1 A A : i 1 i ,^. Conciliation and Arbitration in New Zealand Research Report Number 23 December, 1919 National Industrial Conference Board ^'"^m i\ ^r>;-?it This book is DUE on the last date stamped below OEC 8 W Form L-9-10/ji-3,'2'- > i Southern Branch of the University of California Lo« Angeles Form L I ■^ :./ CONCILIATIOWM.ND ARBITRATION IN NEW ZEALAND Research Report No. 23 December, 1919 Copyright 1919 UNIVERSITY of ( /-< A T -r-,-,^ TyTV\- LOo ANGELES LIBRARY National Industrial Conference Board IS Beacon Street Boston, Mass. 91904 Sh^O £} CONTENTS PAGE Foreword vii I. Introduction 1 Difference between American and New Zealand Conditions 3 II. Development of the System o ^ Amendments to the Act Original Principle of System not Changed by Amendments 8 III. Administrative Machinery 10 ^ Method of Procedure in Conciliation 11 '^ Enforceability of Awards and Penalties ... 12 Minimum Wage and Special Wage Provisions 13 \ IV. Principles Followed in the Arbitration Court of New Zealand 1^3 Principle of Conciliation Firmly Established . 15 V Court not Compelled to Render Award .... 16 ^ Conservative Attitude of Court 17 Court's Position with Respect to Wage-Fixing 18 "Preference" for Unions 19 Rights of the Employer 20 ^ V. Operation of the New Zealand System 22 ^ First Period, 1894-1901 22 Second Period, 1901-1908 23 Dissatisfaction of Workers 24 Third Period, 1U08 Onward 25 Labor Disputes Investigation Act 26 VI. Statistical Comparisons 28 VII. Results of the New Zealand System 35 Appendices 37 LIST OF TABLES PAGE Table 1: Number and Membership of Industrial Unions of Employers and Workers, 1907-1917 11 Table 2: Number and Percentage of Disputes Settled by Con- ciliation and Arbitration, Respectively, 1894-1901, 1902- 1908, 1909-1918 28 Table 3: Industrial Agreements, Recommendations, and Awards in Conciliation and Arbitration, 1904-1918 29 Table 4: Disputes Referred to and Disposed of by Councils of Conciliation, 1910-1918 30 Table 5: Permits Granted to Under-Rate Workers, 1907-1915 30 Table 6: Number of Strikes in New Zealand, 1894-1918 ... 31 Table 7: Number of Prosecutions for Enforcement of Awards and for Strikes and Lockouts, 1910-1918 31 Table 8: Cost of Administration of Conciliation and Arbitra- tion, 1907-1915 32 Table 9: Minimum Wage Rates for Various Occupations from Earliest to Latest Awards 32 Foreword TN view of the widespread interest in evolving some system to reduce the frequency and mitigate the severity of industrial disputes, all available experience with methods of mediation, conciliation, and arbitration possesses an unusually timely interest. Previous re- search reports have reviewed the experience of Canada with the Canadian Industrial Disputes Investi- gation Act, and the experience of leading Australian States and of the Australian Commonwealth with similar programs. The present report presents a review of the experience of New Zealand, which has the distinction of leadership in such legislation in point of time. Conciliation and Arbitration in New Zealand INTRODUCTION In the suggestion and formulation of methods of con- ciliation and arbitration in industrial disputes New Zealand occupies the position of a pioneer. The germ of all that has been attempted in other parts of the British Empire in the direction of either conciliation or arbitration is to be found in the New Zealand Act of 1894. Two years before the wages boards of the Australian state of Victoria were created, and seven years before any other part of Australia had adopted arbitration, the New Zealand system with its Councils of Conciliation and its Courts of Arbitration was in full working order. It is interesting to note this primacy in time, because the larger industrial development and the more complex problems of the Commonwealth of Australia have caused the results of arbitration there to receive greater attention. At first sight, this leadership of New Zealand in legisla- tion for the settlement of industrial disputes is surprising. The country is young and industrially little developed. Its population is small and the proportion engaged in industry quite meager. In 1894, when the arbitration system was introduced, the country contained less than 700,000 white persons, and at the latest estimate its white population was only a little over 1,000,000. Its factory population in 1894 was less than 30,000 and in 1916 it did not exceed 80,000. The number of trade unionists recorded in 1900 was 17,989, a figure that by 1917 had reached 72,873. While the latter number is not inconsiderable, the nature of the industries in which the trade unionists are found reduces its significance. There is no large body of miners or of men employed in the metal trades. The largest unions are among transport workers, while builders come next in order. The Dominion, in short, has no 1 considerable manufactures, no large industrial centers, and no powerful body of organized unionists. Its acceptance of conciliation and arbitration was, therefore, the endorsement of a principle rather than the adoption of a policy forced by expediency. It is true that there had been a number of strikes and much unem- ployment in the preceding period, which had injured the employers and disheartened and impoverished the work- ers. These disputes had made the relief of unemployment a pressing problem, and that task was the first imposed upon the newly created Department of Labor. But in the conception of the first Minister for Labor, the Hon. W. Pember Reeves, it was more important to find some better method for the settlement of industrial disputes. It was this spirit that prevailed in the inauguration of the arbitration system of New Zealand. As with the people of Australia, the system was fundamentally the legislative expression of a social ideal. In explanation of systems of conciliation and arbitra- tion it should be remembered that conciliation, in dis- tinction to arbitration, is a method for securing a peace- able settlement of industrial disputes by bringing botK parties together for discussion and negotiation. The machinery may be either that of an informal conference, a Board or Council deriving its authority from legislative enactment, or a constituted Court. Its initiation depends upon a mediating or third party, Vv^ho gets the parties actually involved into touch with each other and keeps them to the discussion of a solution. He never takes sides, nor gives an opinion, and seldom votes on any issue before the parties. The results of the deliberations are recorded as an agreement which is binding only on the parties who have been concerned in the dispute. Compulsory arbitration, which is the chief characteristic of the New Zealand system, consists, on the other hand, in the Government compelling employers and employees to meet before a Court or Board which shall decide their differences. Compulsion enters in at every step. It is true that in one respect the New Zealand system is not as rigid as that of Australia, since it does not compel the notification of a dispute. The sections of the Act relating to the reference of disputes are permissive, not obligatory, in wording. But when a dispute has been referred to a Council or the Court, the clement of compulsion becomes 2 pronounced. Witnesses are called to give evidence, and employers must, if required, produce papers and books necessary for full inquiry. The award of the Court is binding under a penalty, and parties to it are required to abstain from strikes and lockouts during both the hearing of the dispute and the term of the award. The New Zealand system, like the Australian, combines methods both of conciliation and arbitration. Conciliation is a vital part of the system, but arbitration is its foun- dation and support. The former method, both in theory and in practice, aflFords an opportunity for differences to be completely or partly settled. The latter secures the final adjustment of any unsettled elements of the dispute and the enforcement of the agreement upon all, both employers and workers, engaged in the industry. While in the history of the system the stress laid upon either method has varied, the two methods have at length been integrated, so that every dispute within the jurisdiction of the Industrial Conciliation and Arbitration Act must first be submitted to conciliation before arbitration is invoked. Difference between American and New Zealand Conditions No adequate grasp of the significance of the New Zealand system can be had by American readers without a full appreciation of the radical differences which char- acterize the two countries. The population of New Zealand is very homogeneous — over 98 per cent of its white population is of British stock. In New Zealand the principle of trade unionism is not merely passively accepted, but actually fostered. The activities of unionism do not run to a struggle for the opportunities of organiza- tion, though "preference for unionists," a form of closed shop, is sought. Unlike the Australian trade unions, and more like those of the United States, there was for twenty years little inclination in New Zealand towards the formation of a separate political party. The present Labor Party, which dates roughly from 1914, is small in numbers and weak in influence; the so-called Liberal Party has received the support of the working classes, and has been responsible for the legislation on arbitration as well as for a large body of labor laws. 3 A practical result of this situation is that conciliatidh and arbitration in New Zealand have been concerned mainly with controversies over wages and hours, and with disputes other than those for the opportunities of trade union organization. Every award contains provisions concerning the hours to be worked, the rate for overtime, the minimum wage, and the conditions under which permits may be granted to "slow" workers. Very many contain a preference clause, providing that under certain conditions and on the fulfillment of certain regulations, preference of employment shall be given to unionists in the industry covered by the award. The arbitration system brings practically all conditions of industry under review. These differences in industrial conditions and the nature of the population, apart from those arising out of different political constitutions, and a different attitude towards state control, are fundamental, and not only must be recognized in any attempt to interpret the history of conciliation and arbitration in New Zealand, but must influence in even greater degree conclusions as to the applicability of the experience of New Zealand to countries differently constituted. II DEVELOPMENT OF THE SYSTEM The first Industrial Conciliation and Arbitration Act was passed in 1894 and was described in its sub-title as an "Act to encourage the formation of industrial unions and associations." It provided that seven persons, either employers or workers, who were legally associated for the purpose of protecting or furthering their respective interests, could register themselves as an "industrial union." The effect of such registration would be to bind them to observance of the rules of the industrial union, and to the jurisdiction and awards of any tribunal under the Act. An industrial union