Lords Sitting of 5 February 1913

TRADE UNIONS (No. 2) BILL.
Petition for amendment of; of the British Constitution Association; read, and ordered to be on the Table.
BETTING INDUCEMENTS BILL. [H.L.]
Amendment reported (according to Order), and Bill to be read 3a To-morrow.
MARKET GARDENERS COMPENSATION (No. 3) BILL.
House in Committee (according to Order): Bill reported without, amendment, and to be read 3a To-morrow.

TRADE UNIONS (No. 2) BILL.
[SECOND READING.]
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (VISCOUNT HALDANE): My Lords, I rise to move the Second Reading of this Bill. The Bill was discussed in the other House on Second Reading in August and afterwards went to a Grand Committee, where it was sifted for some fourteen clays, during which various Amendments were made. It afterwards went back to the House of Commons and was discussed on Report, when further Amendments were made; and finally it was passed with the assent of both Parties as embodying a fair settlement of a very difficult question. The Bill contains three principles. The first is that legal sanction should be given to a trade union doing what it has been the constant practice of trade unions to do without interference for upwards of thirty years—namely, to engage in such political objects as assist the return to Parliament of Members representing their views. In the second place, the Bill provides that an object such as that shall not be included in the purposes of the trade union unless a majority of the members, having fair and full opportunity of voting, have so approved under the secrecy of the ballot. Thirdly, the Bill provides that any member who does not desire to contribute for this purpose shall be secure in his freedom not to contribute without being injured in his relations to the trade union.
842
Those are the three principles of the Bill. To understand how they come forward in a somewhat pressing form at this moment it is necessary to remember what has happened to trade unions. During the last dozen years they have had two very unpleasant surprises. When the Act of 1871, which regulated trade unions, was passed, they were under the firm impression that they were not incorporated and not subject to certain disabilities which attached to legal incorporation. If your Lordships look back to the discussions which took place before the Royal Commission and in connection with that Act, you will find that the trade unions strenuously objected to the notion of being incorporated. They desired to remain voluntary associations of individual members, as they had been before, and the reason is not far to seek. Even in those days it was understood that being incorporated carried with it certain disadvantages as well as certain advantages. The advantages are that your funds are better taken care of and more easily dealt with, and that you have certain rights and remedies which you cannot press without incorporation; but the disadvantages arise from the peculiar doctrines of English law. If the corporation is created by a Charter it has considerable powers over and above those which are expressed on the face of the Charter. It can do all things that in a reasonable sense are incident to its existence as a corporation. But if the corporation is created by Statute as distinguished from Charter, then there are a series of decisions of the Courts which have made it plain that the statutory corporation possesses no power which is not expressly given by the words of the Statute or by legal interpretation of the words used. Our law in that respect differs from the law of the United States.
In 1871, when the great Trade Unions Act was passed and when the Royal Commission had concluded its investigations, it was believed that unless a trade union was actually incorporated it could be under no such disabilities as I have alluded to—disabilities in the sense that it was confined to the strict purposes set out in its document of incorporation and bad no powers which might be reasonably incident to its action if it possessed the freedom of an individual. That proved to be a mistake. It was found that the doctrine of ultra vires, as it is called, applied not only to an

843
actual corporation but also to an association which was regulated by Statute and the powers of which were by Statute defined. It was held, in what is well known as the Osborne case in 1909, that the doctrine of ultra vires applied to trade unions just as much as it applied to associations which were actually incorporated. I said at the outset of my remarks that trade unions had had two surprises in the last twelve years. The other surprise was a little earlier. They had believed that their funds, invested mainly for the purpose of providing benefits for their members but also used as a reserve in cases of industrial disputes, were immune from attack by actions in the Law Courts. They were under the impression that they could not be sued, and that damages could not be recovered in actions of tort against those funds. Well, it turned out in 1902 that they had been mistaken in that belief, and the decision in this House in the Taff Vale case struck what they considered a blow at their security and at the safety of their funds, on the security of which many of their members depended for sick, old-age, and other benefits. The result was the Trade Disputes Act of 1906. I only mention that Act to clear the matter out of the way. So far as I am aware, there is no provision in this Bill which touches the questions that arose over the Trade Disputes Act, and I only refer to the matter because it was the other of those two difficulties which have arisen in the administration of trade unions in recent times. I return now to the one with which I am dealing.
The decision of this House in 1909, which made it clear that a trade union was limited in the application of its funds by the strict rule which the doctrine of ultra vires imposed, and that it could not apply them for political purposes—a decision which was a very natural one to lawyers and to those familiar with the principles which guide the Courts in constantly applying well settled rules to new cases—came as a surprise to the trade unions. I doubt whether even their legal advisers had realised its possibility in the year 1871 when the Act was passed, and certainly the trade unions themselves had not realised it because for many years they had gone on using their funds for the promotion of what are called Labour candidatures. It was not unnatural that they should do so. There are a great many cases in which a
844
candidate cannot, unassisted, sustain the considerable expense of a contested election, and even may require some help during his career in Parliament. The great political Parties of the State have their organisations; the Liberal Party has its organisations, the Unionist Party has its organisations, with large funds, contributed by rich men, which enable them to get over these difficulties when it is necessary to do so; but working men have no such possibilities. They have no rich men among their numbers, and the only way in which they can get round what is a real obstacle is by contributions of small amounts from a very large number of members, and the only machinery by which they can collect these contributions is the machinery of the trade unions. Consequently it happened after the extension of the franchise in 1867 that working men began, through the instrumentality of the trade unions, to promote Labour candidates and provide for the sustenance of representatives of Labour during the period in which they sat in Parliament. That practice went on unbroken until a man of considerable courage, Mr. Osborne, adopted an independent line and took exception, I do not know whether to the principle, but at all events to the practice under which he found himself called upon to submit to a levy for the purpose of maintaining a political candidate with whose views he did not agree. The Bill before your Lordships' House to-night does not go back upon what was laid down as the law in the case of Mr. Osborne except to a limited extent. The Bill does not propose to allow the trade unions to compel anybody to be called on for a levy to support a candidate with whose views he does not agree, or to subscribe to the furtherance of political views which are contrary to what he desires.
The Bill contains three principles. First of all, it repeals the technical rule which suddenly made it clear that it was illegal for trade unions to do what they had been doing for over thirty years—namely, to apply their funds for the furtherance of political candidatures and for cognate political objects. In the second place, it declares that these political objects are not to be included within the purposes of the trade unions unless a majority of the members, voting by ballot, so desire. In the third place, it proposes to enact that if any one says he does not wish to subscribe he can do so without incurring damage

