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of appealing encouraged the party who was dis-
satisfied with a recommendation of a board to
appeal immediately, in the hope that it might be
reversed. On the other hand, it must be clearly
recognised that the boards did good work. Mr.
Justice Cooper, president of the court, speaking at
Christchurch in April, 1901, expressed himself as
follows : —

" I should be very sorry, if there was any impression
in the puhlic minds, that the boards are not a necessary
part of the Act. They are very necessary."§

The work done by the boards was to settle some
cases and greatly simplify many others, leaving some
small points only to be decided by the court. This
work is now more appreciated since the effect of
Section 21 of the Amendment Act of 1901, allowing a

§ Report of the New South Wales Royal Commission,
p. 393.


• dispute to be takon direct to the court of arbitration,
has been practically to supersede conciliation boards,
and to congest the court with a press of business
and delay its decisions.* In the future, no doubt,
something will have to be done to remedy this; either
the court will have to be relieved of some of its minor
duties or a second court will have to be created.

From the machinery set up under the Act to
conciliate and arbitrate, we may next turn to the
method of setting this machinery in motion. This
can be done only by an industrial union of employers
or an industrial union of workers, and in practice is
always done by the latter. The former can be created
in any district by any two, originally seven, employers
in the same industry registering as a union, and the
latter by seven workmen employed in one industry
doing likewise. The full title of the original law of
18i>4: was " An act to encourage the formation of
industrial unions and associations, and to facilitate
the settlement of industrial disputes by conciliation
and arbitration," and these " industrial unions,"
which are something quite distinct from " trade
unions," play a most prominent part in the whole
system of compulsory arbitration. As already
stated, only a union can commence proceedings
under the Act, but on the other hand a single employer
can be cited to appear before the court, and can be
bound by its decisions, and in the same way non-
unionist workers may be bound by decisions. The

* Twelfth Report of the New Zealand Department of
Labour, 1903, p. iv.


minimum membership of the workers' union was.
placed as low as seven, so as not to exclude the
operatives of small trades from benefiting under the
Act. A union acts by the will of the majority,
so that four dissatisfied workmen are able to embroil
their employer in a dispute. This is undoubtedly
one of the chief causes which have contributed to the
large number of industrial disputes, and in New South
Wales, as we shall see later, an attempt has been made
to remedy this, by requiring a union to have a minimum
membership of fifty workers. The questions arising
out of industrial unions are by no means limited to the
size of the membership, and at the present time no
point is more discussed in New Zealand than that of
compulsory preference to unionists. I shall have
reason to refer to this again, when dealing with the
question of preference to unionists in general, amongst
the industrial matters which the court is competent
to decide, and we may now consider these in the
order in which they are enumerated in the definition
of " industrial matters."

In the first place, the court has jurisdiction over
all matters relating to "the wages, allowances, or
remuneration of workers employed in any industry,
or the prices paid or to be paid therein, in respect
of such employment." Further, under Section 92
of the Acb of 1900, the court may prescribe minimum
rates of wages, and has done so in almost every case
which has been brought before it. The question
involves a good deal of difficulty, and the position
of the court has not been easy. The court


has always shown itself desirous of raising wages and
inii)roving the conditions of the working classes ;
one result of doing this too freely is to render
the more incapable workmen liable to dismissal,
unless they can obtain certificates of incompetency
allowing them to work for a lower wage, and these
are not readily granted. On the other hand, a
minimum wage tends to become a maximum wage,
and by this means those originally earning higher
wages may have theirs reduced. This in its turn
would tend to lower the standard of workmanship.
These risks, however, have not frightened the court
from imposing raised minimum wages whenever
possible, with consequences which we shall see when
considering the effects of the law.

The second matter over which the court has juris-
diction is " the hours of employment, sex, age,
qualification or status of workers ; and the mode,
terms, and conditions of employment." The most
important action of the court under this section has
been to reduce the hours of labour. This it has done
with considerable freedom, and the effect is, of course,
the same as that of raising wages. The question of
apprenticeship has caused the court considerable
difficulty, as the unions are in favour of indenturing
apprentices, and this is found to be contrary to cus-
tom in several trades. The chief trouble with appren-
tices falls more under the next sub-section, allowing the
court jurisdiction over "the employment of children or
young persons, or of any person or persons, or class of
persons in any industry, or the dismissal of or refusal


to employ any particular person or persons or class of
persons therein." The unions claim to have the
number of apprentices in any business limited to one
for every three or at the most four journeymen. The
workmen, thinking nothing of the future but entirely
of the present, fear the growth of a class of cheap
labour and wish to restrict it as far as possible. It is
only fair to the court to say, that on more than one
occasion it has shown considerable broad-mindedness
when dealing with this question, and has refused to
grant the desired restriction. The general policy of
the court in this matter will be found in the remarks
appended to the award in the Wellington grocers'
dispute in 1902 : —

