I move that the Bill be now read a Second Time. Some Deputies may be wondering why this Bill comes so closely on the heels of the Workmen's Compensation (Amendment) Act, 1953. The explanation is simple. That Act introduced for the first time, in the workmen's compensation code, allowances payable only to married men with wives and children. It did not alter the compensation rates for single men or women, a position which was regarded as unsatisfactory by the Parties in opposition at the time. In view of this limitation of the benefits under the 1953 Act and having regard to the general inadequacy of workmen's compensation payments all round, the present Government decided as part of its 12-point policy programme to improve the position of beneficiaries under the Workmen's Compensation Acts.
The two most important sections in the Act of 1953 dealt with increases in weekly payments for married men and increases in the maximum amounts payable in fatal cases. Under that Act supplemental allowances were granted in respect of a wife who was married to the injured workman at the time of his accident and in respect of a child under 15 years or each of two children under that age, born not later than ten months after the accident giving rise to the compensation. As I have said, the Act gave no increase to single men or women many of whom have to support aged parents or younger brothers and sisters. Moreover, an injured workman who married after his accident gets no allowance for his wife. For those injured workmen the maximum weekly payment remained at the 1948 limit of 50/-.
One further point: the maximum weekly allowances payable under the 1953 Act are 12/- for a wife and 7/- in respect of a child or each of two children, making the total maximum supplemental allowances payable 26/-. But not all married men eligible for those allowances received the maximum payment. The Act provides that the supplemental allowances be deemed to be part of the weekly payment for all purposes and, accordingly, the aggregate of the personal weekly payment and supplemental allowances cannot exceed 75 per cent. of the workman's pre-accident average weekly earnings. Where a workman earning less than £5 1s. 4d. a week—75 per cent. of which is 76/- —sustains injury at his work he cannot draw the maximum compensation of 76/- a week.
I would like to emphasise the fact that workmen whose maximum weekly compensation for total incapacity is pegged at 50/- are suffering grave hardship. It is beyond question that with present wage levels, the sum of 50/- a week is too far removed from what a workman should get on the basis of 75 per cent. of his pre-accident average weekly earnings. Because of the 50/- limit, the amount by which wages exceed £3 6s. 8d.—75 per cent. of which is 50/- —is not taken into account in the calculation of the weekly payment of compensation. Take, for example, the case of a man employed as an agricultural worker in the County of Dublin. According to the Agricultural Wages (Minimum Rates) Order, 1954, which came into operation on the 1st March, 1954, he must get at least £4 14s. for a normal week's work.
As the law stands at present, if this worker is a single man and meets with an accident he cannot get more than 50/- a week although 75 per cent. of his average weekly earnings would work out at 70/6. Where a man's employment is with an industrial concern in which, generally, wages are higher, or as a skilled worker in the building trades, the disparity between 50/- and 75 per cent. of the workman's wages is more marked.
Further, I should like to mention that during the course of the debate on the 1953 Bill a number of Deputies made the point that the payment of allowances to married men would be an inducement to employers to give preference in employment to single men because of the higher rates of compensation to which married men might become entitled. Despite the assurance given by the former Minister for Social Welfare when the 1953 Bill was before this House that this would not happen it is obvious that the temptation is always there. Needless to say, the temptation is all the greater where the employer does not insure against his liability to pay compensation.
The fundamental principle underlying workmen's compensation in this country is to compensate an injured workman for loss of earnings. That principle was embodied in the first Workmen's Compensation Act of 1897, which provided that the workman should receive half his earnings subject to a maximum of £1. The principle remained a feature of workmen's compensation here until the Act of 1953, which provided increases in weekly payments in respect of the wife and children of an injured workman. In so providing, the 1953 Act tried to bring the workmen's compensation code into line with current social welfare legislation and at the same time leave it on its present basis. I think that this position should not be continued. The introduction of supplemental allowances under the Act of 1953 deviated from the compensation principle I have mentioned and in my opinion it is most important that the principle should be restored.
This Bill proposes to increase the maximum of the personal weekly payment for all injured workmen from 50/-to 90/- and to abolish the supplemental allowances payable under the Act of 1953. The new maximum will permit wages up to £6 a week—75 per cent. of which is 90/—to be reflected in the weekly payment of compensation. It will apply to cases where the workman's accident happened before as well as to those arising after the passing of this Bill. The increases will not, however, be payable in respect of any day prior to the day to be appointed for the coming into operation of the Bill.