might apply for cancella- tion of its registration, but not during the pendency of any proceedings in conciliation or arbitration affecting that union; nor would such cancellation relieve it or its mem- bers from obligations incurred under an industrial agree- ment or award. The machinery of conciliation was to consist of Boards of from four to six persons, chosen in equal numbers by industrial unions of employers and workers, respectively, with a chairman elected by these members from outside their number. The Boards were to officiate within each of the eight industrial districts into which the country was to be divided. Provision was made for special Boards of Conciliation to be appointed to meet any case of emergency or any special industrial dispute. The Boards were to seek to conciliate the parties, inquiring expedi- tiously and carefully into the dispute, and making all suggestions that they might deem right and proper for inducing the parties to come to a fair and amicable settle- ment. If a settlement was arrived at, it was to be put in the form of an industrial agreement that was to have a currency of not more than three years, but was to con- tinue in force till superseded by another industrial agree- ment or by an award of the Court. If no agreement was reached, the case was then referred to the Court of Arbitration. The Court of Arbitration was to consist of three persons, one of whom was to be a judge of the Supreme Court. The 5 other two were to be nominated by the employers' and workers' industrial unions, respectively. The Court was to hear all disputes referred to it by the Boards of Con- ciliation, and was to act by the principles of equity and good conscience as well as by legal evidence. It was required to make an award in a dispute within one month after beginning the hearing thereon. It had the right and the power to enforce agreements and awards upon the respective industrial unions concerned, and could impose a penalty not exceeding £500. Amendments to the Act^ The Act was amended in 1895, 1896, and again in 1898. In 1900 the Act and the successive amendments were con- solidated and amended. This Act of 1900 was then called the principal Act, and was amended in 1901, in 1903 twice, and again in 1904. It was consolidated and compiled in 1905, and amended again in that year and also in 1906. In 1908 it was consolidated into what still remains (1919) the principal Act. At the same time a most important amend- ing Act was passed, which was again amended in 1911 and 1913. It was proposed in the latter year to con- solidate the Act again, but pressure of Parliamentary business was too great, and the war has prevented any further attention to the matter. The statute in force today is that of 1908, with the important amendment of that year and the minor amendments of 1911 and 1913. A proposed addition to the contemplated consolidated Act of 1913 was made into a separate measure and passed as the Labor Disputes Investigation Act, 1913. The various amendments to the Act from 1894 to 1913 are briefly epitomized in the appendix. The earlier of these amendments and some of the later ones were con- cerned with relatively minor details. It is worth noting, however, that the Amending Act of 1898 eliminated from the sub-title of the Act of 1894 the words "to encourage the formation of industrial unions and associations." Definite provision was also made for fixing minimum rates of wages and for making exceptions for workers unable to earn the prescribed minimum. The Consolidating Act of 1900 specifically included the claims of union members for preferential treatment as within the definition of "industrial matters," and also 1 For chronological amendments to the Act of 1894 see Appendix A. 6 added the Important provision that pending the disposi- tion of a dispute by an established agency, any strike or lockout should be subject to a penalty. The Amending Act of 1901, in addition to defining more clearly the territorial jurisdiction of Courts of Conciliation and Arbi- tration, also provided that a dispute might go direct to the Court of Arbitration without prior hearing before a Board of Conciliation. The Amending Act of 1903, among other things, defined the circumstances under which dismissal of an employee would constitute a viola- tion of the Act. The Amending Act of 1906 laid down more definite regulations for the submission of applica- tions and other matters of procedure. The Amending Act of 1908 made a substantial change in the machinery of conciliation, both in form and con- stitution. The Conciliation Boards were abolished and in place thereof there were established Councils of Concilia- tion, a name which in itself is more suggestive of the process of conciliation. The Councils, moreover, were constituted differently than were the Boards. The eight chairmen of the Boards (one each of the eight industrial districts) were replaced by Industrial Commissioners, not to exceed four in number, appointed by the Governor. Only three have thus far been appointed. These have been assigned jurisdiction over specific areas. When a dispute is referred to any one of them he obtains the names of suitable "assessors" from both sides and from the industry in which the dispute has arisen. The Council is, therefore, freshly constituted for each dispute, and, in contrast with the earlier Boards which had a fixed tenure and personnel, consists of men familiar with the par- ticular industry in which the dispute occurs. This Amending Act of 1908, furthermore, repealed the Amend- ment of 1901, which had provided that no industrial dis- pute could be referred to a Court until it had been first referred to a Council of Conciliation. Various new penalties were also provided in this Act. The Amending Act of 1911 dealt largely with the form and force of awards. The important feature of the Amending Act of 1913 was a provision that where the parties to a dispute did not object to a recommendation of a Council of Conciliation, this should operate as an industrial agreement and not as an award, thus limiting its application to the parties 7 specifically agreeing, whereas an award covers all em- ployers and all workers in the industry in the particular district. Throughout the amendments, also, there is manifest a growing objection to strikes and lockouts and a tendency to penalize them more and more heavily. Strikes and lockouts had been illegal from the beginning of the legislation. But in earlier promulgations stress was laid rather on prevention of strikes by ameliorative measures than by penal measures. Thus in a pamphlet issued in 1898 by the New Zealand Department of Labor^ is the following statement: The general tendency of these laws is to ameliorate the position of the worker by preventing social oppression through undue influences, or through unsatisfactory condi- tions of sanitation; . . . their aim is to prevent the installation of abuses before such abuses attain formidable dimensions. But, though the relatively unfavorable conditions were removed, industrial dissatisfaction and unrest developed, and measures became necessary for maintaining the decisions of the Court. Before 1900, industrial unions were liable to penalties for breach of an award, such as a strike. In 1900, non-unionists were made liable, a measure that seems to have been taken in the interests of trade unions. By the Amending Act of 1905 individual unionists were made liable for a breach of an award, while from 1908 strikes and lockouts became statutory offenses where the parties concerned were bound by an agreement or an award. An employer taking part in a lockout was made liable to a fine not exceeding £500; an individual worker taking part in a strike was subject to a penalty not ex- ceeding £10. Original Principle of System not Changed by Amendments While, therefore, many of the changes resulting from this successive amendment of the Act have been sub- stantial, in general principle the system is but little dif- ferent from that established in 1894. The Court of Arbi- tration has remained without serious alterations in its » New Zealand Year Book, 1898, p. 297. 8 character, procedure, and powers. It is still a Court of final appeal to which disputes may ultimately be referred. It hears the evidence which has been sifted by the Councils of Conciliation and gives its decisions as awards. These are binding upon all employers. This historical summary and analysis shows that a lengthy and continued process of experimentation has been applied to the New Zealand system of conciliation and arbitration. There has, however, been no alteration in principle; conciliation has been applied frequently and effectively. The experience of the years 1901-1908, even though conciliation was not popular, demonstrated its utility, while the success of the alterations in applica- tion and procedure indicated new lines of development. At the same time arbitration has lost none of its com- pulsory features. It has become more definitely estab- lished as the alternative to strikes and lockouts, and the weight of Parliamentary enactment has been lent to the maintenance of industrial peace through arbitration by penalizing heavily all measures or acts tending towards or creating either strikes or lockouts. Ill ADMINISTRATIVE MACHINERY The administration of the Industrial ConciUation and Arbitration Act is under the jurisdiction of the Minister for Labor, as the head of a department of the Civil Ser- vice, including a number of inspectors whose duty it is to maintain and enforce awards and industrial agreements. For purposes of administration the two islands which constitute the Dominion of New Zealand are divided into eight industrial districts, each centering round one of the more important towns. In these towns the Councils of Conciliation meet when necessary, and the Court of Arbitration visits the four larger centers. As the basis of the administrative system are the "indus- trial unions," composed of not less than three employers on the one hand, or fifteen workers, on the other, all of whom must be engaged in the industry for which the industrial union is formed. The name given to the industrial union specifies to what locality it belongs and whether it is composed of employers or workers. Any two or more industrial unions of either employers or workers may register as an industrial association. This latter, it is obvious, would cover at least two districts, and may include the whole Dominion. These industrial unions and associations are required to register with the Court, and to furnish the Secretary of Labor with a yearly statement of their membership. In 1917 there were 145 unions of employers, with 5,390 members, and 382 unions of workers with 72,873 members. Their number and membership for each year from 1907 to 1917, inclusive, are given in Table 1. 