m^mmmwmm:^f^mz:m'^^^-'m UC-NRLF C E b33 TEA ilillliiiliilliiil i 13Ttl-c> :jLe-f»'t, ^ u »^/v ;- V^" ^ttrce. an Cc-,-,- m DISABLED SAILORS AND SOLDIERS ' COMPENSATION COMMITTEE. EEPOKT v/ ^ OF THE DEPARTMENTAL COMMITTEE ON I i I!! COMPENSATION FOR DISABLED SAILORS AND SOLDIERS UNDER THK AVOKKMEN'S I'OMl'ENSATKIN ACT. l!)0(i , » » » Ma: LONDON: PUIJJ.ISHED \\X HIS MAJESTY'S STATIONEKY OFFICi:. To be puieliased through any Bookseller or directlv from H.M. S1'"ATI0NERY OFFICE at the IbUowiiig addresses: iMi'EEiAL House. Ki.vgsway, Lo.vuox, W.C.2, and 28, Akixudox Stiikkt, London, S.W.I: 37, Peter Stkeet. M.\nchester : 1, St. Andrew's Ckescext, Caudiff; 23. Forth Street, EniNBURiai; or from E. POXSONBY. Ltd.. IIG. Graeton Street, BuitLix. 1918. Price 2d. Xet. ^. ->^^ WARRANT OF APPOINTMENT. I HEKEBY ArPOINT : The ViscouM' Pekl, Mr. MAi.fOT.M Deikvingne, C.B., Assistant Under-Secretary of State, Home Otfice, • Mr. J. C. McBhide, Accident Manajrer of the Commercial Union Assurance Company, Major R. Mitcmeli., C.B.E., Minisitry of Pensions, Mr. J. S. Nicholson, Ministry of Labour, The Honourable Alexandeh Shaw, M.P., and Mr. Ben Tillett, M.P., to be a Committee to consider and report whether any special provision should be made in the case of disabled sailors and soldiers returning to civil employment in regard to the payment of t compensation under the Workmen's Compensation Act. I Fi'RTHEK APPOi.\T Lord Peel to be Chairman and Mr. G. R. A. Buckland, of the Home Office, to be Secretary to the Committee. (Signed) GEO. CAVE. "i^'liitehall, ethMaivh. 1918. i J (22: To THE Right Honourable Siii GEORGE CAVE, M.P., Secretary of State for the Home Department. SiH, Wk have the honour io suhniit the fonowiiif)- report on the ijuestiou referred to us: — OBJECT OE THE INQFIRY. The Committee were appointed iu i-ousequenee of representations made to tlie Home OiRce by the Ministry of Pensions and the Ministry of Labour that difficulties were being experienced in arranging for the return to civil emph>yment of disabled men discharged from H.M. Forces, owiiig to an apprehension among emjjloyers that the emi)loyment of such men would be attended by a greatly increased risk of accident. Cnder the Workmen's Compensation Act, the whole liability for comj)ensation in the case of an accident arising out of and in the course of the employment falls upon the employer, and the uncei-tainty as to the charge for comi)ensation which might be entailed by the employment of disabled men was reported; in some cases to be hindering employers from engaging them. The Committee have accordingly imderstood their terms of reference to mean that they shoiild consider and report whether any sjiecial provision is reqitired in order to ensure that the opeiation of the Act will not prejiuli('e the return of disabled sailors and soldiers to civil employment.* It is evident that if ihis apprehension exists and is likely to operate in the way suggested, it is a matter of considerable importance in view of the great number of disabled men who will have been discharged from the Navy, Army and Air Service by the end of the war. EXTENT OE THE PROliEEM. Our first step was to endeavoui' to ascertain ihe extent to which the ajiprehension existed among employers, the grounds on which it rested, and the effect it was having or was likely to have on the employment of disabled meji. The question had been raised in a very urgent manner by tiie Trade Ailvisory Committee (Disabled Sailors and Soldiers) for the Shipbuilding and Engineering Trades, one of a number of such Committees appointed by the Ministry of Laiwur to advise as to the training and employment of disabled men discharged from H. M. Eorces. This body, which was engaged in preparing schemes for the training and employment of disabled men in engineei'ing and shii)building work, had resolved that no useful imrpose would be served by continuing their work until the question of compensation had been settled. We invited representatives of this Committee to attend l)efore ns. We also approached a number of important employers' organisations and obtained their views on these qnesti(ms. fiastly, the Ministry of Labour at our reqiiest called for repoi-fs from typical Employment Exchanges as to their expej-ience in connection with the placing of disabled men. As was perhaps to be expected, our inquiries did not lead to any very definite conclusions. Different opinions were expressed bv different employers and as.sociations of enu)loyers even in tlie heavier and more dangerous trades. The information received shows that the question has not yet arisen in an acute form. Labour is scarce and emjdoyers are glad to get any man who is capable of doing efficient work. The Employ- ment Pjxchanges report onlv isolated cases in which emjjloyers base tlieii- refusal to employ a disabled man on the ground of increased liability.