TRANSFERRED UNDERTAKINGS (COMPENSATION TO EMPLOYEES) (AMENDMENT) REGULATIONS, 1953 (Hansard, 12 May 1953)

§ THE EARL OF SELKIRK
My Lords, on behalf of my noble friend, Lord Leathers, I beg to move that these Regulations be approved. They are made under the 1947 Act and amend the principal Regulations which were approved by this House in June, 1950. The object of these amending Regulations 392 is to rectify an anomaly which has since that time become apparent. Under the principal Regulations, to be entitled to compensation the claimant must have been an employee at the time when the transfer took place and, secondly, he has to have been employed in the industry since January, 1940. It so happens that in the road haulage business there are a certain number of people who have made their own businesses—in other words, have been owners or part owners, managing the business themselves. These men have subsequently, in certain cases, become employees. The typical example is a man who built up his own business, turned it into a limited liability company and became, for instance, managing director. That man would be excluded from consideration because, for part of the relevant period, he would have been owner or part owner. This Amendment is intended to cover precisely that case, so that such men can be brought in within the terms of compensation as laid down in the principal Regulations. There are two points arising from it. First, the man must still have served continuously, subject to certain limitations, during that period; and, secondly, the period of his service may in certain cases increase the amount of compensation which is due to him. I submit that this consideration was probably overlooked rather unwittingly when the original regulations were made, and that it is fair and proper that we should make an adjustment for it now. I hope your Lordships will agree. I beg to move.

§ LORD LUCAS OF CHILWORTH
My Lords, on the face of it, and with the noble Earl's explanation, these Amendment Regulations appear to be quite in order and highly desirable. But I should like to ask him one question, as it is not made clear in the Order or the explanatory notice attached to it. As the noble Earl has quite rightly said, the case has to be covered of a man who was the owner of a road haulage business but who, during the term of the qualifying period, became an employee. The noble Earl has mentioned the case of a single 393 owner who turns his business into a private limited liability company. Of course, it could also happen with a private ownership, a single ownership, without any limited company structure, or with a partnership. I am apprehensive, although I feel that the noble Earl is going to dispel my apprehension. Having had some experience of the lucidity with which he dealt with a great many intricate matters in our debates on the Transport Bill, I feel sure that this will come easily to him. I do not want to prevent the payment of compensation for hardship, but I do want to prevent anyone from getting compensation twice, because the single ownership business in the road haulage industry was a type of business most generously compensated under the 1947 Act.
Owing to a recent decision of your Lordships' House acting in its Judicial capacity, the compensation for compulsory acquisition has to be paid upon a gross assessment of profits, from which there need be no deduction for any salary or remuneration for the single ownership, and that will cost the British Transport Commission, at this late stage, something in the region of £2 million or more, in additional compensation. What I want to ensure—and I feel sure the noble Earl will be able to satisfy me on the point, which I will put as kindly as I can—is this. I do not want to see an individual who may have had a single ownership business for nine-tenths of the qualifying period, having come to some arrangement to be a shadow proprietor, with somebody else having the real financial interest behind it, now coming forward as the hard-done-by employee and getting compensation as well. If the noble Earl will assure me that that contingency is adequately covered, then I shall be satisfied; and so, I think, will noble Lords on this side.

§ THE EARL OF SELKIRK
My Lords, I thank the noble Lord for what he has said in general. He can set his mind at rest on this matter: there is no question of anybody being paid twice. A man has to be an employee at the time of transfer, in which case he could not come under the decision in the case of Road Haulage Executive v. Elrick, to which the noble Lord has referred. In regard to the other instance which the noble Lord mentioned, the instance in which a man has made an 394 arrangement, I must say that, although it might have been conceivable that a man would make an arrangement, I think it would have been very difficult to do so; and I should have thought that that would be abundantly covered by these provisions. We have much more in mind the case in which, perhaps ten years or more ago, a man may have been, for a few years, an operator of a firm. I think noble Lords can rest assured. We do not know how many people are concerned, but we think there are very few. I hope that in these circumstances the noble Lord will accept what I have said.