HC Deb 30 March 1960 vol 620 cc1377-92
PART 1
Deductions
5 1.—(1) Where in pursuance of such a request as is mentioned in section one of this Act (in this Part of this Schedule referred to as "the relevant request") a payment of wages (in this Part of this Schedule referred to as "the relevant payment") is made in one of the ways authorised by this Act, and—
10 (a) in connection with that payment, a statement in writing (in this Part of this Schedule referred to as "the relevant statement") is given to the employed person for the purposes of subsection (4) of section two of this Act, and
(b) that statement complies with the requirements of paragraphs (a) and (c), and (if applicable) of paragraph (d), of subsection (5) of section two of this Act, but does not comply with the requirements of paragraph (b) of that subsection,
15 the relevant statement shall nevertheless be treated as complying with the requirements of paragraph (b) of that subsection if it complies with the alternative requirements set out in paragraphs 2 to 5 of this Schedule.
(2) In the following provisions of this Part of this Schedule "relevant deduction" means a deduction made from the gross amount of the wages in calculating the relevant payment.
20 2. The relevant statement must state the amount of each relevant deduction which is not a fixed deduction, and the matters in respect of which each such deduction is made.
3. The relevant statement must either specify the aggregate amount of all those relevant deductions which are fixed deductions, or contain particulars sufficient, without reference to any other document, to enable that aggregate amount to be ascertained.
25 4. Not more than twelve months before the date of the relevant payment there must have been given to the employed person a statement in writing (in this Part of this Schedule referred to as a "statement of fixed deductions") specifying—
30 (a) the matters in respect of which fixed deductions from his wages were to be made, and
(b) the amount of each such fixed deduction in accordance with the rate thereof applicable to him at the time when that statement was given to him.
35 5. If, at any time during the period beginning with the date on which the statement of fixed deductions (or, if more than one such statement has been given to the employed person, the most recent statement of fixed deductions) was given to the employed person and ending with the date of the relevant payment, there has been any change in the fixed deductions specified in that statement, whether by the addition of a new fixed deduction or the cancellation of a fixed deduction, or by way of an increase or decrease in the amount of a fixed deduction, notice in writing of that change must either—
40 (a) have been given to the employed person before the date of the relevant statement, or
(b) be given to him in the relevant statement or together therewith.

to", is a paving Amendment to the new Schedule, and closely related to some Amendments I have tabled to that Schedule. Therefore, if this Amendment were to go through, I should be precluded from dealing with my Amendments to the new Schedule.

Mr. Deputy-Speaker

No. The Amendments are to the new Schedule, and the hon. Gentleman cannot move them until the Schedule has been read a Second time.

Mr. Heath

Perhaps I can help my hon. Friend by saying that, for the reason he has mentioned, I do not propose to move this Amendment.

PART II
Instalment of wages paid in different ways
6. This Part of this Schedule applies to any instalment of wages of which—
45 (a) part is paid in one of the ways authorised by this Act in pursuance of a request made by the employed person in accordance with subsection (6) of section one of this Act, and
50 (b) the whole or part of the balance is paid in another of those ways, either in pursuance of another such request made by him or by virtue of subsection (3) of section four of this Act.
55 7. In relation to an instalment of wages to which this Part of this Schedule applies paragraph (d) of subsection (5) of section two of this Act shall be construed as requiring the net amount of the part thereof referred to in sub-paragraph (a) of the last preceding paragraph, and the net amount of the balance, or part of the balance, referred to in sub- paragraph (b) of the last preceding paragraph, to be separately shown in the statement, as well as the net amount of the balance (if any) which is not paid in any of the ways authorised by this Act.
60 8. For the purposes of this Part of this Schedule payment into different accounts, whether at the same or at different banks, shall be treated as payment in different ways authorised by this Act.

Brought up, and read the First time.

