The History of Trade Unionism / (Revised edition, extended to 1920)

by Sidney Webb; Beatrice Webb

The Trade Disputes Act

The first claim of the Labour Party was for the statutory reversal of the Taff Vale judgement, which every one now admitted to be necessary. The question was what should be done. There were, substantially, only two alternatives. One was that, in view of the difficulty of effectually maintaining it against legal ingenuity, the Trade Unions should forgo their position of being outside the law, and should claim, instead, full rights, not only of citizenship, but actually of being duly authorised constituent parts of the social structure, lawfully fulfilling a recognised function in industrial organisation. But for the Trade Union to become, not merely an instrument of defence, but actually an organ of government in the industrial world, required a great advance in public opinion. It assumed an explicit recognition of the legitimate function of the Trade Union, as the basis of a Vocational Democracy, exercising a definite share in the control and administration of industry. It involved a complete transformation of both the criminal and the civil law, so that workmen’s combinations and strikes, together with peaceful picketing in its legitimate form, should be unreservedly and explicitly legalised; the law of civil conspiracy practically abrogated, so that nothing should be unlawful when done in concert with others which would not be unlawful if done by an individual alone; and reasonable limits set to liability for the acts of agents and to the scope for injunctions, so that a Trade Union Executive would be able both to know the law and to be ensured against its perversion. The alternative was to make no claim for the profound advance in Trade Union status that would be involved in such a policy; to forgo any hope of satisfactory or complete amendment of the law, and merely to re-enact the exceptional legislation of 1871, this time specifically insisting that a Trade Union, whether registered or not, should be put outside the law, and made expressly immune from legal proceedings for anything, whether lawful or unlawful, done by its officers or by itself. The outgoing Conservative Government had appointed in 1903 a small Royal Commission to consider the state of the law as to Trade Unionism, before which the Trade Unions had refused to give evidence, because the Commission, which was made up almost entirely of lawyers, included no Trade Unionist. This Commission, it is believed, was told privately not to report until after the General Election, in order that the Conservative Government might not be embarrassed by the dilemma. Early in 1906 it reported in favour of the Trade Union accepting full responsibility for its own actions, subject to considerable, but far from adequate, amendments of the law.[659] This proposal was definitely rejected by the Labour Party, which introduced a Bill of its own, merely restoring the position of 1871. When the Liberal Government brought in a Bill very much on the lines of the Commission’s Report, there was a dramatic exhibition of the electoral power that Trade Unionism, once it is roused, can exercise in its own defence. Member after member rose from different parts of the House to explain that they had pledged themselves to vote for the complete immunity which Trade Unions were supposed to have been granted in 1871. Nothing less than this would suffice; and the most powerful Government hitherto known was constrained, in spite of the protests of lawyers and employers, to pass into law the Trade Disputes Act of 1906. [660]

The Trade Disputes Act, which remains (1920) the main charter of Trade Unionism, explicitly declares, without any qualification or exception, that no civil action shall be entertained against a Trade Union in respect of any wrongful act committed by or on behalf of the Union; an extraordinary and unlimited immunity, however great may be the damage caused, and however unwarranted the act, which most lawyers, as well as all employers, regard as nothing less than monstrous.[661] At the same time the Act, whilst not abrogating or even defining the law as to civil conspiracy, gives three exceptional privileges to Trade Union officials by declaring that, when committed in contemplation or furtherance of a trade dispute, (1) an act done in concert shall not be actionable if it would not have been actionable if done without concert; (2) attendance solely in order to inform or persuade peacefully shall be lawful; and (3) an act shall not be actionable merely by reason of its inducing another person to break a contract of employment, or of its being an interference with another person’s business, or with his right to dispose of his capital or his labour as he chooses. These exceptional statutory privileges for the protection of Trade Union officials in the exercise of their lawful vocation, and of “pickets” in the performance of their lawful function—in themselves a triumph for Trade Unionism—have ever since excited great resentment in most of those who are not wage-earners. Some friends of the Trade Unions expressed at the time the doubt whether the policy thus forced upon Parliament would prove, in the long run, entirely in the interest of the Movement; and whether it would not have been better to have chosen the bolder policy of insisting on a complete reform of the law, to which, when properly reformed, Trade Unions should be subject in the same way as any other associations. The lawyers, as it proved, were not long in taking their revenge.