845
thereby or having his status as a member of the union prejudiced. To realise why the working classes are so keen about this Bill it is necessary to go back for a moment to history. No doubt trade unions have in the course of their time done foolish things, but on the whole they have been. I submit, a great benefit to the working class community. It is impossible for an individual workman to hold his own against an employer in a far more powerful position. It is only by combining for the 13urpose of negotiating on a footing in which the parties are more evenly matched that it is possible for the working man to drive for himself a fair bargain.
Although freedom to combine to that end seems to us elementary, it was a proposition which was hotly contested in the past. Those of your Lordships who have the curiosity to turn to the records on this subject in the eighteenth century will find many things winch will astonish you. Not only was it peremptorily laid down in the Courts that combinations to keep up wages were in, restraint of trade and therefore illegal by the Common Law, but the doctrine of conspiracy was ruthlessly applied to persons who offended by their practice against this rule, and cruel sentences were passed right and left on working men who were doing what would be to-day regarded as commonplace things. The next thing that happened was that legislation of an even more drastic character than the rules of the Common Law was enacted. One of the most curious of the Statutes on the Statute Book is Chapter 136 of 39 and 40 Geo. III, the Act of 1799, which declares that an agreement among workmen that they will ask in common for a rise in their wages or the shortening of their hours of labour is an illegal agreement, and goes on to prohibit any such agreement and any meeting for that purpose, and makes the conduct of working men who indulge themselves in what would otherwise seem to have been a very natural and obvious step in industrial life subject to penalties of the severest order. That Act was not only passed in the year 1799 but was ruthlessly enforced for many years, and the records are full of cases of cruel sentences passed on working men in the early part of the nineteenth century.
But the Reform Act of 1832 brought a considerable change into the spirit in which the Legislature looked at these
846
things. Agitation arose in Parliament and out of Parliament and was growing in volume when the extension of the franchise took place under Mr. Disraeli's Government in 1867, and as soon as it became apparent that the working classes were about to have the franchise their demands took a more definite shape. I say, again, that in the history of trade unions in this period bad things were done as well as good things. Certain of the trade unionists inflicted outrages upon their fellow-workers and a system which was known in those days as "ragging" became prevalent. But accompanying the outbreak of this system there grew the conviction in the minds of reasonable people that if these things happened there was some excuse for their happening by reason of the laws to which trade unions were subjected and the little power which the members of those trade unions had to protect themselves, and a Royal Commission was appointed in 1867. That Commission, after a prolonged investigation, reported on two subjects—the Sheffield outrages, which was the minor subject., and the state of the law, which was really the major subject. As to the minor subject, they reported that although there had been very serious outrages in Sheffield those outrages were the work of not a fifth of the trade unionists existing in Sheffield at that time, the majority of the working classes in that great city and in other great cities having conducted themselves well in the furtherance of their objects.
As regards the law, the Royal Commission was very much divided. The majority recommended legislation of a very indefinite kind, the minority recommended legislation of a much more drastic kind; and Mr. Frederick Harrison and other well-known men took an active part in pressing the minority view on the minds of the public. The result was that two Statutes were passed in 1871. By one of those Statutes the breach of the law which had taken place in Sheffield was provided against and stringent regulations put on such practices as picketing and molestation, and by the other trade unions got their legal status. The Act of 1871, which was the main result of the Royal Commission of 1867, did several things. To begin with, it repealed the doctrine that a trade union could not be treated as legal in the eyes of the law. It repealed the doctrine that by reason of their objects being in restraint of

