HC Deb 01 May 1963 vol 676 cc1073-91

A contract of employment made between an employer who, at the time of the commencement of that employment is a member of an association of employers, and an employee who, at the said time, is a member of a trade union of employees shall (by implication and unless the contrary be expressly stated in the said contract) contain as terms of the said contract such of the terms and conditions of any contract between the said association and the said union as relate to the employment aforesaid; and notwithstanding any provision contained in or having effect under any Act of Parliament passed before this Act such a contract of employment (including the said terms and conditions implied therein as aforesaid) shall be valid and any breach thereof or any wrongful inducement or conspiracy to cause a breach thereof shall be actionable.—[Mr. Page.]

Brought up, and read the First time.

3.35 p.m.

Mr. Graham Page (Crosby)

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

In Committee on the Bill there were discussions from time to time concerning the enforceability or unenforceability of collective agreements, both agreements made between an employer, and employers' federations, and the trade unions. Of course, modern industry and modern industrial relations would be quite impossible without such agreements, but, in fact, collective agreements of that sort are not recognised by the law. Under Section 4(4) of the Trades Unions Act, 1871, no legal proceedings shall be instituted with the object of enforcing any agreement made between one trade union and another, and in that context "trade union" means not only a union of employees, but a union or association of employers.

The Committee, in discussing these matters, certainly rejected any alteration of the law making such collective agreements enforceable or, indeed, penalising in any way the breach of such agree- ments. My right hon. Friend the Minister maintained that the Bill dealt with, and should only deal with, contracts between the individual employer and the individual employee. In this new Clause I have respected that principle. I have dealt with the contract as it may be between the employer and the employee and not directly with any collective agreements between an employers' federation and a trade union.

However, if one is dealing with individual contracts of employment at all, then surely it is quite unrealistic to shut one's eyes to the collective agreements which stand behind these individual contracts of employment. So far as they affect an individual employer and individual employee entering into a contract with each other, these collective agreements are and must be part of the individual contract, if the parties are members of a union or an employers' federation respectively.

It is my submission that they ought to be recognised as such, so the first part of the Clause would make it clear that the relevant terms of the relevant collective agreement are part of the individual contract provided that the collective agreement is between the federation of which the employer is a member and the union of which the employee is a member. After all, that is surely what the parties intend to be the result of their membership of such federations or unions, that they will be bound by agreements which their union or federation makes on their behalf. Surely that is the whole intention of membership of a union.

So much for the employee and the employers themselves, the actual contracting parties to a contract of employment, but it should follow, surely, from that, that others should not be permitted wrongfully to cause a breach of that contract. The law does not normally allow third parties to induce one contracting party to break his contract with another except in one particular instance, and that is under Section 3 of the Trade Disputes Act, 1906. That Section says that: An act done in contemplation or in furtherance of a trade dispute shall not be actionable on the ground only that it induces some other person to break a contract of employment". So the position is that a trade union and an employers' federation may solemnly reach an agreement vital to the interests of the members of each and with the full agreement that it should be observed by their members, and yet we let any Tom, Dick or Harry bully or cajole an individual to treat his contract with contempt. We not only let any outside party like that induce another to break his contract but we give him something of a legal right to do so. So the second part of the new Clause endeavours to prohibit anyone from interfering with that part of a collective agreement which has become a contract between the individuals.

I hope that it will not be suggested by hon. Members opposite, or, indeed, by any of my colleagues, that this is in any way an attack on trade unions or their rights by taking away any right or privilege or exemption or freedom which has been granted to a trade union. Section 3 of the 1906 Act gives no right whatsoever to a trade union as such. All it does is to give a right to an individual to undermine a trade union agreement.

I believe that, if accepted, the new Clause would strengthen trade union agreements. Indeed, that is my genuine and honest intention. The argument is sometimes put that the employer-employee relationship is a human relationship and that one ought not to contaminate it with any form of legal contract. I take a different view. I believe that any human relationship is far better if its terms are properly defined and if, in the last resort, it is enforceable. I believe that if that is done one seldom reaches that last resort.

Nor does one have to resort to taking the law into one's hands, which is frequently the result of the present absence of law in connection with collective agreements between unions of employers and employees. I believe that the Clause would really strengthen those agreements and prevent them from being undermined by irresponsible persons.

