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said that other rules might not be enforced; still less that the property belonging to the Society might be stolen or embezzled without risk of punishment by the ordinary procedure of the criminal law; but only that the rules disclosed such purposes in restraint of trade as to bring the society within the category of those established for an illegal purpose in the sense of the Friendly Societies' Act. It certainly does not affirm what the popular opinion supposed it to do. Whether that opinion as to the law was in itself correct or not has been doubted, and neither Sir William Erle nor the judgment in the case about to be mentioned solves the doubt, which however has since been removed by Statute.
By the temporary Act 32 & 33 Vict. c. 61 it was enacted, that associations having rules, agreements, or practices as to the terms on which their members would consent to employ or be employed, should not be deemed for the purposes of the 24th section of the Friendly Societies' Act, 1855, for the punishment of frauds and impositions, to be illegal or not to be friendly societies within the meaning of the 44th section of the Act, by reason only that any of their rules, agreements, or practices might operate in restraint of trade, or that they were partly for objects other than those of the Friendly Societies' Acts.
The case of Reg. v. Stainer1 occurred after its enactment, and before its repeal by the Trade Union Act, 1871. It was there held that a society (not enrolled and not having its rules deposited under the Friendly Societies' Act), certain of whose rules were in restraint of trade, and therefore void, was not an illegal society in the sense that it was disabled from prosecuting a servant for embezzlement. The Court upon a case stated from Quarter Sessions, held, 1. That while the particular rules being in restraint of trade were void in conformity with Farrar v. Close and Hilton v. Eckersley, it did not follow that the society was formed for criminal purposes. 'The main purposes of a society must be criminal before the question of criminality could arise." 2. That although 32 & 33 Vict. c. 61 had reference only to societies registered or depositing their rules under the Friendly Societies' Acts, it amounted to a clear declaration by the Legislature that such a society as this, i.e. an ordinary Trade Union, should have no defect in its title to property, for that it would be preposterous that it should be able to prosecute before Justices, and yet not be able to indict at the assizes.2
THE LAW SINCE 29TH JULY 1871.
By "The Trade Union Act, 1871," the bodies to which the Act applies are defined thus: "The term Trade Union means such combination, whether temporary or permanent, for regulating the relations between workmen and masters, or between workmen and
1 (1870) 39 L. J., Q. B. 54, L. R. 1 C. C. 230. See Reg. v. Dodd, 18 L. T., N.S. 89.
* Per Cockburn, C.J.
workmen, or between masters and masters, or for imposing restrictive conditions on the conduct of any trade or business, as would, if this Act had not passed, have been deemed to have been an unlawful combination by reason of some one or more of its purposes being in restraint of trade" (sec. 23). And this definition must be read in connection with the 3rd and 4th sections, the enacting clauses earliest in order, which declare
"2. The purposes of any Trade Union shall not, by reason merely that they are in restraint of trade, be unlawful, so as to render any member of such trade union liable to criminal prosecution for conspiracy or otherwise.
"3. The purposes of any Trade Union shall not, by reason merely that they are in restraint of trade, be unlawful so as to render void or voidable any agreement or trust."
At first sight it seems very awkward to define a Trade Union by a quality which it has ceased to possess by virtue of the two enacting clauses in the same Act. But the reason for doing so seems to be, that this Act is intended to be supplementary to the Friendly Societies' Acts; and that it seeks to give a definition of the term trade union which shall clearly avoid placing any trade society beyond the scope of these Acts if it would otherwise have come within them. Such a definition is quite in harmony with the patchwork method of ordinary British legislation; but in the present case it may be supposed also to mark, in common with other provisions in the Act, the temporary and transitional character of the Act in which it occurs. Trade Unions are not yet admitted to equal privileges with other societies which have some of the same purposes, are composed to a great extent of the same classes of the people, and differ only in not being directed to "protective" trade purposes. Nothing could more clearly show the tendency of the law to remove the distinction founded on this kind of purposes, than to formulate the definition in question, not according to the objects of the society, but according to the illegality formerly attaching to those objects. It is to say in effect: Trade societies had better be registered under the Friendly Societies' Acts. Let them be so wherever they can ; but where they can't, we shall enable them, till we think better of it, to get themselves registered and protected by the law under a different name, and with inferior privileges.