" There are some occupations where it is advisable
to liuiit youths in number. But there are other occu-
pations where no such limit is either reasonable or
necessary, and as we have said on more than one previous
occasion, it is our duty to see that the avenues for suit-
able work are not closed to the youth of the colony. We
owe a duty to the boys of the community, as well as to
the adult workers of the colony, and that duty we must
perform to the best of our ability. Tn practically every
occupation, the regulation of which has been subnutted
to this court, we have been asked to exclude youths
beyond a limited proporuou to the adults employed.
The proportion is generally stated at either one youth
to three or one youth to four adults employed. Thought-
ful working men, we think, must recognise that if their
boys are d'ebarred from obtaining suitable employment
in trades, from which there is no natural right for their
exclusion, a wTong is done to these boys, and the diffi-
culties surrounding the bringing up of a faimly are very-
much increased. The interests of the colony demand


that there should he no improper shutting out from the
legit iniiitc! means of earning a livelihood by the youth
of this colony ; and we think that \vc are amply justified
in the interests of the working classes themselves in
again emphasising this principle. While therefore we
do not limit in any way the employment of youth in
this trade, wc prescribe a scale of wages to be paid to
them according to age, which we think will prevent any

The next point, of which mention has already been
made, is " the claim of an industrial union of employ-
ers to preference of service from unemployed members
of an industrial union of workers," and " the claim of
members of industrial unions of workers to be em-
ployed in preference to non-members." The claim of
unionists to preference is based upon the expense and
trouble involved in obtaining an award, under which
non-unionists benefit, but under which unionists
maintain they should benefit first. The chief objec-
tion raised to preference is that it tends to create a
labour monopoly. In recent times the court has
granted preference to unionists pretty freely, provided
the rules were such that a new member could be
admitted without election on the payment of an
entrance fee not exceeding Ss. and a weekly contribu-
tion of not more than 6d. The awards also stipulate
that the union must be able to supply an efficient
workman when an employer requires one, otherwise
he is at liberty to employ a non-unionist. By a
decision of the court of April, 1901, however, when a
non-unionist has been engaged for want of an efficient
unionist, the union is at liberty to provide one within


twelve weeks, and to require the employer to substi-
tute him for the non-unionist. The unionists are now
demanding to have preference rendered compulsory
by law, though whether the desired amendment is
likely to be passed, it is difl&cult to say, for the last
Report of the Department of Labour (1903), which may
be taken as being practically " inspired," throws no
light upon the subject.*

The last thing falling within the definition of an
industrial matter, is " any established custom or usage
of any industry, either generally or in the particular
district afiected." This last matter is certainly pretty
general, and upon it and the preceding matters the
Court has at times put very liberal interpretations.
I may just mention two of these as examples. The
Court took upon itself to grant preference to unionists
as early as 1896, and has continued to do so ever since,
although it was only in 1900 that it was first author-
ised to do so by law. The second point is an exceed-
ingly interesting one, and has reference to the subject
of strikes. I may say in the first place, that whilst
any case is under consideration, a strike or lockout is

* The following is the passage I refer to : " Strong desire
is expressed among the ranks of trade unionists that " pre-
ference to unionists " should be made compulsory by statute.
The plea used is, that the Covu't in giving preference, usually
couples the privilege with the addendum, " other things
being equal," and as it is left to the employer to say whether
such equality exists, the grant of preference is useless with
such a proviso. If the law is amended in the desired direction,
it is probable that it will not be done without fierce opposi-
tion ; but the principle is so important, that it is well worth
full debate and enlightening discussion."


forbidden under a penalty of £50. It was generally
believed, that after an award had been delivered,
employers and employees were at liberty to cease
work if they chose. It now seems that they are
not even at liberty to do this. In February, 1903, the
(yourt raised the minimum wage of the Auckland
cabinet-makers 2d. per hour. The employers, decid-
ing some of the men were not capable of earning the
increased rate, suspended them till they could obtain
certificates of incompetency. The registrar of in-
dustrial unions brought the case before the Arbitration
Court. It could not be proved that there had been
any agreement between the masters to discharge their
workmen, and the case was dismissed. During the
course of the case, the president made the following
announcement :*

" If a combined and concerted action .such as a strike
took place, he should con.sider such action a breach of
award, and punish it severely. It had hitherto been
held by many, that a strike or lockout had only been
punishable undur the Act, if it took place while proceed-
ings were pending or subsequently, but that once the
award had been delivered, then strikes or lockouts were
permissible. The president ruled, however, that he
should act in the spirit, not in the letter of the law ;
and that as the spirit of the Act was in the direction of
preventing industrial strife, he had the power to punish
organised infractions of award."

By Section 5 of the Amendment Act of 1903 this
judicial decision has been made law ; and under

* Report of the New Zealand Department of Labour, 1903,
p. V.


