of 662
bisculated 23.9.49 at 1.0pm
HIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT
Page 590.
Printed for the Cabinet. September 1949
Page 590 290
SECRET
C.P. (49) 192
19th September, 1949
CABINET
Copy No. 31
CONTRACTS OF SERVICE IN ESSENTIAL INDUSTRIES
MEMORANDUM BY THE MINISTER OF LABOUR AND NATIONAL SERVICE
1. At the meeting of the Cabinet on 21st March, 1949 (C.M. (49) 21st Conclusions, Minute 3), I was invited to submit a memorandum on the extent to which contracts of service in essential industries required modification so as to make it clear that workers were under an obligation to fulfil their contracts which could be enforced if necessary by civil proceedings."
2. I have had inquiries made as to the terms under which workers are employed in the following essential industries, namely electricity, gas, coal, water, transport and docks. With the exception of the docks* none of the con- tracts of service in these industries (which are sometimes in writing and some- times oral) calls for special comment.
3. The question of the enforcement of contracts of service in all essential industries gives rise to the consideration of the following three possible remedies, namely: actions for specific performance, for an injunction and for damages.
4. I am advised that, no matter what terms a contract of service might contain, the Court (except to the limited extent referred to in the following paragraph) would not specifically enforce it, that is to say, order the worker to carry out the work for which he was employed: nor in the type of case at present under consideration would the Court grant an injunction to prevent the worker taking up employment elsewhere.
5. The statement that the Court would not grant specific performance of a contract of service must be read subject to the provisions of Sections 3 and 4 of the Employers and Workmen Act, 1875. Under those Sections, where a county court (or a court of summary jurisdiction in cases where the claim does not exceed £10) might otherwise award damages for breach of contract it may, if the workman is willing to give security to the satisfaction of the Court for the performance of so much of the contract as remains unperformed, with the consent of the employer, accept such security and order performance of the contract accordingly, in place either of the whole or some part of the damages which would otherwise have been awarded. I am advised, however, that there would be nothing to prevent the workman from giving notice to terminate his contract of service.
6.
This leaves, as the only remaining civil remedy, an action for damages, I am advised that a master's right to sue a servant for damages for breach of the contract of employment exists apart from any express provision in the contract giving him such a right. On the other hand a provision designed to subject the servant to the payment of a penalty in excess of any damage actually suffered by the employer would not be enforceable.
* The Dock Workers (Regulation of Employment) Scheme 1947 enables disciplinary procedure to be taken against registered dock workers who fail to comply with any of the provisions of the Scheme. Under these provisions a registered dock worker may, for a time, lose his guaranteed wage, be suspended who say sofa bed not exceeding seven days or be dismissed from his empfohent.
37601
2
7. It will be seen therefore that the insertion of a special provision in contracts of service which enabled an employer to sue a worker for damages would be merely declaratory and in terrorem.
8. I appreciate the desirability of each worker in these industries being fully aware of his legal obligations and I have given careful consideration as to whether the steps necessary to secure this object would be justified at the present time. They would seem to involve a general revision of the contracts of service in the essential industries, which, except for water, are the nationalised industries. Such revision could only be effected by agreement of both sides of the joint negotiating machinery or by terminating the employment of some hundreds of thousands of workers and offering them re-employment on new terms. While the second course would clearly be most undesirable, I am doubtful whether the revision could be effected by negotiation and from the industrial relations point of view it would in my opinion be inadvisable for the industries concerned to embark on such negotiations at the present time. In any event it would necessitate a general directive from the Government to the nationalised boards on the subject. and I do not think we should be justified in requiring the boards to act in this way when it is our general policy to leave them free to deal with industrial relations matters without Government interference. In the circumstances I recommend that we should take no action on this question at the present time.
G. Á. I.
Ministry of Labour and National Service, S.W. 1, 19th September, 1949.