3.45 p.m.

Mr. A. J. Irvine (Liverpool, Edge Hill)

I think that the House ought to be clearly aware of what importance attaches to the proposed Clause. We want to be quite sure that we are interpreting it correctly and interpreting correctly the intention of the hon. Member for Crosby (Mr. Graham Page).

As I understand it, the effect of the Clause would be to repeal a Section of the 1906 Trades Disputes Act. That Act and that Section are of cardinal importance in the history of industrial relations in this country. The provisions of the Act do not have any particular bearing upon wildcat and unofficial strikes and matters of that kind. They are of cardinal significance in what may be described, contrariwise, as legitimate collective action by workers in furtherance of a trade dispute. For the hon. Member to argue that in the fashion which is proposed in the Clause that hard-won privilege should be abandoned by the House is remarkable.

I would remind the House of the effect of Section 3 of the 1906 Act. It states that An act done by a person in contemplation or furtherance of a trade dispute shall not be actionable on the ground only that it induces some other person to break a contract of employment or is an interference with the trade, business or employment of some other person, or with the right of some other person to dispose of his capital or his labour as he wills. It is true that the right conferred by the Section is a very wide one but, manifestly, it confers a privilege upon, among others, trade union officials and properly and correctly sponsored representatives of the union concerned to induce in the manner referred to by the Section. For the hon. Member to suggest that his Clause can be rationally regarded as a provision that is likely to assist the trade unions in the performance of their duties and obligations is, I should have thought, quite unacceptable not only to hon. and right hon. Members on this side of the House, but to other hon. Members on both sides of the House.

That, then, is the effect of the proposed Clause. But it is not the only defect, as I understand it. The Clause, even if it would not repeal it, would for all practical purposes override the effect of Section 4(4) of the Trades Unions Act, 1871.

Mr. Graham Page indicated assent.

Mr. Irvine

I am obliged to the hon. Member for indicating by a nod that he agrees with that interpretation of the effect of the Clause.

The 1871 Act provides, in Section 4, that Nothing in this Act shall enable any court to entertain any legal proceeding instituted with the object of directly enforcing or recovering damages far the breach of any of the following agreements". Those are then listed, and the fourth is: Any agreement made between one trade union and another. It seems to me that the Clause, in its fashion of overriding that section of the 1871 Act, adopts, quite apart from the merits, an undesirably clandestine method. What I conceive that the hon. Member seeks to do is to evade the consequences of that provision in the 1871 Act by incorporating the provisions in the collective agreements arrived at between employers associations and trade unions in the individual contract made between employers and employees, and making the terms of the collective agreements enforceable inside the individual contract. This is not only, in our view, therefore, an undesirable thing to do but, additionally, an undesirable way of doing it.

In our consideration of the Bill on Second Reading and in Standing Committee, we have throughout taken the line—I think that it will be generally acknowledged—that the Bill has some, albeit extremely limited, advantages in offering minimal security to the employees in certain classes of employment and in making provisions which will enable the workers to have better information than they have at present about the terms of employment under which they are working, and which are binding.

From that point of view we have given some support to particular provisions of the Bill, and our endeavours have been directed to a constructive attempt to improve these features of the Bill. The moment that anyone suggests, as is suggested now and has been suggested before, that the Bill should be made the occasion for introducing matters which are derogatory of hard-won trade union rights—which is how we see it—we become immediately and implacably resistant. That is our attitude to the new Clause.

These objections to the new Clause are objections in principle and are much more important than the more specific objections which could be made, but I wish additionally to suggest to the House that for it to be provided by Statute that it shall be an implied term in the individual contracts between employers and employees that the terms and conditions of any contract between the employers' association and the union shall be the terms of the individual contract is an expression much too vague to be acceptable to lawyers. It would give rise to endless difficulties and would inevitably involve extension into the principles and rules which govern the implication of terms in contracts to which the courts give consideration.

But that is a secondary and relatively technical point. Our main objection to the new Clause is on important principle.

Mr. John Robertson (Paisley)

While I do not expect that the House will agree to the new Clause, I feel that we should say something about this matter. I hope that I can bring the discussion down from the legal stratosphere to the Floor of the House. I am interested in this matter as it would affect the trade union official and the worker in the factory.

