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REPORTS ON

RECONSTRUCTION

Prom

' ENGLISH SOURCES

Reprinted fey

UNITED STATES SHIPPING BOARD
EEISRGENCY. FLEET CORPORATION
INDUSTRIAL RELATIONS DIVISION

Philadelphia, 1918644? 2-3

f/33M

INTERIM REPORT

on

JOINT STANDING INDUSTRIAL

COUNCILS*RECONSTRUCTION COMMITTEE

'Sub-Committee cn Relations between Employers and Employed

INTERIM REPORT ON JOINT STANDING INDUSTRIAL
COUNCILS*

The Right Hon* J.	H.	WHITLEY,	M. p,, Chairman.

Mir* F.	S*	Button,

Mr* G.	J.	Carter.

Professor S. J, Chapman,

Sir Gilbert Claughton, Bart,

Mr, J.	R.	C;iynes,	.M,P«

Mr* J*	A,	Hobson,

Miss Susan Lawrence*

Mr* J. J. Mallon,

Sir Thos, R. Ratcliffe-Ellis,

Mr, Robert Smillie*

Mr. Allan M, Smith,

Miss Mona Wilson*

Mr, H."J* Wilson, Ministry of Labour
Mr, Arthur Greenwood,

Secretaries,To th.e Eight Honourable D. Lloyd George, .vi,P., Prime wlinister.
Sir,

be have tile honour to submit the following Interim Report on
Joint Sranding Industrial Councils#

2. The terms of reference to the Sub-Committee are;-

,((1) To nuke and consider suggestions for securing a perma-
nent improvement in the relations between employers and workmen#

"(2) To recommend means for securing that industrial conditions
affecting the relations between employers and workmen shall
be systematically reviewed by those concerned, with a view to
improving conditions in the future.

3« After a general consideration of our duties in relation to
the matters referred to us, we decided first to address ourselves to the
problem of establishing permanently improved relations between employers
and employed in the main industries of the country, in which there exist
representative organizations on both sides. The present report accordingly
deals more especially with these trades. We are proceeding with the
consideration of the problems connected with the industries which are
less well organized.

4.	We appreciate that under the pressure of war both employers and
workpeople anci. their organizations are very much preoccupied, but, not-
withstanding, we believe it to be of the highest importance that our
proposals should be put before those concerned without delay, so that
employers and employed may meet in the near future and discuss the
problems before them.

5.	The circumstances of the present time are admitted on all sides
to offer a great opportunity for securing a permanent improvement in the
relations between employers and employed, while failure to utilize the
opportunity may involve the nation in grave industrial difficulties at the
end of the war.

It is generally allowed that the war almost enforced some reconstruc-
tion of industry, and in considering the subjects referred to us we have
kept in view the need for securing in the development of reconstruction
the largest possible measure of co-operation between employers and
employed.

In the interests of the community it is vital that after the war
the co-operation of all classes, establisheduduring the war, should continue,
and more especially with regard to the relations between employers and
employed. For securing improvement in the latter, it is essential that
and proposals put forward should offer to workpeople the means of attain-
ing improved conditions of employment and a higher standard of comfort
generally, and involve the enlistment of their active and continuous co-
operation in the promotion of industry.

To this end, the establishment for each industry of an organization,
representative of employers and workpeople, to have as its object the
regular consideration of matters affecting the progress and well-being of
the trade from the point of view of all those engaged in it, so far as this
is consistent with the general interest of the community, appears to us
necessary,

6.	ilany complicated problems have arisen during the war.which
have a bearing both on employers and workpeople, and may affect the
relations between them. It is clear that industrial conditions will
need careful handling if grave difficulties and strained relations areto toe avoided after the war has ended* The precise nature of the
problems to toe faced naturally varies from industry to industry,
and even from branch to branch within the same industry* Their
treatment consequently will need an intimate Knowledge of the facts
and circumstances of each trade, and such Knowledge is to be found
only among those directly connected with the trade*

?» With a view to providing means for carrying out the polioy
outlined above, we recommend that His Majesty's Government should
propose without delay to the various associations of employers and
employed the formation of Joint Standing Industrial Councils in the
several industries, where they do not already exist, composed of
representatives of employers and employed, regard being paid to
the various sections of the industry and the various classes of labour
engaged*

8., The appointment of a Chairman or Chairmen should, we think,
be left to the Council who may decide that these should be -

(1)	A Chairman for each side of the Council;

(2)	A Chairman and Vice-Chairman selected from the mem-
bers of the Council (one from each side of the Council);

(3)	A Chairman chosen by the Council from independent
persons outside the industry; or

(4)	A Chairman nominated by such person or authority' as
the Council may determine or, failing agreement, by the
Government#

9. The Council should meet at regular and frequent intervals*

10* The objects to which the consideration of the Councils
should be directed should be appropriate matters affecting the sever-
al industries and particularly the establishment of a closer co-opera-
tion between employers and employed* Questions connected with demobili-
zation will call for early attention.

11.	One of the ohief factors in the problem, as it at first
presents itself, consists of the guarantees given by the Government,
with Parliamentary sanction, and the various undertakings entered
into by employers, to restore the Trade Union rules and customs sus-
pended during the war. While this does not mean that all the lessons
learnt during the war should be ignored, it does mean that the definite
co-operation and acquiescence by both employers and employed must

be a condition of any setting aside of these guarantees or under-
takings, and that, if new arrangements are to be reached, in them-
selves more satisfactory to all parties but not in strict accordance
with the guarantees, they must be the joint work of employers and
employed,

12,	The matters to be considered by the Councils must inevitably
differ widely from industry to industry, as different circumstances
and conditions call for different treatment, but we are of opinion
that the suggestion set forth below ought to be taken into account,
subject to such modification in each case as may serve to adapt them
to the needs of the various industries*

.1?. In the well-organized industries, one of the first questions
to be considered should be the establishment of local and works
organizations to supplement and make more effective the work of the
central bodies, It is not enough to secure co-operation at the centre
between the national organizations; it is equally necessary to enlist
the activity and support of employers and employed in the districts
and in individual establishments. The National Industrial Council
should not be regarded as complete in itself; what is needed is a
triple organization-in the workshops, the districts, and nationally.

2Moreover, it is essential that the organization at each of these
three stages should proceed on a common principle, and that the
greatest measure of common action between them should be secured,

14* With this end in view, we are of opinion that the following
proposals should be laid before the National Industrial Councilss-

(a)	That District Counoils, representative of the Trade
Unions and of the Employers* Association in the industry, should
be created* or developed out of the existing maohinery for
negotiation in the various trades,

(b)	That Works Committees, representative of the man-
agement and of the workers employed, should be instituted in
particular works to act in Hoae co-operation with the district
and national machinery*

As it is of the lightest importance that the scheme making pro-
vision for these Committees should be such as to secure the support
of the Trade Unions and Employers* Associations concerned, its design
should be a matter for agreement between these organisations*

Just as regular meetings and continuity of co-operation are essen-
tial in the case of the National Industrial Councils, so they seem
to be necessary in the oase of the distriot and works organizations.

The object is to secure oo-speration by granting to workpeople a
greater share in the consideration of matters affecting their industry,
and this can only be achieved by keeping employers and workpeople in
constant touch*

15* The respective functions cf Works Committees, Distriot Coun-
cils, and National Councils will no doubt require to be determined
separately in accordance with the varying conditions of different
industries. Care will need to be taken in each case to delimit
accurately their respective functions, in order to avoid overlapping
and resulting friction. Per instance, where conditions of employ-
ment are determined by national agreements, the District Councils
or Works Commattees should not be allowed to contract out of con-
ditions so laid down, nor, where conditions are determined by local
agreements, should such power be allowed to Works Committees*

16* Among the questions with which it is suggested that the
National Councils should deal or a3.looa.te to District Councils or
Works Committees the following may be selected for special
mention{-

(i)	The better utilization of the practical knowledge and
experience of the workpeople.

(ii)	Means for securing to the workpeople a greater shore
in and responsibility for the determination and observance of
the conditions under which their work is carried on*

(iiij The settlement of the general principles governing the
conditions of employment, including the methods of fixing, pay-
ing, and readjusting wages, having regard to the need for
securing to the workpeople a share in the increased prosperity
of the industry,	*

(iv)	The establishment of regular methods of negotiation
for issues arising between employers and workpeople, with a
view bo4h to the prevention of differences, and to their better
adjustment when they appear*

(v)	Means of ensuring to the workpeople the greatest pos-
sible security of earnings and employment, without undue
restriction upon change of occupation or employer,

(vif^Methods of fixing and adjusting earnings, piecework
prices, &C,, and of dealing with the many difficulties which arise
wxzh regard to the method and amount of payment apart from the
fixing of general standard rates, whioh are already covered bv
paragraph (ill)*	*

3(vii) Technical education and training

(viii) Industrial research and the full utilization of its
results*

(ix)	The provision of facilities for the full considera-
tion and utilisation of inventions and improvement designed toy-
workpeople, and for the adequate safeguarding of the rights of
the designers of such improvements.

(x)	Improvements of processes, machinery and organiza-
tion and appropriate questions relating to management and the
examination of industrial experiments, with special reference
to co-operation in carrying new ideas into effect and full con-
sideration of the workpeople's point of view in relation to them*

(xi)	Proposed legislation affecting the industry,

17o The methods toy which the functions of the proposed Coun-
cils should be correlated to those of joint bodies in the different
distriots, and in the various works within the districts, must neoes-
sarily vary according to the trade* It may, therefore, be the best
policy to leave it to the trades themselves to formulate schemes suit-
able to their special circumstances, it being understood that it' is
essential to seoure in each industry the fullest measure of co-opera-
tion between employers and employed, both generally, through the
National Councils, and specifically, through district Committees and
workshop Committees*

18,	It would seem advisable that the Government should put the
proposals relating to National Industrial Councils before the em-
ployers' and workpeoples’ associations and request them to adopt
suoh measures as are needful for their establishment where they

do not already exist* Suitable steps should also be taken, at the
proper time, to put the matter before the general public*

19,	In forwarding the proposals to the parties concerned, we
think the government should offer to be represented in an advisory
capacity at the preliminary meetings of a Council, if the parties so
desire. ¥e are also of opinion that the Government should under-
take to supply to the various Councils such information On industrial
subjects as may be available and likely to prove of value,.

20,	It has been suggested that means must be devised to safe-
guard the interests of the community against possible action of an
anti-social character on the part of the Councils* We have, however,
here assumed that the Councils, in their work of promoting the
interests of their own industries, will have regard for the National
interest* If they fulfil their functions they will be the best
builders of national prosperity. The State never parts with its
in&orent over-riding power, but suoh power may be least needed when
least obtruded.

21,	It appears to us that it may be desirable at some later
stage for the State to give the sanotion of law to agreements made
by the Councils, but the initiative in this direction should oome
from the Councils themselves*

22,	The plans sketched in the foregoing paragraphs are applica-
ble in the form in which they are given only to industries in which
there are responsible association of employers and workpeople which
oan claim to be fairly representative. The case of the less well-
organized trades or sections of a trade necessarily needs further
consideration* We hope to be in a position shortly to put forward
recommendations that will prepare the way for the active utilisation in

4these trades of the same practical co-operation as is foreshadowed
in the proposals made above for the more highly organized trades.