* We summarise briefly the opinions expressed to us. The employers' reiirestntatives on the Shipbuilding and Phigineering Trade Advisory Committee said quite frankly that they did not want disabled men, and would not emT)loy them unless the State assumed the liability for compensation. The General Manager of one of the great Railway Comjiauies .said that imdoubtedly the Companies would feel some apprehension in em])loyijig disabled men; the number of light and safe jobs at their disposal was limited, and they were usually filled by men injured in the service of the company itself. The National Eederation of lUiilding Trades Emph)yers said that the apprehension exists in the trade, but it was admitted that the apprehension was based on the expec^tation that employers would be required to pay a special ])remium in respect of such men. The Federation of Mastei- Printers consider a serious danger attaches to the employment of disabled men, and that apprehension on the ])art of employers as to increased compensation liability " has already damped their sympathetic desire to do whatever they can for men who have suffered in the national cause." An important Association of Iron and Steel Manufacturers writes as follows: — ■" It must be admitted ■•' that apprehension does exist in the minds of em!)loyers as to their expenses under tlie Workmen's Com- " pensation Act being increased by the employment of disabled sailors and soldiers in steel works and rolling " mills. It should, of course, be understood that in cases where such men are employed they would be, " whenever possible, placed in positions where the risks, owing to their disablement, would be reduced to a "minimum. The ap])rehensi(m referred to above exists on account of— " (a) the inability of disabled men to get quickly clear of fast running machinery; " (b) the difficulty they would have in getting into position on engines, cranes, &c. ; " (c) the greater risk they run in getting aboiit railways and the works generally; and • Our reference mentions disabled sailors and soldiers only, but our report and recommendations apply equally of course to disabled men belonging to the Royal Air Force. - (20773—1.) Wt. :!.-.794— C. i>7. :ir>00. 12,18. 1) A: S. G. 1. • 386659 *'ensation Act would have any infliience in preventing "employers from engaging wounded men, because all seamen are insured against Workmen's Compensation " .\ct risks by the Shipowners' Protection Associations, which are mutual associations and would not be likely " to discriminate to the disadvantage of such men." The Fedeiated Associations of Boot and Shoe Manufacturers informed the Committee that the employ- ment of disabled men has already substantially increased the cost of Workmen's Compensation Insurances in the industry, but that thej- do not think this will operate against the employment of sTich men. The Employers' Federation of Bleachers. Dyers and Finishers, and the British Flint Glass Manu- facturers' Association say thai no apprehension exists among the employers in their trades ; and the Associa- tion of Glass Bottle Manufacturers do not anticipate any difficulty in employing disabled men. HOW FAR APPREHENSIONS ARE JUSTIFIED. It has been suggested to us that the employment of a disabled man involves a greater compensation risk in two ways: (1) he is more liable to accident, as his disability renders him less able to pi-otect himself; (2) the consequences of an accident to a man wbo is crippled or of weakened constitution may be more seriotis. There appear to be no statistics available which throw light on either of these points. It is usual for a man who meets with an industrial accident to return to his old industry on recovery and to be foimd work, and disabled men are to be found employed in many industries. After the jiassing of the Workmen's Com- pensation Act, questions were occasionally raised as to the risk of emi)loying such men, and an arrangement was made between the Home Office and most of the Accident Insurance Companies by which the Companies Tindertook to " insure defeiitive workmen at such rates as they might deem proper, except where such work- " men were certified by a doctor to be so piiysically or mentallj' unfit for the work on which it was proposed "to employ them that they could not be employed on it without danger to themselves or otliers." It has been, in fact, the practice of the Companies, as stated below, to include disabled men, without distinction, in the general body of employees. No separate accounts have been kept with resjjpct to such cases. As regards the first point — the greater liability of a disabled man to accident — different views were jjut before us by different witnesses. Tlie Inspectors of the Factory Department who appeared befoi-e us gave it as their general impression, based on many years' experience, that in fact accidents were not relatively more numerous among disabled than among ordinaj-y men, or that at any rate the ditference was so small as to be negligible. A disabled man is obviously less able to i)rotect himself against certain dangers; he may, for instance, be less quick to see or to avoid an api)roaching danger, less active in saving himself in case of a fall, and so on. On the other