The hon. Member for Crosby (Mr. Graham Page) said that it was wrong to allow any Tom, Dick or Harry to induce people to break a contract. But what if it is Frank or Sir William? This is where the problem arises. One of the facts of industrial life is that there is no clearly defined way of altering an existing contract. The hon. Member said that the new Clause was not an attack on trade unions; but that is exactly what it is. It is not an attack on any Tom, Dick or Harry, but on the trade union officials, on the shop stewards, on officially appointed trade union representatives.

I had occasion to say during a previous discussion on the Bill that the attitudes of trade unions were mainly reactions to decisions by employers and to circumstances in industry and in particular to the problems associated with negotiation in industry. Hon. Members opposite have to decide on one vital point of principle: do they wish the present system of free negotiation in industry to continue? If they say that they do, they must also accept that both sides of industry must be free to exert pressure when needed. Otherwise, there would be nothing to prevent negotiations from being prolonged beyond reason, or carried out in a thoroughly negative manner.

The probable alternative to the existing situation if the new Clause were accepted would be that all negotiations in all firms on all questions, if the firms were members of the employers' association, would be carried out by national officials. There would be no flexibility and no negotiations at local level. It might be said that that is stretching it too far, but that is how I read the new Clause. There would obviously have to be provided methods whereby local managements and workpeople could initiate their own negotiations, even if a firm were a member of an employers' association. It must also be agreed that it would be desirable in such circumstances for individual managements and workpeople to be able to reach settlements to their own satisfaction.

It may help the hon. Member for Crosby to understand what I am trying to get at if I quote part of the Agreement for the Avoidance of Disputes in the Engineering Industry. Clause (d)11 states: Employers and Shop Stewards and Works Committees shall not be entitled to enter into any agreement inconsistent with agreements between the Federation or Local Association and the Trade Unions. It may well be considered inconsistent for a local management to enter into agreement with local shop stewards to pay a rate of wages higher than that laid down in the national minimum. Yet that is now the accepted way in industry of finding the true level of wages. National negotiations merely lay down the national minimum and the real level of wages is determined by local negotiations. There are many faults with this system. It is a method of subsidising the inefficient firm and also subsidising a firm located in some rather remote area, but it also allows a measure of flexibility which would be denied if the Clause were accepted.

To make industrial agreements enforceable in law and to make any breach of such an agreement actionable would inevitably produce a reaction among the trade unions who would require to seek an appropriate remedy. For better or worse, the decisions of trade unions and the policies of trade unions are not promulgated from above. They are based on and are the result of pressure from below, from the workshop, which is how it should be. But this requires flexibility in negotiation. Workpeople must be able to demand from a management or group of managements the revision of existing contracts and, if the management or group of managements is unreasonable, to stop work in pursuit of their case. The new Clause would obviously have the effect of discontinuing the present arrangement whereby local arrangements can be made for improving minimum rates of wages and working conditions laid down in national agreements.

The effect of this would be that trade unions in national negotiations would have to fix higher levels of wages, and possibly adopt the tactics of the American unions. In America, certain firms are picked on for the establishment of the pattern of wages and conditions, and all other firms then have to follow suit. This system would not be to the advantage of British industrialists.

Mr. Graham Page

Surely in national agreements there is permission for the making of local arrangements which would be part and parcel of the national agreements. Therefore, the new Clause would not prevent such local negotiations.

Mr. Robertson

The hon. Member has not got this quite right. It might amaze him to know that it is a matter of conjecture whether trade unions have the right nationally to demand a meeting of the National Engineering Employers' Association. These things are largely based on custom and practice and not on written agreement. It is a matter of the way the thing has grown up, but new problems would be raised if the Clause were made law. Present agreements would have to be reconsidered and recast in the light of the new situation. It may be rather silly, but that is the way that the thing has grown up, and I think that it has been a jolly good way, because it has provided the flexibility necessary to meet difficult situations. We do not need to look at the book of words whenever a problem arises.

But all that has been in relation to the employer who is a member of an employers' association. I was waiting to hear from the hon. Member what was likely to be the position of a firm which was not a member, and the majority of engineering firms are not members of the employers' association. [HON. MEMBERS: "It does not matter."] Does it not? Are we clear about that? The history of the law relating to trade unions is such that even if I were a lawyer I would hesitate to pronounce on this question. It seems to me that once we breach the law as laid down in the Acts of 1871 and 1906, we open the door to allowing other things to happen.