847
trade they could be recognised as having no validity and possibly involving those who took part in furthering them in prosecutions for conspiracy. Then the Act went on to provide that trade unions might, if they so pleased, register themselves, and if registered under the Registrar of Friendly Societies they should have certain privileges and advantages which had been hitherto denied to them. These were the great purposes of the Act of 1871; but, as I said, nobody believed for a moment that the trade unions had been incorporated and were therefore subject to the doctrine of ultra vires. A trade union was defined in somewhat general terms. So little attention did the Legislature pay to the definition of its objects that there was no proper definition, and there was only a casual reference to benefits as a legitimate object of a trade union. Had it not been for that reference it might have been necessary for the Judges, in interpreting the law, to have held that the benefit organisations of trade unions were also outside the scope of the law. On the words of the Act of 1871 it is certain that a fair argument might have been put forward to that effect, but fortunately in other sections of the Statute the word "benefit" was included, and therefore this House had no difficulty in deciding, in the Osborne case, that the doctrine of ultra vires did not extend to the prohibition of trade unions using their funds for benefit purposes.
But the Act of 1871 did not give satisfaction. There were defects in it, and there were still greater defects in the criminal legislation of the accompanying Statute. Accordingly a fresh agitation arose, and Lord Beaconsfield's Government in 1876 passed an Act extending the scope of trade unions, and by another Act in the previous session placed the law as regarded criminal offences on a much more rational basis. These two Acts of the Government of 1876 represented a considerable advance in the development of the law relating to trade unions. Since that time matters have gone on without suspicion on the part of trade unions that in doing what other political parties do, using their funds for the promotion of political purposes, they were doing what was illegal; but the decision of this House—a decision which, I think, is unanswerable when one comes to consider cognate legal principles and see how they apply, but which, like other
848
decisions, is in advance of things that lawyers dreamed of half a century ago—cast a new light on the position of trade unions, and a trade union can no longer apply its funds for political purposes. The trade unions naturally felt under that the sense of very great injustice, and a movement arose which took shape in the Bill which I have now to describe briefly to your Lordships.
This subject is not a very easy one to deal with, nor is the Bill an easy one to follow as it is printed. That, however, is not the fault of the draftsman; it is due to the difficulty of the subject matter. I will describe the clauses very briefly, and in a somewhat different order from that in which they appear in the Bill so as to give your Lordships the sequence of what is proposed to be enacted. The second sub-section of Clause 1 defines the statutory objects of trade unions, and these are very much like what the objects were in the Act of 1871—objects to which the decision in the Taff Yale case holds that trade unions must be confined, unless the law is altered—namely, the regulation of the relations between workmen and masters, or between workmen and workmen, or between masters and masters, or the imposing of restrictive conditions on the conduct of any trade or business, and also the provision of benefits to members. These are the statutory objects, and Clause 2 says that the expression "trade union" means "any combination the principal objects of which are under its constitution statutory objects." There is a later clause which says that if a trade union by its constitution has the statutory object of regulating the relations of Labour and Capital as its principal object and yet in practice departs from that and goes to other objects, the Registrar may rescind the certificate of incorporation; so that there is careful provision against a trade union departing from what are defined to be its principal objects. The ordinary trade union objects are and must continue to be the principal objects of the trade union if it is to be a legal organisation.
The first subsection of Clause 1 enacts that—
"The fact that a combination has under its constitution objects or powers other than statutory objects within the meaning of this Act shall not prevent the combination being a trade union for the purposes of the Trade Union Acts, 1871 to 1906, so long as the combination is a trade union

849
as defined by this Act, and, subject to the provisions of this Act as to the furtherance of political objects, any such trade union shall have power to apply the funds of the union for any lawful objects or purposes for the time being authorised under its constitution."
The furtherance of political objects by the trade union is subject to careful restriction. First of all, it must be ascertained by a ballot of the members, conducted under proper conditions, that the members by a majority desire to include those political objects. The second clause says that there is to be a separate fund made up of the contributions of those who are willing that part of their contributions, or their special contributions as the case may be, should be taken for the political fund, and that no dissentient member is to be compelled to contribute to the political fund and that the political fund alone may be used for this purpose. Then there is a clause which provides that a member who thinks he has suffered in consequence of the independent action which he has taken may appeal to the Registrar. This is a very important clause which was introduced on Report in the House of Commons, and which has made a great difference to the attitude which many people have taken up to this Bill. Under the clause in question the Registrar is made an absolute kadi. He is the person who, after all, knows about the trade unions, and if the aggrieved member goes to him he looks into the circumstances and makes an order that the member shall have such and such relief as in his discretion he may think necessary. He may, for example, make an order that a certain benefit which has been withheld is to be paid. There are no restrictions placed on the scope of the Registrar's order, and when he has made it, it can be taken to the County Court and made a judgment of that Court and enforced accordingly. I venture to think that that is a useful and valuable clause, and it is not uninteresting to know that it was introduced into the Bill on the joint motion of a Labour Member and another very promising member of the House of Commons who sits upon the Conservative side and who joined in the proposition—I mean Lord Wolmer.
There is very little more in the Bill itself to which I need call your Lordships' attention. I think I have explained its principles in a way which will now make it intelligible. Your Lordships will find that Clause 4 lays down a careful direction to the Registrar in framing the rules under
850
which members are to be protected and under which alone these contributions for political purposes may be applied. He is not to approve the rules unless he is certain that every member has had full liberty of voting, with the secrecy of the ballot properly secured. Then there is a statutory form of notice of unwillingness and facilities are given to members complaining to go to the Registrar. In that state of things the Bill so amended came for its final stage before the House of Commons on Friday last. Up to that date there had been a good deal of controversy, some people taking one view and other people taking another, but a happy spirit of give and take appears to have prevailed in the latter stages of this Bill, and the three parties concerned appear to have found themselves completely at one, because there was no Division on the Third Reading. Speaking in the debate in the other House on Friday last the Leader of the Opposition summed up the situation thus—
"I should like to say a few words about the Bill before it leaves this House. As regards its general principle there has not been from the first any dispute. I think every one in all quarters of the House recognises that the Osborne judgment left trade unions in an invidious and I think an unfair position. They ought to have been able, if they wished, to carry on political action under fair conditions. On that point I do not think there has ever been any difference of opinion."
And then Mr. Bonar Law went on to say that the Bill represented a satisfactory mode of giving effect to the principles on which there was general agreement. I think I have put your Lordships sufficiently in possession of the substance of the Bill. It only remains for me to move, as I now do, that it be read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
THE MARQUESS OF LANSDOWNE: My Lords, the noble and learned Viscount has recommended this Bill to the House in a speech characterised by great moderation, a speech the tone of which I shall endeavour to imitate in the few remarks which I shall have to address to your Lordships. The noble and learned Viscount gave us an extremely interesting retrospect dealing with the history of the question of trade unions and of the legislation affecting them. I shall not endeavour to follow him over that ground. I will only say one word in passing with regard to what fell from him as to the Trade Disputes Act of 1906, to which