The Osborne Judgement

This time the legal assault on Trade Unionism took a new form. The result of the dramatic victory of the Trade Disputes Act, and of the activity of the Labour members in the House of Commons, was considerably to increase the influence of the Labour Party in the country, where preparations were made for contesting any number of constituencies irrespective of the convenience of the Liberal and Conservative parties. The railway companies, in particular, found the presence in Parliament of the secretary of the railwaymen’s principal Trade Union very inconvenient. Within a couple of years of the passing of the Trade Disputes Act, on July 22, 1908, one of the members of the Amalgamated Society of Railway Servants took legal proceedings to restrain it from spending any of its funds on political objects, contending that this was beyond the powers of a Trade Union. Such a contention found no support among eminent lawyers, several of whom had formally advised that Trade Unions were undoubtedly entitled to undertake political activities if their rules authorised such action and a majority of their members desired it. W. V. Osborne, the dissentient member of the Amalgamated Society of Railway Servants, took a different view; and, liberally financed from capitalist sources, carried his case right up to the highest tribunal. As a result, in December 1909, as in 1825, 1867-71, and 1901-6, every Trade Union in the land found its position and status once more gravely impugned. In what became widely known as the Osborne Judgement, the House of Lords, acting in its judicial capacity as the highest Court of Appeal, practically tore up what had, since 1871, been universally understood to be the legal constitution of a Trade Union. [662]

The decision of the judges in the Osborne case throws so much light, not only on the status of Trade Unionism in English law, but also on the animus and prejudice which the Trade Disputes Act and the Labour Party had excited, that we think it worth treating at some length. Formally this judgement decided only that W. V. Osborne, a member of the Walthamstow Branch of the Amalgamated Society of Railway Servants, was entitled to restrain that Trade Union from making a levy on its members (and from using any of its funds) for the purpose of supporting the Labour Party, or maintaining Members of Parliament. But in the course of that decision a majority of the Law Lords, therein following all three judges of the Court of Appeal, laid it down as law (and thereby made it law until Parliament should otherwise determine), (a) that although Parliament has always avoided any express incorporation of Trade Unions, these were all now to be deemed to be corporate bodies, formed under statute, and not unincorporated groups of individual persons; (b) that it follows, by an undoubted principle of English law, that a body corporate, created under statute, cannot lawfully do anything outside the purposes for which the statute has incorporated it; (c) that as the purposes for which Trade Unions are incorporated have to be found somewhere authoritatively given, the definition which Parliament incidentally enacted in the Trade Union Act of 1876 must be taken to enumerate, accurately and exhaustively, all the purposes which any group of persons falling within that definition can, as a corporate body, lawfully pursue; and (d) that the payment of the salaries and election expenses of Members of Parliament, and indeed, any political action whatsoever, not being mentioned as one of these purposes and not being considered by the judges incidental to them, could not lawfully be undertaken by any Trade Union, even if it was formed, from the outset, with this purpose duly expressed in its original rules, and even if all its members agreed to it, and continued to desire that their organisation should carry it out.

This momentous judgement destroyed, at a blow, the peculiar legal status which Frederic Harrison had devised for Trade Unionism in 1868, and which Parliament thought that it had enacted in 1871-76. The statutes of 1871 and 1876, which had always been supposed to have enlarged the freedom of Trade Unions, were now held to have deprived these bodies of powers that they had formerly enjoyed. It was not, as will be seen, a question of protecting a dissentient minority. Whether the members were unanimous, or whether they were nearly evenly divided, did not affect the legal position. Trade Unions found themselves suddenly forbidden to do anything, even if all their members desired it, which could not be brought within the terms of a clause in the Act of 1876, which Parliament (as Lord James of Hereford emphatically declared) never meant to be taken in that sense. “What is not within the ambit of that statute,” said Lord Halsbury, “is, I think, prohibited both to a corporation and a combination.” This was the new limitation put on Trade Unions. All their educational work was prohibited; all their participation in municipal administration was forbidden; all their association for common purposes in Trades Councils and the Trades Union Congress became illegal. The judges stopped the most characteristic and, as was supposed, the most constitutional of the three customary ways that (as we have shown in our Industrial Democracy) Trade Unions pursued of enforcing their Common Rules, namely, the Method of Legal Enactment; grave doubt was thrown on the legality of some of the developments of their second way, the Method of Mutual Insurance; whilst the way that the House of Lords expressly prescribed was exactly that which used to give rise to so much controversy, namely, the Method of Collective Bargaining, with its concomitant of the Strike. So topsy-turvy a view of Trade Unionism, a view which seems to have arisen from the judges’ ignorance of its two centuries of history, could not have survived open discussion, and therefore could hardly have been taken by even the most prejudiced Parliament.