Section 2, unlike the other parts of this Act, deals with the criminal law relating to Trade Unions. In treating of the former law as to the civil disabilities of Trade Unions, we used the word unlawful in a sense nearly equivalent to "not enforceable by the tribunals." In this clause it means "punishable by the law." In the one case it is applied to a purpose or an agreement which the law cannot recognise, and which it will not aid the parties interested in effecting. In the other case it is applied to an act, or to the carrying out of a purpose, which the law regards as penal. The Statute law by which the ordinary purposes and
practices of Trade Unions were made criminal, was repealed or rather amended and modified by the Act 34 & 35 Vict. c. 32, originally intended to be part of the Act which we are considering. But this clause removes any criminal illegality which might have attached to these purposes in virtue of the common law right to freedom in trade. It was very far from clear how far and to what purposes of Trade Unions this criminality extended; but as it is now removed it is unnecessary to discuss the question.1 Under section 3, it is now competent for a trade society to avow in its rules its intention to regulate the relations between its members and their employers and fellow-workmen, or for a society of employers to aim at similar ends, without incurring the risk of any general disability in consequence of these purposes being for the "restraint of trade." This enfranchising clause, however, is clogged with some restrictions which make it doubtful what rights a Trade Union now has beyond those expressly conferred by the Act.
The 4th and 5th sections are carefully framed for the purpose of perpetuating the disabilities of Trade Unions at common law, and of leaving them where they were, except so far as certain special rights and powers are given to them by their registration under this Act. Nothing in the Act is to enable any Trade Union to enforce or recover damages for breach of (1) an agreement between its members as to the conditions on which they shall or shall not sell their goods, transact business, employ or be employed; (2) an agreement for the payment of a subscription or penalty to a trade union; (3) an agreement for the application of the funds (a) to provide benefits to members, or (b) to furnish contributions to nonmembers in consideration of their acting in conformity with the rules or resolutions of such Trade Union, or (c) to discharge a fine imposed by any Court of Justice; (4) an agreement between one trade union and another; or (5) any bond to secure the performance of any of the before-mentioned agreements (sec. 4). But nothing in the section is to constitute any of the above-mentioned agreements unlawful (ib.).
It thus appears that the Act leaves Trade Unions subject to the rules of the common law, whatever they may be, with regard to all the matters mentioned in the 4th section. Hence (1), the authorities already cited seem to show that every, or almost every agreement falling under the first head of this section remains incapable of being enforced, as being in restraint of trade. (2) The opinions of the Court in R. v. Stainer (cit.) indicate a leaning to the view that illegality vitiates only the illegal rule or rules, and that those whose purpose is separable from the tainted rules are valid and enforceable. We shall afterwards see that, while rules of the description specified in the previous clause are invalid, effect will probably be given to a claim for a subscription in respect of an insurance or sick benefit, if
1 See Hilton v. Eckersley; Hornby v. Close; R. v. Stainer, etc., citt.; also Walsby v. Anley, 30 L. J., Mag. Ca. 121; Sir W. Erle, Trade Unions, 31.
the insurance or benefit fund be distinct from the fund for trade purposes. The trustees of a registered society are by section 9 enabled to bring or defend actions relating to "the property, right, or claim to property of the Trade Union ;" and although nothing in the Act is to enable any Court to entertain any legal proceeding for the recovery of such subscription, yet it appears absurd to recognise Trade Unions, to give them a status and powers to hold property and vindicate their claims to property, while their most important source of income, and one not directly tainted by the illegal purpose of restraining trade, is still deprived of legal protection. It seldom or never occurs, however, that a Friendly Society finds it expedient to sue for recovery of subscriptions; and this question may possibly never arise.