10 TABLE i: NUMBER AND MEMBERSHIP OF INDUSTRIAL UNIONS OF EMPLOYERS AND WORKERS, I907-I917 (New Zealand Official Year Book, 1918, p. 637) Employers Workers Year Unions Membership Unions Membership 1907 121 3,630 310 45.614 1908 122 3,918 325 49,347 1909 120 3,702 308 54,519 1910 118 4,262 308 57.091 1911 118 4,251 307 55,629 1912 123 4,410 322 60,622 1913 134 4,700 372 71,544 1914 149 5,819 403 73,991 1915 141 5,718 389 67,661 1916 141 5,554 378 71,38& 1917 145 5,390 382 72.87S Method of Procedure in Conciliation The conciliation machinery as described above consists of Councils of Conciliation, called into existence in each particular dispute by one of three Industrial Commis- sioners, who hold ofRce for four years. A dispute may be referred to a commissioner by a trade union, an industrial association, or an employer. The commissioner is charged with the duty of setting up a Council to deal with a dis- pute. The parties are heard before the Council and are urged to settle all or as many points of difference as possible. If a settlement is arrived at, the terms of the settlement are set forth as an industrial agreement, which is often for convenience taken before the Court of Arbi- tration and registered as an award. If no settlement is arrived at by conference some temporary and provisional arrangement is sought while the matter is being heard before the Arbitration Court. If the assessors on both sides can reach a unanimous conclusion, the Council may make a recommendation, which is filed for public notifica- tion. Should none of the parties, after due notice, disagree with such recommendation within one month, it becomes binding and is enforceable upon the parties as an industrial agreement. If the unanimous recommendation of the assessors is disagreed with by either party, or if no settle- ment is arrived at in any way, the dispute goes forthwith to the Court of Arbitration. The Court of Arbitration consists of a judge of the Supreme Court, with two assessors, one nominated by 11 employers, the other by the workers. Since the presiding judge is a member of the highest Court of the land, the | Court of Arbitration has thereby considerable prestige, 1 and because of its jurisdiction is one of the most powerful i' courts in the British Empire. Its decisions are subject f to no appeal, except on certain points of law, and it is :i significant that practically all appeals have been rejected | and the action of the Court upheld. The Court proceeds more by equity and the principle of "a square deal" than by law. No barrister or solicitor may appear before it, except with the consent of all the parties, and this consent has never been given. Decisions are arrived at expedi- tiously, since the Councils of Conciliation have narrowed the issues, digested and systematized the evidence, and chosen those witnesses only whose evidence was proved in the lower tribunal to be significant. It should be recorded that in contradistinction to the practice of the presidents of the Courts of Arbitration of the Common- wealths of Australia and New South Wales, respectively, the awards of the New Zealand Court of Arbitration are invariably given without any considerable comment. Brief summarized reasons for the award are frequently set % forth, but seldom anything approaching the discussion of 1| economic principles and of their application to the dispute, such as characterizes the awards of Mr. Justice H. B. Higgins of the Court of Arbitration of the Commonwealth of Australia. m ■;7 '!* Enforceability of Awards and Penalties The awards of the Court are binding upon every em- ployer who is, or may be, engaged in the industry while the award is in force, and upon every worker employed by such employer. A worker who commits a breach of an award is liable to a fine not exceeding £10. An employer who does not fulfill all the terms of an award respecting wages is similarly liable to a penalty and to the payment of back wages. ^' Prior to 1903 it was left to unions to initiate proceedings for breach of an award, and they received as a return the fines which were imposed. This function was, however, taken from them in 1903 and placed in the hands of in- spectors of factories, who recovered the fines for the public treasury. Before 1905, proceedings for breach of an award were taken before the Court of Arbitration, 12 which at that period was greatly congested with more im- portant matters. Consequently the enforcement of awards was delegated to the petty courts of the country. The penal provisions of the Act apply specifically since 1908 to strikes and lockouts. A worker in an industry covered by an industrial agreement or award wherein a strike has occurred is liable to a penalty not exceeding £10. An employer bound by an industrial agreement or award who takes part in a lockout is penalized by a sum not exceeding £500. Incitement or instigation to an unlawful strike or lockout is penalized by a sum not exceeding £10 in the case of a worker or £100 in the case of an employer, a trade union, an industrial union, or any person other than a worker. The New Zealand system has always tended to protect trade unionists by virtue of its resting upon a foundation of trade unionism. This protection has taken the ex- pressed form of preference, to be discussed later, but in the administrative machinery it is represented by penal provisions. An employer who dismisses a worker because of the fact that this worker is a member of an industrial union or has taken a prominent part in placing a dispute before a Council of Conciliation is fined a sum not exceed- ing £25. Where the worker was an official of a union or appeared before the Council of Conciliation in a repre- sentative capacity, the onus of proof is on the employer to show that he dismissed this worker for some other reason. Several prosecutions on this count have taken place, but the decisions rarely reveal any bias on the part of employers against trade unionists. Minimum Wage and Special Wage Provisions By statute, the Court is empowered to include a mini- mum wage in its awards, and to provide for the granting of permits to work at a lower rate, to those who are unable to earn the prescribed minimum. The issue of permits has now become a function of the local Inspector of Awards. It was formerly done mainly through the trade unions, which, however, were so reluctant to grant permits that they inflicted some hardship on these subnormal workers by practically making employment impossible for them. Now any worker who, in the language of a recent award, "considers himself incapable of earning the minimum wage fixed by this award" must apply to the local official 13 to have his rate of wages fixed. The official notifies the union concerned and the secretary thereof is allowed to state any objections. The wage is then fixed for a period not exceeding six months, or until demand is made by the secretary of the union that the wage shall again be fixed. In the case of old men or those sufi"ering from physical disability, the wage may be fixed for a longer period. By a very recent Order in Council (July 15, 1919) there were suspended the provisions of all awards and industrial agreements prescribing conditions of employment for under-rate workers and any other conditions of the In- dustrial Conciliation Arbitration Act, so far as these provisions prevented or restricted the employment and training of discharged soldiers. 14 IV PRINCIPLES FOLLOWED IN THE ARBITRATION COURT OF NEW ZEALAND The principles followed by the New Zealand Court of Arbitration do not differ significantly from those followed in the corresponding Court of the Commonwealth of Australia.^ They are less frequently and less clearly enunciated, and are somewhat more favorable to the viewpoint of employers. The minimum wage and the whole method of wage-fixing is diflFerent in both principle and technique, but in other respects the two courts are analogous. The New Zealand system lays stress on the superiority of arbitration over the method of the strike as a means of settling industrial disputes. Time and again the pre- siding judge has emphasized the object of the Industrial Conciliation and Arbitration Acts as consisting in securing the settlement of all industrial disputes by means of con- ciliation and arbitration. He has insisted that arbitration and strikes cannot exist together as remedies for the settlement of industrial disputes. When industrial unrest has been increasing, the judge has used such words of warning as the following:^ The workers of the Dominion must make up their minds which of these remedies they desire to see retained. They cannot have both, and they must elect which they will support. Principle of Conciliation Firmly Established Since 1908 the principle of conciliation has become firmly established as a primary consideration. It is now regarded as a necessary preliminary to arbitration. Prior to 1908 most of the objection to conciliation had come from employers, and most of the support from the workers. But more recently there has been an endeavor on the part of the workers to secure arbitration in preference to ^ See National Industrial Conference Board, Research Report No. 10, Arbi- tration and Wage-Fixing in Australia, pp. 34—37. * Awards and Agreements, New Zealand Court of Arbitration, Vol. IX, p. 59. 15 conciliation as a means to the advancement of industrial unionism. This endeavor has taken the form of bringing separate disputes forward as one dispute. Thus, in 1909 a union cited a large number of employers as parties to a single dispute, including such diverse groups as builders, contractors, quarry proprietors, local municipal councils, and iron-founders. The judge objected to the attempt to nullify the provisions of the Act concerning conciliation, and had the dispute divided into sections and referred as separate hearings to the conciliation commissioner,^ Court not Compelled to Render Award While the Court has always given a patient hearing to the subject matter of a dispute, it has reserved to itself the right to refrain from making an award or from altering an existing award or agreement where the circumstances did not seem to justify such alteration. The Amending Act of 1908 expressly permitted the Court to refuse to make an award if for any reason it considered it desirable to do so. This statutory protection arose out of the action of the Court in an agricultural dispute involving some 4,000 stockmen and farmers in the Canterbury districts. After a protracted and costly hearing before the Board of Conciliation, and an equally unsatisfactory hearing in arbitration, the Court determined not to make an award.^ It held that an award covering the whole of such an industry and fixing hours and wages justly was not practicable. In another case Involving a coal miners' union, the judge declared that there was no necessity for bringing the case before the Court, since there was no *' substantial question in dispute."^ In a further case the Court declined to do anything that would alter or affect the tenure of the award then in force covering the coal mining industry. After the award then in force had been issued, legislative measures defining the day's work In mines had altered conditions so that, as the employers demonstrated, a loss would fall upon them If the reduced workday with overtime came into force. The legislation was not to operate during the tenure of the award then in force. To render what it considered justice to the em- A'^'aHs and Agreements, New Zealand Court of Arbitration, Vol. X, pp. 339, 472. » Ibid., Vol. IX, pp. 517, 528. 3 Ibid., Vol. XVIII, p. 1179. 