851
he also made some reference the other evening when we were debating this subject. Upon that occasion the noble and learned Viscount dwelt rather pointedly upon the manner in which your Lordships' House had acquiesced in the Act of 1906. I, for one, take my full share of responsibility for all that happened in this house with regard to that Act. I will merely repeat now that it seems to me that the action of your Lordships was amply justified. We had lately passed through a General Election, the results of which had been not only unfortunate but overwhelming so far as we were concerned, and if we had desired to do what we sometimes do—namely, reserve the Bill before us for further reference to the constituencies—it must have been clear, I think, to all of us that there was no prospect whatever of obtaining from them a reversal of the policy of His Majesty's Government. In those circumstances it would, to my mind, have been an error of judgment on our part to have resisted the Bill. I only mention the matter because I wished to protest against the idea that because that was the line we took in reference to the Act of 1906 we are in any sense precluded from criticising its operation or from dealing with a perfectly free hand with any further legislation on the question of trade disputes, acid particularly with any attempt to use the Act of 1906 as a vantage ground for the purpose of obtaining further legislation upon the same subject.
I do not think I shall be contradicted when I say that the circumstances of the moment amply justify us in regarding with a somewhat critical eye any proposals for still further modifying the position of trade unions in regard to their action in connection with trade disputes. The last few years have seen a complete transformation of the conditions under which labour disputes are carried on. The leaders are no longer the same leaders. The principles are no longer the same principles. Many of them, indeed, would be absolutely abhorrent to those who at one time were responsible for the direction of the affairs of the trade unions. And, my Lords, the same may be said of the scale upon which the operations of the Unions are now conducted. It is no longer a case of the employees in a single mill, or in a single company, or in a single industry combining for the purposes of improving their position. You have attempts avowedly made for the purpose
852
of the unification of industry into one vast force organised for the purpose of waging war upon society. In the graphic expression which fell from the noble and learned Viscount the other evening, what is claimed is no less than the right to attack the very arteries of our national life. I do not think it would be any exaggeration to say that no mediæval tyrant, no invader of a defeated country has ever claimed the right to pass upon it a sentence more absolutely ruthless than the sentence which apparently some of these trade combinations consider themselves free to pass upon the community to which they belong. We have had a foretaste of these things during the last year or two. We have been threatened with a deprivation of the food which is necessary to keep the country alive, of the fuel which is necessary to keep cold out of the homes of our people, of the means of locomotion necessary to enable them to earn their daily bread. I was glad to gather from what was said by the noble and, learned Viscount, not to-night but the other evening, that His Majesty's Government are considering these matters, and that some kind of inquiry is in progress through the means of the Industrial Council with the object of ascertaining whether any remedies were possible in the case of these arterial strikes to which he particularly referred.
With regard to the Bill upon the Table, those who sit round me will, I am quite sure, desire to receive it in a cautious but by no means an unreasonable spirit. In the first place, as I think the noble and learned Viscount told the House, it is not a reversal of the Osborne judgment. The Osborne judgment, as I understand the matter, still holds the field; and it holds the field, and will, I believe, hold the field because to my mind it is founded not only upon justice but upon common-sense. When I speak of the Osborne judgment may I, for I cannot find words nearly so good of my own, express my meaning in the words of the Master of the Rolls. He laid it down that it was—
"not competent for a trade union to compel a minority to support by their vote, still less by their subscriptions, political opinions which they may abhor, under penalty, not only of being expelled from the union and thus losing all chance of benefit, but also of the risk, and in some cases the very serious risk, of not being able to find employment in their trade."
That judgment in principle, as I understand the matter, holds the field.