23, It may he desirable to state here our considered opinion
that an essential condition of securing a permanent improvement
in the relations between employers and employed is that there
should be- adequate organisation on the part of both employers and
workpeople* The proposals outlined for joint co-operation throughout
the several industjptes depend for their ultimate success upon there
.being such organization on both sides; and such organization is
necessary also to provide means whereby the arrangements and agree-
ments made for the industry may be effectively oarried out#

24# We have thought it well to refrain from making sugges-
tions or offering opinions with regard to suoh matters as profit-
sharing, oo-partnership, dr particular systems of wages, &o. It would
be impracticable for us to make any useful general recommendations
on such matters, having regard to the varying conditions in
different trades* We are convinced, moreover, that a permanent
improvement in the relations between employers and employed must
be founded upon something other than a cash basis* What is wanted
is that the workpeople should have a greater opportunity of par-
ticipating in the discussion about and adjustment of those parts of
industry by which they are most affeoted#

25# The sohemes recommended in this Report are intended not
merely for the treatment of industrial problems when they have
beoome acute, but also, and more especially, to prevent their becom-
ing aoute. We believe that regular meetings to disouss industrial
questions, apart from and prior to any differences with regard to
them that may have begun to cause friction, will materially reduoe
the number of occasions on which, in the view of either employers
or employed, it is necessary to contemplate reoourse to a stoppage
of work*

26* We venture to hope that representative men in each indus-
try, with pride in their oalling and oare for its place as a contributor
to the national well-being, will come together in the manner her©
suggested, and apply themselves to promoting industrial harmony and
efficiency and removing the obstacles that have hitherto stood in the
way.

We have the honour to be, Sir,

Your obedient Servants,

J, H. Whitley, Chairman.

F# S. Button#

Geo* J. Carter,

S. J. Chapman#

G. H* Claughton.

J. R# Clynes,

J# A. Hobson.

A. Susan Lawrence,

J. J. Mallon,

Thos, B* Ratcliffe-Ellis#

Robt, SmiXlie,

Allan M* Smith*

Mona Wilson,

8th Maroh, 1917.	H, J. Wilson, ) secretaries

Arthur Greenwood, )

5APSEEDIX,

The following questions were addressed by the Reconstruction
Committee to the Sub-Committee on the Relations between
Employers and Employed in order to make clear certain points
which appeared to call for further elucidation* The answers given
are subjoined*

Q. 1, In what classes of Industries does the Interim Report
propose that Industrial Ccunoils shall be established? 3hat basis
of classification has the Sub-Committee in view?

A, 1* It has been suggested that, for the purpose of consider-
ing the establishment of Industrial Councils, or other bodies de-
signed to assist in the improvement of relations between employers and
employed, the various industries should be grouped into three classes-
(a) industries in which organization on the part of employers and
employed is sufficiently developed to render the Councils representa-
tive; (b) industries in which either as regards employers and em-
ployed, or both, the degree of organization, though considerable, is
less marked than in (a) and is insufficient to be regarded as repre-
sentative; and (c) industries in which organization is so imperfect,
either as regards employers or employed, or both, that no Asso-
ciations can be said adequately to represent those engaged in the
trade,

It will be clear that an analysis of industries will show a number
which are on the border lines between these groups and special con-
sideration will have to be given to such trades* So far as groups
(a) and (c) are concerned, a fairly large number of trades can
readily be assigned to them; grou^ (b) is necessarily more indeter-
minate.

For trades in group (a} the Committee have proposed the estab-
lishment of Joint Standing Industrial Councils in the several trades*

In dealing with the various industries it may be necessary to con-
sider specially the case of parts of industries in group (a) where
organization is not fully developed*

Q» 2. Is the machinery proposed intended to be in addition to
or in substitution for existing machinery? Is it proposed that
existing machinery should be superseded? By "existing machinery" is
meant Conciliation Boards and all other organizations for joint con-
ference and discussion between Employers and Employed,

A* 2, In most organized trades there already exist joint bodies
for particular purposes, It is not proposed that the Industrial Coun-
cils should necessarily disturb these existing bodies* A council would
be free, if it chose and if the bodies concerned approved, to merge
existing Committees, &c*, in the Council or to link them with the
Council as Sub-Committees,

Q. 3. Is it understood that membership of the Councils is to
be confined to representatives elected by Employers' Associations and
Trade Unions? What is the view of the Sub-Committee regarding the
entry of new organizations established after the Counoils have been
set up?

6A, 3, It is intended that the Councils should be composed only
of representatives of Trade Unions and Employers’ Associations, and
that new organizations should be admitted only with the approval Of
the particular side of the Council of which the organization would
form a part,

Q. 4, (a) Is it intended that decisions reached by the Coun-
cils shall be binding upon the bodies comprising them? If so, is such
binding effect to be conditional upon the consent of each Employers1
Association or Trade Union affected?

A, 4, (a) It is contemplated that agreements reached by Indus-
trial Councils should (whilst not, of course, possessing the binding
force of law) carry with them the same obligation of observance as
exists in the case of other agreements between Employers’ Associa-
tions and Trade Unions, A Council, being on its workmen's side
based on the Trade Unions concerned in the industry, its powers or
authority could only be such as the constituent Trade Unions freely
agreed to,

Q» 4, (b) In particular, is it intended that all pledges given
either by the Government or employers for the restoration of Trade
Union rules and praotices after the war shall be redemmed without
qualification unless the particular Trade Union oonoerned agrees to
alteration; or, on the oontrary, that the Industrial Council shall
have power to decide such question by a majority vote of the workmen's
representatives from all the Trade Unions in the industry?

A, 4, (b) It is clearly intended that all pledges relating to
the restoration of Trade Union rules shall be redemmed without quali-
fication unless the particular Trade Union concerned agrees to altera-
tion; and it is not intended that the Council shall have power to
decide such questions by a majority vote of the workmen's repre-
sentatives from all the Trade Unions in the industry.

?SECOND REPORT

on

JOINT STANDING INDUSTRIAL

COUNCILSPKEFACTQRY NOSE *

This Report of the Committee on Relations between Employers
and Employed is now receiving the joint consideration of the Minis-
ter of Labour and myself, in the light of the practical experience
which has been gained in establishing Joint Industrial Councils in
accordance with the proposals of the First- Report, A statement will
shortly be published with regard to ary modification of the recom-
mendations of this Second Report whioh may be considered expedient
from the administrative point of view.

C, ADDISON*

February 28th, 1918*

MINISTRY OF RECONSTRUCTION,

Committee on Relations between Employers and Employed,

SECOND REPORT ON JOINT STANDING INDUSTRIAL
COUNCILS,

The Right Hon, J* H, WHITLEY, M«P», Chairman,

Mr, F» S* Button,

Sir George J, Carter, K,B,E*

Professor S, J,' Chapman, C*B.E,

Sir Gilbert Claughton, Bart,

Mr, J. R. Clynes, M, P.

*Mr« F. N, Hepworth,

*1**, W, Hill,

Mr, J, A, Hobson.

Miss Susan Lawrence,

*Sir Maurice Levy, Bart, M.P.

Mr, Jt J, Mallon.

Sir Thos, R. Ratcliffe-Ellis.

Mr, Robert Smillie,

' Mr, Allan M» Smith.

*Mr* D. R. H. Williams,

Miss Mona Wilson*

Mr* H, J, Wilson, C.B.E., Ministry of Labour, ) q

Mr, Arthur Greenwood, Ministry »f Reconstruct ion, j beoretar:ie's*

*	*Additional members of the Ccmmittee, appointed in connection

with the present Report,

Ministry of Reconstruction,

2* Queen Anne's Gate Buildings, L®ndon, S.W.l.

9MINISTRY OF RECONSTRUCTION.

Committee on Relations between Employers and Employed.

SECOND REPORT ON JOINT STANDING INDUSTRIAL
COUNCILS.

T® tho Right Honourable L. Lloyd George, M.P., Prime Minister.
Sir,

Following the proposals made in our first Report, we have now
the honour to present further recommendations dealing with industries
in which organization on the part of employers and employed is
less completely established than in the industries covered by the
previous Report, and with industries in which such organization is
weak or non-existent,

2.	Before commencing the examination of these industries the
Committee came to the conclusion that it would materially assist
their enquiries if they could have the direct advantage of the knswl-
edge and experience of some representative employers wh®- were
connected with industries of the kind with which the Committee were
about to deal; and it was arranged, with your approval, that Sir
Maurice. Levy, Mr, F. N. Hepworth, Mr, W. Hill, and Mr. L.R. H.
Williams should be appointed to act with the Committee while these
industries were unc*er consideration. This arrangement made it pos-
sible to release from attendance at the earlier meetings of the Com-
mittee Sir Gilbert Claughton, Sir T, Ratcliffe-Ellis, Sir Ge®rge J.
Carter, and Mr. Allan Smith, whose time is greatly occupied in other
public work and whose experience is more particularly related to the
organized trades covered by our former Report,

3,	It is difficult t® classify industries according to the
degree of organization among employers and employed, but for conven-
ience of consideration the industries of the country may be divided
into three groups

■vr'Group A.-Consisting of industries in which organization on
the part of employers and employed is sufficiently developed to
render their respective associations representative of the great
majority of those engaged in the industry. These are the indus-
tries which we had in mind in our first Interim Report.

Group B,-Comprising these industries in which, either as
regards employers and employed,, or both, the degree of organiza-
tion, though considerable, is less marked than in Group A.

Group C,-Consisting of industries in which organization is
so imperfect, either as regards employers or employed, or both,
that no associations can be said adequately to represent those
engaged in the industry,

The present Report is concerned with Groups B, and C.

104* So far as Groups A, and C* are concerned, a number of
industries can be definitely assigned to them* Group B., however,
is necessarily more indeterminate. Some of the industries in this
group approaoh closely to industries in Group A,, while others verge
upon Group C, Further, most industries, in whatever class they may
fall, possess a ’’tail," consisting of badly organized areas, or
secions of the industry* These facts we have borne in mind in formulat-
ing our further proposals,

5,	So far as industries in Group B, are concerned, we are of
opinion that the proposals of our First Report should, in their main
lines, be applied to those which, on examination by the Ministry of
Labour in consultation with the Associations concerned, are found to
be relatively well organized, We suggest, however, that where in
these industries a Rational Industrial Council is formed there should
be appointed one or at most two official representatives to assist in
the initiation of the Council, and continue after its establishment to
act in an advisory capacity and serve as a link with the Government.

We do not contemplate that a representative so appointed should be

a member of the Rational Industrial Council, in the sense that he
should have power, by a vote, to influence the decisions ef the Council,
but that hhsshould attend its meetings and assist in any way which
may be found acceptable to it. By so doing he would acquire a continuous
knowledge of the conditions of the industry of which the Government
could avail itself, and so avoid many mistakes that under present
conditions are inevitable.

