The Truck Act 1896.
At the time of the passing of the act of 1887 it seems to have been
generally believed that the obligation under the principal act to pay
the "entire amount of wages earned" in coin rendered illegal any
deductions from wages in respect of fines. Important decisions in 1888
and 1889 showed this belief to have been ill-founded. The essential
point lies in the definition of the word "wages" as the "recompense,
reward or remuneration of labour," which implies not necessarily any
gross sum in question between employer and workmen where there is a
contract to perform a certain piece of work, but that part of it, the
real _net_ wage, which the workman was to get as his _recompense_ for
the labour performed. As soon as it became clear that excessive
deductions from wages as well as payments by workers for materials
used in the work were not illegal, and that deductions or payments by
way of compensation to employers or by way of discipline might legally
(with the single exception of fines for lateness for women and
children, regulated by the Employers and Workmen Act 1875) even exceed
the degree of loss, hindrance or damage to the employer, it also came
clearly into view that further legislation was desirable to extend the
principles at the root of the Truck Acts. It was desirable, that is to
say, to hinder more fully the unfair dealing that may be encouraged by
half-defined customs in workplaces, on the part of the employer in
making a contract, while at the same time leaving the principle of
freedom of contract as far as possible untouched. The Truck Act of
1896 regulates the conditions under which deductions can be made by or
payments made to the employer, out of the "sum contracted to be paid
to the worker," i.e. out of any gross sum whatever agreed upon between
employer and workman. It makes such deductions or payments illegal
unless they are in pursuance of a contract; and it provides that
deductions (or payments) for (a) fines, (b) bad work and damaged
goods, (c) materials, machines, and any other thing provided by the
employer in relation to the work shall be reasonable, and that
particulars of the same in writing shall be given to the workman. In
none of the cases mentioned is the employer to make any profit;
neither by fines, for they may only be imposed in respect of acts or
omissions which cause, or are likely to cause, loss or damage; nor by
sale of materials, for the price may not exceed the cost to the
employer; nor by deductions or payments for damage, for these may not
exceed the actual or estimated loss to the employer. Fines and charges
for damage must be "fair and reasonable having regard to all the
circumstances of the case," and no contract could make legal a fine
which a court held to be unfair to the workman in the sense of the
act. The contract between the employer and workman must either be in
writing signed by the workman, or its terms must be clearly stated in
a notice constantly affixed in a place easily accessible to the
workman to whom, if a party to the contract, a copy shall be given at
the time of making the contract, and who shall be entitled, on
request, to obtain from the employer a copy of the notice free of
charge. On each occasion when a deduction or payment is made, full
particulars in writing must be supplied to the workman. The employer
is bound to keep a register of deductions or payments, and to enter
therein particulars of any fine made under the contract, specifying
the amount and nature of the act or omission in respect of which the
fine was imposed. This register must be at all times open to
inspectors of mines or factories, who are entitled to make a copy of
the contract or any part of it. This act as a whole applies to all
workmen included under the earlier Truck Acts; the sections relating
to fines apply also to shop assistants. The latter, however,
apparently are left to enforce the provisions of the law themselves,
as no inspectorate is empowered to intervene on their behalf. In these
and other cases a prosecution under the Truck Acts may be instituted
by any person. Any workman or shop assistant may recover any sum
deducted by or paid to his employer contrary to the act of 1896,
provided that proceedings are commenced within six months, and that
where he has acquiesced in the deduction or payment he shall only
recover the excess over the amount which the court may find to have
been fair and reasonable in all the circumstances of the case. It is
expressly declared in the act that nothing in it shall affect the
provisions of the Coal Mines Acts with reference to payment by
weight, or legalize any deductions, from payments made, in pursuance
of those provisions. The powers and duties of inspectors are extended
to cover the case of a laundry, and of any place where work is given
out by the occupier of a factory or workshop or by a contractor or
sub-contractor. Power is reserved for the secretary of state to exempt
by order specified trades or branches of them in specified areas from
the provisions of the act of 1896, if he is satisfied that they are
unnecessary for the protection of the workmen. This power has been
exercised only in respect of one highly organized industry, the
Lancashire cotton industry. The effect of the exemption is not to
prevent fines and deductions from being made, but the desire for it
demonstrated that there are cases where leaders among workers have
felt competent to make their own terms on their own lines without the
specific conditions laid down in this act. The reports of the
inspectors of factories have demonstrated that in other industries
much work has had to be done under this act, and knowledge of a highly
technical character to be gradually acquired, before opinions could be
formed as to the reasonableness and fairness, or the contrary, of many
forms of deduction. Owing partly to difficulties of legal
interpretation involving the necessity of taking test cases into
court, partly to the margin for differences of opinion as to what
constitutes "reasonableness" in a deduction, the average number of
convictions obtained on prosecutions is not so high as under the
Factory Acts, though the average penalty imposed is higher. In 1904,
61 cases were taken into court resulting in 34 convictions with an
average penalty of £1, 10s. In 1905, 38 cases resulting in 34
convictions were taken with an average penalty of £1, 3s. In 1906, 37
cases resulting in 25 convictions were taken with an average penalty
of £1, 10s.
Reference should here be made to the Shop Clubs Act of 1902 as closely
allied with some of the provisions of the Truck Acts by its provision
that employers shall not make it a condition of employment that any
workman shall become a member of a shop club unless it is registered
under the Friendly Societies Act of 1896. As in the case of payment of
wages in Public Houses Act, no special inspectorate has the duty of
enforcing this act.