One of the virtues of industrial relations and negotiations in Great Britain has been the absence of lawyers when agreements have been made. Although agreements might have made legal nonsense, at least the parties to them have been able to understand exactly what was meant and what the intentions were. If there was any difficulty, they had custom and practice to guide them.

I think that any suggestion that there should be any alteration at all of the law relating to trade union agreements and to questions of inducement of people to break their contracts would be thoroughly bad. I believe that it is true to say that it was on the Floor of this House that these protections were given—and for very good reason. It would be surely wrong that from this House a Clause should emerge in a Bill of this kind, dealing with periods of notice and payments to be made during those periods, in which any such new principle should be injected. I hope that the House will not accept the Clause.

4.0 p.m.

Mr. David Renton (Huntingdonshire)

If I have followed the hon. Gentleman rightly, he is saying that the trade union law between the Statutes of 1871 and 1946 is sound, that it is like the law of the Medes and Persians and should never be altered. Is he really saying that, because, if so, I think that he should realise that there are a great many people outside the trade union movement who think that many of those inside it are living in a dream-world, deluding themselves that the present law is perfect?

Mr. Robertson

I would not say or accept that. My mind runs in a rather different direction. I think that there is not sufficient protection for trade unions and that there is not sufficient disability brought upon the employers; but we will not argue that now.

Mr. Cyril Bence (Dunbartonshire, East)

I wish to follow my hon. Friend the Member for Paisley (Mr. J. Robertson) in expressing strong opposition to this new Clause. I do not want to be impertinent to the hon. Member for Crosby (Mr. Graham Page), or to impute any wrong motives to him. I recognise that he is an expert in the law, and that I am not. I want to follow a point that I thought that my hon. Friend might have come to on this question of companies which are members of federations and companies which are not members. There are what we call the federated firms and the non-federated firms.

As I read the Clause, if a company is a member of, for example, the British Employers' Confederation—and worked for many years for an employer who was a loyal member—that company would be inhibited from pursuing any wages or conditions of employment terms different from those reached by the federation of which it is a member with the trade union, either one trade union or a group of trade unions, covering the classes of labour employed.

Mr. Graham Page

The hon. Gentleman has not read the words in parenthesis in the fourth line, which are: (… unless the contrary be expressly stated in the said contract … It is open to the parties expressly to state that the collective agreement does not apply to them.

Mr. Bence

Therefore, any firm in a federation of employers could contract out of the national agreement with the trade unions in order to give different conditions to its employees in that industrial unit, whether they were superior conditions or inferior conditions. I presume that that is what the hon. Member means.

Mr. Graham Page

They can do that now.

Mr. Bence

Of course they can. Therefore, as I read the new Clause there must be some other motive for it than the creating, as it were, throughout the country of one solid basis of uniform agreement or wage pattern. The hon. Member concedes that this Clause makes provision for variation of agreements as between the employer and his employee. But he uses the phrase, … any wrongful inducement or conspiracy. to change the conditions of those contracts.

All sorts of inducements are used. Some people may call them wrongful either on the part of the employer or of the workpeople. But what about companies that are not in these associations? Will they not have a superior position in negotiating with employers or groups of employers with firms that are in the federation? Will they not be able, by all sorts of inducements, to attract labour—I am not saying that it is a bad thing that they should—and have greater freedom by not being members of an association?

May not the ultimate result of such a Clause as this be that an industry or production unit of some kind that is not a member of the trade association will be able to break through the minimal conditions and go outside the general agreement laid down by the trade union and the federation, because, as my hon. Friend said, quite rightly, they are minimal conditions? Every employer today, without this new Clause, is free to negotiate with his group of employees—whether in a car or any other factory—and can negotiate conditions far superior to those laid down as minimal conditions. Surely the tendancy might be, for federated firms and national agreements under this Clause, to create a uniform standard. The only people who might find it quite easy to move out of that standard would be those firms which are not members of the association.

When my hon. Friend said that members outside that association would be free to do this, hon. Members opposite said "Not at all". They disagree with him. They cannot have it both ways. If they are outside the association, they have freedom to negotiate other terms and conditions outside the national agreements between the trade unions and the British Employers' Confederation. Does not this give them an advantage in the movement and attraction of labour over firms which are subject to national agree- ments made by trade unions with the British Employers' Confederation?