Mr. Heath

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

This new Schedule, and my Amendment in page 10, line 1, to leave out the Schedule, reorganise the Schedule to the Bill. As I have already mentioned, we found ourselves faced with considerable difficulties in Standing Committee because of those firms and nationalised industries that discovered, on examining the Schedule, that it would not allow them to operate systems that have been working satisfactorily.

The main difficulties over the old Schedule arose from the provisions governing "grouping" and fixed deductions, and I undertook to find another Schedule that was simpler and which did not present these difficulties. The House may think the new Schedule rather long. On the other hand, it is much simpler and more straightforward than was the original one.

The main provisions are contained in paragraphs 2 to 5, which set out the way in which the pay statements shall be provided. What we have tried to do is not only to help those employers who have approached us on the matter, but to see that the workman gets the proper kind of information to which he is entitled. Paragraphs 2 to 5 provide that the weekly pay statement that the man gets with his wages, when being paid by one of these methods, should show separately the amount of those deductions that vary from week to week.

Any deduction that changes weekly will be shown separately, and the rest may be grouped together. At the same time, the: employee must receive a full statement once every year. When we drafted the original Schedule we thought that it would be desirable that the man should receive a full statement more frequently, but we have since found in so many cases that the statements are being provided, apparently satisfactorily, once a year, and that so many large systems are based on this, that the yearly provision would appear to meet the case.

The other main point of the Schedule is that when a change in deductions is made, usually, presumably, at the request of an employee who wants an additional deduction made or a present deduction cancelled for some reason, all that is necessary under the new Schedule is for him to be informed in the weekly statement in which the change is made for the first time.

Under the original Schedule it was necessary to set out once again the complete scheme of all deductions being made. It was pointed out to us very recently that this, too, did not fit in with the present systems now in operation. Therefore, we have set out this provision in these paragraphs of Part I of the new Schedule. We think that it is quite clearly stated that it will meet the needs of the present systems, and will give the information that every employee is fully entitled to have.

At the same time, it is a flexible system. When we add the power which the House has already granted to the Minister to make a change in it by Statutory Instrument under the negative Resolution procedure, I think that the Schedule will be able to meet the operation of the Bill, and I hope that the House will feel that we have achieved our purpose.

Question put and agreed to.

Schedule read a Second time.

Mr. Graham Page

I beg to move, as an Amendment to the proposed Schedule, in line 4, to leave out from "Where" to "(in" in line 5.

Mr. Jack Jones

On a point of order, Mr. Deputy-Speaker. Is this an Amendment to the new Schedule now before the House?

Mr. Deputy-Speaker

It is an Amendment to the new Schedule.

Mr. Graham Page

This Amendment refers to line 4 of the new Schedule, and line 4 is, in fact, the first line of the text. Perhaps, Mr. Deputy-Speaker, with the leave of the House, I might also discuss the other two Amendments standing in my name: in line 5, leave out from "Act" to "a" and in line 10, after "Act" insert: or for the purposes of subsection (2) or subsection (3) of section four of this Act

Mr. Deputy-Speaker

With the leave of the House.

Mr. Graham Page

I am much obliged. Perhaps I can at once dispose of the Amendment in line 5. It seeks to leave out the words in brackets in the second line of the text of the new Schedule: … (in this Part of this Schedule referred to as "the relevant request")… If one ploughs right through the new Schedule, nowhere is the "relevant request" mentioned. I am afraid that the words in parenthesis got in in error—

Mr. Ede

The draftsmen again.

Mr. Graham Page

Having disposed of that, I will now deal with the substantial part of my Amendment. The first part of the new Schedule deals with what one might call the consolidated statement of deductions. It permits an employer to give a short statement of deductions.