hand, lie is, as a rule, not employed on work of the more dangerous kinds and his disability has rendered him more cautious. The opinion, however, of botb the employers' and workmen's representatives on the Engineering and Shipbuilding Trade Advisory Committee was that there was an appreciable increase of risk, at any rate in occupations where machinery is used; and similar ^-iews were expressed by a niimber of olher associations of employers. The position of the disabled sailor or soldier is not quite the same as that of the workman disabled in civil employment. He will be in receipt of a life pension, of an amount graded according to his degree of dis- ability which will render it less necessary for him to engage in hard or hazardous work: he will be advised and assisted in the choice of emplovment by the Local Pensions Committee; and opportunities for training for new kinds of work will be offered him. We in;iy ilraw at (ciil if Lalwmr and \vlii( li liave been drawn np by or on the advice of the Trade Advisory Coniniiiiees after a detailed survey of the various occupations. The re])oi-ts indicate that a larfje number of occupations suitable to men sutferin<>- from various kinds and dejfrees of disability exist in the industries in question, and we have no doubt that there will be a ed before the war, despite a measure of risk wbicli may attach to them; and if, as is the case in some of the specially danjjerous industries, the openings for light employment suitable to disabled men are limited, there will be a tendency for them to go into tlie more hazardous processes. It is, ))erhaps, not out of ])lace for us to suggest-that in view of the large numbers of disabled men who will be engaged in industry at the close of the war, the special attention of the Mines and Factory Departments of the Home Office may be necessary to prevent any iindue risks being incurred. As regards the second point mentioned above, it is obvious that even a slight accident may in the case ■)f a disabled man entail very serious consequences. The loss of an eye or a hand to a man who had already lost an eye or a hand has more disabling results and will entail a much greater compensation charge than in the case of the ordinary man. Similarly, a slight accident from which an ordinary man may recover in a few days or weeks may, in tbe case of a man with a constitiition enfeebled by disease, lead to illness of long duration or even permanent disability or death. This risk must, we think, be regarded as a substantial one, but there are no means by which the Committee are able to measure it. Experience over a term of years alone can show the additional liability involved. It has also been suggested that a disabled man is not only more liable to accident himself, but is a greater source of danger to his fellow-workmen. An Association of Iron and Steel Manufacturers writes that " the failure of one man very often involves the safety of others, and a disabled man, according to the " extent of his injury, would be regarded as a weak link whi(da some day may fail, involviiig not only " himself but others who might be dependent on him." If disabled men were likely to be employed to any considerable extent in dangerous occupations, this risk would, no doubt, be an appreciable one, b\it we have no reason to. suppose that such cases are likely to be numerous. Our general conclusion, therefore, is that the employment of disabled sailors and soldiers will entaii on the average a heavier charge for compensation. Whether this increased charge, if allowed to fall on the employer, will weigh very much with him in selecting men is a different question. In the first place, the majority of employers insure against their liability under the "N^'orknien's Com- pensation Act, or are members of a Miitual Indemnity Society.* The practice of the Insurance Companies is to charge employers a flat rate of premium base^l on the amount of wages paid and fixed either for the whole of a trade or industry, or for large sub-divisions of a trade or industry. t These rates are reviewed froni time to time and may be readjusted to meet any change in the claims experience of the companies. We are informed by the Accident Offices Association that, so far as their members are concerned, there has been no alteration made for any trade erience, the experience in respect of such men will not be taken into account in fixing the rate. This undertaking to be subject to the condition that after the 1st January, 1928, the State will, if and when the Association so request, repay to the Association any excess which the claims made in respect of disabled sailors, soldiers or airmen after the date of the request, together with an agreed percentage of the expenses of management, may show over the premiiims paid in respect of them. The companies will keep separate itccounts in respect of the disabled men included in the policies, obtaining the necessary information from the employers for the purpose. {h) As regards employers irho do not insure in respect of their general liability