Scottish Court of Session Decisions

Thomas Lawrie, while in the employment of James Brown & Company, Limited, was injured in circumstances entitling him to compensation under the Workmen's Compensation Act 1897.

The following memorandum of agreement between the parties was duly recorded in terms of Schedule II (8) of the Workmen's Compensation Act 1897—“The said parties agree that the maximum compensation to which the applicant is entitled under the Act is 17s. 6d. per week, being one-half of his average weekly earnings, consisting of 30s. of regular wages and an average sum of 5s. of extra work of overtime wages, but subject to deduction in terms of the second paragraph of the first schedule of the said Act of the average amount which he is now able to earn as regular and extra wages, and the respondents agree in lieu of such compensation to give the applicant regular employment as foreman over the workers at the settling ponds in connection with their works at Esk Mills, and to pay him the fixed weekly wage of 23s., with the usual additional pay for extra work, and also to pay him on the date hereof the sum of £90 sterling, and these in full of all his claims for compensation under the said Act in respect of the said injury.”

James Brown & Company paid Lawrie the £90 and kept him in their employment at a weekly wage of 23s. for nearly three years, when they dismissed him as the result of a dispute.

Lawrie thereafter raised an action against James Brown & Company in which he sued for £300 damages for breach of contract.

His averments were in substance that he had always performed his duties satisfactorily, that he still was able and willing to continue so to perform them, and that he never had done anything which justified his dismissal by the defenders.

He pleaded, inter alia—“(1) The defenders never having implemented the obligation incumbent upon them to provide the pursuer with regular employment as foreman over the workers at the settling ponds, and having by dismissing the pursuer from their service caused him much loss, injury, and damage, they are liable in reparation. (2) The defenders having wrongfully dismissed the pursuer from their service are liable in reparation.”

The defenders pleaded, inter alia—“(1) The action is incompetent as laid, in respect, inter alia, that although the claim arises out of an agreement under the Workmen's Compensation Act 1897, it seeks to add a remedy which the Act does not give. (2) The averments for the pursuer are not relevant or sufficient to support the conclusions of the summons, and the action should therefore be dismissed with expenses.”

On 15th June 1907 the Lord Ordinary ( Guthrie) assoilzied the defenders from the conclusions of the action, and decerned.

Opinion.—The defenders plead incompetency and irrelevancy.

“They say that the action is incompetent because the only claim stated by the pursuer against them arises out of an agreement under the Workmen's Compensation Act 1897. That agreement, they admit, can be enforced in all its terms under the Act, but according to them no part of it can be made the ground for a claim for damages at common law, such as is made in this action. The pursuer has foreseen the difficulty, and has endeavoured to avoid it by representing the statutory agreement as one contract and the agreement for regular employment, which is the basis of his present claim, as another and distinct contract. But this is not so either in fact or in law. The whole stipulations are contained in one agreement. It is headed ‘In the matter of an agreement under the Workmen's Compensation Act 1897,’ &c., and after detailing the terms of the agreement, including the undertaking by the defenders to give the pursuer ‘regular employment as foreman over the workers at the settling ponds,’ ends with these words—‘and these in full of his claims for compensation under the said Act in respect of the said injury.’ In these circumstances it is unsound to maintain, as the pursuer does, that the case is the same as if the stipulation as to regular employment was in a separate document containing no reference to the Act. If the contract founded on by the pursuer is part of an agreement under the Act, as I hold it is, it is not disputed that it cannot be enforced in this action.

I also sustain the plea to the relevancy. It is not necessary to consider the pursuer's averments as to the defenders' breach of a verbal contract to employ his children, and to afford him extra work, because it was explained that these are not matter of substantive claim. Nor is any case made of want of reasonable notice, if the pursuer was truly employed by the defenders, as alleged by them, at will. The pursuer's

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complaint is that, while the defenders undertook to give him ‘regular employment,’ they only did so for nearly three years and then dismissed him. I see no breach of contract by the defenders in thus acting, unless there be read into the agreement an obligation on them to give the pursuer regular employment for life, or at least, as the pursuer contended, so long as he is able and willing to serve them and does his work properly. I see no warrant for reading any such terms into the agreement, and I therefore hold the pursuer's averments of breach of contract irrelevant.”

The pursuer reclaimed, and argued—(1) The action was competent. Although at first sight the agreement was an agreement under the Act, and accordingly only enforceable by the methods prescribed by the Act, closer examination showed that it was not one but two agreements, viz., first, an agreement under the Act for pecuniary compensation, admittedly only enforceable by the methods prescribed by the Act— Cochrane v. Traill & Sons, March 16, 1900, 2 F. 794, 37 S.L.R. 662; second, an agreement as to employment outwith the scope of the Act, and accordingly enforceable, if it was enforceable, only by an action at common law. That the two agreements happened to be contained in one document was obviously immaterial, as was also the fact that incidentally the latter agreement happened to have been recorded under the Act, since no amount of recording could affect the nature of the agreement itself, or change a common law agreement into an agreement under the Act. The question then came to be, Was it enforceable? As soon as the fallacious idea that it was an agreement under the Act was exploded no reason could be stated why it should not be enforced just like any other agreement, viz., by an ordinary action at common law. The defenders' contention involved this anomalous result, that the pursuer was left without any means of enforcing the most important item of a perfectly reasonable and perfectly legal contract which violated no known rule of common or statutory law. It was noticeable in this connection that section I, 2 ( b) of the Act expressly safeguarded a workman's common law remedies. In Robertson v. S. Henderson & Sons, Limited, June 2, 1904, 6 F. 770, 41 S.L.R. 597, it was held that a common law reduction of an agreement under the Act was competent. (2) The action was relevant. It was obvious that in the contemplation of the parties who made the agreement regular employment meant permanent and continuous employment so long as the workman behaved himself and was able and willing to perform his duties.

Argued for the respondents—(1) The action was incompetent. There was only one agreement here. It was impossible to split it into two parts. It expressly bore to be an agreement under the Act, and had been recorded as such, and had thereby become for all practical purposes equivalent to a decree of Court—Schedule II, 8, 14. The only method of enforcement was by a charge, an action concluding for the enforcement of what was virtually a decree of Court, or for damages, being obviously absurd and incompetent. It might perhaps be that part of the agreement could not actually be enforced, but none the less the probability that it would be carried out formed a valuable consideration in the contract—see Robertson v. S. Henderson & Sons, Limited, June 16, 1905, 7 F. 776, 42 S.L.R. 632. It was a fundamental part of the Act that a workman could not proceed both under the Act and independently of it—sec. I, 2 ( b). All that the case of Robertson in 6 F. and 41 S.L.R. decided was that an unrighteous or illegal agreement which purported to have been made under the Act could be reduced by an action at common law. (2) The action was irrelevant. “Regular” employment did not mean “permanent” employment, but only employment which was not casual or intermittent. The agreement contained no stipulation as to the length of time during which regular employment was to be given.