In the original Schedule to the Bill, the employer was entitled to give that consolidated statement of deductions, not only in the case of payment into a bank but also in the case of payment by postal order or money order under the emergency Clause, if I may so call it—Clause 4. That resulted from the words at the end of the first paragraph of the old Schedule: …or for the purposes of subsection (2) or subsection (3) of section four of this Act. For some reason about which I am not quite clear, those words are left out of the new Schedule. I ask that they shall be restored so that the consolidated statement of deductions—the short form, if I may call it that—can be used when payment is made by postal order or money order in the emergency case as well as in the normal case of payment of wages into a bank. I should have thought that the emergency case was just the case in which one would want to use the short, consolidated statement. What I mean by the consolidated statement of deductions is a statement showing fixed deductions in aggregate.

If my Amendment is not accepted, it would mean that when an employee was sick, and there was no request to the employer not to pay the man by postal order or money order, the employer could pay by postal order or money order but would have to send the long statement of deductions. He could not use the Schedule as my right hon. Friend has drafted it. He would have to turn back to Clause 2 (4) and give a full statement of deductions showing each item of deductions. That seems to me to be quite wrong. If we are giving the advantage of the Schedule in the normal course of payment of wages, surely we should give the advantage of it in the case of emergency payment by postal order.

6.0 p.m.

Mr. Skeffington

Will the hon. Member say exactly what he means when he says that fixed deductions can be put in the statement by aggregate? I did not follow his meaning.

Mr. Graham Page

By paragraph 3 in Part I of the new Schedule, The relevant statement must either specify the aggregate amount of all those relevant deductions which are fixed deductions, or contain particulars sufficient … Then, every twelve months, the employee would have a full statement showing how his deductions were made. By use of the Schedule, the short form provided by paragraph 3 could be used.

Mr. Jack Jones

I hope that the Government will reject the idea of aggregate deduction. It will only mean duplication and additional work. A man who takes up employment agrees to a method of payment and gets his weekly pay slip, which shows his deductions week by week. Then he may fall sick. It is suggested that, because he falls sick, he should have something shown in aggregate deduction against his normal receipt of wages. There are some companies that do this today. The modern companies, the real companies, show a complete form of deduction.

I have with me a pay slip showing 36 sub-divisions of various types of wages and deductions, including bus fares. Men are entitled to know these details and whether it is a penny for Dr. Barnardo's Homes or something for the children's fund, the hospital Saturday fund, sick pay, superannuation, coal, fuel, lighting or overalls. Heaven only knows what they all are on his pay slip. Incidentally, the figure of £9 19s. 11d. comes in here. The 9s. 11d. is for National Insurance. I do not suggest that it should be made up to the even 10s., but there it is.

I hope that we shall not further complicate this idea. All credit is due to the hon. Member for Crosby (Mr. Graham Page) in suggesting that we should show people where their earnings come from. Equally, they should be entitled to see exactly where their money goes week by week. I hope, however, that the Government will disagree with the idea that because a man is off sick or it is easy to send him a money or postal order, his deductions can be shown in the aggregate of 9s., 15s., £1 or whatever the amount may be.

Mr. Heath

I turn, first, to my hon. Friend's second Amendment, in line 5. After I had asked the Committee upstairs, and this afternoon the House, not to insert words that were considered to be unnecessary, my hon. Friend the Member for Crosby (Mr. Graham Page) now asks me to remove from the Schedule words which, he has pointed out, are unnecessary. I must, therefore, ask the indulgence of the House for the fact that they appear in the Schedule. My hon. Friend's inspired understanding of how the words came to be there is quite right. They were a remnant of a previous draft. Therefore, I am happy to accept the Amendment to remove some unnecessary words.

I come now to the remaining two Amendments. The hon. Member for Rotherharn (Mr. Jack Jones) has just spoken about pay statements. Nothing in the Schedule prevents a firm from giving more information than is basically specified in the Schedule. What we are trying to do is to meet the needs of those firms which have well-established systems that are accepted both by employers and by trade unions. In particular, we had representations from the British Transport Commission, the London Transport Executive and the National Coal Board, which are some of the largest employers with systems which function well.

My hon. Friend's Amendment deals with Clause 4. He has pointed out that in a system that was intended to deal with emergencies we are asking the employer to give the fullest form of statement which, normally, would be given a minimum of once a year, or more frequently if he so wished. I am not entirely satisfied that the way in which my hon. Friend's Amendment deals with this matter would meet the case.