853
But, my Lords, it is one thing to say that, and it is quite another thing to say that in no circumstances shall a trade union interest itself in politics or spend any part of its funds for political purposes. That would, to my mind, be a position absolutely impossible to maintain. Here you have these great combinations of workmen formed for the purpose of promoting and protecting their own interests, formed avowedly and with every one's approval for the purpose of regulating the relations between Capital and Labour. Can you warn such combinations off the whole field of political activity, or tell them that subject to proper conditions no part of their funds are to be spent for political objects? In my view that would be an impossible position to take up. The frontier is not a frontier which we could possibly defend. It is rather like those cases which we sometimes conic across in the world of diplomacy, where you have a well defined sphere belonging to one Power, another well defined sphere belonging to another Power, and between them a neutral sphere which very often turns out to be at least as important as either of the other two. The very Bill which lies on the Table suggests the extreme difficulty of drawing a hard and fast line between objects which are political and objects which are not. I find in Clause 3 an enumeration of political objects; but I find also earlier in the same clause a remarkable parenthesis in which reference is made to the fact that there are other political objects not specified which are not to be prejudiced by the words which subsequently occur in the clause. We have therefore, it seems to me, to look for a solution under which reasonable latitude will be allowed to the trade unions in the matter of their political activities, and under which at the same time sufficient protection will be afforded to those members who object to any extension of the operations of the union. I would add to that that the safeguards which you provide for the protection of the dissentients must be real safeguards, because the peril is a very real peril. The unions can starve a man into joining their ranks, they can drive him out of the union if he is refractory, and unless they are prevented they can claim the right to coerce him into paying the expenses of a Parliamentary candidate whose principles may be utterly distasteful to him.
854
This Bill, as I understand it, is founded on the two principles which I mentioned a moment ago—that you must give reasonable latitude to the unions and reasonable protection to the dissenting minority. The question your Lordships have to consider is whether the provisions of the Bill accomplish these purposes. It appears from the Bill that the funds of a trade union cannot be used for political purposes without a previous resolution of the union carried under the ballot. That is the foundation of the whole structure of the Bill. The ballot is to be carried out under rules approved by the Registrar of Friendly Societies. The rules so framed will, I understand, have statutory sanction and really be as operative as if they formed part of the Bill itself. That is to my mind a very important feature in the Bill, because unless I am mistaken the result of that is to give any person who is aggrieved the right of recourse to a Court of Law for the purpose of obtaining redress. Then it is laid down that the resolution must be 'carried by a majority of the members voting. I own that at first sight that seemed to me to be a very unreasonable condition. It seemed to me that an infinitesimally small majority in a vote to which the greater part of the members of the union remained indifferent was not a sufficient authority for so fundamental a change in the policy of the union. Cases have been quoted in the course of these discussions where resolutions have been carried by a majority in a vote taken part in by an absurdly small proportion of the members. There is the case of the Amalgamated Society of Engineers, numbering 107,000 members, in which a levy was carried by a vote of only 5,000 to 2,000. There is the case of the Stonemasons Union, where a resolution was carried in a vote of 1,500 members out of a total membership of 15,000, and there are others not less remarkable. I own that my first impulse was to suggest that the majority should be a majority of the whole of the members of the union, but after hearing what has been said on the other side I admit that I am somewhat shaken in that view. It has been stated that, for example, in the case of the Engineers Union a great number of the members might be in different parts of the world and therefore not available for the purpose of the vote. Others, again, might be working overtime and could not be present. Therefore, my Lords, although rather reluctantly, I abandon the idea of

855
suggesting that the majority should be a majority of the total members of the union.
But then I would like to ask, Is there no other course that would be possible in order to prevent a serious decision being carried by a vote which in point of numbers would be a derisory vote? I should like to ask the noble and learned Viscount whether he has considered whether a quorum might not be laid down by the Bill; whether you might not stipulate that, say, at least 50 per cent. of the members had taken part in the voting. He will agree with me that such a limit is not unknown to our legislation. I think I am right in saying that if one trade union desires to amalgamate with another, a vote of at least 66 per cent. is necessary. Then I remember a Bill which we had in this House not very long ago dealing with the question of Scottish temperance—a Bill promoted by His Majesty's Government. In that Bill a resolution in favour of local option, or whatever it was, had to be carried by a sufficient majority on a sufficient vote. I should like to know why it is that some application of that principle might not be resorted to in the present case. With regard to the protection of dissentients, there is a point which I should like to mention. The dissentients are protected under one clause of the Bill by the stipulation that the ballot is to be conducted under conditions of secrecy, but having given the voter this protection you immediately proceed under this Bill to take it away from him by saying that if he does not like the result of the voting on the resolution he has to signify his dissent in writing over his own signature and thereby to reveal the fact that he is one of those who secretly voted against the proposal. That does seem to me to be rather a cruel injustice to the dissentient voter.
Then, my Lords, we come to the clause upon which the noble Viscount dwelt, the clause under which any member who finds himself aggrieved by the action of the union is given the right of appealing for protection to the Registrar of Friendly Societies. I venture to express my agreement with the noble and learned Viscount and to say that I regard that as a valuable addition to the clauses of the Bill. I am quite able to understand the dislike of the members of trade unions to finding them-
856
selves obliged to have recourse to litigation in a Court of Law, and I take it that the object of this proposal is to supply them with a much more easily available and cheaper remedy. To that extent the proposal seems to me to be a good one. But I own that I am a little dismayed by the number and importance of the duties which are given to the Registrar of Friendly Societies under this Bill. He comes in at every turn, and I cannot suggest a better description of him than that which the noble and learned Viscount himself gave a moment ago when he said that the Registrar of Friendly Societies would be under this Bill a kind of "absolute kadi." What I want to get from the noble and learned Viscount is this. Is he quite sure that the present position of the Registrar of Friendly Societies is strong enough to make him and his office fit for the task assigned to them under this Bill? What is the tenure of the Registrar of Friendly Societies? Is he an official of one of the public Departments? Is he removable at will, or has he a tenure of any kind? Then his staff, I see, is a very small one; he has, all told, something like eight clerks and subordinates. I should like to ask another question about the Registrar of Friendly Societies. He is made responsible for the rules which will be issued under this Bill. There are rules to be issued under Clause 3 with regard to the provision of separate funds and the protection of dissentients, and there are rules under Clause 4 for the conduct of the ballot. The question which I wish to ask is whether these clauses have the effect of limiting the interference of the Registrar to the particular and special points dealt with in the clauses, or has he any general power of supervising the rules of the union and putting his foot down if he finds that any particular rule is an improper or inadequate rule.
There is one other question arising out of the sixth clause of the Bill upon which I should like to be enlightened. Clause 6 provides the mode of giving effect to exemption from contributions to political funds, and it is proposed that effect may be given to the exemption of members either by means of a separate levy or by another process which is described further on in the clause. The suggestion that the protection should be given by the establishment of a separate levy seems to me absolutely sound and I

