HC Deb 30 March 1960 vol 620 cc1336-43

Where an employed person requests payment of his wages in multiples of ten shillings, it shall be lawful for the employer to retain as a trustee for the employed person the shillings and pence by which his wage for the period for which they are payable together with any money previously so retained exceed the immediately lesser multiple of ten shillings.—[Mr. Gresham Cooke.]

Brought up, and read the First time

3.47 p.m.

Mr. R. Gresham Cooke (Twickenham)

I beg to move, That the Clause be read a Second time.

This Clause—[Interruption.]

Mr. Speaker

Order. Hon. Members will assist the progress of business by receding a little more silently.

Mr. Gresham Cooke

I believe this to be an excellent Bill which would be improved by the addition of this Clause to make it possible for the payment of wages to be made in multiples of 10s. The Clause is in the same words as a Clause in the Wages Bill which was drafted by my hon. Friend the Member for Crosby (Mr. Graham Page).

My experience in this matter goes back to my days in the steel industry, when I was the secretary of the United Steel Companies at Sheffield. The operation of paying wages in a large works is a voluminous one, lasting over several days. The calculation of wages, the punch-card system, and so on, all took place on Monday and Tuesday. Then, on Wednesday, there was the collection of moneys from the bank, checking at the bank, bringing it to the works, allocating the cash into the sections and putting it up into wage packets. That took a further two days, and, in my experience, the operation generally finished about Wednesday night or Thursday morning.

A day of this time was involved in sorting the shillings and pence to go into the wage packets. Therefore, if payment were to be made only in notes, the payment of wages, in a large works, could, generally speaking, be made a day earlier. Or, alternatively, it could be run over the same period with less staff. In either event, there would be some benefit to industry, either in the time of payment or the efficiency of the work.

Again, were this the case, another possibility would come into the foreground. That is that men might be content to take a basic sum on Monday, paid in notes, which could probably be quite easily done, and the calculation of shift bonuses, and so on, could be worked out during the week and an adjusting sum paid on the following Monday and added to the basic sum which had been previously paid in notes.

When this idea was put forward some years ago by United Steel to the union representatives at a works in Cumberland it was not looked on with favour by the union representatives, because the payment of wages there was made on Fridays and it was thought that the men would not have a shilling in their pockets with which to pay the union dues. If the payment of wages were brought forward to Wednesdays or Thursdays, surely the objections and difficulties concerning the payment of union dues on Fridays could be overcome.

This Clause would enable wages to be paid in a simpler form, in multiples of £1 and 10s. notes, and any surplus of under 10s. would be carried forward to the following week until the surplus amounted to 10s., when it would, of course, be paid in a 10s. note. It is a sensible Clause, if I may say so, in line with the spirit of the Bill and I think that it would improve the Bill. Therefore, I have pleasure in commending it to the House.

Mr. Graham Page (Crosby)

I beg to second the Motion.

This system of payment of wages by no shillings and no pence has been in operation in a fair number of cases. It has proved very beneficial as a time-saving device in the packaging of wages. It has been used particularly in the public services and some hospitals have adopted it.

When I had the privilege of bringing a Private Member's Bill on this subject before the House. I gave examples of the use of this system and its saving of time. I do not propose to go over those examples again today. But the very fact that this system has been discussed in connection with the reform of the Truck Acts has, I fear, given the impression that it is illegal under those Acts.

The argument that it is illegal arises from a word used in the 1831 Truck Act. It says that wages must be paid in the current coin of the realm, but the word "entire" is added. The wording of that Section is: The entire … wages, … shall be paid … in the current coin of this realm. Therefore, if any deduction is made to bring payment to the nearest 10s. or £1 it is thought that it may not be the payment of the entire wages.

Some firms and undertakings have been advised that this is a perfectly legal method of the payment of wages despite the Truck Acts. Others advise that it is an illegal method. If my right hon. Friend could say today that he has been advised that this is a perfectly legal method—this system of paying wages to the nearest 10s. or £1—and that it is unnecessary to put this Clause into the Bill, I would be quite satisfied. I can assure the House that it is being operated in some undertakings and, indeed, in the payment of manual workers. Those undertakings have been advised that it is a perfectly legal method of dealing with the matter.