It would be reasonable that where an employer is using a system which fits in with the Schedule—in other words, meets the requirements under the Schedule—it should be in order for him when making a payment under Clause 4 to make the normal pay statement which would be made for the week—that is the logical way of dealing with it—and he should not interrupt the rhythm of the process to produce anything more. On the other hand, if the employer is not using a system which is acceptable under the Schedule, he should provide a full statement if he is taking advantage of the provisions of Clause 4.

If my hon. Friend is willing to accept my assurance, we will endeavour to find a form of words—I think we have one— which we could put down in another place, so that when Clause 4 is used that would be the position. If an employer is using a system which corresponds to the Schedule, the normal pay statement for the week in question will be given if the employer makes use of Clause 4 for emergency purposes. If, on the other hand, he is not using a system which corresponds to the Schedule, he must send out the full pay statement, so that the man receiving his wage packet knows what are his deductions for the week. If this is agreeable to my hon. Friend, perhaps he will be prepared to consider withdrawing his Amendment.

Mr. Robens

On the whole, the new Schedule commends itself to us. We must bear in mind that machine accounting will develop and we do not want constantly to have to change an Act of Parliament to fit in with modern requirements and techniques. What is important, however, is that the worker should have the right to know exactly what deductions are made.

Reading the Schedule, simplified though it is, I am not sure that the worker has any right other than the normal right of going to the wages or pay clerk at his place of employment for an explanation of the deductions. Under the Schedule, all the regular deductions will be aggregated. They would be the sort of deductions that my hon. Friend the Member for Rotherham (Mr. Jack Jones) has mentioned, including regular contributions to various charities which are deducted from pay by agreement, and other regular sums of that character.

Under the Schedule, an employee will be entitled once a year to have the whole of the details. It may well be that there is argument concerning the pay, particularly the complicated pay in, say, the cotton industry, where people have difficult computations to make. Within the Schedule, therefore, an individual worker should have the right to be able to ask, his employer to explain at any time, in any week, any deductions that have been made in aggregate but which have not been shown separately. I do not think that the Schedule provides for that, although I do not want to make too much of it.

I accept the whole idea of the Minister on this matter, because we had a good talk about it in Committee and the resultant Schedule is an excellent one. It appears to me, however, to have that weakness. In considering the Bill, one has always wanted to safeguard the rights of the recipient of wages. I should be a little happier if a worker had the right to be given details of his pay deductions at any time he was in doubt.

Perhaps the right hon. Gentleman could consider this. It may be that more suitable words might be put in so as to get that right. I do not think that, in practice, it is a right which would be exercised to a great extent, but I can imagine that there would be occasions when a man might be in doubt, having only an annual statement, as to exactly what these aggregate deductions are in detail. He should have the right to ask what they are.

I am not asking the right hon. Gentleman to say now whether or not he can do it, but to consider it, and, if he finds that it can be done without militating against the whole idea of the Bill, or breaking down the arrangements to be made, to deal with it in another place. Otherwise, the Schedule is admirable, and I commend it to the House.

Mr. Graham Page

I beg to ask leave to withdraw the Amendment.

Amendment to the proposed Schedule, by leave, withdrawn.

Amendment made to the proposed Schedule: In line 5, leave out from "Act" to "a".—[Mr. Graham Page.]

Schedule, as amended, added to the Bill.

Amendment made: In page 10, line 1, leave out Schedule.—[Mr. Heath.]

6.13 p.m.

Mr. Heath

I beg to move, That the Bill be now read the Third time.

As the right hon. Member for Blyth (Mr. Robens) has just mentioned, we have had a very full discussion on this Bill, both in Committee and today, and the House will agree that a considerable number of useful improvements have been made. I am indebted to the right hon. Gentleman and his hon. Friends and to my hon. Friends for the suggestions they have made, for the way in which the Bill has been discussed and for the improvements which they have helped us to make in it.