857
have not a word to say against it, but then what is the alternative procedure which is indicated further on in the clause? Is it something of this kind? Is it that there need be no separate levy, that there may be one general fund with a consolidated levy, and that the dissentient member is to be left only with a chance of getting a kind of rebate from that fund after special application on the occasion of one of his periodical payments? If I am right I must say that that alternative course of procedure does not seem to me to be very happily conceived or to afford the member in question very adequate protection.
These are really all the points that I desire to refer to except, perhaps, one other matter. It is a matter which was raised the other evening by my noble friend Lord Dunmore in the course of a very interesting speech which he addressed to the House, and it has reference to the results of the recent decision in the Vacher case. What I understand has happened is this. This House sitting in its judicial capacity has decided that no action can be entertained by any Court in respect of tortious acts committed by or on behalf of a trade union, even when no trade dispute is in progress or in contemplation. That, I think, is the effect of the judgment of your Lordships' House. But, my Lords, this Bill entitles trade unions to engage in political operations, and the question I would like to ask the noble and learned Viscount is this, whether the combined effect of the Vacher decision and of this Bill is to permit trade unions to use, and to use with complete immunity, what I can only describe as poisoned weapons, in the way, for example, of libels for political purposes and even if no trade dispute is proceeding or in contemplation at the time. That is all I wish to say upon the Bill. We certainly regard it in no hostile spirit, but we hold that if a change of this kind is needed the balance should be held evenly between those who desire that trade unions should take part in political activity and those who desire to leave things as they are. We think that the fullest protection should be given to those who wish to remain in the union and who desire also that their own participation should be limited by the law as it now stands and not by the law as it will stand after this Bill has passed.
THE EARL OF DUNMORE: My Lords, the noble and learned Viscount on the Woolsack, I think, was rather inclined this evening to place an equal share of responsibility for all the trade union legislation which has been passed by the present Government in recent years upon the shoulders of the Opposition. He quoted Mr. Bonar Law as having said that he was in favour of trade unions being able to carry on their political activities under fair conditions. We are certainly in agreement there; but I think the questions which have just been put by the noble Marquess on this side of the House show that, however much we may be in sympathy with the objects of this Bill, we do not and cannot accept any responsibility for the framing and the details of the Bill. I brought up a question the other day in regard to the immunity of trade unions and their funds from the ordinary processes of the law. That question bears directly on the issues involved in this Bill. This Bill seeks to extend the scope of action of trade unions. Under what is known as the Osborne judgment it was decided, as the noble and learned Viscount pointed out, that direct political action was outside the activity of trade unions and that the levy of funds for that purpose by a trade union was illegal. But if this Bill becomes law, a trade union, provided it complies with certain provisions in this Bill, will be able to apply its activities and its funds in any political direction.
Six or seven years ago if I had been employed in any of the industries in this country I should undoubtedly have been a trade unionist, but to-day I frankly confess I would hesitate before I joined a trade union, that is if I had any voice in the matter. It would depend very largely upon what use the trade union made of this Bill. Under what I may, perhaps, call the old trade unionism there were certain benefits to be derived. The policy of the old trade unionism, with which I am heartily in accord, broadly speaking had two objects in view. It tried, on the one hand, to obtain for the workers a larger share in the profits of industry. If a trade was making larger profits the members of the trade union were, by collective bargaining, able to get higher wages. It seems to me that the old trade unionism confined its activities to promoting the industrial welfare of the workers, but under the new trade unionism they travel very far outside those limits,