The Development of English Law

What was the explanation of the view of the Trade Union constitution that the judges took? The English Courts of Justice, it must be remembered, have peculiar rules of their own for the construction of statutes. When the plain man wants to know what a document means, he seeks every available explanation of the intention of the author. When the historian inquires the purpose and intention of an Act of Parliament, he considers all the contemporary evidence as to the minds of those concerned. The Courts of Law, for good and sufficient reasons, debar themselves from going behind the face of the document, and are therefore at the mercy of all the unstudied ineptitudes of House of Commons phraseology. Along with this rigour as to the intention of a statute, the English and American judges combine a capacity for developments of doctrine in the form of legal principles which is, we believe, unequalled in other judicial systems. Now, the subject of corporations is one of those in which there had been, among the past generations of English lawyers, a silent and almost unselfconscious development of doctrine, of which, in Germany, Gierke had been the great inspirer, and Maitland in this country the brilliant exponent.[663] Our English law long rigidly refused to admit that a corporate entity could arise of itself, without some formal and legally authoritative act of outside power. How, it was asked, except by some definite act of creation by a superior, could the persona ficta come into existence? How, otherwise (as Madox quaintly puts it), could this mere “society of mortal men” become something “immortal, invisible, and incorporeal”?[664] As a matter of fact, associations or social entities of all sorts always did arise, without the intervention of the lawyers, and nowadays they arise with amazing ease, without any act of creation by a superior; and when the English lawyers refused to recognise them as existing, it was they who were irrational, and the common law itself that was at fault. Nowadays we live in a world of social entities of all sorts, and of every degree of informality, corporate entities that to the old-fashioned lawyers are still legally non-existent as such—clubs and committees of every possible kind; groups and circles, societies and associations for every conceivable purpose; unions and combinations and trusts in every trade and profession; schools and colleges and “University Extension Classes,” often existing and spending and acting most energetically as entities, having a common purse and a single will, in practice even perpetual succession, and (if they desire such a futile luxury) a common seal, without any sort of formal incorporation. Gradually English lawyers (whom we need not suspect of reading Gierke, or even, for that matter, Maitland) were unconsciously imbibing the legally heterodox view that a corporate entity is anything which acts as such; and so far from making it impossible for the persona ficta to come into existence without a formal act of creation, they had been, by little alterations of procedure and imperceptible changes in legal principles, sometimes by harmless little dodges and fictions of the Courts themselves, coming near to the practical result of putting every association which is, in fact, a social entity, however informal in its constitution, and however “spontaneous” in its origin, in the same position of a persona ficta, for the purpose of suing and of being sued, as if it had been created by a formal instrument of incorporation, decorated by many seals, and procured at vast expense from the post-Reformation Pope himself; or as if it had been expressly incorporated by the Royal Charter of a Protestant King or the private statute of a Victorian Parliament.

Now this development of legal doctrine to fit the circumstances of modern social life is, when one comes to think of it, only common sense. If twenty old ladies in the workhouse club together to provide themselves with a special pot of tea, and agree that one among them shall be the treasurer of their painfully-hoarded pennies as a common fund, they do, in fact, create a social entity just as real in its way as the Governor and Company of the Bank of England. Why should not the law, if it ever comes to hear of the action of the twenty old ladies in the workhouse, deal with the situation as it really is, according to their wishes and intentions, without inquiring by what formal act of external power a persona ficta has been created; and therefore without demanding that the old ladies shall first procure a charter of incorporation from the Pope, from the King, or from Parliament? And considering that Trade Unions were now in fact social entities, often having behind them more than a hundred years of “perpetual succession”; counting sometimes over a hundred thousand members moving by a single will; and occasionally accumulating in a common purse as much as half a million of money, the Law Lords might well think it absurd and irrational of Parliament to have decided in 1871-76, and again in 1906, to regard them as unincorporated groups of persons, having, in a corporate capacity, no legally enforceable obligations and hardly any legally enforceable rights. It may have been absurd and irrational, but what right—so the Trade Unionists asked—had the judges to change the law?