under tlie Act, the Association will undertake to insure any such emjjloyer, if he so desires, in respect of disabled men alone at the general fiat late, subject to the condition that the State will, if the Association so request, repay the Association any loss incurred by them through such insurance, i.e., the excess of the compensation paid, plus an agreed proportion of the expenses of management, over the premiums received. We recommend that this offer, which appears to us to be very advantageous to the State, should be accepted . A number of the insurance companies, however, are not members of the Accident Offices Association, and there are also the Mutual Indemnity Societies to be considered. It should be open to them to enter into an undertaking with the Government on similar lines, i.e., to insure disabled men at the normal rate on condition of repayment by the State, if desired, of any excess of payments over j)remiums — the exact arrange- ments being a matter for adjustment according to the (iircumstances in each case. As regards large firms who elect to carr>- their own insurance, the arrangement mig-ht be that if they give notice before (say) the 1st Janiiary, 1919, and supply such information as the Government may require in regard to the average compensation cost for the works, &c., they shall be entitled to obtain at the end of each year a refund of the excess of the cost of compensation paid in respect of injuries to disabled men over the average compensation cost (excluding disabled men), or (if they prefer it) over the amount of the premiums that would have been payable for their disabled men on the rates charged by the Accident Offices Association. » Possibly a lower figure might be fixed if the refund were made at longer intervals than a year, t.tf. £50,000 if the interval was two years. 8 Definition of " tlixahled we?;."— It will be necessniy to ilpiiiie, for the pui'iioses of the scheme, win to be included as " disabled men." It appears to lis that the only practicable test will be whether the nJ is in receipt of a disability pension from the State, and we understand that the itinistry of Pensions confl in this view. All disabled sailors and soldiers whose disability is attribntable to or aErpravated by the y\ are entitled to a jiension ('tenijiorarv oi' ])ci-manent accordinp' to the natnre of the rasp ajid uraduated accDi'dil to the degree of disability) — exceplinp' only men whose disability is rated at less than 20 ))('r cent, (calcnla^ on the basis of the avei-aji-e man's ability), and who receive a Inmi) sum rrratnitv instead of a ])ension. Ministry of I'ensions do not consider it necessary that any special iirovision as regards comjjejisation shoil be made in resi>ect of this latter class — the degree of injun- being so slight as to involve no increase, oi| negligible increase only, in the risk of accident. Full records of all pensioned men are available at the Ministry of Pensions and will enable t| Govei-nment to exercise an adequate check on any claims for re-imbnrsement that nniy be made upon whether by Tnsiirance Companies, Mutual Indemnity Associations or individual finns. The scheme we recommend will nmkc it necessary for the em])loyers to ascertain, when applied to employment by a disabled man, whether he is in receipt of a pension or not. A pensioned man is givenl certificate indicating his position under the Pensions Warrant — and we see no objection to his being requirl to produce this to the employer. It has been suggested that some i-esentment may be caused among tf workers by such inquiries through an a])iii-ehension that employers may reduce the rate of wages to] pensioned man'. AVe think, liowever, that no siich feeling will arise if it is understood that the inquirj are required by the State, and it is obvious that the identification of the pensioned man is essential for tlJ or any scheme. Cost to State. — For the reasons whicli wc have set out earlier in the report we do not regard the increa in the comiiensation liability in these cases as likely to he at all sei-ious, and consequently wc do not expel that the charge to the State will be cinisidcrable. No exact estimate can, of course, be given. The nun)lj| of permanent pensioners after the close of the war can only be roiighly estimated ;* and the number of thr who will take up inchistrial employment, and the additional compensation charge which may be incurred respect of them, are unknown. Tf we take •'^50,000 as the number of iiennanent iiensioners. and assume till 2-'i0.000 will take uj) indu^trial cmiilo\ nicnt, the normal compensation charge (on the basis of the Hoii Office nublished returnsf) would be unch-i' £120.000 iier annum. If we estimate the average of the incrensJ liability for comi)ensation at 25 tier cent, alxivc the normal, the annual charge to the State would not excel £80,000. and we think that £50,000 may be taken as an outside figiire. For the first ten years during whij the Associated Companies have offered to maintain the tiresent rat^s of premium without making any clai