United Kingdom Labour Law - History

History

"It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate."

Labour law in its modern form is primarily a creation of the last three decades of the 20th century. However, as a system of regulating the employment relationship, labour law has existed since people worked. In feudal England, the first significant labour laws followed the Black Death. Given the shortage of workers and consequent price rises the Ordinance of Labourers 1349 and the Statute of Labourers 1351 attempted to suppress sources of wage inflation by banning workers organisation, creating offences for any able-bodied person that did not work, and fixing wages at pre-plague levels. Ultimately this led to the Peasants' Revolt of 1381, which was in turn suppressed and followed up with the Statute of Cambridge 1388, which banned workers from moving around the country. Yet conditions were improving as serfdom was breaking down. One sign was the beginning of the more enlightened Truck Acts, dating from 1464, that required that workers be paid in cash and not kind. In 1772 slavery was declared to be illegal in R v Knowles, ex parte Somersett, and the subsequent Slave Trade Act 1807 and Slavery Abolition Act 1833 enforced prohibition throughout the British Empire. The turn into the 19th century coincided with the start of the massive boom in production. Gradually people's relationship to their employers moved from one of status - formal subordination and deference - to contract whereby people were formally free to choose their work. However, freedom of contract did not, as the economist Adam Smith observed, change a worker's factual dependency on employers.

As its height, the businesses and corporations of Britain's industrial revolution organised half the world's production across a third of the globe's surface and a quarter of its population. Joint Stock Companies, building railways, canals and factories, manufacturing household goods, connecting telegraphs, distributing coal, formed the backbone of the laissez faire model of commerce. Industrialisation also meant greater urbanisation, and inevitably miserable conditions in the factories. The Factory Acts dating from 1803 required minimum standards on hours and conditions of working children. But people were also attempting to organise more formally. Initially, trade unions were suppressed, particularly following the French Revolution of 1787 under the Combination Act 1799. The Master and Servant Act 1823 and subsequent updates stipulated that all workmen were subject to criminal penalties for disobedience, and calling for strikes was punished as an "aggravated" breach of contract. But then the position was slowly liberalised and through the Trade Union Act 1871 and the Conspiracy, and Protection of Property Act 1875 trade unions were legitimised. Toward the turn of the 19th to 20th century, in Mogul Steamship Co Ltd v McGregor, Gow & Co, the House of Lords emphasised that businesses should be free to organise into trade associations in the same way that employees organised into unions. However, with growing unrest and industrial action the House of Lords changed its mind. At the turn of the 19th to 20th century he notorious judgment of Taff Vale Railway Co v Amalgamated Society of Railway Servants, made unions liable in economic tort for the costs of industrial action. Although a combination of employers in a company could dismiss employees without notice, a combination of employees in a trade union were punished for withdrawing their labour. The case led trade unions to form a Labour Representation Committee, which then became the UK Labour Party, to lobby for the reversal of the law. After the United Kingdom general election, 1906 a coalition government composed of the new Labour Party and the Liberals, among whom David Lloyd George and Winston Churchill were rising stars, quickly passed the Trade Disputes Act 1906. This laid down the essential principle of collective labour law that any strike "in contemplation or furtherance of a trade dispute" is immune from civil law sanctions. Accompanying this, the government embarked on widespread social reform. The Old Age Pensions Act 1908 provided pensions for retirees. The Trade Boards Act 1909 created industrial panels to fix minimum wages. And the National Insurance Act 1911 levied a fee to insure people got benefits in the event of unemployment.

During World War One the brutality of the Western Front demanded the participation of every available person and resource. As women took over traditional "men's jobs" the Suffragette movement gained momentum. Before the war's conclusion, the Representation of the People Act 1918 gave universal suffrage to men over age 21 and women over 28. A new beginning was promised by the victors to their people. The Versailles Treaty created the International Labour Organisation to draw up common standards between countries, for as it said, "peace can be established only if it is based on social justice", and echoed the US Clayton Act 1914 in pronouncing that "labour should not be regarded merely as a commodity or an article of commerce". But the international system remained disjointed as the United States Congress withheld its approval to join the League of Nations. Within the UK the postwar settlement was to make a home fit for heroes. Whitley Councils extended the Trade Boards Act 1909 system to Joint Industrial Councils that encouraged (non legally binding) fair wage agreements, while the Ministry of Labour actively organised and advised the growth of trade unions. This was based on a theory of collective bargaining, agreement or action, advocated by Sidney Webb and Beatrice Webb in Industrial Democracy to remedy the inequality of bargaining power of workers. Without legal force behind collective agreements, the law remained in a state of collective laissez faire, encouraging voluntarism for agreement and dispute settlement between industrial partners. The 1920s and 1930s were economically volatile. In 1926 a General Strike against coal miners' pay cuts paralysed the country, though was broken by Winston Churchill, by then the Chancellor of the Exchequer. The Labour Party had formed Parliamentary majorities in 1924 and 1929, but achieved little in the way of reform, particularly after the onset of the Great Depression.

By the Second World War and the Labour government of Clement Attlee, trade union membership was well established and collective agreements covered over 80 per cent of the workforce. With the British Empire in rapid dissolution, immigration from Commonwealth countries, and record levels of female workplace participation the character of Britain's workforce was changing fast. Though the common law was sometimes comparatively progressive, sometimes not, the first statutes to prohibit discrimination focused on gender and race emerged in the 1960s as the Civil Rights Act was passed in the United States. Discrimination in employment (as in consumer or public service access) was formally prohibited on grounds of race in 1965, gender in 1975, disability in 1995, sexual orientation and religion in 2003 and age in 2006. A complicated and inconsistent jamboree of Acts and statutory instruments was placed into a comprehensive code in the Equality Act 2010. Much discrimination law is now applicable throughout the European Union, to which the UK acceded in 1972. Although labour laws in the early European Treaties and case law were scant, the Social Chapter of the Maastricht Treaty brought employment rights squarely into the EU's jurisprudence. Meanwhile, starting from the Contracts of Employment Act 1963, workers gained a growing list of minimum statutory rights, such as the right to reasonable notice before a fair dismissal and a redundancy payment. Labour governments through the 1960s and 1970s were troubled by reform of the unwieldy trade union system. Despite producing reports such as In Place of Strife and the Report of the committee of inquiry on industrial democracy which would have made unions accountable to their members created more direct workplace participation, reform did not take place.

From 1979, a new Conservative government took a strongly sceptical policy to all forms of labour law and regulation. During the 1980s ten major Acts gradually reduced the autonomy of trade unions and the legality of industrial action. Reforms to the internal structure of unions mandated that representatives be elected and a ballot is taken before a strike, that no worker could strike in sympathetic secondary action with workers with a different employer, and that employers could not run a closed shop system of requiring all workers to join the recognised union. The wage councils were dismantled. A public campaign against the merits of unions paralleled the decline of membership and collective agreement coverage to under 40 per cent. In addition, the government opted out of the EU Social Chapter in the Maastricht Treaty. In 1997 the new Labour government brought the UK into the EU's Social Chapter, which has served as the source for most reform in UK law since that time. Domestic led reform was minimal. The National Minimum Wage Act 1998 established a country-wide minimum wage, but did not attempt to reinvigorate the Wage Board system. The Employment Relations Act 1999 introduced a 60 page procedure requiring employers to compulsorily recognise and bargain with a union holding support among workers, though union membership remained at a level steadily declining below 30 per cent.