HL Deb 28 April 1960 vol 223 cc195-9

3.43 p.m.

Order of the Day for the Second Reading read.

THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE)

My Lords, the purpose of this Bill is to enable wages in certain circumstances and under certain conditions to be paid by methods other than by cash. Of course, the only thing that prevents that from being done now is the Truck Acts. I refer to the "Truck Acts" collectively as the Act of 1831 together with certain lesser Acts which have been passed since that time. These used to prohibit wages from being paid by cheque unless the recipient was within fifteen miles of a bank which issued its own notes. Now there are no such banks in England, and it is only in Scotland that that would be possible. The Truck Acts as a whole are still in many respects necessary. In other respects they are obsolete; and in some respects they need improvement; and in July of last year a Committee was set up by the then Minister of Labour under Mr. David Karmel, Q.C., for the purpose of considering what changes ought to be made in the Truck Acts. It has been asked: Why cannot we wait until that Committee have reported before bringing in this Bill? But we do not know how long the Committee are to take before making their report.

In the meantime there seems to be general agreement about the desirability of this Bill. Several Private Members' Bills which were introduced in order to achieve the same purpose have, for one reason or another, never reached the Statute Book. On the National Joint Advisory Council of the Minister of Labour there was agreement that the measure now before us was necessary, and in fact in the time of the former Minister, the right honourable gentleman Mr. Iain Macleod, the National Joint Advisory Council helped a great deal and played a great part in preparing this Bill. I hope that it is neither contentious enough nor complex enough to take up more than a little of your Lordships' time.

The main clause of the Bill is Clause 1, which provides that under certain conditions wages may be paid other than by cash; and it insists very strongly on the condition that the wage-earner must make a request that this should be done. In fact, Clause 1 of the Bill begins with the words: If an employed person requests his employer to pay his wages in a way specified in the request, In subsection (4) it is said that: Any request made by an employed person as mentioned in subsection (1) of this section shall be made by notice in writing given to his employer. The employer is not required to reply in writing. He may signify his agreement either by writing back or simply by paying the wages in the way specified by the employee's request. In subsection (3) the methods of payment authorised are

  1. (a) payment into an account at a bank, being an account standing in the name of the person to whom the payment is due, or an account standing in the name of that person jointly with one or more other persons;
  2. (b) payment by postal order;
  3. (c) payment by money order;
  4. (d) payment by cheque.
Payment by cheque has been permitted in the Bill in case this should be convenient in certain cases. But your Lordships will easily see that it is not very likely that that will be made use of in many cases, because if a wage-earner has a bank account of his own, obviously he will prefer that his money should be paid directly into his bank account instead of being given to him by cheque, putting him to the trouble of sending it to the bank.

If, on the other hand, he has not a bank account he will have to cash his weekly cheque, and obviously it would be more convenient for him to be paid in cash by the employer in the ordinary way. Payment by cheque has, however, been permitted in case it may be found convenient. Your Lordships can easily imagine that payment in the other two forms mentioned—by money order and by postal order—might be convenient in other cases. It is paragraph (a)—"payment into an account at a bank"—which I believe is most likely to be made use of, by mutual agreement. A wage-earner earning a high wage may often find it more convenient not to be given a large sum in bank notes each week. It may be safer, it may save trouble, and may help saving, too. It is sometimes easier to save if one does not know that the money is actually in one's pocket, or if some member of one's family does not know that it is in one's pocket.

Clause 2 and the Schedule to the Bill between them require that at the time when any such payment is made the employer shall furnish to the employed person a written statement showing his gross wages, the amount of any deductions and the net amount payable; and the Schedule, which can be altered by order by the Minister, tries to cover all the different methods of wage ascertainment which are customary in different industries. Clause 3 enables the arrangement to pay wages by one of these methods specified in Clause 1 to be terminated by not less than four weeks' notice in writing by either party.

Clause 4, I think, is the only one about which there has been any contention, because it is perhaps rather more for the convenience of the employer than of the wage-earner. What it provides is that if the wage-earner does not, or cannot, turn up at the usual place of payment—if he is perhaps ill and cannot come—and his wages need to be sent to him by post the employer may, without any written request, send him his wages, not by cheque but by money order or by postal order. What happens now is that bank notes have to be sent in a registered envelope, and it may be preferable in many cases to send a money order or postal order. But the clause did not give universal satisfaction in another place because it did not have to be preceded by a written request from the employee. However, an Amendment was accepted, and is now in the Bill, to the effect that if the wage-earner wrote stating he did not wish his wages to be paid by money order then the employer would still have to send them by cash, as he does now. I do not know whether your Lordships will think that that is a satisfactory solution; but, so far as I know, it seems to have satisfied everybody in another place, and I think there is now general agreement on the subject.

Clause 4 of the Bill comes into effect one month after the Bill is passed. The remainder of the provisions of the Bill come into effect six months after the Bill is passed. That is to give employers and wage-earners time to make their plans if they want to take advantage of the provisions in this Bill. There is one exception, and that is the payment by cheque. The provisions concerning payment by cheque, as distinct from postal order, money order or paying into a bank account, do not come into effect until my right honourable friend the Minister of Labour decides on an appointed day. The reason for this indeterminate delay is the fears which have been expressed, and which I think were mentioned in a debate your Lordships had on this subject last year, by shopkeepers about the possible consequences of payment of wages by cheque.

What the shopkeepers, or some shopkeepers, are afraid of is that if a great number of wage-earners get their wages by cheque they may want to cash the cheques the day after pay day, and they will expect grocers and other suppliers to cash their cheques for them. They are not obliged to, but if they do not the customer may go to another supplier who will. They are afraid that every week they will have to put an abnormally large amount of cash into their tills to cash all these cheques which they expect their customers to bring them; and this will be not only inconvenient but an obvious temptation to robbers to come and attack them. I have already given the reasons why I do not think that in practice wages are likely to be paid to any great extent by cheque. If a man intends to cash a cheque he obviously will not ask his employer to pay him by cheque. He will obviously prefer to be paid in cash. It is much better to be paid in cash at the pay office than to get a cheque and cash it at a shop. I therefore do not think it is likely to happen, but in view of these fears my right honourable friend wants time for more discussion with tradesmen before he brings it into effect. That is the reason for the indeterminate date. I think this Bill will serve a useful purpose in bringing wage payments up to date and more into conformity with modern conditions. I beg to move that the Bill be now read a second time.

Moved, That the Bill be now read 2a.—(The Earl of Dundee.)