The question of the retention of the official representatives should
be considered by the Ceunoils in the light of experience gained when
an adequate time has elapsed, We anticipate that in many cases their
continued assistance will be found of value even after an industry has
attained a high degree of organization, but in no case should they
remain except at the express wish of the Councils concerned,

6,	It may be that in some Group B. industries in which a Rational
Industrial Council is formed certain areas are well suited to the
establishment of District Councils, while in other areas the organi-
zation' of employers or employed, or both, is too weak to be deemed
representative. There appears to be no good reason why in the former
areas there should not be District Industrial Councils, acting in con-
junction with the Rational Industrial Councils, in accordance with (
the principles formulated in the Committee’s' earlier report on the
well-organized trades,

7,	An examination of some of the industries coming within
Group B. may show that there are some which, owing to the pecu-
liarities of the trades and their geographical distribution, cannot
at present be brought readily within the scope of the proposals for

a Rational industrial Council, though they may be quite well organized
in two or more separate districts. In such a case we think there
might well be formed one or more District Industrial Councils, We
anticipate that in course of time the influence of the District
Councils would be such that the industry would become suitable for
the establishment of a Rational Industrial Council,

8,	In the case of industries in Group B, (as in the industries
covered by our first Report), we consider that the members of the
Rational Councils and of the District Councils should be representa-
tives of the Employers’ Associations and Trade Unions concerned,

In the formation of the Councils, regard should be paid to the various
sections of the industry and the various classes of labour engaged, and
the representatives should include representatives of woman's organiza-
tions, In view of the extent to which women are employed in these

11industries, we think the Trade Unions, when selecting their repre-
sentatives for the Councils, should inolude a number of women among
those who are appointed to be members,

9.	It does not appear to us necessary or desirable to suggest
any fixed standard of organization which should exist in any industry
before a National Industrial Council shoxild be established. The case
of each industry will need to be considered separately, regard being
paid to its particular circumstances and characteristics.

In the discussion of this matter, we have considered whether it
would be feasible to indicate a percentage of organization which should
be reached before a Council is formed, but, in view of the great
diversity of circumstances in these industries and of the differing
degrees to which the several sections of some of them are organized,
we have come to the conclusion that it is more desirable to leave the
matter to the deoision of the Ministry of Labour and the organizations
concerned. Whatever theoretical standard may be contemplated, we
think its application should not be restrictive in either direction.

10.	The level of organization in industries in Group C. is such
as to make the scheme we have proposed for National or District
Industrial Councils inapplicable. To these industries the machinery
of the Trade Boards Act might well be applied, pending the develop-
ment of such degree of organization as would render feasible the
establishment of- a National Council or District Councils,

11.	The Trade Boards- Act was originally intended to secure the
establishment of a minimum standard of wages in certain unorganized
industries, but we consider that the Trade Boards should be regarded
also as a means of supplying a regular machinery for negotiation and
decision on certain groups of questions dealt with in other circum-
stances by collective bargaining between employers' organizations and
trade unions.

In order that the Trade Boards Act may be of greater utility in
connection with unorganized and badly organized industries or sections
of industries, we consider that oertain modifications are needed
to enlarge the functions of the Trade Boards, We suggest that they
should be empowered to deal not only with minimum rates of wages,
but with hours of labour and questions cognate to wages and hours*

We are of opinion also that the functions of the Trade Boards should
be extended so as to enable them to initiate and conduct! enquiries on
all matters affecting the industry or the section of the industry
concerned.

12.	If these proposals were adopted, there would be set up, in a
number of industries or sections of industries, Trade Boards (con-
sisting of representatives of employers and employed, together with
"appointed members") who would, within the scope of their functions,
establish minimum standard rates and conditions applicable to the
industry or section of the industry which they represented, and con-
sider systematically matters affecting the well-being of the industry,

13.	Where an industry in Group 0, becomes sufficiently organized
to admit of the institutien of National and District Councils, we con-
sider that these bodies should be set up on lines already indicated,
Where it appears to a Trade Board that an Industrial Council should

be appointed in the industry concerned, they should have power (a)
to make application to the Minister of Labour, asking him to approach
the organizations of employers and employed, and (b) to suggest a
scheme by which the representation.of the workers' and employers'
sides of the Trade Board could be secured.

1214.	Whether in industries in Group G, the establishment of
Works Committees is to be recommended is a question which calls
for very careful examination, and we have made the geneva1 question
of works Committees the subjeot of a separate Beport.

15.	We have already pointed out that most of the industries in
Groups A. and B. have sections or areas in which the degree of organ-
ization among the employers and employed falls much below what is
normal in the rest of the industry; and it appears to us desirable
that the general body of employers and employed in any industry should
have some means whereby they may bring the whole of the trade up

to the standard of minimum conditions which have been agreed upon
by a substantial majority of the industry. We therefore recommend
that, on the application of a National Industrial Council sufficient-
ly representative of An industry, the Minister of Labour should be
empowered, if satisfied that the case is a suitable one, to make an
Order either instituting for a section of the industry a Trade Board
on which the National Industrial Councilmshould be represented, or
constituting the Industrial Council a Trade Board under the provisions
of the Trade Boards Act. These proposals are not intended to limit,
but to be in addition to, the powers at present held by the Ministry
of Labour with regard to the establishment of Trade Boards in trades
and industries where they are considered by the Ministry to be
necessary,

16.	We £ave already indicated (paragraph 9) that the circum-
stances and characteristics of each of the several industries will
need to be considered before it can be decided definitely how far
any of our proposals oan be applied in particular instances, and we
have refrained from attempting to suggest any exact degree of organiza-
tion which would be requisite before a particular proposal could be
applied. We think, however, that the suggestion we have made in the
preceding paragraph to confer upon a National Industrial Council the
powers of a Trade Board should be adopted only in those oases in
which the Minister of Labour is satisfied that the Council represents

a substantial majority of the industry -concerned.

17.	We are of opinion that most of the chief industries of the
country could be brought under on© or other of the schemes contained
in this and the preceding Beport, There would then be broadly two
classes or industries in the country-Industries with Industrial Coun-
cils and industries with Trade Boards.

18,	In the former group the National Industrial Councils would
be constituted either in the manner we have indicated in our first
Report, carrying toth them District Councils and Works Committees,
or on the lines suggested in the present Beport, i.e», each Council
coming within the scope of this Beport having associated with it one,

Or two, official representatives to act in an advisory capacity and as
a link with the Government, in addition to the representatives of the
employers and employed.

19,	It should be noted that in the case of industries in which
there is a National Industrial Council, Trade Boards might, in some
instances, be associated with the Council in order to determine wages
and hours, &c*, in certain sections or areas. It is possible that in
some allied trades, really forming part of the same industry, both sets
of proposals might, in the first instance, be in operation side by side
one trade having its Industrial Council and the other its Trade Board.
Where these circumstances obtain, we anticipate that the Trade Board
would be a stepping stone to the full Industrial Council status.

1320,	It may be useful to present a brief outline of the proposals
which we have so far put forward

(a)	In the more highly organized industries (Group A,)
we propose a triple organization of national, district, and
workshop bodies, as outlined in our first Report,

(b)	In industries where there are representative associations
of employers and employed, which, however, do not possess the
authority of those in Group A, industries, we propose that the
triple organization should be modified by attaching to each
Rational Industrial Council one or at most two representatives

of the Ministry of Labour to act in an advisory capacity,

(c)	In industries in both Groups A, and B„, we propose that
unorganized areas or branches of an industry should be provided,
on the application of the National Industry Council and with the
approval of the Ministry of Labour, with Trade Boards for such
areas or branches, the Trade Boards being linked with the
Industrial Council,

(d)	In industries having no adequate organization of em-
ployers or employed, we recommend that Trade Boards should be
continued or established, and that these should, with the approval
of the Ministry of Labour, be enabled to formulate a scheme for
an Industrial Council, which might include in an advisory capacity
the "appointed members" of the Trade Board,

21.	It will be observed that the policy we recommend is based
upon organization on the part of both employers and employed. Where
this is adequate,as in Group A* industries, there is no:need of
external assistance. In Group B. industries, we think chat the
organizations concerned would be glad to have the services of an
official representative who would act as adviser and as a link with
the Government. In unorganized sections of both grodps of industries
we believe that a larger measure of Government assistance will be both
desirable and- acceptable, and we have therefore suggested the adoption
of the machinery of the Trade Boards Act in this connection. In
Group C.industries we think that organization will be encouraged by
the use of the powers under the Trade Boards Act, and where National
Industrial Councils are set up we recommend that the "appointed
members" of the Trade Board should act on the Councils in an advis-
ory capacity. Briefly, our proposals are that the extent of State
assistance should vary inversely with the degree of organization in
industries,

22.	We do not, however, regard Government assistance as an
alternative to the organization of employers and employed. On the
contrary, we regard it as a means of furthering the growth and
development of such organization*

23.	We think it advisable in this connection to repeat the fol-
lowing paragraph from our former Reportj-

"It may be desirable to state here our considered opinion
that an essential condition of securing a permanent improvement
in the relations between employers and employed is that there
should be adequate organization on the part of both employers and
workpeople. The proposals outlined for joint co-operation throug. -
out the several industries depend for their ultimate success upon
there being such organization on both sides; and such organization
is necessary also to provide means whereby the arrangements and
agreements made for the industry may be effectively carried out."

1424.	In considering the scope of the matters referred to us
w© have formed t$e opinion that the expression "employers and
workmen" in our reference covers State and Municipal authorities
and persons employed toy them. Accordingly we recommend that such
authorities and their workpeople should take into consideration
the proposals made in this and in our first Report, with a view
to determining how far such proposals can suitably be adopted
in their case,

We understand that the Ministry of Labour has up to the
present circulated our first Report only to employers* and
warkpeople's associations in the ordinary private industries*

■We think, however, that both it and the present Report should
also be brought to the notice of State Departments and Municipal
Authorities employing labour*

25.	The proposals we have set forth above do not require
legislation except on three points, namely, to provide-

(1)	That the Trade Boards shall have power, in addition
to determining minimum rates of wages, to deal with hours of
labour and questions cognate to wages and hours*

(2)	That the Trade Boards shall have power to initiate
enquiries* and make proposals in the Government Departments
concerned, on matters affecting the industrial conditions
of the trade, as well as on questions of general interest
to the industries concerned respectively*

(3)	That when an Industrial Council sufficiently representa-
tive of an industry makes application, the Minister of Labour
shall have power, if satisfied that the case is a suitable one,
to make an Order instituting for a section of the industry a
Trade Board on which the Industrial Council shall be represented,
or constituting the Council a Trade Board under the Trade
Boards Act,

26.	The proposals which we have made must necessarily be
adapted to meet the varying needs and circtimstances of different
industries, and it is not anticipated that there will be uniformi-
ty in practice. Our recommendations are intended merely to set
forth the main lines of development which we believe to be
essential to ensure better relations between employers and employed.
Their application to the several industries we can safely leave
to those intimately concerned, with the conviction that the
flexibility and adaptability of industrial organization which
have been so large a factor in enabling industry to stand the
enormous strain of the war will not fail the country when peace
returns.

27.	Other problems affecting the relations between employers
and employed are engaging our attention, but we believe that, what-
ever further steps may be necessary to accomplish the object we
have in view, the lines of development suggested in the present
Seport and the one which preceded it are fundamental, We believe
that in each industry there is a sufficiently large body of
opinion willing to adopt the proposals we have made as a means
of establishing a new relation in industry,

We have the honour to be,

Sir,

Your obedient Servants,*

15J.H* Whitley, Chairman,

F.	S* Button,

S.J, Chapman,

G,	H, Claughton.