16 ployers, the Court declined to make any alterations in that award. ^ Conservative Attitude of Court In conformity with this principle is that by which the Court insists that working conditions and customs obtaining in the industry are not to be lightly changed. In 1902 the workers in the Canterbury woolen mills asked for a reduction in hours from 48 to 45 per week and for the abolition of piecework. Both demands were refused, on the following grounds :"- We are satisfied that no real cause for complaint exists and that these workers are well treated and well paid under the present system and we make no alteration in the condi- tions at present existing. On one occasion the Court was asked to abolish a recognized custom of industry, that of the contract system in mines. It refused to do so unless shown by preponderat- ing evidence that the change was necessary in the interests of justice. On another occasion the Court refused to insert a clause in an award requiring employers to give reasons for the dismissal of their men. It based its action on the grounds that men were not, and could not be, compelled to give reasons for leaving a job and that the existing custom could not lightly or justly be disturbed. Even as late as 1917 the same principle was explicitly laid down as in the following extract from a judgment of the Court :^ In the claim made by the union a great number of altera- tions and additions to the existing general conditions of employment were asked for. The Court has repeatedly laid it down that general working conditions which have been settled and acted upon for years will not be disturbed unless clear evidence is brought forward to show the necessity for amendment. An interesting application of this reluctance to alter existing awards was manifested in May, 1906. At that date the Colonial Sugar Refining Company and its em- ployees arrived at an agreement for an increase in wages * Quoted in Broadhead, State Regulation of Labour and Labour Disputes in New Zealand, p. 167. ^ Quoted ibid., p. 4L 'Awards and .\greements, New Zealand Court of .'\rbitration, Vol. XV'III, p. 428. 17 and a change in hours while an award was in force. The new agreement was brought before the Court, which did not alter the award. It showed how the award was the only enforceable agreement, but expressed its satisfaction that such an agreement as the new one could be arrived at, and left it to the industry to be observed voluntarily.^ Court's Position with Respect to Wage-Fixing In regard to wage-fixing no definite principle has been evolved. The Court invariably names a minimum wage in each award. But it should be noted that this minimum wage is not a minimum subsistence wage as is that awarded by the Arbitration Courts of Australia. ^ It is rather "an ideal wage such as an able-bodied worker of average ability ought to earn" and is generally "higher than the average wages prevailing in the trade at the time the award was made."^ This minimum sum is generally arrived at as a compromise between the demands of the union and the offers of the employers. The fact that the minimum wage is near the average wage in the industry gives prominence to the provision for permits to work at a lower wage. In fixing this lower wage the official charged with the duty is required to have regard to the worker's capability, his past earnings, and suchothercircumstances as such inspector orother person shall think fit to consider after hearing such evidence and argument as the union and such worker shall offer.* The permit given to such a worker is restricted in time, so as to protect the principle of the minimum in case the worker should improve in ability and become able to earn the minimum. Where an under rate is fixed for a person by reason of old age or permanent disability, the same contingency does not arise, and the period may be much longer. It should be noted that this provision for a permit tends to nullify the principle of a minimum wage. In 1906 and 1907 the unions began to ask that some form of profit-sharing be adopted. The response of the 1 Awards and Agreements, New Zealand Court of Arbitration, Vol. VII, pp. 233-235. "* National Industrial Conference Board, Research Report No. 10, Arbitra- tion and Wage-Fixing in Australia, pp. 34, 35. ' Stewart and Le Rossignol, State Socialism in New Zealand, p. 232. Cf. also Broadhead, ut supra, p. 57. * This condition is found in similar form In most awards. 18 Court was identical with that of the Australian Common- wealth. It pointed out that such a principle would involve the necessity of fixing a differential wage rate between the successful and the less successful employer, and would lead to confusion and irritation. The positive attitude of the Court is found in a statement from Mr. Justice Sim, then President of the Court :^ The Court should endeavor to give the men air remunera- tion for their work, regardless of whether employers get a profit or not. Profits could only be taken into consideration in extreme cases. There were cases where an increase in wages, would wipe out a business.* The question of increased cost of living has not become acute in New Zealand. There, food prices have not in- creased during the war more than 48 per cent above pre- war prices, while house rents have fallen.^ In some cases a war bonus of 10 per cent has been added but no per- manent increase given.^ "Preference" for Unions In view of the fact that proceedings in conciliation and arbitration rest upon the basis of organizations of em- ployers and workers, the principle of preference has come to play an important part in public discussion of the system, though its significance is really inconsiderable. As noted, the Amending Act of 1900 had specifically pro- vided for reciprocal preference between the industrial unions of employers and workers respectively, in the industry concerned. In practice, since the unions which registered under the Act often did not include all the workers in the industry, this provision was chiefly useful to the workers. Industrial unions of workers generally ask for preference but their request is not always granted. It is refused where the workers are widely scattered or where many businesses are involved. But where the members of a union form a large majority of the workers in the trade affected, and where the rules of the union allow for the easy entrance of non-unionists, preference is granted. ^ Quoted in Broadhead, ut supra, p. 61. * Awards and Agreements, New Zealand Court of Arbitration, Vol. XVIII, pp. 1298-1299. » Labour Gazette (London), October, 1919, p. 424. * Ibid., Vol. XVIII, p. 71. 19 A typical provision for preference runs as follows: If an employer shall hereafter engage any worker coming within the scope of the award who shall not be a member of the union, or who shall not become a member thereof within fourteen days after his engagement and remain such member, the employer shall dismiss such worker from his service if required to do so by the union, provided there is then a member of the union equally qualified to perform the particular work required to be done, and ready and willing to undertake to do the same. The provisions of the foregoing clause shall operate only if and so long as the rules of the union shall permit any worker coming within the scope of this award of good char- acter and sober habits to become a member of the union upon payment of an entrance fee not exceeding five shillings upon a written application, without ballot or other election, and to continue a member upon payment of subsequent con- tributions not exceeding sixpence per week. It should be noted that in 1913 firemen and reporters, who received an award fixing wages and hours, were granted preference, but were bound not to affiliate with or have connections or dealings with any federation of trade unions or any industrial federation of workers.^ Further, just as preference is a benefit to a union, so its withdrawal can be made a punishment. In an en- gineering dispute, in 1917, the union instructed all engi- neers to refuse to work overtime. This action was declared "unjustifiable and unreasonable" by the Court, which, to mark its disapproval, refused to continue the preference of employment which the union had previously enjoyed.^ The principle of preference does not go as far as com- pulsory unionism. The Court may provide for preference to unionists, in which the choice is left to the worker between unemployment and joining the union, but it cannot compel any person to join a union.^ Rights of the Employer From the inauguration of the arbitration system. New Zealand employers have been insistent on the assertion of their right to the full control of their factories. Their ' Awards and Agreements, New Zealand Court of Arbitration, Vol. XIV, p. 535. 2 /Z-jW., Vol. XVIII, p. 1189. ' See Annual Report of the Department of Labor, New Zealand, 1917. 20 contention has had substantial support from the Court. Thus, in an award dated 1899 applying to the Auckland Boot Trade, it was held : (a) It is the individual right of the employer to decide whom he shall employ or dismiss.' {b) It is the individual right of the workman to accept or refuse work from any employer. It is the manufacturer's right to introduce whatever machinery he deems necessary or his business may require. If a division or subdivision of labor is required for the purpose of working such machinery, such division or subdivision shall be allowed, subject to the minimum wage. Weekly hands may be employed in connection with machinery subject to payment ol the minimum wage hereinafter provided. No restriction shall be put upon the output of any machine or the method of working such machine. Every employer is entitled to the fullest control over the management of his factory and to make such regulations as he deems necessary for timekeeping and good order. In a later award the first two clauses do not appear but the substance of the others is repeated.^ 1 Cf. Awards and Agreements, New Zealand Court of Arbitration, Vol. V, p. 27, with ibid., Vol. XVIII, p. 3&4. ' In this connection, see the provisions for preference on p. 20. 21 V OPERATION OF THE NEW ZEALAND SYSTEM In order to appraise the results achieved by arbitration in New Zealand, a brief review of the actual working of the Act is desirable. The period of its operation is marked off into three significant divisions, with respect to the attitudes of the employers and the workers, respectively, and according to the status and prestige of the principle of conciliation in the system. These periods are as follows: 1894 — 1901, from the passing of the principal Act to the period when an amendment reduced the Boards of Concih- ation to a nullity. During this time the workers were heartily on the side of the Act, while the employers were distrustful and doubted both its necessity and its efficacy. 1901 — 1908, the period during which conciliation was very largely in abeyance, when the workers were receiving less from the Act, and when the employers were finding its operation a bulwark against the demands of the workers. 