superannuation funds throughout industry, which we all welcome and do our best to encourage.

It was always felt that this provision was a technical bar to extending these benefits to employees. The way that this has been overcome in many employments has been that although existing employees could not be compelled to accept membership of a works club, or to join a superannuation fund, new employees engaged after the passing of the scheme could be compelled to join as a condition of service.

There is a great deal of constitutional force in saying, in support of this Amendment, that if we are putting on the Statute Book a Bill which is a variation of the existing law affecting the payment of wages, which can only be carried out by the consent of the workers concerned in giving written permission to the employer to pay wages in a different manner from that which obtained previously, that relationship and freedom to make a contract should remain not only for the existing body of workers, but also for those engaged at a later stage by the companies who wished to do this. Otherwise, there is no mutuality or equity as between labour and employer in the payment of wages under the Bill.

For that reason alone, in addition to the powerful reasons put forward by my hon. Friend, I think that we would all welcome it on this side of the House if the right hon. Gentleman could accept the Amendment.

Mr. Marsh

This is generally recognised on both sides of the House as an important point. When the Minister opened the debate on the Second Reading of the Bill he made a great point of the freedom of choice which, we believe, is essential to the working of this Measure. Unfortunately, due to other occupations on another Bill, I was not able to get on to the Committee which considered this one. It is true that there was a great degree of co-operation from the other side of the Committee, and it is only fair to say so, but this is a major and important point to my hon. Friends and myself.

It has generally been accepted that this Measure will be worth a great deal to employers. It may be suggested that it will also be worth something to employees, though I doubt whether that is as large a benefit as it is the other way round. One thing is certain. Without wishing to take a particularly Hobbesian view of employers as a body, I believe that many employers will be very keen indeed to ensure that they receive virtually 100 per cent. acceptance of a scheme of payment by cheque. Whilst the safeguards against the employer coercing the existing employee are now considerable, and, I would think, unbreakable, there are no safeguards against the employer coercing the prospective employee.

We realise that this is a difficult problem with which to deal, because the prospective employee is not an employee and. as such, is not covered by the terms of the Bill. But as the Bill stands at present, there is nothing to prevent any employer saying to a prospective employee, or, as will probably happen, to a group of prospective employees, "Well, gentlemen", or whatever he would call them, "all things being equal, in making the choice we would be very much concerned with who, if any of you, were prepared to fit into our existing arrangements and agree to be paid by cheque." He could put it as boldly as that and there would be nothing in law to stop him offering prospective employees a form to sign.

Mr. W. R. van Straubenzee (Wokingham)

Is there anything in the Clause, as amended, to prevent an employer making exactly that sort of statement?

Mr. Marsh

If there is not, my right hon. and hon. Friends on the Front Bench will get a dreadful shock. Our intention is to make it clear in the Bill that nothing in it permits an employer to make such suggestions to an employee. We want to underline this point as much as possible.

This point was raised in Committee, and the Parliamentary Secretary's answer was, quite rightly, that the employer could impose these conditions as boldly as that, and that there would be nothing to stop him, but that when the prospective employee had become a de facto employee the employee's defence would be that he could break the agreement because it would have no validity. That is perfectly true, but I do not think that it is a desirable practice to encourage in industry where a person is employed on the basis of certain specific undertakings. In any event, I do not think that the employee's future prospects would be very good, to say the least, if he was employed on the basis of an offer made by his employer and he then resorted to what the employer would regard as a legal "wangle" to break an agreement reached in good faith.

This is a difficult problem and it is certainly one of substance. I hope— indeed, I feel sure—that the Minister will be able to show a continuation of that degree of co-operation which has so far existed, by accepting this Amendment.

Mr. Ray Mawby (Totnes)

We discussed this matter thoroughly in Committee, and I should like to remind the House what the Bill entitles employers to do. All that it does, in certain cases. is to allow an employer and an employee by agreement to set aside the operation of the Truck Acts. Therefore, unless an employer strictly observes the terms of the Bill, he will be liable to the operation of the Truck Acts and the employee will be able in law to charge the employer with being in breach of the Truck Acts. I should have thought that this matter had been dealt with thoroughly by my hon. Friend the Parliamentary Secretary in Committee when he pointed out that immediately a person became an employee he was covered by Clause 6 (7).

It is important to remember that all sorts of other considerations enter into the question of an employer taking on a new employee. It would be wrong to assume that an employer would lay upon a prospective employee certain restrictions which he would not apply to his existing employees. I know of a number of instances where the employer stipulates that a prospective employee shall not be taken on unless he belongs to a certain trade union. This is a stipulation with which, no doubt, we will either agree or disagree; nevertheless it is a standard practice which is adopted by a number of employers. But I have not heard it suggested in the House that we should have legislation to prevent an employer laying down conditions which would force a prospective employee to do something which he may or may not want to do. I do not want to take this matter any further because I am a lifelong trade unionist, but I thought it important that the point should be made.