I do not think that there is a great deal left for me to say on Third Reading about its contents. On Second Reading I described it as being a modest but not unimportant Measure and that remains true. I will deal with only one major point which has concerned us all the way through our debates—that those who can take advantage of the Bill should have the fullest information about it.

Throughout the Bill, in the safeguards which we have tried to write into it, we have had the sanction against an employer that the wages would not, in fact, have been paid if he did not observe the conditions of the Bill. That has been a main and very powerful sanction. On the other hand, it is very important that all those concerned should know the real meaning of the provisions of the Bill. I therefore gave an undertaking upstairs that we would do our utmost, as soon as the Bill received the Royal Assent, to publicise it and to make known its provisions and the way in which they can be operated. I assure the House again that we shall do that.

The points which we have discussed and the observations expressed on them will figure in the publication which we shall make available. I hope that the House will feel that even those things which we have not been able to write into the Bill we shall be able to publicise through the leaflet which will become available. We shall have discussions with the British Employers' Confederation and the Trades Union Congress, as well as with the nationalised industries and others who have been able to help us in the course of drafting the Bill, in order to see that we have covered all the points. We shall make quite certain that the matters raised in the House and upstairs will be covered as well.

A number of reasons were put forward in our debates about why this Bill would be useful. I will not go over that again, but I feel that this makes a change in the law, which has been the statute law of this country for the last 130 years, and will enable those who wish to take advantage of a new way of handling their own private affairs to do so. Many will want to take advantage of it, but others will prefer to continue in the same way.

The Bill will remove one difference between those covered by the Truck Acts from the point of view of payment of wages and those who are not so covered —between those who have always been able to make use of these facilities and those who have not. It will break down one barrier there, and I hope that it will be thought to be a useful Measure from the point of view of our industrial population as a whole. I hope that the Bill will be given a Third Reading.

6.15 p.m.

Mr. Prentice

It would be fair to say that throughout our discussions the Bill has been received with mixed feelings on our side of the House. We find the mixture a little more palatable now, because some of our suggestions have been accepted, but, nevertheless, our feelings are still somewhat mixed.

On the one hand, we feel that this is a good Bill in that, as the Minister has pointed out, it does direct a blow at artificial distinctions between those classified as manual workers under the Truck Acts and other workers. These distinctions are absurd in the way in which they have been handed down in legal decisions. For instance, a bus driver is a manual worker within the Truck Acts, but a bus conductor is not, and there are all sorts of distinctions like that. We also welcome the Bill because we feel it will be useful to some manual workers who have bank accounts or who want to open bank accounts and make use of the Bill's provisions.

On the other hand, we have had, and still have, some concern about the way in which the Bill could be misused by bad employers. The hon. Member for Totnes (Mr. Mawby) said that we should not assume that employers will act in an unreasonable way. We do not assume that, but there are good, bad and indifferent employers, and some may be tempted to put pressure on their workers to suit their own convenience in the payment of wages. The Bill has been improved in some respects in dealing with that aspect.

We on this side of the House are entitled to claim some credit in having thought of all the good ideas, and the Government deserve credit for having accepted some of them. We are glad particularly about two points. One is the Amendment to Clause 5 which, as it now stands, enables workpeople to use an agent to act on their behalf. We are concerned here very largely to see that the trade union movement plays its full part in implementing the Bill. The Bill has been strengthened on this point and that is a good thing. We were also glad to see that the voluntary principle in Clause 1 has been extended to what has been called emergency cases in Clause 4.

I make two comments about the way in which the Bill will work in practice. If and when the practice of paying wages by these various methods, particularly payment by cheque, becomes widespread, much extra work will be put on the banks. We must recognise that the banking system, since the ending of the credit squeeze, has been under heavy pressure. Staffs are busy and many are working long hours. When the Bill comes into effect it will increase their work further.