(3) It is a more important point whether an agreement by a society to provide benefits for its members (sec. 4, subs. 3a), may be enforced or found a suit for damages. The observations just made apply à fortiori to this case. And indeed it would be a very hard law which should prevent a member who had for many years paid into a superannuation or death fund in connection with a Trade Union from vindicating his right to the payments which his contributions had purchased. Of course his remedy, if he has one, will be by proceeding against the trustees of the society as for an ordinary debt, and there is no summary remedy under the Friendly Societies' Acts or otherwise of which he can avail himself. This shows a certain advantage in keeping the insurance funds of Trade Unions separate, and in retaining the registration of separate friendly societies in connection with particular trades where that can be done. But care must be taken that these friendly societies are perfectly distinct as regards funds, officials and rules from the Trade Unions belonging to the same trades.
An agreement to furnish contributions to non-members as an inducement to comply with the resolutions of the Union will be illegal if these resolutions tend to restrain trade; and the looseness of this doctrine creates many doubtful questions. Would it be illegal for a society to agree to pay a man's expenses to a distant place, where there was a demand for workmen of his kind, in order that he might not increase the pressure on the labour market of a place where hands were already numerous? An agreement to discharge any fine imposed by a sentence of a Court of Justice would of course be invalid. But it is another question whether a Trade Union might not become liable by virtue of a rule to that effect, or a special agreement, to indemnify a member for legal expenses incurred in a litigation in a civil or a criminal court. In England such a contract will be ruled by the law as to champerty and maintenance, in which some fine distinctions are found.1
(4) The fourth head of this section makes it impossible to obtain specific implement of all or almost all agreements for trade pur1 Williamson v. Henley, 6 Bing. 299. Findon v. Parker, 11 M. and W. 975.
poses between Trade Unions, or to recover damages for the breach of such agreements, which would be held to be in restraint of trade. It also leaves the previous law to determine whether agreements for friendly purposes between different Trade Unions are enforceable. Thus, where a Trade Union has various branches, questions may arise as to the disposal of funds belonging to the central board or to a particular branch or lodge, which are all separate Trade Unions under this Act in respect of their trustees and funds (see secs. 6 and 7, and below). It is difficult to forecast decisions which will depend on the terms of the rules and the nature of the claim in each case; but it is not perhaps too hazardous a conjecture that the principle of the divisibility of a society's purposes already noticed, will be applied wherever it fairly can be, so as to give validity to agreements of this kind. The main intention of the Legislature in this clause seems to be to leave the former law to operate wherever two or more unions form an alliance for the restraint of trade.
The fifth class of agreements which are excepted from the opera tion of the Act, and left upon the former law, are "bonds to secure the performance of any of the above-mentioned agreements." This saves the doctrine of Fisher v. Bridges. There a piece of land was bought for the purpose of being sold by lottery, contrary to the Statute, and part of the price being unpaid, it was, after the agreement to sell, and in pursuance of it, secured by a deed in favour of the plaintiff. The Court of Exchequer Chamber held that the covenant was given for payment of the purchase-money, that it sprung from and was a creature of the illegal agreement, and that, "as the law would not enforce the original contract, so neither would it allow the parties to enforce a security for the purchase-money, which, by the original bargain, was tainted with illegality."
The Friendly Societies' Act, 1855, and subsequent amending Acts, the Industrial and Provident Societies' Acts, and the Companies' Acts, 1862 and 1867, are expressly declared not to apply to Trade Unions, the registration of Trade Unions under any of these Acts is void, and the deposit of the rules of any Trade Union under the Friendly Societies' Acts before the passing of this Act ceases to be of any effect (sec. 5).
Some societies that are really Trade Unions have been registered under the Friendly Societies' Act as if they were proper friendly societies. This has been effected by excluding from the registered rules all regulations as to trade purposes. In some cases, in Scotland at least, where such exclusion has not been complete, even where the trade purposes are apparent, societies of this kind have inadvertently been registered. There is no doubt that such registration would have been held void in a court of law, even before
1 2 E. & B. 118; rev. 3 E. & B. 642, 23 L. J., Q. B. 276.
Per curiam. Comp. Geere v. Mare, 2 H. & C. 339, 33 L. J., Ex. 50. Att.Gen. v. Hollingsworth, 2 H. & N. 416. See, in Scotland, Strachan v. Graham, June 12, 1823, 2 S. 391; Russel_v. Liston's Trs., June 12, 1844, 6 D. 1138.