Of course, even if it is stipulated by an employer that a prospective employee must belong to a certain trade union, that person, once he becomes an employee, can allow his contributions to lapse and he can cease to be a member of the union. Then, of course, other things would happen. But in this matter I believe it is perfectly clear, as was announced by my hon. Friend the Parliamentary Secretary in Committee, that if a prospective employee considers that he has agreed under duress to have his wages paid other than in cash, as soon as he becomes an employee he can revoke the agreement which he has made and can say, "I stand by the operation of the Truck Acts, and unless I make an agreement freely with my employer, my employer is bound to pay me cash regardless of this Measure."

Mr. Skeffington

One appreciates that that is the point at which a person has become employed, but we are trying to remove the pressure that might be exercised on persons who stick up for their rights, who do not agree to make a request, and who will not become employees and, therefore, will have no remedy under the Bill. That is the point.

Mr. Mawby

Very often this condition is applied to people who are members of, for instance, the Transport and General Workers' Union or the Electrical Trades Union and who approach an employer who says to them, "You will join the vehicle builders' union", or whatever is the appropriate union in that shop, "or I shall not employ you." That is just as much duress as any other form of duress.

Mr. J. T. Price

On a point of order, Mr. Deputy-Speaker. May I ask you what the Transport and General Workers' Union has got to do with this Clause?

Mr. Deputy-Speaker (Sir Gordon Touche)

I take it that the hon. Member was using it as an illustration.

Mr. Mawby

I apologise if I have misled hon. Members in using an illustration. If the hon. Member for West-houghton (Mr. J. T. Price) had been present during the Committee stage, he would probably have understood that all the way through I have been devoting myself to the task of trying to ensure that these conditions are applied fairly. In Committee my hon. Friend the Parliamentary Secretary pointed out that if a prospective employee felt that he was under duress, and if this were a condition on which he had obtained his employment, immediately he became an employee he would be in the same position as any other person employed in that firm. He could, therefore, without any danger at all revoke any agreement he has reached on this particular point.

Mr. Marsh

Does the hon. Gentleman think that this is a desirable state of affairs, that the only way in which a prospective employee can obtain the freedom of choice which both sides want to ensure for employees should be by deliberately agreeing to something in the full knowledge that, the moment he gets the job on that basis, he will dishonour the agreement? Is that a particularly satisfactory way of dealing with the matter?

5.0 p.m.

Mr. Mawby

Hon. Members opposite are assuming that an employer will take that attitude. I do not agree that, when a prospective employee applies to him, a prospective employer will automatically lay it down, in effect, "Unless you agree that your wages may be paid other than in cash, I shall refuse to employ you". I do not think that that will happen anyway. That is the crux of the matter. Hon. and right hon. Members opposite may disagree, but, if they disagree, why on earth was a similar Amendment withdrawn in Committee?

There is no evidence at all to show that an employer would take all the risks associated with the possibility of having action taken against him in the courts by an employee who felt that his employer was contravening the Truck Acts. I believe that the Amendment is entirely unnecessary and, even if it were regarded as necessary, the reply of my hon. Friend the Parliamentary Secretary in Committee showed that there is adequate opportunity, immediately a prospective employee becomes an employee, when he need no longer be compelled to carry out even an agreement which he felt he ought to accept under duress.

Mr. Dan Jones (Burnley)

First of all, I must tell the hon. Member for Totnes (Mr. Mawby) that the Amendment was withdrawn in Committee precisely to allow for this situation. Surely, that was a proper thing to do and quite feasible.

I hope that the Minister will give serious and sympathetic consideration to the Amendment. I shall not repeat what has been said already, but I must emphasise that the Amendment was very carefully prepared. We are concerned about the number of skilled men available and we want such skilled men as we have—I am referring particularly to engineers—to have the maximum of mobility. I should hate to see anything at all prescribed which would militate against that mobility.

A man may be perfectly satisfactory in all respects and yet, for his own personal reasons, he may not wish to enter into a scheme of payment suggested by an employer. For that reason, although he is suitable technically, he may be rejected. From my personal experience, I can well imagine such a man going to his local trade union officers and telling them that there is a job at such-and-such a place, a job he can do, but, although the employers want him, he has been rejected on that ground. There would be a dispute immediately, and we should be the authors of it.

There seems to be no reason at all why this very simple but none the less effective Amendment should not be made. If we do not make it, we shall have one law for the employed and quite a different law for the prospective employee, and that, I think, would not be playing the game.

Mr. Loughlin

We spent some time on this matter in Committee. There is only one reason why it has been brought up again. In Committee, the Parliamentary Secretary said it will be looked at again so that we can be certain that the words … "—[OFFICIAL REPORT, Standing Committee A, 1st March, 1960, c. 136.] and so on.

