This post is a bit of a divergence from usual fare on the website – a discussion of a trade union legal case from 1867 . This may become a series covering of cases covering notable cases (think Tolpuddle, Taff Vale, RMT v UK but hopefully some less well known cases too). We will see …

___

Charles Close was born in West Yorkshire in the 1820s and went on to become a boilermaker, a skilful and relatively lucrative profession.  Close was also became a member of the United Society of Boilermakers and Iron Shipbuilders, a trade union established in 1834.  The union, following intermediate amalgamations was to become part of the GMB Union.

Close was the treasurer for the union’s Bradford branch. In 1865 the union conducted an audit of the branch’s accounts and found that that Charles Close had embezzled £25 of union funds, this was a significant equivalent to several months’ wages.  After attempting to resolve without recourse to legal proceedings another union member, John Hornby entered the stage by commencing legal proceedings against Charles on behalf of the union; that legal challenge was to culminate in the  

John Hornsby was the union’s president of the Bradford branch. As an aside it is somewhat refreshing for those of us who have experienced the joys of trade union executive committees to see that internecine disputes was ever thus!

The Background context

McCunn describes the legal position of Trade Unions as existing “in a kind of legal limbo.” That is surely correct. But, the time unions felt much more assured on their position. In 1800 the Combination Act (the last of multiple statutes over the previous century) was an “An Act to prevent Unlawful Combinations of Workmen”. What was it that made a combination unlawful? The Act made one of the central unlawful acts clear, it was an offence for any worker “who shall at any time after the passing of this Act enter into any combination to obtain an advance of wages, or to lessen or alter the hours or duration of the time of working, or to decrease the quantity of work.” This struck at the core purpose of trade unions: to work together (combine) to improve working conditions, pay, etc! Trade Unionism was de facto an both unlawful and a criminal endeavour (albeit there is debate over the extent to which it was enforced).

The passing of the Combination Laws Repeal Act 1924 removed the threat of criminal prosecution for combining to improve working conditions in respect to wages and hours (but did not remove the risk of criminal conspiracy charges for other union interests such as such as threatening an employer with strike action to induce dismissal of non-union workers as the case of R v Byerdike (1832) 174 Eng Rep 61) shows).

Still the repeal gave hitherto underground unions the confidence to “come out into the open” (Vester and Gardner) and with that more amendable to pursuing legal redress.

However, aside from the taint of criminality context, the the United Society of Boilermakers and Iron Shipbuilders, like all trade unions was an unincorporated organisation. At common law that would have meant that the organisation could only take action if all of its members acted in concerned. As anyone who has been involved in trade unions such a level of unanimity is especially difficult to achieve but even more so for James Hornby and his fellow members since the prospective Defendant (Charles Close) was himself a member of the union which is akin to a defendant sitting on a jury hearing and deciding evidence against herself!

The problem for the union was however even more problematic in common law. As a member of the unincorporated body it was legally questionable whether Charles Close could steal from the union since the £25 belonged to the members, including himself.

Nevertheless, the union was in a bullish mood (McCunn) because it believed that Parliament had provided them standing to bring a case even without unanimous support of its members because of section 44 of the Friendly Societies Act 1855. Friendly societies burgeoned in the seventeenth and eighteenth centuries and are essentially organisation where members join together for a common purpose such as providing financial relief for members in need.

Section 44 of the Friendly Societies Act provided that so long as a society’s rules were deposited with the relevant body (which the Union had done) and the society was established “for any purpose that was not illegal” then the society could pursue legal actions in defence of their funds.

John Hornby had every reason to be confident in his standing to pursue a legal case under section 44 as in 1865 the union had secured a conviction against one William Warner who had been Secretary of the Leeds branch and had also embezzled union funds.

The Case of Hornsby v Close (1866 and 1867).

The union brought its case against Close in 1866 before Bradford Magistrates.  It does not appear that the issue of whether Charle Close had in fact stolen the £25  was considered. Instead, Charles resisted the union’s case on jurisdictional grounds.

Section 44 of the Friendly Societies Act 1855 only gave standing for a society to commence proceedings where that society has been established “for any purpose that was not illegal”. Whilst, following the repeal of the Combination Acts,  it may no longer to criminal to withdraw labour or induce the same to improve wages etc, a central purpose of the union was still to provide support to those against restraint of trade. That may not be criminal, but it was still illegal and therefore that restraint of trade illegality deprived the union of standing to rely on section 44.

Close’s argument was successful, and in January 1866 the Magistrates dismissed the claim.

Standing back from the legalities for a moment this is a remarkable course of conduct for a trade unionist to take (remember Close was not just a member but an active officer of the union). Some 40 odd years later the Osborne judgment (1909) would be issued, this was a case where a union member challenged the operation of his union’s political donations. Within trade union circles Walter Osborne’s legal challenge is viewed in an extremely negative light as an employer and Tory Party lackey (I think somewhat unfairly, as it happens, especially as he was a member of the Liberals). But here, a union member (although as a defendant rather than plaintiff), advanced a legal argument that struck to the heart of trade union modus operandi, and gave succour to one of the multitude of employers who would go on the seek to restrain the exercise of “combination” for the private end of escaping liability for having had the temerity to extract £25 out of the hand of his fellow union members. In a rogue’s gallery of trade unionists there are surely few who would command a more prominent position than Charles Close?