Mr. Richard Marsh (Greenwich)

I thank the hon. Member for giving way. He said that there were some public undertakings already operating this scheme and he specifically mentioned hospitals. I was surprised to hear this. Can he give more details about it?

Mr. Page

I gave the details on a previous occasion and I do not want now to detain the House unnecessarily. The scheme was gone into very carefully by one hospital management group and one teaching hospital—the Shenley Hospital Management Group and St. Thomas's Hospital, across the river. They may well have paid manual workers in this way—doormen, commissionaires, messengers, and so on—and if this system is illegal under the Truck Acts then they were acting illegally. Many of them have been advised that it is perfectly legal, and I should like my right hon. Friend to say today that it is legal and that we do not need this Clause in the Bill.

Mr. Charles Loughlin (Gloucestershire, West)

I do not want to detain the House on this matter for long. Whether the principle or the method is legal or illegal, it is true that it obtains. It obtained in at least one factory where I had some experience. I do not, however, think that we ought to underwrite the system in the Bill.

I think that the hon. Member for Twickenham (Mr. Gresham Cooke), in moving the Clause, put his ringer largely on the difficulty so far as the workpeople are concerned when he said that they had no money to pay trade union contributions on Friday night. It does not only affect trade union contributions.

We, rightly or wrongly, implemented the scheme, and it is true that it enabled an enormous saving in time for the employers in the making-up of wages. Where we tended to fall down—this would apply equally whether wages were paid on Thursdays or Fridays—was on account of the enormous strain which it placed on the transport service from that factory. A large proportion of the workpeople going home on the night of the payment of wages tendered to the bus conductor a 10s. note or a £1 note. Difficulties arise in other respects as well.

We have to be concerned solely in this instance with its practical application. In many factories and places where people work there are all sorts of schemes which are not deductible from wages. There are all sorts of activities in which employees engage which have to be attended to, particularly when pay day is on a Friday, and with the operation of the five-day working week the difficulties are increased. The only valid objection which I can see to this method of paying below and above the line in 10s. multiples is the inconvenience to which the workpeople are put. We found, in practice, that while it is very attractive from the point of view of making up the wages it produced such a volume of discontent among the workpeople that its operation by the employers was not worth while from a long-term point of view.

4.0 p.m.

The Parliamentary Secretary to the Ministry of Labour (Mr. Peter Thomas)

It may be of assistance to my hon. Friends the Member for Twickenham (Mr. Gresham Cooke) and the Member for Crosby (Mr. Graham Page) and to the House if I give our opinion as to the legality of this system. We have looked into this matter and I am advised that there is nothing at all to prevent an employer agreeing with his employee that the system as set out in the new Clause should be adopted.

My hon. Friend the Member for Crosby mentioned some difficulty which has been found concerning the legality of this when one looks at Section 3 of the 1831 Act. That Section says that an employed person, a person within the ambit of that Act, must receive his entire wages in cash and that any part of those wages paid to him in any other manner is illegal and void.

The Truck Acts have been concerned with the proper payment of wages and they have not been concerned with the timing of wages. There would be no difficulty in an employee saying to his employer, "I do not want my wages this week. I am going on holiday next week and I should like to have a fortnight's wages paid to me next Friday." If the emloyer agreed, and that were done, it would not mean that by withholding the payment of wages to the employee on that particular pay-day the employer was in breach of the Truck Acts. There is no difficulty as I see it, and as I am advised, in an employer and his employee entering into the arrangement which is set out in this Clause.

Therefore, I suggest to my hon. Friends that their apprehension as to the effect of adopting this system need not be great and that if employers and employees wish to adopt this system—as to the advisability of which I do not wish to say anything—there is nothing in the Truck Acts to prevent them doing so.