J.B. Clynes,

F»W, Hepworth*

Wilfrid Hill,

J,A* Hobson,

A, Susan Lawrence*

Maurice Levy, .

J,J.Mallon,

Thos. B* Batoliffe*El1is,
Allan M, Smith,

P.R.H. Williams.

Mona Wilson.

H.	J. Wilson,)
A, Greenwood,)

Secretaries

*

18 October 1917.

*Sir G. J. Carter and Mr, Smillie were unable to attend any
of the meetings at whioh this Report was considered and they
therefore do not sign it.

16JOINT MEMORANDUM OP THE MINISTER

OP RECONSTRUCTION

and the

MINISTER OF LABOUR,

Explaining the Government's view of the Proposals

of the

\

SECOND WHITLEY REPORT.

17inhjstrial oowxls asa> traie boards

Joint Memorandum by the Minister of Reconstruction and the

Minister of Labour.

1* The proposals contained in the First Report on Joint Stand-
ing Industrial Councils of the Committee on Relations between
Employers and Employed have been adopted by the Government* The
steps which have been taken to establish Industrial Councils have
enabled the Government to consider the proposals of the Second Re-
port on Joint Standing Industrial Councils in the light of exper-
ience. This Report, which deals with industries other than those
which are highly organized, follows naturally upon the First Report
of the Committee, and develops the line of policy therein proposed.

It has not been found possible from the administrative point of
view to adopt the whole of the recommendations contained in the
Second Report, but such modifications as it seems desirable to make
do not affect the principles underlying the Committee’s proposal
for the establishment of Joint Industrial Counoils. They are de-
signed to take advantage of the administrative experience of the
Ministry of Labour with regard to both Industrial Councils and
Trade Boards* |n view of the growing interest which is being
taken in the establishment of Industrial Councils and of the pro-
posed extension of Trade Boards, it appears desirable to set forth
the modifications which the Government regard as necessary in
putting into operatioh the recommendations of the Second Report*
and also to make clear the relations between Trade Boards In-
dustrial Councils*

2, The First Report on Joint Standing Industrial Councils
referred only to the well-organized industries. The Second Report
deals with the less organized and unorganized trades, and suggests
the classification of the industries of the country into three groups:-
"Group A*-Consisting of industries in whioh organization
on the part of employers and employed is sufficiently developed
to render their respective associations representative of the
great majority of those engaged in the industry. These are
the industries whioh we had in mind in our first Interim Report.

'’Group B.-Comprising those industries in whioh, either
as regards employers and employed, or both, the degree of organ-
ization though considerable, is less marked than in Group A,

"Group C,-Consisting of industries in which organization
is so imperfect, either ,as regards employers or employed, or
both, that no associations can be said adequately to represent
those engaged, in the industry,"

The proposals of the Committee on Relations between Employers
and Employed are summarized in paragraph 20 of their Second Report
as follows;- ’

"{a) In the more highly organized industries (Group A»l
we propose a triple organization of national, distriot, and
workshop bodies, as oxitlined in our First Report.

"(b) In industries where there are representative associa-
tions of employers and employed, which, however, do not possess
the authority of those in Group A, industries, we propose that
the triple organization should be modified, by attaching to
each National Industrial Counoil one, or at most two, representa-
tives of the Ministry of Labour to act in an advisory capacity.

10"(c) In industries in both Group A. and B», we propose
that unorganized areas or branches of an industry should be
provided, on the application of the National Industrial
Council, and with the approval of the Ministry of labour,
with Trade Boards for such areas or branches, the Trade
Boards being linked with the Industrial Council.

"(d) In industries having no ad@qu3.te organization of
employers or employed, we recommend that Trade Boards should
be continued or established, and that these should, with the
approval of the Ministry of labour, be enabled to formulate
a scheme for an Industrial Council, which might include, in
an advisory capacity, the appointed members of the Trade Board."

It may be convenient to set out briefly the modifications of
the above proposals, which it has been found necessary to. make*

(1)	As regards (b) it has been decided to recognize one
type of Industrial Council only, and not to attach official
representatives to the Council, except on the application of
the Industrial Council itself.

(2)	As regards {0) and (d) the relations between Trade
Boards and Industrial Councils raise a number of serious admin-
istrative difficulties due to the wide differences in the
purpose and structure of the two types Of bodies. It is not
regarded as advisable that a Trade Board should formulate a
scheme for an Industrial Council, nor id it probable that
Trade Boards for unorganized areas will be set up in conjunc-
tion with a Joint Industrial Council.

3. It is necessary at the outset to emphasize the fundamental
differences between Industrial Councils and Trade Boards. A Joint
Industrial Council is voluntary in its character and can only be
brought into existence with the agreement of the organizations of
employers and workpeople in the particular industry, and the
Council itself is composed exclusively of persons nominated by
the Employers' Assocaitions and Trade Unions concerned. The In-
dustrial Council is, moreover, within very wide limits, able to
determine its own functions, machinery and methods of working.

Its functions in almost all cases will probably cover a wide range
and will be concerned with many matters other than wages. Its
machinery and methods will be based upon past experience of the
industry and the existing organization of both employers and
employed. Industrial Councils will, therefore, vary in structure
and functions as can be seen from the provisional constitutions
already submitted to the Ministry of Labour, Financially they
will be self-supporting, and will receive no monetary aid from
the Government. The Government proposes to recognize the Indus-
trial Council in an industry as the representative organization
to which it can refer. This was made clear in the Minister of
Labour's circular letter of October 20th, 1917, in which it is
said that "the Government "desire it to be understood that the
"Councils will be recognized as the official standing consultative
"Sommittee to the Government on all future questions affecting the
"industries which they represent, and that they will be the normal
"channel through which the opinion and experience of an industry
"will be sought on all questions in which the industry is concerned."

A Trade Board, on the other hand, is a statutory body established
by the Minister of Labour and constituted in accordance with Regu-
lations made by him in pursuance of the Trade Boards Act; and its
expenses, in so far as authorized by the Minister of Labour and
sanctioned by the Treasury, are defrayed out of public money.

19The Regulations may provide for the election, of the representatives of
employers and. workers or for their nomination by the Minister of Labour,
but in either case provision must be made for the due representation of
homeworkers in trades in which a considerable proportion of homeworkers
are engaged* On account of the comparative lack of organisation in the trades
to which the Act at present applies * the method of nomination by the Minister
has proved in practice to be'preferable to that of election,and in nearly
all cases the representative members of Trade Boards are now nominated by
the Minister. The Employers'Associations and Trade Unions in the several
trades are invited to submit the names of candidates for the Minister's con-
sideration, and full weight is attached to their recommendation, but where
the trade organizations do not fully represent ail sections of the trace,
it is necessary to look outside them to find representatives of the different
processes and districts affected.

A further distinction between Trade Boards and Industrial Councils is,
that while Industrial Councils are composed entirely of representatives of
the Employers' Associations and Trade Unions in the industry, every Trade
Board includes, in addition to the representative members, a small number
usually three) of "appointed members," one of whom is appointed by the
Minister to act as Chairman and one as Deputy Chairman of the Board. The
appointed members are unconnected with the trade and are appointed by the
Minister as impartial persons. The primary function of a Trade Board is
the determination of minimum rates of wages, and when the minimum rates
of wages fixed by a Trade Board have been confirmed by the Minister of
Labour, they are enforceable by criminal proceedings, and officers are
appointed to secure their observance* The minimum rates thus become part
of the law of the land, and are enforced in the same manner as, for example,
the provisions of the Factory Acts. The purpose, structure, and functions
of Industrial Councils and Trade Boards are therefore fundamentally different.
Their respective areas of operation are also determined by different considera-
tions. An Industrial Council will exercise, direct influence only over the
organizations represented, upon it. It will comprise those employers'associa-
tions with common interests and common problems; similarly its trade union
side will be composed of representatives of organizations whose interests
are directly inter-dependent. An Industrial Council therefore is representative
of organizations whose objects and Interests, whilst not identical, are
sufficiently interlocked to render common action desirable. The various organ-
isations represent the interests of employers and workers engaged in the pro-
duction of a particular commodity or service (or an allied group of commodi-
ties or services).

A Trado Board, on the other hand, Is not based on existing organizations
of employers and employed, but covers the whole of the trade for which it is
established. As the minimum rates are enforceable by law, it is necessary
that the boundaries of the trade should bo precisely defined; this is done,
within the limits prescribed by statute, by the Regulations made by the
Minister of Labour, natural divisions of industry are, of course, followed
as far as possible, but in many cases the line of demarcation must necessarily
be somewhat arbitrary. In the case of Industrial Councils difficult demarca-
tion problems also arise, but the considerations involved are somewhat
different, as the object is to determine whether the interests represented by
given prganirations are sufficiently allied to justify the co-operation of
these organisations in one Industrial Council.

4. The reports received from those who are engaged in assisting the
formation of Joint Industrial Councils show that certain paragraphs in the
Second Report of the Committee on Relations between Employers and Employed have
caused some confusion as to the character and scope of Joint Industrial
Councils and Trade Boards respectively. It is essential to the future
development of Joint Industrial Councils that their distinctive aim and
character should be maintained. It is necessary therefore to keep clearly in
mind the respective functions of the Joint Industrial Council and the Trade
Board, in considering the recommendations contained in the following paragraphs
of the Second Report

(a) Paragraphs 3, 4 and 5, dealing with the division of Joint In-
dustrial Councils into those that cover Group A,industries, and those

that cover Group B, industries*

20(b)	Paragraph 7, dealing with district Industrial Councils in
industries where no National Council exists*

(c)	Paragraphs 10,13,15 and 16, dealing with Trade Boards in
relation to Joint Industrial Councils, '

(d)	Paragraphs 11 and 12, dealing with Trade Boards in indus-
tries which are not suitably organized for the establishment of a
Joint Industrial Council,

5# Distinction drawn between Joint Industrial Councils in Group A.
Industries and Group B, Industries,- In paragraph 9 of the Second Report
it is implied that the Ministry of Labour 'would determine whether the
standard of organization in any given industry has reached such a stage
as to justify the official recognition of a Joint Industrial Council in
that industry; It is clear, however, that it would be impossible for the
Ministry to discover any satisfactory basis for distinguishing between
an industry which falls in Group A,, and one which falls into Group B»

It is admitted in paragraph 9 of the Second Report, that no arbitrary
standard of organization could be adopted, and it would be both invidious
and impracticable for the Ministry of Labour, upon whom the responsibility
would fall* to draw a distinction between A, and B. Industries, The only
clear distinction is between industries which are sufficiently organized
to justify the formation of a Joint In6.ustrial Council and those which
are not sufficiently organized. Individual cases must be judged on their
merits after a consideration of the scope and effectiveness of the
organization, the complexity of the industry and the wishes cf those
concerned.