1908 — onward, when conciliation was restored, but when a large section of the workers was in open revolt against the Act, and employers were upholding it and utilizing its pro- visions in their own defense. First Period: 1894-1901 When the Act was passed in 1894 it met the whole- hearted support of the workers. Employers, however, were resolutely opposed to its compulsory features, and had thrice defeated similar measures in the preceding Parliament. When awards under the Act began to appear, they were found to give the workers continuous advances in wages, with, in many cases, reductions in the hours worked. Many of the awards also contained clauses granting preference to unionists. There were no strikes against the Act, for no strike could effect such favorable conditions as were obtained in the awards granted by the Court. Employers, on the other hand, were driven into an attitude of persistent opposition. Most of this centered on the working of the Boards of Conciliation. One or 22 two of them seem to have deserved much of the censure directed against their constitution and procedure. Their members held a fixed office and were consequently often called upon to investigate and settle disputes involving technical matters in which they had no competence. Because the members belonged each to one specific trade, their decisions in another and different trade frequently roused discontent. An effort to utilize experts to assist the Boards proved a failure. The procedure of the Boards was slow, costly, and partisan. Two at least were condemned on all sides for their inefi^ectiveness and their provocative tendencies. Their efforts at con- ciliation failed more often than they succeeded. In consequence, disputes had to be heard twice, and em- ployers came to assert that, if such a system was called for, the Arbitration Court was sufficient and the Boards should be abolished. It is evident that the attitude of the employers was responsible for this failure of the machinery for con- ciliation. They refused in large part to recognize the Act, neglected to organize, and failed to nominate em- ployer members of the Boards. In the latter contin- gency, the Government, exercising its prerogative and acting in their stead, nominated members. But these nominees were unrepresentative and often unsatisfactory to employers. The Act was amended to allow 2. smaller number of employers to organize, and it is significant of the reluctance of employers that at length as few as two employers were permitted to form an industrial union to utilize the machinery of the Court. Second Period: 1901-1908 The second period commences with the practical sus- pension of the principle of conciliation and the nullifying of the activity of the Boards. The employers were now more favorable to the system, since the Court of Arbitra- tion had already warned the workers that concessions would come more slowly. The awards of the Court consequently came in for much criticism from the workers and the President of the Court found himself in the posi- tion, unusual for a judge, of having his decisions traversed. In consequence, judges were unwilling to hold their positions longer than necessary, and changes in procedure arose from changes in the person of the President of the Court. 23 Dissatisfaction of Workers. As a result, industrial unions of workers came to assert their dissatisfaction with the awards, procedure, and spirit of the Court of Arbitration. Part of this discontent had arisen from the practical abandonment of the conciliation procedure. By the Amending Act of 1901 more was lost than was apparent. The Boards of Conciliation were demonstrated to have had a utility not to be measured by the number of recommendations they made or the number of these recommendations accepted by both sides. In respect to procedure alone, they dealt with masses of conflicting evidence; they heard every witness the workers brought forward; they narrowed down the differences between the parties and prepared a compact and concise case for the Court of Arbitration. Without this assistance the Court soon became congested. In its more legal and formal atmosphere the workers were ill at ease, hence their complaint at their annual Trades Councils' Confer- ence, 1906, that "they were getting too much law and too little justice."^ The decisions of the Court and the amending acts of Parliament combined to create great industrial unrest. This culminated in 1906 in the first strike New Zealand had had since 1894. In the year ending March 31, 1907, there were twelve strikes, and twelve more in the following year. The era of peace had apparently ended. Employers and the public alike came to feel that measures must be taken to prevent strikes. The Amending Act of 1908, therefore, defined strikes and lockouts, and prescribed penal measures against them. At the same time, however, it yielded so far to the complaints of the workers as to restore the method of conciliation. An official manifesto^ of the Wellington Trades and Labor Council, July 2, 1908, shows both their objections to the Act and the spirit in which they were ready to receive the amendments: We want the Act as originally conceived by the framer. . . . The failure of the present Act is due to the fact that em- ployers have designedly ignored the Boards [of Conciliation] and relied on the Court [of Arbitration]. The constitution of the Court, with its legal encumbrances and formula and the unconscious bias of its president, makes the odds two to one against the workers every time. The Court has of late, 1 Quoted in Broadhead, State Regulation of Labour and Labour Disputes in New Zealand, p. 177. * Quoted in Scholefield, G. H., New Zealand in Evolution, p. 240. 24 in addition to its failure to improve the industrial condition of workers, attempted to usurp the power of the legislature, and each attempt has been with the object of depriving the worker of constitutional rights already granted. We for the time being advise the workers to adhere to the principle. As an improved method of settling industrial disputes conciliation has always been advocated by the workers, and we again urge the importance of it. Only as a last resort should the Court, in our opinion, be resorted to. Third Period: 1908 Onward The third period opened with a more promising method of conciliation in vogue, but with penal provisions for strikes and lockouts also in force. These penal provisions, it should be noted, were applicable only to unions which were registered under the Act and bound by an industrial .agreement or award of the Court. Much resentment 'sprang up against them. They would compel the workers to obey the law, but would bring no additional benefits. Their effect was, therefore, to heighten a contrast hitherto little noticed between unions registered and unions not registered under the Act. The latter were seen now to have the advantage of being able to strike without being penalized. Among the former, consequently, there commenced a tendency to cancel registration under the Act. In the year following the passing of the Amending Act, eighteen unions made such cancellations. This procedure opened up a division between those unions which favored conciliation and arbitration and those which preferred the method of industrial unionism that was manifesting itself in New Zealand as in other parts of the world. The latter became organized into the New Zealand Federation of Labor, with the niiners' unions as its leading spirits. It advocated a policy of revolutionary socialism and set about the creation of a so-called Independent Labor Party. Through the years 1910 to 1914, as the record of strikes shows, it created a significant disturbance of the industrial peace that had hitherto prevailed. One strike, which illustrates the division within the unions and the support of the em- ployers to the Act, may be briefly described: In May, 1912, a strike broke out in the Waihi gold mines. The majority of the workers were members of the New Zea- land Federation of Labor, and had refused to work with the engine drivers and winders in the mines, who had formed 25 a union and registered it under the Act. Up to 1911 the miners' union, comprising most of the workers, had been registered but had cancelled its registration. The engine drivers, now deprived of the protection and benefit of the Act, had formed a separate union, and registered it in order to enter into an industrial agreement with their employers. It was their action which led to the strike. The strike "fizzled out." All new workers employed were formed into unions and registered under the Act, so that the employers could have a binding agreement entered upon. In 1913 an attempt was made at a general strike, but after a severe struggle was defeated. It is significant that few unions registered under the Act took part in the strike, which was engineered throughout by the New Zealand Federation of Labor. Further, the employers insisted on registration under the Act as one of the condi- tions of settlement, and the striking workers had to sub- mit to these terms. Thus the Act has, it seems, become a bulwark to the employers. Labor Disputes Investigation Act The persistent action of unions not registered under the Act in disturbing industrial peace and in seeking to break down the administration of the Industrial Conciliation and Arbitration Act led to the passage of an Act modeled on the Canadian Industrial Disputes Investigation Act. This Act dates from 1913 and provides additional ma- chinery for the investigation of disputes. It applies only to societies of workers not at the time bound by any award or industrial agreement under the Industrial Con- ciliation and Arbitration Act, 1908, and to employers of such workers. In case of a dispute relating to conditions of employment, notice may be given to the Minister of Labor of the parties and their claims. The Minister shall thereupon refer the matter for inquiry and conciliation to a conciliation commissioner or for investigation to a Labor Dispute Committee. This committee is to consist of not less than three nor more than seven members, one of whom is to be chairman. The other members are to be appointed, respectively, in equal numbers, by the em- ployers and workers, parties to the dispute, and they in turn elect an outside person as their chairman. In case of failure to complete the committee in any way, the Minister of Labor has the right to appoint. The committee is 26 required to endeavor to effect a settlement, and in case of failure, to report to the Minister and submit at least two proposals for settlement. If a settlement is not arrived at within fourteen days, the Registrar of Industrial Unions shall carry out a secret ballot among the workers. Where the Labor Dispute Committee has not made any recom- mendations the question put shall be whether a strike shall take place. Where recommendations have been made, their acceptance shall be submitted to ballot. At the same time, a similar ballot shall be put to employers, the word "lockout," however, being substituted for the word "strike." Where an agreement is arrived at by these means, it is to have the same weight and binding force as an industrial agreement under the Industrial Conciliation and Arbitration Act. Strikes are unlawful unless notice has been given of the presence of a dispute; before the expiration of seven days after publication of the results of secret ballot; and during currency of an agree- ment. The penalty is a fine not exceeding £10 on each individual. A lockout is unlawful under similar condi- tions and is punishable by a fine not exceeding £500. Aiding and abetting an unlawful strike or lockout is penalized equally in the case of worker and employer. 