Inducement of, or Threat to Induce, Breach of Contract

Part of Orders of the Day — Industrial Relations Bill – in the House of Commons at 12:00 am on 16 February 1971.

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Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East 12:00, 16 February 1971

We do not need a pair to go to the hon. Gentleman's constituency.

On one point I agree with the hon. Member for Blackley, and that is on the importance both of the Clause and, in this context, the Opposition Amendment No. 796, which was not selected. The Amendments selected, while raising important and interesting points, did not go to the heart of the matter, but that Amendment would have done so if it had been selected. No doubt it was not selected because it went so much to the heart of the matter as to get rid of the Clause lock, stock and barrel. It shows the Opposition's approach in the matter, that they would like to revert to the pervasive immunity of Section 3 of the Trades Disputes Act, 1906, immunity for all, registered and unregistered, collective and individual.

Indeed, the Opposition wish to go further than even Section 3, because Amendment No. 796 would leave out the limiting words of that Section. Section 3 is limited to contracts of employment, but the Opposition would like to include all contracts, with no limitations. So it is not even true to say that they want to put the clock back to 1906, if I may borrow the hon. Gentleman's phrase. They want to give a still wider immunity.

It is clear that the Opposition would like to proceed as if Part IV of the Bill did not exist. On that artificial assumption they would in effect do away with the Clause. They are quite entitled to wish that Part IV did not exist, but when we are debating Part V we must have regard to what the Committee has done. It has accepted Part IV, and we now proceed on the assumption that there is a system of registration to be put into force and a prescribed dichotomy between registered and unregistered bodies and between their respective rights and liabilities.

At this stage we can pose the question and face up to the issue. The question, as I see it, is this: which approach is better and more logical, having regard to all the factors—the Clause 85 approach or the reversion to the previous practice, perhaps reinforced by the extension brought about by the omission of the restrictive words in Section 3 of the 1906 Act. The factors include on the one hand the desirability of preserving reasonable rights of strike action and on the other the desirability of upholding the sanctity of contracts and the rights of parties. The matter is well put in paragraph 848 of Donovan, where the Royal Commission says: It is thus very largely for the law of tort to draw the line between the protection of the right to strike which, as Lord Wright said in a celebrated judgment, is 'an essential element in the principle of collective bargaining', and the protection of the rights of others which may be adversely affected by its exercise. That balance must be struck, and amongst the relevant factors we must take into account are Part IV and the fact of registration. The Clause takes account of both these things.

One of the most important consequences of registration is that certain acts will be lawful for registered trade unions and their officials acting within the scope of their authority, but will be unlawful for others. If we went back on that, we should reverse the whole pattern of the Bill in this context and undermine its basic purpose. [Interruption.] As I have said, hon. Members opposite are entitled to want to do that, but we are approaching the matter now on the basis that the Committee has passed Part IV.

The basic question is this: is immunity from action for tort, which means action for a civil wrong, a privilege which should be appropriately restricted to registered trade unionists, or should it be available for all, irrespective of registration, on the basis that they would otherwise suffer unfair discrimination?

To answer that question we must look at the legal and social background and the nature of the immunity. The starting point is found in the words in the leading text book, Clerk and Lindsell on Torts at paragraph 792: Knowingly to procure"— or, as it is sometimes put, to induce— a third party to break his contract to the damage of the other contracting party without reasonable justification or excuse is a tort. So, apart from any statutory immunity, inducing a breach of contract is a civil wrong. It is something which causes damage to an innocent third party and therefore, apart from special considerations, the right of sanctity of contracts should be protected. If there is to be an immunity, that immunity must be justified for good social reasons. Section 3 of the 1906 Act provided a statutory protection in respect of the tort of inducing a breach of contract of employment, but, in the words of Professor Wedderburn, It was expressed in language that establishes formal privileges or immunities in a trade dispute. That privilege or immunity is not done away with in Clause 85. On the contrary, it is expressly preserved for registered trade unions and their officials acting within the scope of their authority. But it is restricted to them.