INDUSTRIAL LAW AND THE LABOUR‐ONLY SUB‐CONTRACT
| Published date | 01 January 1967 |
| DOI | http://doi.org/10.1111/j.1468-2230.1967.tb01135.x |
| Author | G. de N. Clark |
| Date | 01 January 1967 |
INDUSTRIAL LAW AND
THE
LABOUR-ONLY
SUB-CONTRACT
THE
problems created by labour-only sub-contracting and by the
presence of self-employed
persons
in
industry
have been largely
neglected until recently by both lawyers and writers
on
industrial
relations. Lawyers have generally assumed that labour law was
concerned with the relationship between the parties
to
a
contract
of service;
it
often used to be called
''
the law of master and
servant." Having once distinguished the servant from the inde-
pendent contractor, most writers have been content
to
ignore the
latter except
to
point out that the employer
will
not be liable for
his acts
of
"
collateral
"
negligence.l
These problems have been forced
on
our
attention recently,
first by the sudden increase in the number
of
firms involved,
especially in the building industry: and second by the decision of
the Court
of
Appeal in
Emerald Construction Co.
v.
Louthian.%
This case has important consequences in the law of industrial
disputes generally:
it
also shows how the presence
of
a labour-only
sub-contractor can dramatically alter the legal character of an
otherwise straightforward situation. Shortly the facts were that
the plaintiffs had contracted with Messrs. Higgs and Hill Ltd.
for the supply of labour (bricklayers
and
others) for the construc-
tion of a power station at Fiddlers Ferry in Lancashire. Higgs and
Hill were the main contractors; the defendants were officials of the
Amalgamated
Union
of
Building Trade Workers. They objected
to
the practice of labour-only sub-contracting, and asked Higgs and
Hill
to
bring
it
to an end and employ their bricklayers direct.
When Higgs and Hill refused they declared
an
official strike,
picketed the site and induced a number of workmen
to
leave their
employment there. The plaintiffs complained
of
these matters and
sought an interim injunction
on
various grounds: but the Court of
Appeal (Lord Denning M.R., Diplock and Russell
L.JJ.),
allowing
their appeal from Lawton
J.
in chambers, relied
on
the tort of
inducing breach of contract in the
''
indirect
"
form.'
It
was held
that the defendants had
tried
to
induce Eggs and Hill to break
1
There are
no
references
to
sub-contractors
in
Mansfield Cooper,
Outlines
of
Idustrial Law
;
Flanders and Clegg,
Industrial Relations in Great Britain;
Roberta,
Industrial Relations
;
Phelps Brown,
Growth
of
Br,i,tish Industrial
Relatiom.
Fridman,
Modern Law
of
Employment,
says
that the
only
rela-
tionship
which properly
falls
t.o
be descrjbed
in
a
work
on
the
law
of
employment
is
that
of
master and servant (p.
30).
Contrast Wedderburn,
The Worker and the Law,
pp.
39-40.
For
a
recent treatment, see Grunfeld,
Modem Trade Union Law,
p.
369
et seq.
2
rl966J
1
W.L.R.
691.
6
JAN.
1967
THE
LABOUR-ONLY
SUB-CONTRACT
7
their contract with the plaintiffs; and that this was not a
"
contract
of employment
"
within section
8
of the Trade Disputes Act
1906.
The purpose of this article is to describe briefly the historical
background of the sub-contracting system:
to
outline the main
legal consequences of its adoption: and
to
suggest some ways in
which the law might intervene to regulate its effects and reduce its
attractions. Sub-
contracting flourished in almost every industry for centuries before
what is now regarded as the normal employment relationship
developed. Typical examples were the self-employed weaver taking
his raw materials from and selling
his
product back to the clothier;
or
the working partnerships in the tin mines of Cornwall, the lead
mines of the Mendips and many others.' Even when the factory
system developed
it
by
no
means necessarily followed that the
relationship between the factory owner and the work-people was
immediately transformed into the modern one of master and
servant. The old attitudes died hard:
on
the one side the factor
or
merchant, who did not interfere-and did not seek to interfere-
in the process of production itself:
on
the other, the domestic
worker, choosing
his
own
hours and methods of work, nominally
at least his
own
master. Survivals of these attitudes can still be
found from time to time in industrial customs like those permitting
deductions from wages for the provision of shop room, light, power,
etc., even in quite large works."
In the eighteenth century this kind of small-scale contracting
in industry was almost universal.
A
notable example was in the
great ironworks of the Crowley family in Durham, said
to
have
been the largest concern of its kind in Europe. The master iron-
workers normally worked in the
firm's
workshops using tools and raw
materials provided by the firm and were paid by the piece. This
has been described as a combination of the factory and domestic
systems which
''
for the worker may be said to have combined the
worst of both worlds, for
it
added to the long hours and irregular
income of the domestic system the discipline and supervision of
the factory." The master ironworkers employed their own hammer-
men and apprentices and paid them out of the moneys they received
from the firm for their work.e
It
comes
as
something of a surprise to learn how long such
systems survived in coal mining. The butty system was oldest
established and lasted longest in Staffordshire and the Black
Country. Here as the coal was relatively easy to get a small unit
4
Clapham,
Economic History
of
Modern Britain,
2nd ed.,
Chap.
V,
esp.
pp.
166,
176.
Cf.
Dobb,
Studies in the Development
of
Capitalism.,
Chap.
4.
5
See Allen,
G.
C.,
Industrial Development
of
Birmingham and the Black
Country,
1860-1927
(1966),
pp.
159-160.
Flinn,
M.
W.,
ad.,
The Law Book
of
the Crowley Ironworks
(Surtees Society,
1957),
pp.
xxiv,
xxv.
In
a sense the sub-contractor has always been with us.
Gregg,
Social and Economic History
of
Britain
1760-1965,
p.
103.
To continue reading
Request your trial