We understand that the right hon. Gentleman is to hold discussions with the banks about the practical effect of the Measure. He will do this particularly with regard to the fact that whereas payment by postal orders or payment into a banking account will come into force six months after the Bill becomes an Act, payment by cheque will not do so until he makes a Regulation to that effect. I take this opportunity, once again, to urge on him that consultations with the banking profession should include consultations with the National Union of Bank Employees.

This is a matter to which we attach very great importance. Our attempt to write in an Amendment failed; I cannot return to that, but the Minister can in the implementation of the Bill, and in the consultations he can make sure that he brings in the only genuine trade union in banking. This is something which we have warned him will be the subject of Questions from time to time. We urge him to take this opportunity to make the Bill work better by bringing bank staffs into consultation with his Department.

Our other concern is that the option in the Bill shall be genuine. The Bill gives the employee the right to make the decision, the right to take the initiative, about which way he wants his wages to be paid, but what will matter in the last analysis is not what the Bill says, but what it is understood to say by the workpeople and by their employers. There is a threefold operation to be carried out. Employers' organisations should be circulating their member firms to stress the importance of making this a genuinely voluntary matter. They should remind member firms that, as the Minister has just pointed out, it will be a breach of the Truck Acts if pressure is put upon the worker in a way which the Bill does not allow, particularly a breach of Clause 6 (7) if he makes it a condition of employment. If an employer were guilty of that breach, he could be sued for the payment of the wages all over again. It is important that that sanction should be known.

It is probably very important that the National Farmers' Union should make that known to its members. No one is suggesting that most farmers want to behave unreasonably, but the odd unreasonable person in the countryside in many ways has more power in that his workers may be living in tied cottages of which the farmer is the landlord, so that there is extra scope for unfair pressure, which is a particular reason why it should be pointed out that there is a sanction in the background.

This is also a job for the trade unions. I hope that the trade unions will circulate their full-time officials' and branch secretaries pointing out the voluntary nature of the Bill, so that they can advise members of their rights and be alert and vigilant about any case of an employer acting against the letter and the spirit of the Bill.

Thirdly, this is a job for the Government. We were all glad to hear what the Minister said about the need for explanatory leaflets. I hope that those leaflets will be clear and simple and will not contain too much jargon and will emphasise strongly and clearly the voluntary nature of the Bill. Those are the points which should be emphasised.

To repeat them, they are that the initiative shall come from the employee in all cases; secondly, that the employee has the choice of having his wages paid in cash, or by money order, postal order, by cheque, or into his bank account. Here I point out that it is perhaps unfortunate that the Bill has become known as the "Cheque Bill". It provides for payment of wages by cheque, but it also provides for alternative methods of paying wages. Most people who want to change will probably find that the most convenient alternative will be to have their wages paid into a bank account. There will be no advantage in having a cheque and then having to get it cashed.

I hope that it will be clearly pointed out that employees can choose to have part of their wages paid in that way and part by cash. That is an important alternative which needs to be widely known. It should also be emphasised that employees have the free choice of the bank and the branch of the bank, and that if the employer wants them to have their wages paid into his bank, they need not agree. Finally, it is illegal for employers to make it a condition of employment that people should take their wages in this way, and I hope that the literature which the Minister mentioned will emphasise that.

I sum up by saying that on this side of the House we regard this as a useful Bill which will extend the liberty of people to have their wages paid in the way they want, but it has its dangers and it is very important that everybody concerned with it should be vigilant about those dangers and see that we do not restrict the liberty of some people while enlarging that of others.

6.25 p.m.

Mr. Graham Page

Hon. Members on this side of the House cannot let the occasion pass without congratulating my right hon. Friend and the Parliamentary Secretary for piloting the Bill through so smoothly and for meeting suggestions from both sides of the House. We are very grateful for my right hon. Friend's acceptance of Amendments which we have suggested and we believe that he has produced a very good Bill.

Question put and agreed to.

Bill accordingly read the Third time and passed.