The experience already gained in connection with Joint Industrial
Councils indicates that it would be inadvisable in the case of industries
in Group B, to adopt the proposal that "there should be appointed one or
"at most two official representatives to assist in the initiation of the
"Council and continue after its establishment to act in an advisory capacity
"and serve as a link with the Government," It is fundamental to the idea
of a Joint Industrial Council that it is a voluntary body set up by the
industry itself, acting as an independent body and entirely free from
all State control* 'Whilst the Minister of Labour would be willing to
give.every assistance to Industrial Councils, he would prefer that any
suggestion of this kind should come from the industry, rather than from
the Ministry*

The main idea of the Joint Industrial Council as a Joint Body repre-
sentative of an industry and independent of State control has not become
familiar and the introduction of a second type of Joint Industrial Council ,
for B» industries would be likely to cause confusion and possibly to preju-
dice the future growth of Joint Industrial Councils,

In view of these circumstances, therefore, it has been decided to
adapt a single type of Industrial Council*

6,	District Industrial Councils, - Paragraph 7 of the Second Report
suggests that in certain industries in which a National Industrial Council
is not likely to be formed, in the immediate future, it might none the
less be possible to form one or more "District" Industrial Councils,

In certain cases the formation of joint bodies covering a limited area
is probable, It would, however, avoid confusion if the term "District"were
not part of the title of suoh Councils,and if the use of it were confined
to District Councils in an industry where a National Council exists, In-
dependent local Councils might well have a territorial designation instead*.

7,	Trade Boards in Relation to Joint Industrial Councils,- The distinc-
tion between Trade Boards and Joint Industrial Councils has been set forth
in paragraph 3 above. The question whether an Industrial Council should be
formed for a given industry depends on the degree of organization achieved
by the employers and workers in the industry, whereas the question whether

a Trade Board should be established depends primarily on the rates of wages
prevailing in the industry or in any part of the industry. This distinction
makes it clear that the question v?hether a Trade Board should or should not
be set up by the Minister of Labour for a given industry must be decided
apart from the question whether a Joint Industrial Council should or should
not be recognized in that industry by the Minister of Labour,

It follows from this that it is pessible that both a Joint Industrial
Council and a Trade Board may be necessary within the same industry.In highly organized industries the rates of wages prevailing vtpill
not, as a rule, he so lev? as to necessitate the establishment of a Trade
Board, In some cases, however, a well-defined section of an otherwise
well-organised industry or group of industries may he unorganized and
ill-paid? in such a case it would clearly he desirable for a Trade Board
to be established for the ill-paid section,while there should at the
same time be an Industrial Council for the remaining sections,or even
for the whole,of the industry or industrial group.

In case of* other industries sufficiently organized to justify the
establishment of an Industrial Council, the organizations represented on
the Council may nevertheless not be comprehensive enough to regulate
wages effectively throughout the industry. In such cases a Trade Board
for the whole Industry may possibly be needed*

Where a Trade Board covers' the whole or part of an industry covered
by a Joint Industrial Council, the relations between them may, in order ,
to avoid any confusion or misunderstanding, he defined as follows

(1)	Where Government Departments wish to consult the industry,
the Joint Industrial Council, and not the Trade Board, will be
recognized as the body to be consulted*

(2)	In order to make use of the experience of the Trade Board,
the constitution of the Industrial Council should be s« drawn as to
make full provision for consultation between the Council and the Trade
Board on matters referred to the former by: a Government Department?
and to allow of the representation of the Trade Board on any Sub-
committee of the Council dealing with questions with which the

Trade Board is concerned*

(3)	The Joint Industrial Council clearly cannot under any
circumstances over-ride the statutory powers conferred upon the
Trade Board, and if the Government at any future time adopted the
suggestion contained in Section 21 of the. First Report that the
sanction of law should be given on the application of an Industrial
Council to agreements made by the Counoil, such agreements could not
he made binding on any part of a trade governed by a Trade Board,

so far as the statutory powers of the Trade Board are concerned,

The Minister of Labour will not ordinarily set up a Trade Board
to deal.with an industry or branch of an industry, in which the majority
of employers and ’workpeople are covered by wage agreements, but in which
a minority, possibly in certain areas, are outside the agreement. It
would ...appear that the proposal in Section 21 of the First Report was
specially designed to meet such cases. Experience has shown that there
are great difficulties in the way of establishing a Trade Board for one
area only in which an.industry is carried on, without covering the whole
of a Trade, though the Trade Boards Act allows of this procedure,

8, Trade Boards in industries which are not sufficiently organized
for the establishment of a Joint Industrial Council,-Section 3 of the
Trade Boards Act, 1909, provides that "a Trade Board for any trade shall
"consider, as occasion requires, any matter referred to them by a
"Secretary of State, the Board of Trade, or any other Government Depart-
"ment, with reference to the industrial conditions of the trade, and shall
"make a report upon the matter to the department by whom the question
"has been referred,"

In case of an industry in which a Trade Board has been established,
but an Industrial Council has not been formed, the Trade Board is the
only body that can claim to be representative of the industry as a whole.

It is already under a statutory obligation to consider questions
referred to it by a Government Department; and where there is
a Trade Board but no Industrial Council in an industry it will
be suggested to Government Departments that they should consult
the Trade Board as occasion required in the same manner as they
•would consult Industrial Councils,

22On the other hand, for the reasons which have been fully
set out above, Industrial Councils must be kept distinct from
Trade Boards, and the latter, owing to their constitution,
cannot be converted into the former,< If an industry in which
a Trade Board is established becomes sufficiently organized for
the formation of an Industrial Council, the Counoil would have to
be formed on quite different lines from the Trade Board, and the
initiative should come, not from the Trade Board* which is a
body mainly nominated by the Minister of Labour, but from the
organizations in the industry. Hence it would not be desirable
that Trad© Boards should undertake the formation of schemes for
Industrial Councils,

7th June, 1918,

23SUPPLEMENTARY REPORT

on

WORKS COMMITTEES.

24MINISTRY OF RECONSTRUCTION

Committee on Relations between Employers and Employed,

Supplementary Report on Works Committees.

The Right Hon.J.H. Whitley,M.P.,Chairman.

Mr.F.S, Button.

Sir George J. Carter, K.B.E.

Professor S.J.Chapman,C,B.E.

Sir Gilbert Claughton,Bart,

Mr. J. R. Clynes, M.P.

*Mr» F. N. Hepworth.

*Mr» W. Hill.

Mr. J. A, Hobsbn.

Miss Susan Lawrenoe.

*Sir Maurice Levy, Bart.,M„P.

Mr. J. J. Mallon,

Sir Thos, R. Ratcliffe-Ellis.

Mr. Robert Smillie.

Mr. Allan M, Smith.

*Mr* D.R.H.Williams.

Miss Mona Wilson.

Mr, H.J.Wilson,C.B.B., Ministry of Labour,	) secretaries

Mr. Arthur Greenwood,Ministry of Reconstruction, )

*Additional members Of the Committee, appointed in connec-
tion with the present Report,

Ministry of Reconstruction,

2, Queen Anne's Gate Buildings,

London, S.W.l,

24SUPPLEMENTARY REPORT ON WORKS COMMITTEES

To the Right Honourable D. Lloyd George, M.P.,Prime Minister.

Sir,

In our first and second Reports we have referred to the
establishment of Works Committees^representative of the manage-
ment and of the workpeople, and appointed from within the works,
as an essential part of the scheme of organization suggested to
secure improved relations between Employers and Employed, The
purpose of the present Report is to deal more fully with the pro-
posal to institute such Committees,

2,	Better relations between employers and their workpeople can
best be arrived at by granting to the latter a greater share in the
consideration of matters with which they are concerned* In every
industry there are certain questions, such as rates of wages and
hours of work, which should be settled by District or National
Agreement, and with any matter so settled on Works Committee should
be allowed to interfere; but there are also many questions closely
affecting daily life and comfort in, and the success of, the busi-
ness, and affecting in no small degree efficiency of working, which
are peculiar to the individual workshop or faotory, The purpose

of a Works Committee is to establish and maintain a system of
co-operation in all these workshop matters,

3,	W® have throughout our recommendations prooeeded upon the
assumption that the greatest success is likely to be achieved by
leaving to the representative bodies of employers and employed in
each industry the maximum degree of freedom to settle for themselves
the preoise form of Council or Committee which should be adopted,
having regard in eaoh case to the particular circumstances of the
trade; and, in accordance with this principle, we refrain from in-
dicating any definite form of constitution for the Works Committees,
Our proposals as a whole assume the existence of organizations of
both employers and employed and a frank and full recognition of
such organizations. Works Committees established otherwise than

in accordanc© with these principles could not be regarded as a
part of the scheme we have recommended, and might indeed be a
hindrance to the development of the new relations in industry to
which we look forward. We think the aim should be the complete
and coherent organization of the trade on both sides, and Works
Committees will be of value in so far as they contribute to
such a result*

4,	We are of opinion that the complete success of Works Com-
mittees necessarily depends largely upon the degree and efficiency
of organization in the trad®, and upon the extent to which the
Committees can be- linked up, through organizations that we have in
mind, with the remainder of the scheme which we are proposing, viz.,
the District and National Councils* We think it important to state
that the success of the Works Committees would be very seriously
interfered with if the idea existed that such Committees were used,
or likely to be used, by employers in opposition to Trade Unionism.
It is strongly felt that the setting up of Works Committees without
the co-operation of the Trade Unions and the Employers* Associations

25

*In the use of the term "Works Committees" in this Report it is not
intended to use the word "works** in a technical sense; in such an
industry as the Coal Trade, for example, the term "Pit Committees"
would probably be the term used in adopting the scheme*in the trade or branch of trade concerned would stand in the way
of the improved industrial relationships whioh in these Reports
we are endeavoring to further*

5. In an industry where the workpeople are unorganized, or
only very partially organised, there is a danger that Works
Committees may be used, or thought to be used, in opposition to
Trade Unionism, It is important that such fears should be guard-
ed against in the initiation of any soheme. We look upon success-
ful Works Committees as the broad base of the Industrial Structure
which we have recommended, and as the means of enlisting the
interest of the workers in the sucoess both of the industry to
which they are attached and of the workshop or factory where so
much of their life is spent. These Committees should not, in
constitution or methods of working, discourage Trade organizations*

6« Works Committees, in our opinion, should have regular meet-
ings at fixed times, and,as a general rule, not less frequently than
once a fortnight. They should always keep in the forefront the idea
of constructive co-operation in the improvement of the industry to
which they belong. Suggestions of all kinds tending to improvement
should be frankly welcomed and freely discussed. Practical pro-
posals should be examined from all points of view. There is an
undeveloped asset of constructive ability-valuable alike to the
industry and to the State- awaiting the means of realization; problems,
old and new, will find their solution in a frank partnership of
knowledge, experience and goodwill. Works Committees would fail in
purpose if they existed only to smooth over grievances,

7. We recognize that, from time to time, matters will arise
which the management or the workmen consider to be questions they
cannot discuss in these joint meetings. When this occurs, we antici-
pate that nothing but good will come from the friendly statement of
the reasons why the reservation is made,

6* We regard the successful development and utilization of Works
Committees in any business on the basis recommended in this Report
as of equal importance with its commercial and scientific efficiency;
and we think that in every case one of the partners or directors, or
some other responsible representative of the management, would be
well advised to devote a substantial part of his time and thought
to the good working and development of such a committee*

9. There has been some experience, both before the war and
during the war, of the benefits of Works Committees, and we think
it should be recommended most strongly to employers and employed
that, in connection with the scheme for the establishment of National
and District Industrial Councils, they should examine this experience
with a view to the institution of 'Works Committees on proper lines,
in works where the conditions render their formation practicable. We
have recommended that the Ministry of Labour should prepare a sum-
mary of the experience available with reference to works Committees,
both before and during the war, including information as to any
rules or reports relating to such Committees, and should issue a
memorandum thereon for'the guidance of employers and workpeople
generally, and we understand that such a memorandum is now in course
of preparation.*

26

*This Memorandum is now completed and will be published
immediately by the Ministry of Labour.10.	In order to ensure uniform and common principles of action,
it is essential that where national and District Industrial Councils
exist the Works Committees should be in close touch with them, and
the scheme for linking up Works Committees with the Councils should
be considered and determined by the National Councils.