Section 6 of the same Act the dismissal of even a
single workman by an employer in certain cases may
be treated as a breach of the award.*

Above I have attempted to mention shortly all
the more important features of the New Zealand
Acts. For want of space many interesting details
have had to be omitted, but a knowledge of these
can easily be acquired by reading through the
original Acts, Before considering the general
effects of compulsory arbitration, I may just
refer to one amendment introduced by the Act of
1900. Previous to this time an award could relate
to the industrial district only in which proceedings
were commenced. By Section 87 of the Industrial
Conciliation and Arbitration Act, 1900, the Court is
empowered to make Colonial awards, subject to the

* Sections 5 and 6 of the Industrial Conciliation and Arbi-
tration Amendment Act, 1903, are as follows : —

5. "If dui'ing the currency of an award, any employer,
worker, industrial union or association or any combination
of either employers or workers, has taken proceedings with
the intention to defeat any of the provisions of the award,
such employer, worker, union, association, or combination
and every member thereof respectively, shall be deemed to
have committed a breach of the award and shall be liable

6. " Every employer who dismisses from his employment
any worker by reason merely of the fact that the worker is
a member of an industrial union, or who is conclusively
proved to have dismissed such worker merely because he
is entitled to the benefit of an award, order or agreement,
shall be deemed to have committed a breach of the award,
order, or agreement, and shall be liable accordingly."

A note on the interpretation of Section 6 will be found
in Appendiiv I,


right of any union of employers or workers, belonging
to a district other than that in which the Court is
sitting, when making the award, to lodge a protest,
in which case, the award is to be suspended in that
district, until the Court has sat there and heard and
determined the objections. The difference in climate
and general conditions between the north and south
of New Zealand often tends to make a Colonial award
unfair, so that the Court has seldom used its power
under this Section.

Turning to the effects of the law, we find that the
Act was brought on to the Statute Book with the
intention of preventing industrial strife, so that we
shall be justified in asking ourselves in the first place,
how far it has been successful in achieving this end.
New Zealand has been referred to as '' a country with-
out strikes * " ; but this is not accurate, as small strikes
have occurred from time to time. This does not prove
that the law has been a failure, for everyone is at
liberty to strike, before proceedings are commenced
under the Act, and if both parties to the dispute are
non-unionists, the strike may very well continue.
The reader must not think that this desirable
state of affairs is entirely due to compulsory
arbitration, as there were practically as few strikes
and lockouts before 1894 as since that date. All the
Act has helped to do in this direction, is to check the
number of strikes from growing in proportion to the

* This is the title of the late H. D. Lloyd's book, and the
phrase vnil be frequently found in the literature dealing
with New Zealand.


increased industrial population. If the number of
strikes and lockouts has remained at such a nominal
figure, the same cannot be said of the number of
" industrial disputes," i.e., "disputes arising between
one or more employers or industrial unions or as-
sociations of employers, and one or more industrial
unions or associations of workers in relation to in-
dustrial matters." There can be no doubt that a
large number of the disputes would never have arisen
but for the existence of the Act. Even Mr, Wise,
who introduced compulsory arbitration into Nevv
South Wales, has written as follows on this subject* :

" In New Zealand, owing to the permission of any
seven persons engaged, for no matter how short a time
in one employment, to registet' themselves as an indus-
trial union, employers have been exposed to being har-
assed by trivial complaints arising from the perversity
or ill-will of their workm.en, and sometimes, it is to be
feared, incited by trade competitors."

In New South Wales, it may be mentioned here, Mr.
Wise has attempted to overcome this objection by
requiring not fewer than fifty workmen to unite in
forming a union.

A word may be said at this point, with regard to the
enforcement of awards. So far little trouble has
been experienced on this account, the reason, no
doubt being, that almost all the awards have been in
favour of the workers, and that there is no difficulty
in compelling employers to submit to awards. The
number of fines imposed is by no means inconsiderable,

* N.S.W. Industrial Arbitration Act, National Review,
August, 1902.



though no fine, apparently, has exceeded £25 in
amount. The triviality and the unimportance of many
of the proceedings for the enforcement of agreements
brought before the court, arc largely accounted for
by the complainant receiving whatever fine is
inflicted. Up to the present, only one or two small
cases of breach of award have been brought against
a union, and the evidence is insufficient to show
whether an agreement could be effectually enforced,
if a union were the defaulting party.