Special provision is contained in the Bill for the small number of workmen in receipt of compensation under the Acts which were in operation before the Workmen's Compensation Act of 1934. The Act of 1948 abolished temporary allowances payable to these workmen—estimated to number less than 100—under an emergency powers Order of 1944, and in substitution provided an increase of two-thirds of the weekly payments as they stood on the 1st August, 1934, subject to a maximum of 50/-. The Act of 1953 gave an increase by way of supplemental allowance of 12/- to any of these men who were married at the time of the accident giving rise to their compensation and whose wives are still living. As the supplemental allowances payable under the Act of 1953 are being abolished by the present Bill provision is made in the Bill for raising the maximum of the weekly payment for these cases to 90/- with a corresponding increase of 80 per cent. in all payments below that figure. The Bill provides that no workman will suffer a reduction in compensation by reason of losing a supplemental allowance.
The second important feature in the Act of 1953 was the increases it brought about in the lump sums payable in fatal cases. Under the Act of 1934, adults who were totally dependent on the deceased workman got three years' earnings with a minimum of £200 and a maximum of £300. Where there were juvenile dependents only or juvenile and adult dependents, the minimum was £200 and the maximum £600. The Act of 1953 doubled the minimum and maximum of those lump sums, but in view of the depreciation in money values since 1934 those increases did not go far enough. It is now proposed to provide for a further increase of 50 per cent. on the present figures for lump sums, in the case of accidents happening after the appointed day.
The effect of the Bill on the present position will, therefore, be as follows:—
(1) Where the workman leaves an adult dependent who was wholly dependent on him, the maximum lump sum at present is the equivalent of three years' wages or £600, whichever-is the less, and the minimum is £400. The Bill raises the £600 to £900 and the £400 to £600.
(2) Where the workman leaves juvenile dependents wholly dependent on his earnings, the maximum of the children's lump sum is £1,200 and the minimum is £400. The Bill raises the £1,200 to £1,800 and the £400 to £600.
(3) Where the workman leaves both-adult and juvenile dependents who were wholly dependent on him, the-maximum amount, at present, of the aggregate lump sum is £1,200 and the minimum is £400. The Bill increases-these sums to £1,800 and £600 respectively.
In short, the Act of 1953 doubled the amounts appearing in the Second Schedule of the Act of 1934, which are used in the calculation of the children's lump sum. This Bill trebles the-amounts shown in that Schedule.
We now come to Section 8 of the Bill. As Deputies are aware, the Workmen's Compensation Acts provide-for a weekly payment to a workman while he is unable to earn as much as he did before his accident. The weekly payment can never exceed three quarters of his wages and, because of the fixed maximum, it is generally very much less. This reduction in income would be a great hardship at any time, and it is especially so while a man is sick. In the great majority of cases, incapacity lasts only a few weeks, and the workman and his dependents simply have to tighten their belts and endure the hardship until he returns to work.
There is another type of case, however, which involves hardship of a more serious and lasting kind—the type of case in which, say, a man who has been a carpenter all his life meets with an accident at the age of 45 and loses a few fingers. He cannot return to his old occupation and, at his age and with his limited qualifications, he cannot get employment in any other. Men in this type of case face the prospect of going through the rest of their lives with nothing to depend on but the meagre weekly payment of compensation. If they could lay hands on a little capital, many of them would set themselves up in a little shop or other business or undergo a course of training or treatment which would enable them to become again independent and self-supporting members of society.
As things stand, they have no right to seek redemption of their weekly payment. Employers have such a right under Section 27 of the Workmen's Compensation Act, 1934, but, if they do not choose to exercise it, there is no way open to the workman of securing a lump sum settlement except by agreement with the employer or, generally, with the employer's insurance company. There are about 800 cases settled by agreement for lump sums every year. Nearly half of these agreements are not registered under the Acts, and the average lump sum is about £360.
There is a widely held belief that these voluntary settlements are rarely to the workman's advantage. It is generally his first experience of such negotiations, and on the other side you have representatives of insurance companies who have long experience of this kind of business and are skilful at driving a hard bargain. There is a great temptation to the average workman who finds himself in debt after an accident to make a settlement for a few hundred pounds in the hope that his injuries are not as bad as they are represented to be and that he will be able to return to work in a reasonable time.
The purpose of Section 8 was to protect the interests of these men by bringing the courts into the picture. The section gives the court power to make a redemption order at the workman's request whenever the court thinks fit to do so, having regard to the workman's reason for seeking redemption, the nature of his injury and—where the employer so requests— the employer's circumstances. Where the injury is permanent, the redemption price is the same as that fixed for employers in the Schedule to the Act; where it is not, the redemption price is fixed by the court. By leaving it to the discretion of the court whether or not redemption should be granted in each particular case, the section was designed to hold the balance equitably between employer and workman and to protect the workman's interests without doing any injustice to the employer.