Predictably, the union were furious at the decision and there were allegations of anti-union bias. One respondent (with good reason) complained that the £25 theft was uncontested but ‘with £25 of our money in his pocket’ he now ‘huzza’d and scoffed at our society’ (McCunn). An appeal was launched funded by a levy upon members and George Mellish QC was appointed to argue the case, which was heard in January1867.

Relying on the precedent of a case a decade previous – Hilton v Eckersley (1855) – the Lord Chief Justice (of the Queens Bench) held that the union’s rule were contrary to public policy and, therefore, illegal even though he accepted they may not have been criminal.  The union rules providing has it did financial support for striking workers among other rules supported combinations of workers to restrain the trade of employers.

Hilton v Eckersley was a ‘combination’ case, but not of a trade union variety (although as McCunn notes the judgements very much had combinations of workers in mind notwithstanding the different subject matter of the case at hand).

In 1853 Nathaniel Exkersley was the Mayor of Wigan and a mill-owner. Factory workers in Wigan engaged in a strike to secure higher wages. Ecksersley and other employers organised a combination of employers, comprising 18 mill owners who promised that the approach to the strikes would be governed by majority agreement of its members and, should a member fail to do so, would be subject to a £500 penalty fine. One of those employers was Caleb Hilton. The mill-owners agreed to a ‘lock-out’ strategy. Striking workers were being starved into submission and workers approached Eckersley and proposed a return to work for half the sum sought in the strike. Eckersley was agreeable but the other employers were not, and so Eckersley resigned from the combination and re-engaged the striking workers. Caleb Hilton commenced an action to enforce the £500 payment which was defeated. The judges found the employer aims to be laudable but that they were unenforceable. The real focus of the decision was against the prospect of workers combining together. Thus Baron Alderson made the pointed comment in judgment that if such a bond against employers should be acceptable the courts would soon be being called to “legal effect to combinations of workmen for the purpose of raising wages, and make their strikes capable of being enforced at law.” And so, contracts facilitating a restraint of trade was unenforceable the “clinching argument against the bond was not that it was against the public interest per se, but that a similar contract made by workers would have ‘disastrous consequences’ for the nation” (McCunn).

Honby v Close gave the court the opportunity to direct the ratio of Hilton v Eckersley to what was the intended real subject: to determine that contracts (as a union rule book was) that encourage restraint of trade (of employers) was unlawful.

Aftermath

The judgment in Hornby v Close seized upon opportunity to give the judgment Hilton v Eckersley sought to provide. Union’s were tyrannical organisations that were depriving naïve members of genuine freedom by removing freedom to contract. Baron Alderson went to say that by seeking, by combining efforts and consolidating negotiating power unions were “oppressed by a majority of his fellow workmen.”

A union of workers was ‘illegal’ because by the Rules of the union the sought to facilitate collective action in furtherance of improved wages for all members and so this was against public policy in  that it denied the opportunity for employers to trade but, I suspect more pertinently, the freedom for workers to shoot themselves in the foot and further enrich employers). As Frederic Harrison argued (Harrison was a pro-union barrister) “the repercussions of Hornby reached far beyond the application of the 1855 Act. The judges had found that unions were ‘in their nature contrary to public policy’, to be ‘condemned and suppressed by the law’ just like ‘public nuisances and immoral considerations” (cited in McCunn).

Whilst not a major cause the Hornby v Close decision was an impetus for the establishment the following year of the Trades Union Congress in 1868 and attempts to secure passage of new legislation by Frederic Harrison. The increased franchise after the Reform Act 1867 and increased working class vote was seen as an impetus to press parliamentarians for a parliamentary resolution. The later passing of the Trade Union Act 1871 to (attempt to) remedy the effect of the common law moved the dial in the trade union’s favour but not decisively (see for example discussion in Russell v Amalgamated Society of Carpenters and Joiners [1912] UKHL 1026.

Sources:

Michael J Klarman, The Judges versus the Unions: The Development of Labor Law, 1867-1913, Virginia Law Review, Vol 75(8), (1989), 1487-1602.

J H McCunn, Hornby v Close (1867): Freedom of Contract and Freedom of Trade, Landmark Cases in Labour Law, (Eds J Adams-Prassl, A Bogg, and ACL Davies), Hart Publishing, (2022), 31-53.

A E Musson, The Congress of 1868: The Origins and Establishment of the Trades Union Congress, TUC, (1955).

John V Orth, English Combination Acts of the Eighteenth Century, Law and History Review, Vol 5(1), (1987), 175-211.

H Vester and A H Gardner, Trade Union Law and Practice, Sweet and Maxwell, (1958).