Mr. Graham Page

The hon. Gentleman is framing his remarks in the form of a question to me, so I must answer them. The new Clause deals only with collective agreements between employers within an association and members of the trade unions. If an employer is outside the association, he will have the same advantages or disadvantages as he has at present, and the new Clause does not attempt to touch those.

Mr. Bence

That is my point. In my view, the new Clause limits the capacity of inducement of federated firms which make agreements with the trade union movement as against non-federated firms which make agreements with the trade union movement. I do not wish to be dogmatic, but this is how the new Clause struck me when I read it, that it gives greater freedom and advantage to firms having national agreements with the national trade union movement over firms which are members of associations. They would be tied by the new Clause to national agreements and would be in danger of breach of that agreement if they use a "wrongful inducement", whatever that means.

Nothing that the hon. Member for Crosby has said makes me feel that my interpretation of his new Clause is wrong. Unless I can be assured that I am wrong, I hope that my hon. Friends will divide the Committee against the new Clause, because I think that it is a most dangerous proposal and certainly would not give justice as between non-federated firms and federated firms. If accepted, it would undermine the function of the trade union movement and individual executives of companies in using their expertise, efficiency and organisation to provide better conditions and to give better remuneration in the most efficient plants.

Mr. Aidan Crawley (Derbyshire, West)

I did not intend to intervene, but I have been led into doing so by the remarks of the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine), which were not, I think, relevant to the new Clause. It seemed to me that what he was saying was that, whatever change has to be accepted by others in this country, and whatever privileges have to be whittled down as society evolves, the privileges which under no circumstances shall ever be touched are those which have been won and are enjoyed by trade unions. Everybody else must be modernised. That, fundamentally, was what the horn, and learned Member was saying, but it is not relevant to this new Clause.

What the new Clause tries to do is to strengthen and not impinge on free negotiation engaged in between trade unions and employers' associations. As I understand it, the new Clause seeks to provide that nothing in the Bill shall invalidate agreements freely negotiated and entered into by trade unions and employers, and that if both sides freely accept obligations together they shall not use the Bill as a means of evading them. I should have thought that every hon. Member would agree that that was a desirable object.

4.15 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

Anything which preserves the sanctity of contracts is to be admired, and the spirit behind the new Clause is to be commended. But in its literal interpretation I have some grave doubts about it, because it seems to me that it seems to elevate to a superior position collective contracts of employment over individual contracts of employment. Rightly or wrongly, individual contracts of employment between a master and an employee can be interfered with under the doctrines of the 1871 and 1906 Acts, not only by trade union officials, as was explained by the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) but by other people, and nothing in the new Clause would prevent that from happening.

However, if the new Clause were passed, collective contracts could not be interfered with. It seems to me that that is not right. Individual contracts are, I believe, far more sacred because they are more freely entered into than collective contracts. What with the instance of the closed shop and the pressure, not only among employees but also among masters, to join trade associations and trade unions, it does not seem to me that collective contracts have a greater sanctity than individual contracts.

Nevertheless, if the new Clause is passed the contract freely entered into between an employer and an employee on an individual basis can still be interfered with in the way that the 1871 and 1906 Acts permit, whereas large group contracts in respect of which the consensus ad idem between the individual employee and the individual employer is much more remote and much more forced are given a superior status.

For that reason, I do not think that the new Clause is right.

Mr. Graham Page

I think that my hon. and learned Friend is misreading the new Clause. It starts with the words: A contract of employment made between an employer … and an employee and in the latter part still talks about the contract of employment between the employer and the employee. Therefore, the latter part refers to the individual contract and not only to the terms of the collective agreement.

The Parliamentary Secretary to the Ministry of Labour (Mr. William Whitelaw)

I understand entirely the purposes of my hon. Friend the Member for Crosby (Mr. Graham Page) in moving the new Clause. Before I deal with it, however, I should like to point out to the hon. Member for Paisley (Mr. J. Robertson) that I propose to spend a minute or two in an area as rare to me as it is to him, namely, the legal stratosphere. Having done that, I promise the hon. Gentleman that I will return to the Floor of the House and to the implications of the Clause on the shop floor.

