Note 521 — Chapter VII

By “contracting out” was meant an arrangement between employer and employed by which the latter relinquish the rights conferred upon them by the Act, and often also their rights under the Common Law. The Act was silent on the subject; but the judges decided, to the great surprise and dismay of the Trade Union leaders, that contracting out was permissible (see Griffiths v. Earl of Dudley, 9, Queen’s Bench Division, 35). The usual form of “contracting out” was the establishment of a workman’s insurance fund to which the workmen were compelled to subscribe, and to which the employer also contributed. Among the coal-miners, those of Lancashire, Somerset, and some collieries in Wales generally contracted out. The employees of the London and North-Western, and London and Brighton Railway Companies also contracted out. In one or two large undertakings in other industries a similar course was followed. But in the vast majority of cases employers did not resort to this expedient. Particulars are given in the Report and Evidence of the Select Committee on Employers’ Liability, 1866; the publications of the Royal Commission on Labour, 1891-94; and Miners’ Thrift and Employers’ Liability, by G. L. Campbell (Wigan, 1891); and our Industrial Democracy.

In 1893-94 a further amending Bill passed the House of Commons which swept away the doctrine of common employment, and placed the workman with regard to compensation on the same footing as any other person. A clause making void any agreement by which the workman forewent his right of action, or “contracted out,” was rejected by the House of Lords, and the Bill was thereupon abandoned. The question was settled in 1896 by the passage, under the Unionist Government, of the Workmen’s Compensation Act, giving compensation in all cases, irrespective of the employers’ default.