859
and I am extremely doubtful as to whether those wider excursions are of any benefit to the rank and file of the trade union movement, however much the ambition of some of their leaders may be gratified.
The essential point which I ventured to bring before your Lordships the other day was the position occupied by trade unions in regard to the ordinary law. I pointed out that under the Trade Disputes Act a trade union may commit any of those wrongful acts for which the law ordinarily provides a remedy by an action for damages with entire immunity as regards their trade union funds. This point, which it seems to me was carefully avoided by the noble and learned Viscount on the Woolsack, assumes a new significance under the present Bill, because when this Bill becomes law a trade union, as far as I read the Bill, can embark on a political contest armed with a weapon possessed by no other political organisation in the world. No matter what wrongful acts a trade union may commit towards its political opponent the trade union as a union will be free from responsibility. Its agents may libel and slander not only their political opponents but any other person whom they wish to injure without in any way making the trade union funds liable.
There is one point in this Bill which I was very much interested to observe. It is not very clear in the Bill, but, so far as I can make out, for the first time in trade union legislation there is a legal division in the funds of the union if it embarks on certain political objects. It does seem to me that this political fund should, like all other political funds of organisations which enter into political contests, be liable for the payment of damages for wrongful acts committed with the consent of the governing body of the trade union. I am strengthened in this opinion by the argument used by the noble and learned Viscount when he was replying to my remarks on the 22nd of last month. He defended the immunity of trade union funds under the Act of 1906. I will read the noble and learned Viscount's exact words. He said—
"The Trade Disputes Act of 1906 was, like many other measures, passed to deal with a balance of evils. There are evils whichever course you take in regard to this most difficult and disputed part of labour legislation. There are evils in leaving anybody, as the noble Earl has said, open to injury to his property or injury of other kind at the hands of a trade union and unable to sue
860
that trade union. On the other hand there are great evils, which were vividly placed before the public at that time, in allowing the funds of hundreds of thousands of innocent persons who depend upon those funds for their sole provision for sickness, old age, and other contingencies, to be made the subject of executions and judgments in respect of the acts of those who carry on things at a distance and act without any authority, express or actual, from the persons whose funds they were affecting; and it was because of the serious consequences to those funds and because of the great hardships which the doctrine of constructive agency brought about that the agitation for the protection of trade unions arose ".
I should like to point out that that argument does not apply in the present case. There is no reason why this political fund which is contributed, as I understand the Bill, solely for political objects should not be liable for the wrongful acts committed by the trade union. That is all that I have to say in regard to this Bill. The Bill in the shape in which it comes before your Lordships has been greatly improved by the provision which gives the right of appeal to a member of a trade union if he can show that he has suffered any disadvantages or injury through refusing to contribute towards a political fund with which he is out of sympathy, and having regard to that provision I would not be prepared to vote against the Second Reading of this Bill.. Great powers have been placed in the hands of the leaders of trade unions, and the responsibility for the use, whether wise or unwise, which they make of this Bill will rest on their shoulders.
THE LORD CHANCELLOR: My Lords, the noble Marquess and the noble Earl who has just sat down asked me certain questions which I will endeavour to answer. I will take them in the order in which they were put. The noble Marquess asked, in respect of the provision in the Bill as to voting, why not apply the analogy of local option and of amalgamation proceedings. The answer is that local option is a restriction of the liberty of the subject, and therefore you proceed very strictly in that case. In amalgamation also it is the extinction of the independent existence of the trade union that is involved, and therefore there again you proceed very strictly. But here you are only proposing to let a trade union go on doing what it has always been doing during the last thirty years and what it has only been prevented from doing because of the application of the doctrine of ultra vires. It is true that there were a number of conflicting points of