The first aim of the new Clause appears to be to ensure that the terms of any relevant collective agreement are imported into the employee's contract by implication unless the contract expressly states the contrary. This part of the new Clause is, I understand, intended as a means of assisting the enforcement of collective agreements. There must be some doubt as to whether it would be a useful addition to the existing provisions. It seeks to import the terms of a collective agreement into the contracts of members of the associations on both sides which have made the agreement unless the contract expressly provides otherwise.

The provisions of a collective agreement reached between representative organisations in an industry are usually terms of the contract, whether expressly or impliedly so. Under the Terms and Conditions of Employment Act, if, on a reference to the Industrial Court, an employer is shown not to be observing the established terms and condition, the court can make an award which is legally binding on it. It is perhaps worth noting that under the Clause the terms of a collective agreement would be binding only on members of the associations which made the agreement. The machinery provided by the Terms and Conditions of Employment Act goes wider and makes it possible to require the observance of established terms and conditions by non-federated employers as well.

Secondly, the new Clause seeks to make a breach of any contract which incorporates the terms of a collective agreement actionable, and also to make any wrongful inducement or conspiracy to cause a breach of such a contract actionable.

What strikes one first is that it is a little surprising to limit this kind of provision to one kind of contract only—that is to say, to contracts the terms of which are imported from collective agreements. This would be a very arbitrary line of demarcation, as I am sure my hon. Friend the Member for Crosby would agree.

Now I return to the shop floor. In a factory, where some of the workpeople belong to a union—

Mr. J. Robertson rose—

Mr. Whitelaw

I hope that the hon. Gentleman will not mind if I do not give way now. I am only too ready to give way to him, but I should like to finish what I am saying.

In a factory where some of the workpeople belong to a trade union and some do not, the contracts of employment of the trade unionists would be subject to this provision, but the contracts of those outside the union would not. I do not think that there really can be a basis for such a distinction.

It is also surprising that the Clause should state that a breach of contract of this kind would be actionable. It is surprising because a breach of contract of employment is already actionable, and the Clause, therefore, in this respect only states what is already the law. And in so far as it only applies to contracts of employment of a particular kind, it might seem to imply that other contracts of employment are not enforceable at law, which would be an unfortunate implication.

Now I turn to what my hon. Friend made quite clear is the real point of the Clause. This is that any wrongful inducement or conspiracy to cause a breach of this kind of contract should also become actionable at law. As I understand it, the intention is that someone who induces another person to go on strike or to take other coercive action in breach of contract, or a number of people who combine for this purpose, would be liable to be sued in tort by the other party to the contract for inducing the breach. But, as was pointed out by the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine), this would alter the effect of Sections 1 and 3 of the Trades Disputes Act, 1906, which gives immunity from legal actions of this kind.

Clearly, this provision is aimed at a man who takes the lead in an unofficial strike or in some other form of disruptive action in breach of contract. Very often in Committee upstairs and in this Chamber it has been shown that hon. Members are at one in condemning such unconstitutional action, which is damaging both to our economy and to industrial relations. We would all welcome any practicable way of reducing and discouraging it. What we have to decide is whether this Clause would be an effective provision towards this end.

Almost invariably, the person we have described would be an employee who is himself taking part in the unofficial strike. He can, of course, already be sued for breach of contract. He hardly ever is. The employer knows that he cannot recover worthwhile damages and is in any case unwilling to embitter relations with his employees by taking legal action. We must ask whether this new Clause would give much greater incentive to the employer to bring such an action. He would know that even if he were awarded substantial damages he would be very lucky if he were able to recover them. The risk of embittering relations with his employees would remain and might be increased. The employer would surely wonder whether, by bringing an action, he might not end up by making a martyr of the defendant.

I have sought, in answer to a serious endeavour on a serious matter by my hon. Friend, to put forward what I believe to be the difficulties in accepting a provision of this kind. I must return to what has frequently been said by my right hon. Friend and by me in Committee—that the Bill is not a suitable place to include a provision of this kind. The Bill has two purposes. The first is to lay down minimum rights to notice and the second is to require employers to inform their employees in writing of the main terms of employment. This Clause strays far beyond those purposes.