11,	¥e have considered it better not to attempt to indicate
any specific form of Works Committees. Industrial establishments
show such infinite variation in size, number of persons employed,
multiplicity of departments, and other conditions, that the particu-
lar form,of Works Committees must necessarily be adapted to the
circumstances of each case, It would, therefore, be impossible to
formulate any satisfactory scheme which does not provide a large
measure of elasticity,

Tfe are confident that the nature of the particular organization
necessary for the various cases will be settled without difficulty
by the exercise of goodwill on both dides.

We Itavo tr,o "non on r to be,

Sir,

Your obedient Servants,*

J. H. Whitley, Chairman,

F.	S. Button.

S« J* Chapman

G.	H. Claughton.

J. R. Clynes.

F. N» Hepworth.

Wilfrid Hill.

J. A. Hobson,

A. Susan Lawrence.

Maurice Levy.

J. J, Mallon.

Thos, R, Ratcliffe-Ellis,

Allan M* Smith,

D. R. H. Williams,

Mona Wilson,

F, Wilson,
A, Greenwood,

Secretaries,

18th October 1917.

*Sir G. J» Carter and Mr. Smillie were unable to attend any
of the meetings at which this Report was considered and they there-
fore do.not sign it. Sir G. J» Garter has intimated that in his
view, in accordance with the principl.es indicated in paragraphs 3,4
and 5 of the Report, it is important that ’Works Committees should
not deal with matters Which ought to be directly dealt with by the
firms concerned or their respective Associations in conjunction
with the recognized representatives of the Lrade Unions whose
members are affected*

27REPORT

on

CONCILIATION and ARBITRATION*

(In substitution of (Cd*908i*))

28MINISTRY OF RECONSTRUCTION

Committee on Relations between Employers and Employed,.

'	the Right Hon. J*H. WHITLEY,M.P,, Chairman

Mr. F. S. Button
Sir George J* Carter, K.B.E,

Professor S. J. Chapman, O.B.E.

Sir Gilbert Claughton, Bart.

Mr. R. Glynefe, M. P*

*Mr. F,-N. Hepworth.

*Mr. w; Hill,

Mr* J. A. Hobson,

Miss Susan Lawrence.

*Sir Maurice Levy, Bart„,M»B*

Mr. J, J. MaiIon

Sir Thos, R, Ratcliffe-Ellis,

Mr, Robert Smillie,

Mr. Allan M. Smith*

*Mr, D. R. H, Williams,

Miss Mena Wilsen,

Mr. H. J. Wilson, C. B, E*, Ministry tf Labour, ) seGreta,rles
Mr. Arthur Greenweod, Ministry of Reconstruction, )

*Additional members of the Committee, appointed in connection
with the present Report.	/

Ministry of Reconstruction,

2, Queen Anne*s Gate Buildings,

London, S.W.l,

29REPORT OH CONCILIATION AND ARBITRATION,

To the Right Honourable D. Lloyd George, M» F*, Prime Minister,

Sir,

We believe that the recommendation made in our earlier Reports
for the establishment of Industrial Councils will provide facilities
for full and free discussion of matters affecting the several in-
dustries and so improve the relations between Employers and Employed,
We have thought it necessary, however, tc give some attention to
the cases in which the panties may desire voluntarily to refer some
difference that has arisen to Arbitration or Conciliation, But it
must be understood that we do not intend to express any views on
the extent to which disputes can be equitably or satisfactorily
settled in this way. As regards arbitration, our sole concern in
this Report is with the question of the machinery to he provided
when it is the expressed wish of both parties, for any reason, to
have recourse to it*

2.	We are opposed to any system of Compulsory Arbitration;
there is no reason to believe that such a system is generally de-
sired by employers and employed and, in the absence of such general
acceptance, it is obvious that its imposition would lead to unrest*
The experience of Compulsory Arbitration during the war has shown
that it is not a successful method of avoiding strikes, and in
normal times it would undoubtedly prove even less successful. Dis-
putes can only be avoided by agreement between employers and workers
and by giving to the latter the greater measure of interest in the
industry advocated in our former reports; but agreement may
naturally include the decision of both parties to refer any specified
matter or matters to arbitration, whether this decision is reached
before or after a dispute arises.

3,	For the same reason we do not recommend any scheme relating
to conciliation which compulsorily prevents strikes or lock-outs
pending injury. But it is obviously possible and desirable that in
some instances arrangements should be voluntarily made in organised
trades for holding an inquiry before recourse to extreme measures;
and we suggest that the Ministry of Labour should be authorized to
hold a full inquiry when satisfied that it was desirable, without
prejudice to the power of the disputing parties to declare a strike
or lock-out before or during the progress of the inquiry*

4.	It is important that it should be clearly understood that
we do not contemplate the imposition ef an elaborate system of
conciliation and Arbitration upon industry, in place of the present
well-recognized voluntary conciliation and arbitration machinery
which exists in so many of the important trades of the country.

On the contrary, we desire to emphasize the advisability of a
continuance, as far as possible, of the present system whereby
industries make their own agreements and settle their differences
themselves*

5,	The extent to which machinery for th§ conciliatory adjust-
ment of disputes exists in the important trades of this country

is one of the most marked features of its industrial organization,
and the valuable work that has been done by the numerous Concilia-
tion and Arbitration Boards in the past has rendered it possible
for the State to remain very much in the background. There seems

30no reason to suppose that after the war these Boards will not
continue to work effectively, and it may be (especially in so
far as they may become merged in or correlated with the Joint
Industrial Councils, whose establishment the Committee h&ve
recommended) that they will achieve an even larger degree of
success in securing the settlement of points that may arise be-
tween employers and employed, when.regular joint meetings, apart
from any disputes, have been established, and their benefit
experienced*

6,	It is desirable, however, to consider the part that should
be taken by the State in the event of those directly concerned in
industry be.ing unable to adjust their differences themselves* The
interest of the community may require that there should' be an
unbiassed and independent examination of the facts and circumstances
connected with any dispute between Employers and employed, On this
point' the Committee have had under consideration the Canadian
Industrial Disputes Investigation Act, and the Report on the work-
ing of that Act made by Sir George Askwxtb (Qa*6603), They have
also had under consideration the recommendations contained in

the Report of the Industrial Council (Cd, 6952 of 1913)*

The Committee endorse the view thgt there should be means by
which an independent inquiry may be made into the facts and cir-
cumstances of a dispute and an. authoritative pronouncement made
thereon, although this does not carry with it any compulsory power
of delaying strikes or lookouts.

7,	Section 2 (l) (a) of the Conciliation Act, 1896, empowers
the Ministry of Labour to cause an inquiry to be held into the
facts and circumstances of disputes-*. Presumably the existing
Act empowers the Ministry of Labour to publish reports made as a
result of inquiries of this character, but, if not, the necessary
power should he obtained, so that there may be immediate publica-
tion, for the information of those affected by the dispute and

of the public generally, of an independent and authoritative account
of the matters in difference.

The question whether these powers should be exercised in
respect of particular esses is one of which must be left to the
discretion of the Government Department concerned,

8,	Arbitration being recognized as an appropriate method
whereby the parties to industrial differences may voluntarily seek
to have those differences adjusted, it is necessary to consider
what form of arbitration tribunals are calculated to command the
confidence of those who may appeal to them. Under the Conciliation
Act the usual form of arbitration tribunal was the ’’single arbitrator,*',
an independent person .appointed by the Board of Trade sitting as

sole judge except in cases where the points in dispute necessitated
the assistance of technical assessors* Courts of Arbitration ,

(an employer's representative, a workmen' representative, and'an
independent chairman), were established in 1908, but comparatively
few oases are referred to this form of tribunal*

9,	Under the Monitions of War Act, in addition to single arbitra-
tors and Courts of Arbitration, two other forms of tribunal were
established-the Committee on Production and the Special Arbitration
Tribunal for Women’s Wages, The Committee on Production consisted

of three independent persons appointed by the Government, and ,
the majority of the disputes referred'to arbitration during the
war other than those affecting the wages of women on munitions work

31have been settled by that tribunal, Its personnel has recently
been changed and it is no// constituted on lines similar to
a Court of Arbitration* except that its members hold continuous
office and are not appointed ad hoc. The Special Arbitration
Tribunal for Women's Wages consists of an independent Chairman
and members chosen either for their official experience or their
special knowledge of the interests of employers and workpeople
respectively.

10,	As arbitrations affecting the same trade or section of
trades may recur* there are advantages to both employers and
workpeople in knowing that the tribunal to whioh they submit any
differences which they may have failed themselves to settle is
one to which previous differences have been submitted, and which
therefore has become to some extent familiar with the conditions
of the trade.

11,	For these reasons it would appear desirable that there
should be a Standing Arbitration Council on the lines of the
present temporary Committee on Production to whioh differences
of general principles and differences affecting whole industries
in large sections of' industries may be referred in cases where
the parties have failed to come to an agreement through their
ordinary procedure, and wish to refer the differences to arbitra-
tion.

Such tribunal should include in its membership persons who
have practical experience and knowledge of industry, and who are
acquainted with the respective standpoints of employers and work-
people.

12,	There are, however, certain administrative difficulties
connected with the utilization of tribunals of three or more per-
sons, particularly where the parties desire that their case should
be heard locally, and where the matter is one of relatively small
importance, and it is desirable that suitable persons should be
available to act as single arbitrators, where the parties agree

to submit their case to a single arbitrator, Persons possessing
experience of industrial conditions and acquainted with industrial
and workshop life, including representatives of labour, would seem
the most likely to command the respect and confidence of the parties.
It will be obvious that the efficiency of an arbitrator, provided
that he possesses the right personal qualifications, increases with
practice and the study of the conditions with which he has to deal.

13,	The question whether, and if so, by what means, awards

of single arbitrators should be co-ordinated with the more general
awards of the Standing Arbitration Council is one of considerable
difficulty, as there are important reasons why the several awards
should not conflict.

The experience which has been gained of the various forms of
arbitration tribunals suggests that there are great advantages to
all parties in facilitating co-ordination of decisions, Conflict-
ing decisions given by different tribunals are bound to cause
dissatisfaction to one or other party. With the object of avoiding
such conflict as much as possible it is of paramount importance
that the Department charged with the appointment of arbitrators
should be in a position t« ensure that the several arbitrators
should have opportunities of interchanging views and experiences.

The means to ensure reasonable co-ordination should be provided
through the secretariat of the Standing Arbitration Council.