861
view in the other House with regard to the Act of 1906 and that concessions were made on all sides, but this is the form which that Act ultimately took. It is not an easy thing to get agreement in the other House, but that agreement was got and I take it that it was upon that basis that the delicate structure of the Act was finally put together.
The noble Marquees asked me about exemption, and said that a person wishing to be exempt must sign his name and that was a hardship. Certainly with regard to the ballot it would be very wrong for a man to be required to give his name, but when you come to exemption I do not see any other way in which the matter can be carried out. You must know who it is that wants to be exempt. If somebody wishes to be exempt he must say so, and I cannot think of any way in which exemption cart be provided for on any other footing than by his giving his name; and, after all, he has the protection of the Registrar. Then it has been asked, Is the Registrar a man in a big enough position to be able to deal with all these complicated matters? A new Registrar of Friendly Societies was recently appointed. An endeavour was made to get a man of great ability and discretion, and we believe that the man we were fortunate enough to secure is a very competent person and will be fully able to deal with this excessively delicate jurisdiction. No doubt, as the noble Marquess has said, it is a very delicate jurisdiction and a very extensive one. Further, the Registrar is a Civil servant and has all the security of tenure that attaches to a Civil servant. He is placed in the position of exercising judicial or quasi-judicial functions, and no doubt his functions will be well discharged.
Then comes the question, Can be supervise the rules? Has he sufficient power of supervision? In this connection I ought to draw your Lordships' attention to Clause 2, subsection (2), which rather extends the principle already existing. Subsection (2) is as follows—
"The Registrar of Friendly Societies shall not register any combination as a trade union unless in his opinion, having regard to the constitution of the combination, the principal objects of the combination are statutory objects, and may withdraw the certificate of registration of any such registered trade union if the constitution of the union has been altered in such a manner that, in his opinion, the principal objects of the union are no longer statutory objects, or if in his opinion the principal objects for which the union is actually carried on are not statutory objects."
862
That provides a formidable penalty. Then he gets a very large discretion under Clause 3 with respect to the rules for the purpose we are considering.
THE EARL OF SELBORNE: The noble and learned Viscount said that this officer will henceforth exercise judicial or quasi-judicial functions. Would be consider whether the Registrar could not be given a judicial or a quasi-judicial status?
THE LORD CHANCELLOR: The Registrar of Friendly Societies will have a great deal of work to do, much of it of an administrative character, and to make him a Judge would probably be to spoil him as an administrator. It is essential that he should be an administrator, and I think that what reconciled the Labour Members to this clause was that the Registrar would be largely an administrator and that no hard and fast rules of law were likely to be applied in this case. I think it is safest to leave the position of the Registrar as it stands, and I think it was on that basis that we got this clause through.
THE EARL OF SELBORNE: There is also the question of his tenure of office.
THE LORD CHANCELLOR: He has, as I have said, the tenure of office of a Civil servant, and the position of a Civil servant is one of consider able stability. The next question the noble Marquess put to me was about Clause 6. He asked why not have a separate levy in all cases. That arises in connection with Clause 3, Subsection (I), (a). The Registrar is to see that there is a rule in force providing—
"That any payments in the furtherance of those objects are to be made out of a separate fund (in this Act referred to as the political fund of the union), and for the exemption in accordance with this Act of any member of the union from any obligation to contribute to such a fund if he gives notice in accordance with this Act that he objects to contribute."
One of the most difficult points that the other House had to deal with in regard to this Bill was as to the restriction of trade union funds for certain purposes. The trade unions have objected right through, as making their constitution unworkable, to any attempt to split up their funds on any considerable scale, and although an option has been given in this Bill I do not think it is likely to meet with opposition on the part of the unions. Anybody who does not like to contribute to the political fund is under no obligation to contribute to it.
THE MARQUESS OF SALISBURY: How will be know that?
THE LORD CHANCELLOR: He will be informed of it.
THE MARQUESS OF SALISBURY: It is not provided for in the Bill.
THE LORD CHANCELLOR: The Registrar will see to that. The levy will not be made for political objects unless it is the distinct wish of the members, and no member is under any obligation to contribute if he objects to do so. That is the effect of Clause 3. To break up the funds into two divisions would meet with the tremendous opposition on practical grounds of the trade unions. Then the noble Marquess asked, Does not this Bill extend the decision in the Vacher case to the effect that whether there is a trade dispute or not the trade union is exempt from liability in respect of its funds. If the noble Marquess will look at Clause 1, subsection (1), he will see that there is nothing in this Bill which proposes to relax the doctrine of ultra vires in the case of any unlawful application of the funds of unions. The words of the subsection, taking the last three lines, are these—
"Any such trade union shall have power to apply the funds of the union for any lawful objects or purposes for the time being authorised under its constitution."
There you have a provision by which the trade union cannot use its funds for libelling people or for doing any act which is not sanctioned under the constitution of the trade union.
If that is so, and if you are left to deal with the matter on the footing of the general law, then I would point out this. It is not true that there is no remedy in the case of libel such as occurred in the Vacher case. The only thing is you cannot split up the funds of the trade union. Trade unions have always protested against their funds, which exist for all sorts of purposes, being split up, and I do not know why the political fund, winch may be for the purpose of the maintenance of representatives in Parliament, and so on, should be made liable any more than their other funds in this matter. To use the funds of a trade union for promoting a libel, if such a thing were to be done, would be an unlawful application of the funds; but I see no reason why if it is not right
864
to take the benefit funds for the purpose of satisfying damages for libel it would be right to take the political fund, which exists for a perfectly innocent purpose, to satisfy such damages. A trade union is a creation of the law and a very peculiar creation of the law. The only effect of the Trade Disputes Act is that you cannot get at those funds to make them satisfy the damages in an action for tort, but you can proceed against the individual who has been guilty of the libel and you can also proceed against such individuals by what is a much more effective remedy in some cases—namely, by injunction.
What I said the other day I say again: The Trade Disputes Act of 1906 is an Act which was passed to deal with, and which you have to look upon from the point of view of, the balance of advantages and disadvantages. I said the other day that as a remedy for the grievances to which it was addressed I never thought it perfect. If I had had my way—and I did try to get my way on one occasion—I should have preferred rather to have restricted the general principles of the law of agency; but if you had limited the general principles of the law of agency the result would have been precisely the same, so that it is as broad as it is long. As regards the practical question, one has to bear in mind that the trade unions were always under the impression that their funds could not be laid hold of. That is an old tradition with them, and it has always been their passionate desire to retain their old traditional position erroneous as it proved to be when the law was investigated. That is what caused them to raise, in 1906, the question of the Trade Disputes Act in so precise and exact a form.
I think I have now covered most of the questions which have been put to me. It may be that if we had been free to do so we might have dealt with this matter in a somewhat different fashion. We might have put the constitution of trade unions on a footing which would have been much more satisfactory to their members if we had only foreseen the ramifications of the law and the difficulties that have arisen out of the Act of 1871, but we have to deal with the position as it is to-day. This Bill does not touch the questions dealt with by the Trade Disputes Act. It deals only with time questions which have arisen since. It is an attempt to settle those questions on a footing with regard to which there has

865
been general agreement in the other House, and whether the system is the most perfect one that could be devised or not I venture to commend it to your Lordships.
On Question, Bill read 2a, and committed to a Committee of the Whole House on Monday next.

CHILDREN (EMPLOYMENT ABROAD) BILL. [H.L.]
THE MARQUESS OF SALISBURY: I should like to ask the Government a Quest-ion about the Bill which stands first on the Paper for to-morrow, the Children (Employment Abroad) Bill. Do the Government intend to pass that Bill in the present session? I have no desire to dissuade them from doing so, because in my opinion the Bill is a very important one and one that I should be very glad to see pass into law. I merely ask what the Government propose to do with respect to it.
THE MARQUESS OF CREWE: In the absence of my noble friend who speaks for the Home Office I am afraid I am unable to give the noble Marquess a reply, but I will inquire.
House adjourned during pleasure.
House resumed by the Lord HERSCHELL.

ESTABLISHED CHURCH (WALES) BILL.
Brought from the Commons; read la; to be printed; and to be read 2a on Tuesday next. (No. 205.)
House adjourned at five minutes past Eleven o'clock, till To-morrow, Two o'clock.