The chief work of the Arbitration Court has not
been so much in maintaining industrial peace, as
in improving the conditions under which the work-
people labour. The Industrial Conciliation and
Arbitration Acts practically constitute the court a
legislative and a judicial body at the same time.
The court in its awards first lays down the conditions
under which a given trade is to work during the next
years, and then proceeds to interpret the conditions
drawn up by itself ; at times it has even gone as far
as to define the scope of its own jurisdiction. When
a case of breach of award occurs, no jury is empanelled
to hear industrial disputes ; the decisions of the court
are final, and no appeal can be made from them. It can
safely be said, that no other court in the British Empire
has such absolute power as an Arbitration Court under
the compulsory system. There can be little doubt that
the conditions under which women work have been con-
oiderably improved in New Zealand since the intro-
duction of compulsory arbitration, and the general
tendency has been to raise wages and reduce hours


all round. The consequence of this has been a
general rise in prices. Employers, unable to pay
the increased wages out of their existing profits,
have succeeded to a large extent in shifting the
burden on to the consumers.

All investigators are unanimous in asserting that
the cost of living has increased, though Mr. Clark is
the only one who expresses this tendency in figures :
" The increase in the cost of living in New Zealand
since the awards began to go into effect is variously
estimated at from 20 to 40 per cent." * The prices
of commodities quoted in the New Zealand Official
Year-Books, of which examples will be found in
Appendix II, clearly bear out Mr. Clark's testimony.
The Report of the Department of Labour for 1902
admits the increased cost of living, but says that it
appears to carry little disadvantage. This it tries
to demonstrate in the following ingenious way :
" As soon as the workman gets his wages, they are
almost all distributed again directly ; with high
earnings he buys more bread, beef, beer, tea,
clothes, theatre tickets, excursion tickets, etc., than
if he made poor earnings." The statement would
be exceedingly plausible, were it not that all mention of
increased cost of the bread, beef, etc., were omitted.
The same report asserts that the farmer, whose produce
goesoverseaSjhas also not been harmed bytheenhanced
cost of living. If this is really so, and increased
agricultural exports seem to point in this direction,
it only shows that the farmers have been able to add
* Labour Conditions in New Zealand, p. 1240.



80 much on to the price of what they sell at home, as
to cover any loss they may incur on their exports.

We may now consider in a general way, what the
efEects of compulsory arbitration have been upon
New Zealand industry. It certainly has not been
killed, and there is no proof to show that it has
been particularly harmed, except in the case of the
boot and shoe industry.* The chief reason for this
has already been given above : employers have
been able to pay the increased wages out of the in-
creased prices they have obtained for their products.
The boot and shoe industry, owing to the tariff not
being sufficiently high, has not been in a position to
stand a sufficient rise in prices to support the awards,
and imports have increased to a considerable extent
during recent years, whilst the home industry has
been practically stationary. The peculiar condi-
tions which have left New Zealand apparently
unharmed, after working for ten years under a system
of compulsory arbitration, have been well summed
up by M. Challaye, a French gentleman, who visited
New Zealand in the spring of 1900 :

" It is because New Zealand is not big, has a small
population, is rich in natural riches, it is above all be-
cause it is isolated — both geographically and economi-
cally — that it can support its 5ocial legislation, which
is so advanced, without being crushed by foreign com

* For some unfavourable views of the effects of com-
pulsory arbitration, tlie reader may consult J. MacGregor
and F. G. Ewington [see Appendix III] and also the table
ou p. 168.


A tariff wall is essential to successful compulsory
arbitration, but more is required besides that. In a
large country the question of enforcing awards
would be exceedingly difficult, if not impossible, for
it must be remembered, that New Zealand is not
only a small country, but an agricultural one at that,
in which practically all awards have been favourable
to labour. But one thing perhaps more than another
has contributed to the successful working of com-
pulsory arbitration in New Zealand. Ever since
it was introduced in 1894, the country has been
enjoying a great wave of prosperity. What the
effects of a period of depression would be, it is difficult
to say. The country has also been fortunate in more
than once having a very capable judge as president
of the court of arbitration. Mr. Justice Williams,
the first president, and Mr. Justice Chapman, the
present one, can certainly be numbered amongst
the most successful. We will now consider
the attitude of employers and employees towards
compulsory arbitration, and I shall have reason to
refer again to the prospects of the future success of
the Acts.

There is probably no question concerning com-
pulsory arbitration, about which more contradic-
tion of opinion exists, than that of the attitude of
New Zealand employers towards the law. In the
first place, there is usually a good deal of bandying
with words. Some people express their belief in the
principle of the Act, whilst cordially hating the Act
itself. Others will declare themselves as satisfied


with the court of arbitration, referring, of course, to
its honesty and ita fair-mindedness, without for a
moment meaning that they would not like to see
compulsory arbitration abolished. The report of
one recent investigation into the working of the New
Zealand law contains the statement, that : —

" In no part of the Colony we visited, did we hear any
general desire for its repeal."

And the chairman of this same Commission is
reported to have said : —

" Wo exan)incd a largo number of witnesses from

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Online LibraryDouglas KnoopIndustrial conciliation and arbitration → online text (page 12 of 18)