or counterclaim sound in damages or not, and such set-off or counterclaim shall have the same effect as a statement of claim in a cross action, so as to enable the Court to pronounce a final judgment in the same action, both on the original and on the cross claim. But the Court or a judge may, on the application of the plaintiff before trial, if in the opinion of the Court or judge such set-off or counterclaim cannot be conveniently disposed of in the pending action, or ought not to be allowed, refuse permission to the defendant to avail himself thereof. Under the Employers and Workmen Act, 1875 (38 & 39 Vict. c. 90), s. 3, sub-s. 1, the County Court May adjust and set-off, the one against the other, all such claims on the part either of the employer or of the workman, arising out of or incidental to the relation between them, as the Court may find to be subsisting, whether such claims are liquidated or unliquidated, and are for wages, damages, or otherwise (r). This is qualified by sect. 11, which provides that: In the case of a child, young person, or woman subject to the provisions of the Factory Act, any forfeiture on the ground of leaving work shall not be deducted from or set-off against a claim for wages or other sum due for work done before such absence or leaving work, except to the amount of the damage (if any) which the employer may have sustained by reason of such absence or leaving work (s). Frequently, so-called "penalties" are, by the agreement between masters and workmen, to be paid by the latter for defective workmanship, spoilt material, &c. The Truck Acts impose certain limitations in this matter (t). Wages and Salary, when and how Payable. A master is responsible for the payment of wages, even though the servant has been hired by the bailiff or overseer (u). It is sometimes said that at Common Law wages are due and payable when they are earned, but in practice this point is governed by custom or the terms of the contract. In Ridgway v. Hungerford Market Co. (r), the Court thought that evidence of successive quarterly payments of the salary of a clerk was sufficient to show (r) Hindley v. Haslam (1878), 3 Q. B. D. 481. See part ii. p. 612. (8) Warburton v. Heyworth (1880), 6 Q. B. D. 1. See part ii. p. 619. See Hosiery Manufacture (Wages) Act, 1874, which prohibits stoppages from wages except for bad and disputed workmanship; and Factory and Workshop Act, 1901, s. 116, which requires particulars of work and wages to be given to pieceworkers. (t) See part ii. p. 350. (u) Nabonie v. Scott (1815), Hume, Decisions, 353. (x) (1835), 3 A. & Ε. 171. that he was entitled to payment of his salary quarterly, although the minutes of his appointment in the company's books merely mentioned an annual salary, and did not mention the periods at which it was payable. So far as seamen are concerned, the time of payment of wages is fixed by the Merchant Shipping Act (y). In the case of ships in the home trade, it is two days after the termination of the agreement, or at the time when the seaman is discharged, whichever first happens. The Legislature has in various statutes imposed restrictions on the mode of paying wages. Thus, in the Truck Acts (s), it is enacted that contracts for the hire of artificers are to be paid in current coin and not in goods (a). So in the Coal Mines Regulation Act (6), and the Metalliferous Mines Regulation Act (c), it is enacted that wages shall not be paid at any public-house or beershop to persons employed in or about any mine to which the Acts apply (d); and by the Payment of Wages in Public-houses Prohibition Act, 1883 (e), these provisions are extended so as to include any "workman" as defined by sect. 2 of that Act. The Truck Act, 1887 (f), makes illegal contracts imposing as a condition of employment any term as to the place at which, or the manner in which, or the person with whom any portion of the wages is to be expended. (y) 57 & 58 Vict. c. 60, ss. 134, 135. (2) 1 & 2 Will. IV. c. 37; 50 & 51 Vict. c. 46; 59 & 60 Vict. c. 44; see part ii. p. 331. (a) See at p. 334, infra. There is a similar provision in the Hosiery Manufacture (Wages) Act, 1874 (37 & 38 Vict. c. 48); and see sect. 12 of the Stannaries Act, 1887. (b) 50 & 51 Vict. c. 58, s. 11; see part ii. p. 386. (c) 35 & 36 Vict. c. 77, s. 9; see part ii. p. 366. (d) Wages may be recovered in the County Courts, or proceedings may be taken under the Employers and Workmen Act, 1875 (38 & 39 Vict. c. 90, s. 4) (vid. p. 