P was a member of a union which had a rule that he would be automatically expelled if he became six weeks in arrears. He had entered a union scheme whereby he authorised his employer to make a weekly deduction of his salary which would be paid to his union. Because of the union’s oversight, the deductions were not made, and the first he became aware of this was when he was expelled from the union. Because his company only used unionised workers he was sacked. CA held that damages for the admitted breach of contract should consist of (a) the plaintiff's actual loss, viz. the difference between what he would have earned if he had remained in the union shop and what he in fact received in wages and benefit to the date of assessment, less such amount as the union might prove was due to his failure to act reasonably to mitigate the damage; and (b) an estimate of his future loss of earning capacity attributable to the withdrawal of his union card. Damages were not directly analogous to personal injury (and hence the same formula shouldn’t be used) since the union may be able to mitigate the damage by restoring the membership card.
Lord Denning MR (supported by other judges): It is no defence that under union rules the union can arbitrarily and capriciously revoke a person’s membership without regard to the rules of natural justice (NB this is before legislation governing when a union may exclude/expel a person) because they are an interference with a man’s right to work if the industry in which he works is closed shop. Such powers would also therefore be unlawful restraints of trade in such an industry. He also described the rule conferring such powers on the union as ‘ultra vires’ though he doesn’t explain why.