27 VI STATISTICAL COMPARISONS The relative success of the methods of conciliation and arbitration during the three differing periods above described is indicated in Table 2. In ascribing the settle- ment of a dispute to conciliation, account is taken only of those that were fully settled by this method. TABLE 2: NUMBER AND PERCENTAGE OF DISPUTES SETTLED BY CONCILIATION AND ARBITRATION, RESPECTIVELY, 1894-I9OI, I9O2-I908, I9O9-I918 Period Number Conciliation Arbitration Percentage Conciliation Arbitration Total 868 878 49.7 50.3 1894-1901 51 100 33.8 66.2 1902-1908 22 372 5.6 94.4 1909-1918 795 406 66.2 33.8 It will be seen that the number of disputes referred to conciliation has varied greatly during the periods. In the first period, employers took cases to the Arbitration Court twice as frequently as they settled them by voluntary conciliation. In the second period, while the conciliation machinery still remained, it was practically nullified. In the third period, disputes were settled by conciliation twice as frequently as they were referred to the higher Court. A statement more in detail of the activities of the tribunals of conciliation and arbitration since 1904 is available and is summarized in the following Table 3. 28 TABLE 3 : INDUSTRIAL AGREEMENTS, RECOMMENDATIONS, AND AWARDS IN CONCILIATION AND ARBITRATION, I9O4- I918 (Annual Reports, New Zealand Department of Labor) Year ending Industrial Recommendations Awards March 31st Agreements in Conciliation in Arbitration Total 358 1,1G7 1,SS3 1904 19 13 25 1905 15 10 26 1906 5 7 52 1907 4 12 59 1908 10 15 98 1909 12 9 88 1910 14 102 89 1911 17 87 74 1912 25 119 80 1913 32 118 94 1914 42 166 93 1915 34 93 71 1916 21 134 102 1917 63 159 168 1918 45 123 114 In this table industrial agreements, recommendations of conciliation tribunals, and awards of the Court of Arbitration are given separately. It must be remembered that industrial agreements are, in most cases, arrived at before conciliation tribunals, and in every case are in- stances of voluntary conciliation. Further, industrial agreements arrived at in conference are, in a considerable number of cases, taken to the Court of Arbitration and made into awards, so as to bind not merely the parties, but all engaged in the same industry in the specified locality. This action is taken in most cases by employers to safeguard themselves against the competition of other employers whom only an award could compel to pay the same rates of wages. This custom tends, therefore, to exaggerate somewhat the activity of the Court of Arbi- tration as compared with the conciliation tribunals. A closer analysis of the activities of the Councils of Conciliation since their inauguration in 1910 is given in Table 4. This apportions the disputes into those fully settled, those in which a considerable measure of agree- ment had been arrived at, and those where, in default of any measure of agreement by conciliation, the whole matter was referred to the Court of Arbitration. 29 TABLE 4: DISPUTES REFERRED TO AND DISPOSED OF BY COUNCILS OF CONCILIATION, I9IO-I918 (Annual Reports, New Zealand Department of Labor) Year ending Number Fully Number Partly Number Referred to Court March 31st Total Settled Settled of Arbitration <• Total 1^01 795 216 190 1910 102 67 23 12 1911 87 65 14 8 1912 119 86 19 14 1913 118 74 23 21 1914 166 112 28 26 1915 101 61 23 17 1916 177 103 31 43- 1917 190 127 32 31 1918 141 100 23 18 " These form only a portion of cases handled by that Court; see Table 3. The fact that of these 1,201 disputes less than 200 were referred to the Court of Arbitration is a clear illustration of the importance of conciliation in the New Zealand sys- tem. As stated above, the Act allows what are known as under-rate workers to apply for permits to work at a rate lower than the minimum prescribed in an award. The following Table 5 gives the number of such permits granted during the years 1907-1915. TABLE 5: PERMITS GRANTED UNDER-RATE WORKERS, I907-I915 (Annual Reports, New Zealand Department of Labor) Year ending Permits Year ending Permits March 31st Granted March 31st Granted 1907 239 1913 199 1908 265 1914 208 1909 311 1915 122 1910 227 1911 289 1912 176 The number of strikes that have occurred in New Zealand since the inauguration of the system of arbitra- tion is tabulated in the following Table 6. With such 30 small figures as are therein shown, there is no need to add the usual statistics of hours and wages lost. Since few of the strikes have been of long duration, the loss in hours and wages has likewise been small. TABLE 6: NUMBER OF STRIKES IN NEW ZEALAND, 1894- I918 (Annual Reports, New Zealand Department of Labor) Year ending Number of Year ending Number of March 31st Strikes March 31st Strikes 1894-1905 nil 1912 20 1906 1 1913 23 1907 12 1914 46 1908 12 1915 4 1909 4 1916 7 1910 11 1917 8 1911 15 1918 6 The penal provisions of the Act against strikes and breaches of awards and agreements are automatically- applied. Table 7 presents the statistics of action taken to enforce awards and prosecute for strikes and lockouts. Lockouts seldom occur. TABLE 7: NUMBER OF PROSECUTIONS FOR ENFORCEMENT OF AWARDS AND FOR STRIKES AND LOCKOUTS, I9IO-I918 (Annual Reports, New Zealand Department of Labor) Year ending Enforcement of Prosecutions for March 31st Awards Strikes and Lockouts 1910 661 6 1911 539 69 1912 464 2 1913 436 50 1914 363 7 1915 340 — 1916 285 — 1917 194 17 1918 288 ~ The cost of administration of the system since the year 1907 is given in Table 8. 31 TABLE 8: COST OF ADMINISTRATION OF CONCILIATION AND ARBITRATION, I907-I915 (Annual Reports, New Zealand Department of Labor) Year ending Cost Year ending Cost March 31st £ March 31st £ 1907 4,525 1913 8,172 1908 4,075 1914 7,756 1909 7,103 1915 7,962 1910 6,902 1911 6,795 1912 6,924 1^ The period selected comprises two years before the great activity following on the Amending Act of 1908, when the Councils of Conciliation were created. Each of the three commissioners appointed under this Act receives a salary of £500. The salaries paid to the three members of the Court of Arbitration and to the three commissioners total £4,300. This item forms, therefore, a large proportion of the total cost of the system. The system has been accompanied by a general increase in wages. Evidence of this is furnished by comparisons of wages in several occupations from the earliest to the latest awards. These are set forth in Table 9 for boot- makers; painters, drivers, brick, pottery and clay workers; butchers; carpenters and joiners, and "laborers." TABLE 9: MINIMUM WAGE RATES FOR VARIOUS OCCUPA- TIONS FROM EARLIEST TO LATEST AWARDS Laborers Bootmakers Painters Drivers Minimum Rate Minimum Rate Minimum Rate Minimum Rates Year Per hour Year per hour Year per hour Year Hourly Weekly d d d d i d 1903 10.5 1899 10.0 1898 13.0 1902 12.0 45.0 1906 10.5 1903 11.25 1901 14.0 1906 12.0 42.0 1909 12.0 1905 12.0 1904 15.0 1909 13.5 44.0 1913 14.0 1909 12.0 1908 15.0 1912 13.5 48.0 1916 14.0 1912 1916 14.0 15.0 1911 1913 1916 15.0 16.5 18.0 1916 15.0 52.0 32 TABLE 9: MINIMUM WAGE RATES FOR VARIOUS OCCUPA- TIONS FROM EARLIEST TO LATEST AWARDS Continued Brick. Pottery, and Clay Workers Carpenters and J oiners Butchers (general) Minimum Rates Minimum Rates Minimum Rates Year Hourly Weekly Year Hourly Weekly Year Weekly d 5 d d J d i d 1903 12.0 45.0 1S99 14.0 48.0 1899 35.0 1904 12.0 45.0 1902 15.0 51.0 1902 40.0 1909 12.0 45.0 1905 15.0 51.0 1906 43.0 1911 12.75 45.0 1907 IG.O 55.0 1909 50.0 1915 13.5 1911 16.5 57.0 1912 51.0 1914 18.0 * 1916 60.0 1917 18.0 * ♦Weekly rates not fixed. It will be noted that in practically every case the in- crease over the respective periods covered was substantial. While other causes presumably contributed to the ad- vance, it is clear from the preceding discussion that the system was an important factor. These tables also reflect the conservative character of the decisions of the Councils and the Court. First they suggest that the existing award was not to be altered unless good cause could be shown. Thus, the minimum hourly and weekly rates of brick, pottery, and clay workers remained unaltered for several years, while in every occu- pation included except that of general butcher, an award was repeated at least once, so far as minimum rates were concerned. Second, such increases as were granted, especially before the war, were slight. In fact they were in some cases less than the increase in the cost of living. The relation of the minimum wage to the scale of wages prevailing in an industry should be briefly noted. As stated above, the minimum wage in New Zealand is close to the average wage in the trade. The Secretary of the Department of Labor in his Annual Report for 1909 as- serted that few workers had accepted the minimum wage, and most of them were earning more. For example, in the case of the bootmaking trade, in which, as shown in Table 9 above, the rate was as low as for unskilled laborers, it was asserted that in Auckland 66 per cent, in 33 Wellington 85 per cent, in Christchurch 66 per cent, and in Dunedin 50 per cent of the workers were receiving wages above the minimum. For all trades in the centers given above, the proportions were, respectively, 61.25%, 57.5%, 47%, and 46.5%. In 1910 the Minister altered these latter figures to 63%, 64%, 63%, and 56.5%, respectively, and concluded: There is sufficient evidence to show that in our manufactur- ing industries at least an average of 50 per cent of the workers compared received more than the rate granted in the awards of the Court of Arbitration. In other words the minimum wage has not been a maximum. 34 VII RESULTS OF THE NEW ZEALAND SYSTEM It must be said of the New Zealand system of concilia- tion and arbitration that it has not realized all that was hoped for from its introduction. Notwithstanding the penal provisions against strikes enforced since 1908, strikes have continued to occur and even a general strike was attempted. The system has, therefore, by no means given universal satisfaction. At times the employees have been discontented, at other times the employers, according as the system in actual operation appeared to work to the disadvantage of the one or the other party. Again, the awards of the Court have not been universally respected, as the considerable number of prosecutions for the enforcement of awards indicates. Nevertheless, it appears that the system, especially in respect to conciliation, has achieved substantial results. As the statistical comparisons already given show, the system of conciliation has in a broad way been effective in the adjustment of industrial disputes. Two-thirds of all controversies over wages and working conditions have been settled by agreements and a significant portion of the remainder has been partially settled in the same way. It is clear, therefore, that conciliation has been a very essential feature of the New Zealand system. It must be borne in mind that the efficacy of conciliation may be attributable in part to the existence of the principle of compulsory arbitration, which might easily make the two parties more disposed to compromise, on grounds of expediency, if for no other reason. Conciliation and arbitration in New Zealand have been accompanied by increased wages, although numerous other factors have contributed to the increase. It may be noted that the minimum wages awarded by the Courts are exceeded in the case of a large share of the workers. In other words, the minimum wage has not tended to become the maximum. Moreover, contrary to the experience in Australia,^ it would appear that the ^National Industrial Conference Board, Research Report No. 10, Arbitration and Wage-Fixing in Australia, p. 41. 