No one on this side of the House suggests that the mere insertion of these words will deal entirely with the circumstances outlined by right hon. and hon. Members. What we want to insert is some provision to deal with the employer who may indulge in malpractices. I have lived long enough to know that all employers are not bad employers. I know many employers who would not think for a moment of trying to impose a condition of this kind on a prospective employee; nor would they discriminate between someone who would give an assurance and someone who would not. But, equally, I know certain employers who might well do that.

Mr. Kenneth Lewis (Rutland and Stamford)

I fail to follow the hon. Gentleman's argument. The Bill indicates that every employer will be paying both by cheque and by cash, since it is clear that some employees will opt to be paid by cheque and some will opt to be paid by cash. Why should an employer in such circumstances ask any prospective employee to accept his wages in one way or the other? In view of the fact that he will be paying both by cash and by cheque, it will make no difference which form of payment is asked for.

Mr. Loughlin

There is some substance in that point, but there may be an employer who desires to introduce gradually the system of payment by cheque for all his employees. A proportion of his existing employees may agree that their wages shall be paid by cheque, but, if the employer's desire is that all his employees shall adopt this system, obviously the more prospective employees he can induce to accept it the greater will be the proportion of people being paid by cheque and the more quickly will the day come when he can have what he wants.

Mr. Lewis

I accept that, but the hon. Gentleman is then assuming that any employer will take bad employees, although, presumably, he will want the best he can get in order to ensure that he gradually reaches the situation where he is paying wholly by cheque.

Mr. Loughlin

I must remind the hon. Gentleman that, in many industries today, there is much repetitive work and, consequently, any question of employees being good, bad or indifferent is really hypothetical at the time of their engagement. All things being equal, any one among a number of employees could be employed by the employer and, consequently, the choice may well be between one who agrees to have his wages paid by cheque and one who does not agree. I realise that there are variations in labour value among all employees, but, other things being equal, such a situation as I have indicated may well arise.

To return to my original argument, the mere insertion of these words will not of itself necessarily achieve the result we have in mind. No matter what we do, people desirous of getting round the law will do so. If prescriptive words of the kind suggested in the Amendment were written into the Bill, there would be less likelihood of people taking advantage of the law. That is the simple issue.

I personally cannot complain about the response which the Minister gave to the points that we raised in Committee. I think that the Notice Paper today proves that he has done everything he possibly could to meet the points put from both sides in Committee; but I am still wondering why he will not accept the Amendment.

Only one argument was advanced against the Amendment in Committee. It was that the Amendment was not necessary, in that once a prospective employee becomes employed he comes under the umbrella of the Measure. But that is equally an argument for inserting these words in the Bill. If when a person becomes employed he comes under the Bill, when it becomes an Act, there is no reason why he should not come under it initially when he is still a prospective employee.

I should like to know the Minister's objection to the Amendment. I am not speaking simply to obstruct the right hon. Gentleman. I want provisions put in the Bill which will enable it to work not only successfully but equitably between employer and employee. Perhaps the Minister will tell us why he will not accept the Amendment.

Mr. A. V. Hilton (Norfolk, South-West)

I should also like to appeal to the Minister to accept the Amendment. I understood the hon. Member for Totnes (Mr. Mawby) to say that he has been a lifelong trade unionist: so have many hon. Members on this side of the House. I am a lifelong trade unionist. I represent agricultural workers, the lowest-paid workers in the country. It is on their behalf that I should like to say a few words.

Acceptance of the Amendment would be of advantage to agricultural workers, bearing in mind that, although this is 1960, any sort of agreement is the exception rather than the rule. Most things are still done by word of mouth. My hon. Friend the Member for Gloucestershire, West (Mr. Loughlin) said that the majority of employers are all right, but some get in a muddle, especially in an industry where there is nothing down in writing. Acceptance of the Amendment would give a square deal, particularly, to farm workers. I hope that the Minister will accept it.

5.15 p.m.

Mr. P. Thomas

I fully appreciate the deep feeling hon. Members have expressed about the principle underlying the Amendment. We had a considerable discussion on this matter in Committee, and I do not think there was much at issue between us. The right hon. Member for Blyth (Mr. Robens) said: What we want to ensure is that when an individual is being interviewed for a job it shall not be a condition of his taking up the employment that he must take his wages in a certain way."—[OFFICIAL REPORT, Standing Committee A, 1st March, 1960; c. 137.] I would agree with that. I think that the House is anxious to ensure that, when a person who is interviewed for a job is told that it is a condition of employment that he should take his wages in one of the ways set out in the Bill, then, if that person takes up employment, all payments of wages made to him will be illegal and the employer will be in contravention of the Truck Acts. In accordance with the promise that I gave in Committee, I have considered this matter very carefully and I have been advised on it. What I said in Committee is quite true.