I hope that I have been able to convince my hon. Friend that there really are practical difficulties in the way of the Clause and that for those reasons it would appear very unlikely that the Clause would have any real effect in carrying out what my hon. Friend has in mind. In addition, the Bill is not the place for it. I hope, therefore, that my hon. Friend, after this interesting debate, feels able to withdraw the Clause.

Mr. W. R. Rees-Davies (Isle of Thanet)

This is a most commendable effort by my hon. Friend the Member for Crosby (Mr. Graham Page) to bring a most important provision to the Floor of the House. I would be happier to accede to the suggestion of my hon. Friend the Parliamentary Secretary that we should not pursue it further if he had gone further himself in indicating that the Government would take positive action by legislation to deal with the type of situation covered by the Clause. From our discussions in Committee upstairs, and the speeches both of hon. Members opposite and of my hon. Friends, it is clear that very serious legislative consideration is being given to severance and redundancy payments and to general improvement of the position as between employers and unions.

It is partly true that this new Clause seeks to amend Section 4(4) of the Trade Unions Act, 1871. That subsection prevents one from having an action for damages as between one union and another, be they unions of employers or of labour. I take the view that it is time that it was amended. It is out of date and not in accordance with modern conditions. It is also time that we altered Section 3 of the Trade Disputes Act, 1906. It is a thing of the past and out of keeping with modern conditions. Where possible, we can get an enforce-ability of contracts with plenty of good will on both sides of industry.

This Clause would put some contracts in a superior position. It is one thing to deal with a contract where the employee is not a member of a union and the employer is not a member of an employers' association. They may enter into a contract quite freely. But the case is different where there has been a long period of collective bargaining, such as with the contracts of the electricity and gas industries, which are drawn up between parties with detailed representation from both sides. These contracts are negotiated by gigantic men of industry—the union men throwing down 3 million votes on one side and the employers' representatives speaking for whole industries on the other—and they guarantee that their employers and employees will honour the contract.

What lies behind this Clause is the pursuit of that type of policy. If we find, for instance, that the E.T.U. or the Transport and General Workers' Union have freely negotiated a contract, we have to consider carefully whether, if there is a breach of that contract by either side, there is any reason why there should not be an enforcement by way of damages in respect of the breach.

4.30 p.m.

The new Clause does not go quite so far. It says that the contract of employment, a collective contract between the employer and the employee, shall give that employer the right to sue the employee unless the parties expressly exclude that, and they can exclude it if they wish. Those of us who deal with these matters in the courts from time to time cannot accept the argument of the Minister that an employer will not sue an employee because he will thereby create bad relations. If an employer were sued in the execution of this new Clause, it would merely be a test case. The union would appear for the employee, the employers would no doubt be represented by their association, and they would test whether there had been a breach of the contract.

We have at the moment a preposterous situation with regard to the agreement with the electricity boards. There is a divergence of view about whether if a man is absent for three days under Clause 64 of that agreement he is obliged to provide a certificate in relation to his illness. He does not do so in practice. I take the view that if he does not establish his illness he is guilty of a breach of the agreement.

It might be very useful to have a test case to establish what really is the meaning of the terms of Clause 64 of that agreement. If a person were absent and did not provide a proper certificate to say that he had been ill, and his employers brought a test case to get a decision on the terms of that Clause, they would be able to sue for a breach of the agreement. Similarly, they would be able to use the new Clause for a test case.

I hope that the Government will take very much more seriously the overwhelming feeling in the country, including within the trade unions and among employers, that there is a need to go a great deal further than we have in the past. The question of honouring agreements is uppermost in the minds of many people, and there is deep-seated anxiety that a great many people on both sides of industry are not really honouring their obligations as employers and employees.

I am sure that the Minister will agree that we on this side of the House have shown great restraint. I would have liked to see this Bill widened immeasureably to meet the real feelings in the country today, but I accept it because it is admirable in many respects. I hope that before the General Election the Government will bring forward a Bill to further improve the position and thereby better our trade and industrial relations.

Mr. Stan Awbery (Bristol, Central)

From the tone of his speech I gather that the hon. Gentleman wants to go back to the pre-Taff Vale decision and make the trade unions responsible for the actions of individual members. According to the new Clause, if a man violates his agreement action will be taken against him. If 1,000 or 2,000 men on the factory floor violate their agreements, will action be taken against them, too?

Question put and negatived.