The awards and decisions of that Council would be circulated
among the single arbitrators who would thus be kept in touch
with the more general and comprehensive cases.

3214,	In order that there might be the requisite differentia-
tion between questions of general importance or principle and
questions of comparatively less importance, the Department responsi-
ble for referring cases to arbitration should pass all cases to

the secretariat of the Standing Arbitration Council, This secretariat
should include a highly trained staff with experience of industry ,
and knowledge of arbitration work so that pwoper differentiation
would be made btween the various cases and, subject to the con-
currence of the parties, the several cases leferred to the form
of tribunal most competent to deal with them to the satisfaction
of those concerned*

15,	The question whether awards and agreements should be
made enforceable by means of monetary or other penalties was
examined exhaustively by the Industrial Council in an inquiry
commenced in 1912, and the Committee concur generally in the
views expressed in the Report made by the Council in 1913

(Cd, 6952) to the effect that, while it is to the interests of
both employers and workpeople and the community generally that
industrial agreements should be duly fulfilled* in the long run
this object is more likely to be secured by an increased regard
k for moral obligation, respect for an ihstructed public opinion,
and reliance on the principles of mutual consent, rather than
by the establishment of a system of monetary penalties*

16,	Our conclusions,therefore, are thats-

(a)	Whilst we are opposed to any system of Compulsory
Arbitration, we are in favour of an extension of voluntary
machinery for the adjustment of disputes. Where the parties
are unable to adjust their differences, we think that there
should be means by which an independent inquiry may be

made into facts and circumstances of a dispute, and an
authoritative pronouncement made thereon, though we do not
think that there should be any compulsory power of delaying
strikes and lockouts,

(b)	We further recommend that there should be established
a Standing Arbitration Council for oases where the parties wish
to refer any dispute to arbitration, though it is desirable
that suitable single arbitrators should be available, ’where

the parties so desire.

We have the honour to be,

Sir,

Your obedient Servants,*

H. J, Wilson,
A. Greenwood,

J, H, 'Whitley, Chairman,

F.	S. Button.

Geo, J* Carter,

S. J. Chapman*

G.	H. Claughton,

J. R. Clynes.

P. N. Hepworth*

Wilfrid Hill*

J. A, Hobson,

A, Susan Lawrence*
Maurioe Levy.

J, J, Mallon.	1

Thos* R, Ratcliffe-Ellis«
Allan M, Smith*

D, R, H. Williams.

Mona Wilson*

| Secretaries.

31st January 1918.

33r

* *Mr« Smilie was unable to attend any of the meetings
at which this Beport was considered and therefore does not
sign it, Mr, Allan M, Smith has not signed the Report* hot
makes the following statement :-"Without expressing aV^
opinion on the views contained in the Arbitration Report
of the Committee, I have refrained from signing the Beport,
bcoause 1 consider that the subject dealt with is qne’ which,
unprejudiced by any pronouncement of the Committee,' should
be left to the free discussion and consideration of thd1
employers and workpeople in each branch of industry,”

34LETS® AEDEESSED

\

by the

MINISTER OP LABOUR

to the Xeadlrsg

EMPLOYERS' ASSOCIATIONS AND

TRAXS2 UNIONS *

35LETTER ADDRESSED BY m2 MINISTER OF LABOUR
TO THE LEADING EMPLOYERS* ASSOCIATIONS
AND TRADE UNION'S.

Ministry of Labour, Montagu House, Whitehall,S.W.l,

Sir,

20th October,1917.

In July last a circular letter was addressed by the Ministry
of Labour to all the principal Employers' Associations and Trade
Unions asking for their views on the proposals made in the Report
of the Whitley Committee on Joint Standing Industrial Councils, a
further copy of which is enclosed. As a result of the replies
which have been received from a large number of Employers' organiza-
tions and Trade Unions generally favouring the adoption of those
proposals, the War Cabinet have decided to adopt the Report as
part of the policy which they hope to see carried into effect in
the field of industrial reconstruction.

In order that the precise effect of this decision may not be
misunderstood, I desire to draw attention to one or two points
which have been raised in the communications made to the Ministry
on the subject, and on which some misapprehension appears to
exist in some quarters.

In the first place, fears have been expressed that the proposal
to set up Industrial Councils indicates an intention to introduce
an element of State interference which has hitherto not existed
in industry. This is not the case. The formation and constitution
of the Councils must be principally the work of the industries
themselves. Although, for reasons which will be explained later,
the Government are very anxious that such Councils should be estab-
lished in all the well-organized industries with as little delay
as possible, they fully realize that the success of the scheme
must depend upon a general agreement among the various organiza-
tions within a given industry and a clearly expressed demand
for the creation of a Council, Moreover, when formed, the Councils
would be independent bodies electing their own officers and free
to determine their own functions and procedure with reference to
the peouliar needs of each trade* In fact, they would be autonomous
bodies, and they would, in effect, moke possible a larger degree of
self-government in industry than exists today.

Secondly, the Report has been interpreted as meaning that the
general constitution which it suggests should be applied without
modification to each industry. This is entirely contrary to the
view of the Government on the matter. To anyone with a knowledge
of the diverse kinds of machinery already in operation, and the
varying geographical and industrial conditions which affect
different industries it will be obvious that no rigid scheme
can be applied to all of them. Each industry must therefore adapt
the proposals made in the Report as may seem most suitable to its
own needs, In some industries, for instance, it may be considered
by both employers and employed that a system of Y/orks Committee
is necessary owing to the perfection of the arrangements already
tn operation for dealing with the difficulties arising in particular
works between the management and the trade union official. In
others, Works Committees have done very valuable work where they
have been introduced and their extension on agreed lines deserves
every encouragement. Again, in industries.which are largely based

36on district organizations it will probably be found desirable
to assign more important functions to the District Councils than
would be the case in trades which arc more completely centralized
in national bodies. All these questions will have to be threshed
out by the industries themselves and settled in harmony with their
particular needs,

Thirdly, it should be made clear that representation on the
Industrial Councils is intended to be on the basis of existing
organizations among employers and workmen concerned in each in-
dustry, although it will, of course, be open to the Councils,
when formed, to grant representation to any new bodies which may
come into existence and which may be entitled to representation.
The authority, and consequently the usefulness of the Councils
will depend entirely on the extent to which they represent the
different interests and enjoy the whole.hheai*tdd support of the
existing organizations, and it is therefore desirable that repre-
sentation should be determined on as broad a basis as possible,
Lastly, it has been suggested that the scheme is intended
to promote compulsory arbitration. This is certainly not the
case, ’Thatever agreements may be made for dealing with disputes
must be left to the industry itself to frame, and their efficacy
must depend upon the voluntary co-operation of the organizations
concerned in carrying them out,

I should not like to explain some of the reasons which have
made the Government anxious to see Industrial Councils established
as soon as possible in the organized trades. The experience of
the war has shown the need for frequent consultation between the
Government and the chosen representatives of both employers and
workmen on vital questions concerning those industries which have
been most affected by war conditions, In some instances different
Government Departments have approached different organizations in
the same industry, and in many cases the absence of joint repre-
sentative bodies which can speak for their industries as a whole
and voice the joint opinion of employers and workmen, has Tteen
found to render negotiations much more difficult than they would
otherwise have been, The case of the cotton trade, where the
industry is being regulated during a very difficult time by a
Joint Board of Control, indicates how greatly the task of the
State can be alleviated by a self-governing body capable of taking
charge of the interests of the whole industry. The problems
of the period of transition and reconstruction will not be less
difficult than those which the war has created, and the Govern-
ment accordingly feel that the task of rebuilding the social
and economic fabric on a broader and surer foundation will be
rendered much easier if in the organized trades there exist
representative bodies to which the various questions of difficulty
oan be feferred for consideration and advice as they arise. There
are a number of such questions on which the Government will need
the United and considered opinion of each large industry,
such as the demobilization of the Forces, the re-settlement
of munition workers in civil industries, apprenticeship
(especially where interrupted by war service), the training and
employment of disabled soldiers, and the control of raw materials;
and the more it is able to avail itself of such an opinion the
more satisfactory and stable the solution of these questions
is likely to be.

Further, it will be necessary in the national interest to
ensure a settlement of the more permanent questions which have
caused differences between employers and employed in the past,
on such a basis as to prevent the occurrence of disputes and of
serious stoppages in the difficult period during which the
problems just referred to will have to be solved. It is felt

37that this object can only.be secured by the existence of permanent
bodies on the lines suggested by the Whitley Report, which will
be capable not merely of dealing with disputes when they arise, but
of settling the big questions at issue so far as possible on such
a basis as to prevent serious conflicts arising at all*

The above statement of the functions of the Councils is not
intended to be exhaustive, but only to indicate some of the more
immediate questions which they will be called upon to deal with
when set up, Their general objects are described, in the words of the
Report as being "to offer to workpeople the means of attaining
improved conditions of employment and a higher standard of comfort
generally, and involve the enlistment of their active and continu-
ous co-operation in the promotion of industry," Some further
specific questions, which the Councils might consider, were
indicated by the Committee in paragraph 16 of the Report, and
it will be for the Councils themselves to determine what matters
they shall deal with, Further, such Councils would obviously be
the suitable bodies to make representations to the Government as
to legislation, which they thiiik would be of advantage to their
industry,

In order, therefore, that the Councils may be able to fulfil
the duties which they will be asked to undertake, and that they
may have the requisite status for doing so, the Government■desire
it to be understood that the Councils will be recognized as the
official standing Consultative Committees io the Government on
all future questions affecting the industries which they represent,
and that they will be the normal channel through which the opinion
and experience of an industry will be sought on all questions with
which the industry is concerned. It will be seen, therefore, that
it is intended that Industrial Councils should play a definite
and permanent part in the economic life of the country, and the
Government feels that it can relay on both employers and workmen
to co-operate in order to make that part a worthy one,

I hope, therefore, that you will take this letter as a formal
request to your organisation on the part of the Government to con-
sider the question of carrying out the recommendations of the
Report so far as they are applicable to your industry. The Ministry
of Labour will be willing to give every assistance in its power
in the establishment of Industrial Councils, and will be glad to
receive suggestions as to the way in which it can be given most
effectively* In particular, it will be ready to assist in the
convening of representative conferences to discuss the establish-
ment of Councils, to provide secretarial assistance and to be
represented, if desired, in a consultative capacity at the prelimin-
ary meetings, The Ministry will be glad to be kept informed
of any progress made in the direction of forming Counoils* Although
the scheme is only intended, and indeed can only be applied, in
trades which are well organised on both sides, I would point out
that it rests with those trades which do not at present possess a
sufficient organization to bring it about if they desire to apply
it to themselves*	^

In conclusion, I would again emphasize the pressing need for
the representative organization of employers and workpeople to
come together in the organized trades and to prepare themselves
for the problems of reconstruction by forming Councils competent
to deal with them* The Government trust that they will approach
these problems not as two opposing forces each bent on getting
as much and giving as little as can be contrived, but as forces
having a common interest in working together for the welfare of
their industry, not merely for the sake of those concerned in it,'
but also for the sake of the nation which depends so largely on
its industries for its well-being. If the spirit which has enabled all
classes to overcome by willing co-operation the innumerable dangers and
difficulties which have beset us during the war is applied to the problems
of Reconstruction, I am convinced that they can be solved in a way which
will lay the foundation of the future prosperity in the country and of
those engaged in its great industries.