35 awards in New Zealand have not resulted In a relative under-valuation of skill by raising the wages of the un- skilled workmen. While the system has contributed to a shortening of the workday, much if not most of the reduction in work- hours is directly attributable to the legislative enactment of 1901 which introduced the 48-hour week. To sum up, it may be said that the system of concilia- tion and arbitration in New Zealand, while by no means curing industrial unrest, has shown the value of con- ciliation as a means of settling industrial disputes and preventing them from becoming more serious. For a long time after the adoption of the Act there were practi- cally no strikes and, despite some increase in recent years, they have on the whole been relatively infrequent. It is true that industrial peace prevailed from 1894 to 1905 largely because workers were securing most of their de- mands. These demands, however, were in general moderate and justified by the increasing prosperity of the country. In the later awards of the Court more con- sideration appears to have been given to the interests of employers. In particular, there has been a noteworthy disposition on the part of the Courts to refuse unreason- able demands. This undoubtedly has tended to accent- uate the industrial unrest, but no just system of wage- fixing could have done otherwise, and the fact that in- dustrial unrest has occurred is not to be regarded so much a reflection on the system of conciliation and arbitration as a reflection of a great variety of causes, many of them world-wide in their import, which were beyond the ability of any arbitration system to solve effectively. 36 Appendix A The Important provisions of the various amendatory legislation to the original Act of 1894 are briefly epito- mized below. Amending Act of 1895 stipulated that a minimum number of five employers could associate to form an industrial union of employers. It provided for two experts to be nominated to assist the Court in dealing with technical matters. Other minor amendments were intended to make matters of administration more simple or more complete. Amending Act of 1896 was only regulative in character and could have been met by regulation instead of legisla- tion. The most important provision was that no person while sitting on one Board should be eligible for nomina- tion or election to a seat on any other Board. The same year by regulation the Government decided that Board members should be paid a fee of one guinea for each day they sat. Amending Act of 1898 struck out from the sub-title of the Act of 1894 the words "to encourage the formation of industrial unions and associations." It made more explicit the power of the Court to determine what con- stituted a breach of an award, and what penalty might be attached thereto, and enlarged the Court's jurisdiction and powers as to matters before it at any time. Power was also given to prescribe a minimum rate of wages, and provision was made for fixing a lower rate for workers unable to earn the prescribed minimum. The Consolidating Act of 1900 enlarged the definition of "industrial matters," hitherto restricted to wages, hours, employment of children and young persons, by adding: {a) the claim of members of an industrial union of em- ployers to preference of service from unemployed members of an industrial union of workers. {b) The claim of members of industrial unions of workers to be employed in preference to non-members. 37 91904 The Act also reduced the minimum number of em- ployers necessary to form an employers' industrial union to two, retaining the original figure of seven in the case of workers. An important provision was inserted in this Act which was to appear in fuller form in 1908. Until a dispute had been disposed of neither the industrial unions parties to the dispute, nor the individual em- ployers and workers affected, should do anything in the nature of a strike or lockout on penalty of a fine not exceeding £50. By another provision, the Court might render an award which could extend beyond any one of the eight industrial districts and even to the whole of New Zealand. Amending Act of 1901 made a number of regulative changes, but added the right of the Court to limit an award to a city or town within an industrial district or to extend the award after limitation on application by the proper authorities. New definitions of "worker" and "industry" were inserted, so that the provisions of the Act could apply to practically every wage-earner. The Court of Arbitration had disclaimed jurisdiction over grocers' clerks, street railway employers, and similar workers, on the ground that their occupations were not properly industrial. The most important amendment introduced in this year, 1901, was one allowing a dispute to go directly to the Court of Arbitration without a hearing before a Board of Conciliation. Amending Acts of 1903. In both the amending Acts of this year there were several regulative changes, but the second amending Act added power to extend an award to another industrial district where the award related to a trade or manufacture the products of which entered into competition with those manufactured in the industrial district where the award was in force. Two sections were added, defining the circumstances under which the dismissal of an employee would be a breach of the Act, and providing that action in combination, whether by employers or workers, to defeat an award would be punished as a breach of an award. Amending Act of 1905 introduced only three short regulative clauses. Amending Act of 1906 introduced several more regula- tive changes, and made more definite the procedure allow- 38 ing for the issue of permits to work at less than the minimum wage. Applications were henceforth to be made in writing to the Registrar of the Court, who was to notify the secretary of the industrial union of workers in the trade. A hearing was then to be held where the views of the union on the matter could be expressed. A permit thus became an official authorization, not an arrangement between the worker and the union. No worker was to be subject to a fine because he refused to work at the rate of wages fixed in an award, unless such refusal was in pursuance of an intention to defeat the award. Amending Act of 1906 provided that the President of the Court should henceforth be known as the Judge of the Court. The nominated members were henceforth to receive an annual remuneration of £500. Amending Act of 1908 introduced definitions of strikes and lockouts and fixed penalties for persons taking part in or in any way inciting, instigating, and abetting strikes or lockouts. Special penalties were imposed with respect to strikes and lockouts in certain specified industries. Unions convicted of having instigated or abetted a strike were liable to suspension of their registration for a period not exceeding two years. The most important change introduced by this Amend- ing Act was the abolition of the Conciliation Boards, and the substitution therefor of Councils of Conciliation, and the provision, repealing the Amendment of 1901, that "no industrial dispute shall be referred to the Court until it has been first referred to a Council of Conciliation." The machinery and regulations for the Councils were em- bodied in the Act. Assessors to assist the chairman of the Council of Conciliation must be or have been engaged in the industry in respect of which the dispute had arisen. The powers and duties of the Council with respect to dis- putes were to be practically the same as those of the earlier Boards of Conciliation. Other provisions penalized employers for dismissing workers for taking part in trade union activities or for action in connection with an arbi- tration award, or because such person was entitled to the benefit of an award. The onus of proof that a worker was dismissed for other reasons was laid upon the em- ployer. 39 The Amending Act of 1911 provided for an industrial agreement to be made into an award where the agreement bound a majority of the workers in the district. An award might also be extended over more than one industrial district, or even over the whole country. Provision was made for the procedure in a dispute that had not been settled by conciliation and concerning which the Council of Conciliation had made a recommendation. The parties were to be afforded the opportunity of expressing their disagreement with the recommendation. Should they fail to do so, the recommendation was to operate as an award. In case of their signifying their disagreement, the matter was to be referred to the Court of Arbitration forthwith. The Amending Act of 1913 consisted of two clauses, and was passed expressly to provide that the recommendation of a Council of Conciliation to which the parties had not objected should operate as an industrial agreement, not an award. In explanation of this distinction it should be said that an industrial agreement binds only the parties agreeing thereto, while an award covers all em- ployers and all workers in the industry in the district specified. Appendix B ABRIDGED TEXT OF NEW ZEALAND INDUSTRIAL CONCILIATION AND ARBITRATION ACT, 1908, WITH AMENDMENTS "Industrial matters" means all matters affecting or relating to work done or to be done by workers, or the privileges, rights, and duties of employers or workers in any industry, not involving questions which are or may be the subject of proceedings for an indictable offense; and, without limiting the general nature of the above definition, includes all matters relating to (a) The wages, allowances, or remunerations of workers employed in any industry, or the prices paid or to be paid therein in respect of such employment; (b) The hours of employment, sex, age, qualification, or status of workers, and the mode, terms, and conditions of employment; (f) The employment of children or young persons, or of any person or persons or class of persons, in any industry, or the dismissal or a refusal to employ any particular person or persons or class of persons therein; (d) The claim of members of an industrial union of em- ployers to preference of service from employed members of an industrial union of workers; ((f) The claim of members of industrial unions of workers to be employed in preference to non-members; (/) Any established custom or usage of any industr)-, either generally or in the particular