Mr. Alfred Robens (Blyth)

Would the Parliamentary Secretary say whether the advice that he has now given the House is the personal advice of himself and his right hon. Friend, or whether it is the advice of the Law Officers of the Crown? On more than one occasion we have been told that it is not our task here to interpret the law and that there are places set aside for the interpretation of Parliament's will. Therefore, I should like to know whether this is the view of the Law Officers, or of himself and his right hon. Friend.

The only other thing I want to say in resisting this new Clause is that I think it a great mistake even to clear up this small problem arising from the Truck Acts in this way. When we embarked on the Bill it was our intention merely to deal with one particular matter, the payment of wages other than in the coin of the realm. We all tried to keep the purpose as narrow as that and we succeeded. I should regret very much if hon. Members tried to take the opportunity of the Bill going through the House to bring in this Clause for another purpose entirely.

If the Truck Acts are not clear, it would be best to leave this matter to the Committee which has been set up. There is a Committee under Mr. Karmel which is now considering the Truck Acts in relation to modern conditions. We know of the ridiculous situation arising as a result of the Truck Acts. I need not go over that again. They have been spoken about in the House on many occasions and they certainly require to be brought into line with modern practice. I should have thought this Clause was the kind of thing—if there is any doubt about whether this system is legal or not—which could be cleared up by that Committee.

I take it that when he has received the report of the Karmel Committee the Minister will probably introduce legislation in this House to bring the provisions up-to-date. That is the time when these odd little items should be dealt with. We should now concentrate on the principle of the Bill, which is merely to pay wages to manual workers—people covered by the Truck Acts—in other than the coin of the realm. I hope that the hon. Member for Twickenham (Mr. Gresham Cooke) will not pursue this matter further now.

It is very easy to make a case that this would facilitate the payment of wages by paying in notes, but the convenience of people who earn wages must be considered. What happens if a man earns £9 19s. 10d.? Does he want to leave 9s. 10d. with his employer? If this Clause said that the employer would be empowered to pay up to an even 10s., that might have been a different argument and a different case. Presumably, under the Truck Acts he would not be able to draw back amounts overpaid, but this matter wants far more consideration than can be given it at this time by a mere new Clause in a Bill. Consideration ought to be given to it properly by the Karmel Committee.

I hope that after what the Parliamentary Secretary has said and after he has told us whether this is the advice of the Law Officers or not, the hon. Member for Twickenham will withdraw the new Clause.

Mr. Jack Jones (Rotherham)

It would be a little awkward if a man whose wage was £9 19s. 10d. a week had 4d. underpaid one week and he received the 10s. 6d. next week and was thereby overpaid.

Mr. P. Thomas

I speak again by permission of the House to reply to the right hon. Member for Blyth (Mr. Robens). I certainly would not presume to give my own opinion to the House on a matter of law as important as this. What I told the House is the advice that we have received in the Department. The right hon. Member knows that one is well advised in matters such as this. This is the advice we have received and that is what I conveyed to the House.

Mr. Robens

The advice of the Department need not necessarily be the advice of the Law Officers of the Crown. The question I put to the hon. Gentleman is whether this is the advice of the Law Officers of the Crown.

Mr. Thomas

I believe it is not customary to say whether or not one has received certain advice from the Law Officers of the Crown.

Mr. Robens

One of them could be fetched.

Mr. Thomas

What I told the House was Chat it is the advice received from the Department. I agree with what the right hon. Member said that it is not, of course, conclusive and ultimately the matter inevitably must be one for the courts. I agree with the right hon. Member that a matter like this is probably inappropriate for this Bill, but I did not deal with that aspect. It is a matter, I quite agree, which could very appropriately be considered by the Karmel Committee, and I hope it will be, but I have given the House the advice which we in the Department have received.

Mr. Gresham Cooke

In view of what my hon. Friend the Parliamentary Secretary has said—that in his opinion, or rather the opinion of his Department, it is legal to pay wages in multiples of 10s., of course with the agreement of the employed person as set out in the Clause —I beg to ask leave to withdraw the new Clause.

Motion and Clause, by leave, withdrawn.