THE WAGES ACT 1986: AN EXERCISE IN EMPLOYMENT ABUSE
| DOI | http://doi.org/10.1111/j.1468-2230.1988.tb01744.x |
| Published date | 01 January 1988 |
| Date | 01 January 1988 |
LEGISLATION
THE WAGES ACT
1986:
AN EXERCISE IN EMPLOYMENT
ABUSE
AT a meeting last November of the European Parliament’s
Standing Committee on Employment, the European Trade Union
Confederation (E.T.U.C.) accused the British Government of
seeking
to
promote “the
sort
of free market dogmas and policies
on deregulating working conditions which it has been following at
national level.”’ The policies objected to by the E.T.U.C. form
part of the Government’s overall plan to stimulate job creation and
increase business efficiency by freeing employers from some of the
allegedly more onerous constraints of statutory employment
protection. Included in the changes which are being pursued on the
basis that “the rights
of
people in employment have to be balanced
against the needs of those who are unempl~yed,”~ are an increase
in the qualifying period for unfair dismissal complaints from one to
two years (already in force)3 and (still at the proposal stage) the
imposition of a
E25
fee on applicants to an industrial tribunal,
refundable
if
the applicant wins the case or withdraws the claim.4
Against this background the Wages Act
,
which received the
Royal Assent on July
25,
1986,
comes as no surprise. The Act
makes important changes in three areas: payment of wages, powers
of Wages Councils and redundancy rebates.
PAYMENT
OF
WAGES
Part I, which came into force on January
1, 1987,
repeals the
Truck Acts
1831-1940.
The Truck Acts represented one of the
earliest forms of legal control of the employment relationship and
covered two aspects of wages protection which have long been the
subject of controversy: the manner
of
payment and deductions.
Manner
of
Payment
At common law employer and employee were free to agree on
how wages were to be paid. This led inevitably to abuses such as
the “tommy shop” and payment in kind.5 Under the former,
employees were given vouchers which could only be exchanged for
goods (often
of
poor quality and at inflated prices) at shops
controlled by the employer. Under the latter, employees were
Centre
for
Research
on
European Women (C.R.E.W.) Reports
(1986)
Vol.
6,
No.
12,
Government White Paper
Building Businesses
not
Barriers,
Cmnd.
9794,
May
1986.
S.I.
1985,
No.
782.
White Paper, p.35.
Otherwise known as “truck.”
p.6.
84
JAN.
19881
LEGISLATION
85
given goods worth less than the full value of their wages. Legislative
measures to control and prohibit these and similar abuses date
back to the fifteenth century. The first Parliamentary enactment, in
1465, was followed by a series of statutes, each applying to
different trades, until the legislation was consolidated in the Truck
Act 1831. Passed partly as a result of pressure from the newly
legalised trade unions, the Act was supported by major employers,
who wished to put an end to unfair competition caused by their
lesser rivals’ extensive use
of
the truck system.6
Section
1
prohibited the payment of wages in anything other
than
“coin
of the realm.” This protection, however, extended only
to workmen, namely those “engaged in manual lab~ur.”~ In
addition to the difficult borderline cases which resulted from this
definition,8 the legislation became increasingly anomalous as the
composition of the work force changed to include more and more
white-collar workers who were excluded from its protection.
Further, as these particular forms of exploitation of workers
became less common, this part of the statute came to be seen, in
the context of the modern work force, largely as a restrictive
measure denying both manual and non-manual workers the right to
choose their method of wages payment and in particular denying
manual workers access to fringe benefits which were often not
made available to them for fear of breaching the Acts. In 1959, the
Government responded by appointing a Committee to undertake a
general inquiry into the operation of the Truck Acts 1831-1940.’
At about the same time, certain well publicised attempts by
employers to transfer to payment of wages by cheque were followed
by a series of payroll robberies’O and calls for immediate reform
resulted in the Payment of Wages Act 1960. This permitted cashless
pay (either directly into a bank account, by money order, postal
order or cheque) provided the worker made a written request and
the employer agreed. There was no provision, however, for an
employer to impose cashless pay, and either side could withdraw
from the agreement by giving notice.
This partial reform consequently failed to satisfy the growing
number of employers for whom the cost and security problems of
paying wages in cash were considerable. Further reform was also
For
a history and analysis
of
the truck system see G. Hilton,
The Truck System
s.2
of
the Truck Amendment Act 1887, as amended by the Statute Law (Repeals)
Act 1973. Domestic servants were
specifically
excluded from the legislation. The Truck
Act 1831 originally applied to “Artificers,” a term which
was
not defined
until
the 1887
Act.
The words have been restrictively interpreted.
See
in particular
Bound
v.
Lawrence
[1892] 1
Q.B.
226 and
Cameron
v.
Royal London Ophthalmic Hospital
[1941] 1
K.B.
350.
Ministry
of
Labour,
Report
of
the Committee on the
Truck
Ac&,
1961. (The Karmel
Committee.) The Committee’s recommendations
for
repeal and replacement
of
the Truck
Acts were not implemented.
For
criticism
of
the Report, see
0.
Aikin
(1962) 25 M.L.R.
215 and M. Hickling,
ibid.,
p.512.
‘1”.
lo
Hilton,
op. cit.,
p.149.
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