612, infra). As to recovery of wages of seamen, see 57 & 58 Vict. c. 60, ss. 164-167; 43 & 44 Vict. c. 16, s. 11; 31 & 32 Vict. c. 71, s. 3, sub-s. 2. County Courts which have Admiralty jurisdiction may entertain claims for wages when amount claimed does not exceed 150/.; but see Merchant Shipping Act, 1894, s. 165. As to remedies of married women, see p. 66, supra. As to infants' remedies for wages, see R. S. C. Ord. XVI. r. 16 (infants to sue as plaintiffs by their next friends); County Court Rules, 1903 and 1904, Ord. III. r. 10; Ord. V. r. 16 (next friend to be responsible for costs); 51 & 52 Vict. c. 43, s. 96 (infant may sue for "any sum of money not greater than one hundred (3 Edw. VII. c. 42, s. 3) pounds which may be due to him for wages or piecework, or for work as a servant, in the same manner as if he were of full age "). (e) 46 & 47 Vict. c. 31. (f) Sect. 6; see part ii. p. 345. Effect of Bankruptcy and Winding-up on Wages and Salaries. There was formerly considerable difference of opinion as to whether, under sect. 10 of the Judicature Act, 1875, the rules as to priority of debts in bankruptcy applied in the case of winding-up companies (g). But the point has now been settled by legislation. The Preferential Payments in Bankruptcy Act, 1888 (h), provides as follows: Sect. 1 (1). In the distribution of the property of a bankrupt and in the distribution of the assets of any company being wound up under the Companies Act, 1862, and the Acts amending the same, there shall be paid in priority to all other debts (b) All wages or salary of any clerk or servant (i) in respect of services rendered to the bankrupt or the company during four months before the date of the receiving order (k), or, as the case may be, the commencement of the winding-up, not exceeding fifty pounds; and (c) All wages of any labourer or workman (1) not exceeding twenty-five pounds, whether payable for time or for piece-work, in respect of services rendered to the bankrupt or the company during two months before the date of the receiving order (k), or, as the case may be, the commencement of the winding-up: Provided that when any labourer in husbandry has entered into a contract for the payment of a portion of his wages in a lump sum at the end of the year of hiring, he shall have priority in respect of the whole of such sum, or a part thereof, as the Court may decide to be due under the contract, proportionate to the time of service up to the date of the receiving order, or, as the case may be, the commencement of the winding-up (m). (2) The foregoing debts shall rank equally between themselves, and shall be paid in full, unless the property of the bankrupt is, or the assets of the company are, insufficient to meet them, in which case they shall abate in equal proportions between themselves. (3) Subject to the retention of such sums as may be necessary for the costs (g) See Re Association of Land Financiers (1881), 16 Ch. D. 373; In re Williams (1887), 36 Ch. D. 573, 582. (h) 51 & 52 Vict. c. 62. (i) A secretary to a company may be a "clerk or servant" within this section; but a secretary, who does not give his whole time to the service of the company, and discharges the general duties of his office by a clerk appointed and paid by himself, is not a "clerk or servant" within the section: Cairney v. Back, [1906] 2 K. B. 746. See the decisions on 6 Geo. IV. c. 10. s. 48; 5 & 6 Vict. c. 122, ss. 28, 29; 12 & 13 Vict. c. 106, ss. 168, 169, cited in App. to this chapter. (k) Means "interim receiving order," if there be such: Ex parte Fox, In re Smith (1886), 17 Q. B. D. 4. (1) Ex parte Allsop, Re Disney (1875), 32 L. T. (N. S.) 433 (a decision on the same words in the Bankruptcy Act, 1869). (m) Sect. 3, sub-sect. (18) of the Bankruptcy Act, 1890 (53 & 54 Vict. c. 17), enacts: "No composition or scheme shall be approved by the Court, which does not provide for the payment in priority to other debts of all debts directed to be so paid in the distribution of the property of a bankrupt." of administration or otherwise, the foregoing debts shall be discharged forthwith, so far as the property of the debtor, or the assets of the company, as the case may be, is or are sufficient to meet them. (5) This section, so far as it relates to the property of a bankrupt, shall have effect as part of section forty of the Bankruptcy Act, 1883. (6) This section shall apply in the case of a deceased person who dies insolvent, as if he were a bankrupt, and as if the