Perhaps I may put one or two points to the House. First, even if the proposed words were inserted, an employer who tells a prospective employee that a condition of his employment would be that he should, shall we say, take his wages by cheque would not have done anything illegal. He would be in contravention of the Truck Acts only as soon as there was a contract of employment. I am advised that if a prospective employee had been required to enter into a contract of employment in that way, the employer would be in breach of the Truck Acts. He would be liable to the penalties under Section 9 of the Truck Act, 1831, and any payments that he made to the employee afterwards, in the ways envisaged by the Bill, would be illegal and void.

That is a tremendous sanction. The House will appreciate that if an employer requires a prospective employee, even before he has been employed under a contract of employment, to enter into a contract under this Bill against his will, he is running a great risk. I submit that the words set out in the Bill adequately cover this matter. Any additional words would only tend to detract from the force of the words in Clause 6 (7). The insertion of the Amendment would not confer any rights upon a person who applies for a job and is not engaged. The Truck Acts, as the House will understand, protect only those who are employed. I submit that subsection (7) is very wide and adequately covers the fears expressed by hon. Members

Mr. Loughlin

Might I deal with the question of the breach of the Act? At present an enormous number of wages council Orders are operating, and the inspectorate daily makes inspections and finds an enormous number of people not complying with the provisions. I suggest that it is much better to put into an Order something simple stating what the position is rather than to have the situation which applies at the present time. The wages council legislation is constantly breached by employers who are not too careful what they do under the Acts.

Mr. P. Thomas

As we see it, the subsection adequately covers the matter. I agree that all Acts of Parliament must be difficult to interpret by lay people— indeed, they are difficult to interpret by lawyers—but this is the sort of thing that can well be made clear in the explanatory leaflet which it was stated during the Committee stage would be sent out. I suggest to the hon. Gentleman that if one were all the time to put in words of explanation the Bill would become very unwieldy and very often the effect of what might be a very good Clause would be considerably weakened.

Mr. D. Jones


Mr. Deputy-Speaker

An hon. Member can speak only once in a debate on Report.

Mr. Prentice

In view of the very strong case which has been put to the hon. Gentleman by a number of my hon. Friends, we find the Parliamentary Secretary's reply very disappointing. Even if he takes the view that the Bill as it stands provides as much protection as it would if it were amended in this way, we have to bear in mind that what matters is not only what the Bill says but what it is understood to mean by the people concerned, in this case the employers and those going to them for employment. As the Bill stands, the understanding will be that the safeguards exist only when the contract of employment has come into effect. Indeed, in another part of his speech the Parliamentary Secretary tended to confirm that.

Suppose at an interview for employment the applicants are presented with a duplicated or printed letter containing an application for their wages to be paid in a certain way—one which suits the employer—and who is to get the job is settled after the signatures have been put on the form. As I understand the hon. Gentleman, the man who gets the job can later seek a remedy under the Truck Acts, commencing proceedings and saying that his wages have been paid illegally.

I suppose he would have another remedy; he could sign another piece of paper in the form of an application to withdraw the proposal that his wages should be paid in a certain way. My hon. Friend the Member for Greenwich (Mr. Marsh) was right when he said that people would not behave in that way. If they did, what might not happen to them later on on some other pretext? At all events, pressure would have been applied at the interview and in the majority of cases the employees would continue to get their wages in a way for which they had not voluntarily and freely opted. That is the danger that we seek to remove by our Amendment.

It seems to us that Clause 6 (7) is one of the most important parts of the Bill. It provides that it should not be a condition of employment for wages to be paid in a particular way. It seems to us that here we have indicated a loophole. In Committee we invited the Government to find a form of words which would dose the gap. In answer to the point made by the hon. Member for Totnes (Mr. Mawby), we withdrew our Amendment upon an indication from the Parliamentary Secretary that he would look at the point. We are very disappointed that it has not been met although other points that we raised in Committee have been met by the Government. Even now the Government could say that they would have another look at the matter and possibly introduce an Amendment in another place. If not, it seems to us that we are leaving a loophole open for abuse of the Clause and the Bill.

There is another factor to be considered, as has already been pointed out. If there are two or three applicants for a job, how are we to know on what grounds one is chosen? Possibly no form of words could give 100 per cent. protection, but here we are seeking to give more protection than the Bill gives at present. There is also the case of people who have obtained jobs after having signed a form at the interview applying for their wages to be paid in a way which suits the employer. They are not likely to seek remedies under the Truck Acts afterwards.

Consequently, we find the Parliamentary Secretary's statement very disappointing, and I appeal to him even at this stage to say that he will look at the point again.

Amendment negatived.