district affected. . . . "Industry" means any business, trade, manufacture, undertaking, calling, or employment in which workers are employed. "Worker" means any person of any age of cither sex em- ployed by any employer to do any work for hire or reward. Subject to the provisions of this Act, any society consists of not less than three persons in the case of employers, or fifteen in the case of workers, lawfully associated for the purpose of protecting or furthering the interests of employers or workers or in any connection with any specified industry or indus- tries in New Zealand, may be registered as an industrial union under this Act on compliance with the following provisions. . . . The effect of registration shall be to render the industrial union, and all persons who are members thereof at the time of registration, or who after such registration become mem- bers thereof, subject to the jurisdiction by this Act given to a Board and a Court respectively and liable to all the provisions of this Act, and all such persons shall be bound by the rules of the industrial union during the continuance of their member- ship. Any Council or other body, however designated, repre- senting not less than two industrial unions of either em- ployers or workers may be registered as an industrial association of employers or workers under this Act. The parties to industrial agreements under this Act shall in every case be trade unions or industrial unions or industrial associations or employers; and any such agreement may provide for any matter or thing affecting any industrial matter, or in relation thereto, or for the prevention or settlement of an industrial dispute. Every industrial agreement shall be for a term to be specified therein, not exceeding three years from the date of the making thereof. . . . Notwithstanding the expiring of the term of the indus- trial agreement, it shall continue in force until superseded by another industrial agreement or by an award of the Court, except where . . . the registration of an industrial union of workers bound by such agreement has been cancelled. The Governor may from time to time . . . constitute and divide New Zealand or any portion thereof into such industrial districts, with such names and boundaries, as he thinks fit. The Governor may from time to time appoint such persons as he thinks fit (not exceeding four in number) as conciliation commissioners ... to exercise the powers and jurisdiction hereinafter set forth. Any industrial union, industrial association, or employer being a party to an industrial dispute, may make applica- tion in the prescribed form to the commissioner exercising jurisdiction within the industrial district in which the 42 dispute has arisen that the dispute may be heard by a Council of Conciliation. It shall be the duty of the Council to endeavor to bring about a settlement of the dispute, and to this end the Council shall, in such manner as it thinks fit, expeditiously and carefully inquire into the dispute and all matters affecting the merits and the right settlement thereof. In the course of the inquiry the Council shall make all such suggestions and do all such things as it deems right and proper for inducing the parties to come to a fair and amicable settlement of the dispute. The procedure of the Council shall in all respects be absolutely in the discretion of the Council, and the Council shall not be bound to proceed with the inquiry in any formal manner, or formally to sit as a tribunal, or to hear any addresses or evidence save such as the Council deems necessary or desirable. The Council may on the inquiry hear any evidence that it thinks fit, whether such evidence would be legally admissible in a court of law or not. No barrister or solicitor, whether acting under a power of attorney or otherwise, shall be allowed to appear or be heard before the Council. If a settlement of the dispute is arrived at by the parties in the course of the inquiry, the terms of the settlement shall be set forth as an industrial agreement. If no settlement of the dispute is arrived at by the parties in the course of the inquiry, the Council shall endeavor to induce the parties to agree to some temporary and provisional arrangement until the dispute can be determined by the Court of Arbitration. . . . the Council may make such recommendation for the settlement of the dispute according to the merits and substantial justice of the case as the Council thinks fit. . . . No such recommendation shall be made unless it is unanimously agreed to by all the assessors, and the com- missioner shall have no vote in respect of the making or nature of any such recommendation. Where a recommendation of a Council of Conciliation is filed with the Clerk of Awards with the notification that no settlement has been arrived at, the clerk shall, as 43 soon as practicable, give notice in the prescribed form to all the parties to the dispute of the filing of the recom- mendation and of the place where it may be seen, and requiring them, if they disagree with the recommendation, to signify their disagreement within one month, and, if they so desire, to state reasons for such disagreement. If within the time aforesaid no notice of disagreement has been filed, the clerk shall as soon as possible thereafter give notice in the prescribed form to the parties of the fact, and the recommendation shall, as from seven days after the date of that notice operate and be enforceable in the same manner as an industrial agreement duly executed and filed by the parties. If any party to the dispute duly signifies his disagree- ment with the recommendation, the dispute shall be referred by the clerk to the Court for settlement, and thereupon the dispute shall be before the Court, and the Court may, after hearing any of the parties that have signified their disagreement, incorporate the terms of the recommendation in an award. Where a notification that no settlement has been arrived at has been delivered to the Clerk of Awards and the Council makes no recommendation for the settlement of the dispute, the clerk shall forthwith refer the dispute to the Court for settlement, and thereupon the dispute shall be deemed to be before the Court. There shall be one Court of Arbitration for the whole of New Zealand for the settlement of industrial disputes pursuant to this Act. The Court shall consist of three members, who shall be appointed by the Governor. Of the three members of the Court, one shall be the judge of the Court, and shall be so appointed, and the other two (hereinafter called "nominated members") shall be appointed as herewith provided. Of the two nominated members of the Court one shall be appointed on the recommendation of the industrial unions of employers, and one on the recommendation of the industrial unions of workers. The Court shall have jurisdiction for the settlement and determination of any industrial dispute referred to it under the provisions of this Act. 44 Any party to the proceedings before the Court may appear personally or by agent, or, with the consent of all the parties, by barrister or solicitor, and may produce before the Court such witnesses, books, and documents as such party thinks proper. The Court shall in all matters before it have full exclu- sive jurisdiction to determine the same in such_ manner in all respects as in equity and good conscience it thmks fit. The award, by force of this Act, shall extend to and bind as subsequent party thereto every trade union, industrial union, industrial association, or employer who, not being an original party thereto, is at any time whilst the award is in force connected with or engaged in the industry to which the award applies within the industrial district to which the award applies. The award, by force of this Act, shall also extend to and bind every worker who is at any time whilst it is m force employed by any employer on whom the award is binding; and if such worker commits any breach of the award he shall be liable to a fine not exceeding £10, to be recovered in like manner as if he were a party to the award. When a strike takes place in any industry every worker who is or becomes a party to the strike and who is at the commencement of the strike bound by any award or industrial agreement affecting that industry, shall be liable to a penalty not exceeding £10. When a lockout takes place in any industry every employer who is or becomes a party to the lockout and who is at the commencement of the lockout bound by any award or industrial agreement affecting that industry, shall be liable to a penalty not exceeding £500. Everv person who incites, instigates, aids, or abets an unlawful strike or lockout or the continuance of any such strike or lockout, or who incites, instigates, or assists any person to become party to any such strike or lockout is liable, if a worker, to a penalty not exceeding £10, and it an industrial union, industrial association, trade union, employer, or any person other than a worker, to a penalty not exceeding £200. If any person employed in any of the industries to which this section applies strikes without having given to his employer, within one month before so striking, not less 45 than fourteen days notice in writing, signed by him, of his intention to strike, or strikes before the expiry of any notice so given by him, the striker shall be liable on summary conviction before a magistrate to a fine not exceeding £25. (Employers who lock out without similar notice are liable to fine of £500.) (This section applies to the following industries: gas, electricity, water and milk supply, slaughter of meat, sale or delivery of coal, and working of any ferry, tramcar, or railway.) (A union convicted under this penal section of the Act may have its registration suspended for a period not exceeding two years, thereby being deprived of the protec- tion of the Court and of any industrial agreement or award hitherto in force in that industry.) Every industrial union, industrial association, or employer who commits a breach of an award or industrial agreement shall be liable to a penalty not exceeding £100 in respect of every such breach. Every employer who dismisses from his employment any worker by reason merely of the fact that the worker is an officer or a member of an industrial union, or merely because such worker has acted as an assessor on a Council of Conciliation or has represented his union in any negotiations or conference between employers and work- ers, or merely because such worker is entitled to the benefit of an award, order, or an agreement, is liable to a penalty not exceeding £25. In every case where the worker dismissed was im- mediately preceding his dismissal a president, vice-presi- dent, secretary, or treasurer of an industrial union, or an assessor for a Council of Conciliation, or represented his union in any negotiations or conference between employers and workers, it shall lie on the employer to prove that such worker was dismissed for a reason other than that he had acted in any of the said capacities. 46 UNIVERSITY OF CALIFORNIA LIBRARY Los Angeles This book is DUE on the last date stamped below. SEP 2 6 198p 1 Pip UC SOUTHERN Rtf / AA 001 153 175 vc^- '^ .^ V *i:\ H\ r>^ i/K