Since the Bill was circulated, however, organisations of employers have represented to me that the section as it now stands is unlikely to be confined in its operation to cases where redemption would be of benefit to the workman without doing any injustice to his employer. One of the great difficulties in doing this is, of course, the nature of the incapacity for which compensation is provided under the Workman's Compensation Acts. This incapacity is incapacity to earn and is a separate and distinct thing from physical disability. While there may be no doubt about the duration of physical disability, as, for example, in the case of the loss of a limb, there can rarely be the same certainty about the duration of incapacity to earn. We have only to think of the many thousands of disabled servicemen and others who have been returned to full earning capacity in Great Britain since the last war. As things stand, employers have the safeguard that compensation is a weekly payment which diminishes as the amount of the workman's post-accident earnings increases and ends when it reaches the preaccident level.
While I do not accept all the objections urged by the employers, I realise that much depends on the interpretation placed on the section by the courts, which might well have the effect of making the section do more than it was intended to do. I will, accordingly, await with interest the views which Deputies may have to offer on the section.
Another important provision is contained in Section 11 of the Bill which amends Section 60 of the Act of 1934. Section 60 was amended by Section 6 of the Act of 1953 which provides that acceptance by the workman of compensation under the Act or of any payment purporting to be by way of compensation thereunder shall not prevent the workman from maintaining proceedings independently of the Act. A recent judicial decision suggests that Section 6 of the Act of 1953 did not fully achieve what was intended and the purpose of Section 11 of the Bill is to place beyond doubt the right of the workman to claim compensation under the Act and also to take proceedings independently of the Act as long as the employer will not have to pay twice over.
The judicial decision mentioned is the subject of an appeal to the Supreme Court and it is expressly provided that Section 11 shall not apply to that particular case nor to cases which stand adjourned at the passing of the Bill pending the determination of that appeal by the Supreme Court, nor to cases which may have been decided in conformity with the decision from which the appeal was taken.
A further section in the Bill substitutes the date of death of the workman for the date of allocation of the children's lump sum. The Act of 1934 defines a juvenile dependent as one who is under the age of 15 at the date of death of the workman. At present the children's lump sum is divided among the children in the ratio of the number of months between the date of its allocation by the court and the date on which each child will attain the age limit for juvenile dependency. A child attaining that limit between the date of death of the workman and the date of allocation cannot share in the children's lump sum. As he was not an adult dependent at the date of the workman's death he cannot get a share of the adult's lump sum and consequently gets no compensation at all. Cases of serious hardship have arisen as a result of this position which is remedied by Section 9 of the Bill.
Under the current legislation a workman does not receive payment in respect of the first three days of incapacity where his incapacity lasts less than four weeks. The 1906 Act fixed the period at two weeks, but this was extended to four weeks in Great Britain in 1923 and under our own legislation in 1934. The Bill restores the period to two weeks, which is considered more reasonable and corresponds with the position under the British Industrial Injuries Scheme.
The remaining section of the Bill raises the age limit for juvenile dependency from 15 years to 16 years, which is the age limit for qualified children under the Social Welfare Act, 1952, and for children's allowances.
The increases which it is now proposed to give in payments of compensation are long overdue. The inadequacy of these payments was apparent for a long time and, as I have already said, the Government decided, as part of its 12-point policy programme to bring about a betterment of the position. One of the first things I did when I took up office was to set about implementing that decision and this Bill is the result. Its aim is the restricted one of removing some of the most pressing difficulties, and it is not intended as a comprehensive measure to remedy all the defects of the existing system of workmen's compensation. The first step in this direction would be a full inquiry to ascertain and set out the defects in the present code and to recommend how best they might be remedied so that injured workmen would be assured of proper and adequate compensation.
I was first inclined to the view that such an inquiry should be entrusted to a parliamentary committee of the kind which this House set up in March last year, but later I found myself turning towards the idea of an outside commission or committee which would be representative of the various interests involved—the workers, the employers, the legal and medical professions and the insurance companies. I have finally come to the conclusion that the inquiry could best be carried out by a commission and I am having the necessary steps taken to set up such a body. I hope it will be possible for them to complete their examination of this vexed question within a reasonable time and that their recommendations will enable us to go as far as is possible in our circumstances towards providing the best possible system of compensation for injured workmen.