date of his death were substituted for the date of the receiving order. By sect. 3 this Act applies only to bankruptcies and windings up commenced after December 31, 1888. Sect. 6 repeals the Companies Act, 1883; sect. 40, sub-sect. (1) and (2) of the Bankruptcy Act, 1883, and the Bankruptcy (Agricultural Labourers' Wages) Act, 1886 (η). It is provided by the Preferential Payments in Bankruptcy Amendment Act, 1897 (o), as follows : Sect. 2. In the winding-up of any company under the Companies Acts, 1862, and the Acts amending the same, the debts mentioned in sect. 1 of the Preferential Payments in Bankruptcy Act, 1888, shall, so far as the assets of the company available for the payment of general creditors may be insufficient to meet them, have priority over the claims of holders of debentures or debenture stock under any floating charge created by such company, and shall be paid accordingly out of any property comprised in or subject to such charge. Sect. 3 gives a similar priority to these debts over any claim for principal or interest in respect of debentures or debenture stock, in case of a receiver having been appointed or possession having been taken on behalf of the debenture holders. The making of a winding-up order by the Court, or the appointment of a manager and receiver, discharges the servants of the company (p); and that, though the liquidator may continue to employ them in analogous duties with a view to reconstruction (q). The circumstances may afford evidence of a new contract; but, to be acted on by the Courts, that evidence must be clear and satisfactory (r). But a resolution for the voluntary winding-up of a limited company does not operate as a notice of discharge to the servants of the company (s). Rule 106 of the Companies Winding-up Rules, 1890, permits, in cases where there are numerous claims for wages by employees, that the claims should be made through a foreman or other person on the employees' behalf. By sect. 53 of the Bankruptcy Act, 1883 (t), it is enacted that: (1) Where a bankrupt is an officer of the army or navy, or an officer or clerk otherwise employed or engaged in the Civil Service of the Crown, the trustee shall receive for distribution amongst the creditors so much of the bankrupt's pay or salary as the Court, on the application of the trustee, with the consent of the chief officer of the department under which the pay or salary is enjoyed, may direct .... (2) Where a bankrupt is in receipt of a salary (u) or income (x) other than aforesaid, or is entitled to any half-pay, or pension, or to any compensation granted by the Treasury, the Court, on the application of the trustee, shall from time to time make such order as it thinks just for the payment of the salary, income, half-pay, pension, or compensation, or of any part thereof, to the trustee to be applied by him in such manner as the Court may direct (y). Sect. 83, sub-sect. 2, of the Act of 1883, excepts from property divisible among the creditors, "The tools (if any) of his (the bankrupt's) trade, and the necessary wearing apparel and bedding of himself, his wife, and children, to a value, inclusive of tools and apparel and bedding, not exceeding twenty pounds in the whole” (s). Servants need not wait for payment till the trustee has examined the debtor as to his affairs (a). If an employer becomes bankrupt before the expiry of the period fixed by the contract of service, the servant may prove for the full amount of salary that would have become due had the contract been performed (6). See as to the preferential rights of a workman to money due as compensation for accident in an employer's bankruptcy, Workmen's Compensation Act, 1906, s. 5, sub-s. (3) (66). (t) 46 & 47 Vict. c. 52. (4) Includes annual salary of a commercial traveller terminable at week's notice: Ex parte Brindle, In re Brindle (1887), 56 L. T. (N. S.) 498; (actor's salary) Ex parte Shine, In re Shine, [1892] 1 Q. B. 522; (but not a collier's wages) Ex parte Lloyd, In re Jones, [1891] 2 Q. B. 231. (2) Does not include the earnings of a "bone-setter," dependent on his personal skill; Ex parte Benwell, In re Hutton (1884), 14 Q. B. D. 301; and see In re Rogers, [1894] 1 Q. B. 425 (a dentist in partnership). (y) See "contracts for assignment of salary" on p. 100, supra. (z) And see sect. 122, sub-sect. (4) of the Act. (a) Ex parte Powis (1873), 17 Eq. 130. (b) Yelland's Case (1867), 4 Eq. 350; Clark's Case (1869), 7 Eq. 550. (bb) See infra, pt. ii. Μ. K |