I-.am, Sir,

Your obedient servant,

GEO, H. ROBERTS.

38#2683

MINISTER OP HECOlTSTIiUCT lOIi

GCmiTTES ON RELATIONS

BEOT2M

EMPLOYERS AND EMPLOYED

fiital report

Presented to Parliament by Command of H5s Majesty.

Cd. 9153

;MINISTRY OP RECONSTRUCTION

Committee on Relations between Employers and Brployed*

The Right Hon, J, H. WHITLEY, M.P., Chairman,

Mr* P, S. Button

Sir George J. Carter, K.B.E»

Mr# S. J. Chapman, C, B»E»

Sir Gilbert Claughton, Bart.

Mr* J. R. Clynes, M.P.

*Mr. F* N. Hepworth#

*Mr* W. Hill
Mr, J. A. Hobson,

Miss Susan Lawrence*

*Sir Maurice Levy, Bart*, M.P.

Mr* J. J. MaiIon.

Sir Thos. R, Ratcliffe~Ellis«

Mr* Robert Smillie

Sir Allan M. Smith, K.B.E,

*Mr» I). R. E, Williams.

Miss Mona Wilson.

Mr. H» J* Wilson, C.B.E., Ministry of Labour, }	4_	.

Mr* Arthur Greenwood, Ministry of Reconstruction,) ©dreuar^es*

* Additional members of the Committee, appointed in connection with

the present Report,

Ministry pf Reconstruction,

2, Queen Anne's Gate Buildings,
London, S. %W. I*3

FINAL REPORT.

To the St. Hon. D. LLOYD GEORGE, M.P., Prime Minister.

SIR,

The Committee was appointed by the Prime Minister in October, 1916, with the
following terms of references-

(1)	To make and consider suggestions for securing a permanent improvement

in the relations between employers and workmen.

(2)	To recommend means for securing that industrial Conditions affecting

the relations between employers and workmen shall be systematically
reviewed by those concerned, with a view to improving conditions in
the future.

This reference might be held to invite us to recommend in detail schemes appli-
cable to varied industries. From this we have refrained, in the belief that it is
wiser to indicate a ground plan only, and invite the persons actually engaged in the
several industries to build the fabric suited to their own conditions.

2,	We have presented four Reports. In our first Report on Joint Industrial
Councils (Cd. 8606) we recommend the establishment for each of the principal well-
organised industries of a triple form of organisation, representative of employers
and employed, consisting of Joint Industrial Councils, Joint District Councils, and
Works Committees, each of the three forms of organisation being linked up with the
others so as to constitute an organisation covering the whole of the trade, capable
*f considering and advising upon matters affecting the welfare of the industry, and
giving to labour a definite and enlarged share in the discussion and settlement of
industrial matters with which employers and employed are jointly concerned.

3,	In our second Report on Joint Industrial Councils (Cd. 9002) we proposed
for trades where organisation is at present very weak or non-existent an adaptation
and expansion of the system of Trade Boards working under an amended Trade Boards
Act; and for trades in which organisation is considerable, but not yet general, a
system of Joint Councils with some Government assistance which may be dispensed with
as these industries advance to the stage dealt with in our first Report.

In the second Report we proposed also a plan whereby the Joint Council of an
Industry when it has agreed upon a minimum standard of working conditions for those
employed In the industry may have the means of making those conditions general in any
district or over the whole country.

Taking our first and second Reports together they constitute a scheme designed
tc cover all the chief industries of the country and to equip each of them with a
representative joint body capable of dealing with matters affecting the welfare of
the industry in which employers and employed are concerned, and of earing for the
progressive inprovement of the industry as an integral part of the national prosper-
ity.

4.	We have considered it no less important that in each factory or workshop,
where the circumstances of the industry permit, and when the conditions which we
have stated are fulfilled, there should be a Works Committee, representative of the
management and the men and women employed, meeting regularly to consider questions
peculiar to the individual factory or workshop, which affect the daily life and
comfort of the workers and in no small degree the efficiency of the work, and in
which practical experience will bring a valuable contribution to the improvement of
methods, This question was the subject of our third Report. (Cd. 9085.)

5,	We wish to re-affirm our conviction, expressed in the first Report, of the
urgency of the matter. In our opinion there is pressing need that every organised
industry should equip itself with a representative machinery capable of dealing with
the large questions of common interest to employers and employed arising in war
time, during demobilisation and in the period after the war. Further, we believe
that when the Joint Councils have gained confidence and experience in dealing with4

tlie urgent problems of the moment they will find their sphere of usefulness to be
much Wider-than they themselves imagined at their first inception*

Similarly, Works Committees, beginning perhaps with limited functions, will,
we anticipate, without in any way trenching upon matters appropriate to the Indus-
trial Councils find a continual growth in the list of questions appertaining to the
individual factory or workshop that can be dealt with by mutual agreement. We have
purposely refrained, throughout our Reports, from making proposals' in detail with
regard to the constitution of the Councils and Committees or the scope of their
functions because we are convinced that this can only be done satisfactorily by.the
people engaged in an industry and familiar With all its circumstances*

We note with sat isfact ion'that, following the approval of our first Report by
the War Cabinet, the Ministry of Labour has•established a special Department to give
assistance and information where it may be'desired, and to collect and codify the •
results of the activities and experience of the Councils that have been formed or
are coming into existence,

6, In our fourth Report (Cd* 9099) we have made recommendations on Concilia-
tion and Arbitration, Relying in the main on the methods built up by agreement with
in the various industries and looking to an expansion and improvement of these meth-
ods resulting from the habit of dealing with common questions in Joint Council, we
have limited our new proposals to the establishment of a small Standing Arbitration
Council, on the lines of the present Committee on Preduction, to deal with cases
where the parties have failed to come to an-agreement under their ordinary procedure
and wish to refer their differences to this Council.

In this connection we have made suggestions designed to minimise the occurrence
of conflicting awards,and to secure an interchange of knowledge and experience be- '
tween persons called upon to act as Arbitrators.

7* On the question of the adoption of schemes of Profit-sharing and Co-part-
nership we have considered the evidence at present available and have felt bound to
come to the conclusion that it does not justify us in putting forward any general
recommendations*

8* Qur recommendations have the effect of conferring upon the Joint Industri-
al Councils, and through them upon the several industries, a large measure of self-
government, Many of the subjects which might perhaps have been suggested, as form-
ing objects of enquiry by the present Committee are matters which, in cur opinion,
can more usefully and pfafitably be considered by the Joint organisations, composed
as they are of those actually concerned in the various trades. Moreover, since our
Committee was constituted two new Departments of State have been set up, via*, the
Ministry of Labour and the Ministry of Reconstruction*

The functions of these. Departments and the activities of the various Advisory1
Committees which they have established will necessarily include the consideration
of the relations between employers and employed and of the problems connected there-
with, and the Departments will no doubt- be better able (through and with the assist-
ance #f the Industrial Councils which we have recommended) to offer such advice and
guidance as may be found necessary than the present Committee,

It is clear therefore that if we were to undertake further enquiries there
would be a considerable amount ®f overlapping either with the work that is now being
carried on by the Central Departments cr with the duties and functions of the In-
dustrial Councils,

For these reasons we beg to be allowed to present this as our Final Report*

9, Throughout our work we have received most valuable assistance from our
Secretaries, Mr* H. J* Wilson;* and Mr* Arthur Greenwood, and we wish to record our
gratitude to them for the services they have rendered*

We have the honour to be,

Sir,

Your obedient Servants,*

J. H. WHITLET (Chairman).

F. S. BUTTON*

GEO* J* CARTER*

S. J. CHAPMAN.G. H. CLAUGHTON.

4 J. E. CLYNES.

F. N. HEPWORTH.

WILFRED HILL.

I J. A. HOBSON.

4 A. SUSAN LAWRENCE.

MAURICE LEVY.

4 J. J. MALLON.

THOS. R. RATCLIFFE-ELLIS.
D. H. R. WILLIAMS.

4 MONA WILSON.

H. J. WILSON ) „	^	.

A. GREENWOOD ) Secretaries.

1st July, 1918.

NOTE.

By attaching our signatures to the general Reports we desire to render hlearty
support to the recommendations that Industrial Councils or Trade Boards, according
to whichever are the more suitable in the circumstances, should be established' fur
the several industries or businesses and that these bodies, representative 6,f sil-.
ployers and employed, should concern themselves with the establishment of minimum
conditions and the furtherance of the common interests of their trades.

But while recognising that the more amicable relations thus established betweej
capital and labour will afford an atmosphere generally favourable to industrial
peace and progress, we desire to express our view that a complete identity of intf
ests between capital and labour cannot be thus affected, and that such machinery
cannot be expected.to furnish a settlement for the more serious conflicts of inter*
involved in the working of an economic system primarily governed and directed by
motives of private profit.

J. R. CLYNES.

J. A. HOBSON.

A. SUSAN LAWRENCE.

J. J. MALLON.

MONA WILSON.

* Mr. Smillie was unable to attend any of the meetings at which this Report ws
sidered, and therefore does not sign it. Sir Allan M. Smith signs subject to
note to the Report on Conciliation and Arbitration.

The members whose names are marked 4 sign subject to the note appended.INTEHIM BEPCRT

on

JOINT STANDING 1“

COUNCILS*RECONSTRUCTION COMMITTEE

Sub-Committee cn Relations between Employers and Employed

INTERIM REPORT ON JOINT STANDING INDUSTRIAL
COUNCILS*

The Right Hon* J» H. WHITLEY, M, P,, Chairman*

Mr*	P*	S.	Button,

Mr#	G.	J,	Carter.	!

Professor S, J, Chapman.

Sir Gilbert Claughton, Bart,

Mr»	J.	R.	Ciynes,	M.P.

Mr*	J*	A,	Hobson,

Miss Susan Lawrence*

Mr* J. J. Mallon.

Sir Thos* R. Ratcliffe-Ellis,

Mr, Robert Smillie*

Mr, Allan M, Smith*

Miss Mona Wilson*

Mr, H. J* Wilson, Ministry of Labour
Mr, Arthur Greenwood,

SecretariesTo the Right Honourable y, Lloyd George, ,vi.P., Prime'minister.
Sir,

We have the honour to submit the following Interim Report on
Joint Sranding Industrial Councils,

2.	The terms of reference to the Sub-Committee are;-

“(1) To make and consider suggestions for securing a perma-
.nent improvement in the relations between employers'and workmen.

"(2) To recommend means for securing that industrial conditions
affecting the relations between employers and workmen shall
be systematically reviewed by those concerned,	a view to

improving conditions m the future.

3,	after a general consideration of our duties n relation to

the natters referred to us, we decided first to address ourselves to the
problem of establishing permanently improved relations between employers
and employed in the main industries of the country, in which there exist
representative organizations on both sides. The present report accordingly
deals more especially with these trades. We s^re proceeding with the
consideration of the problems connected with the industries which are
less well organized.

4.	\7e appreciate that under the pressure of war both employers and
workpeople ana their organizations are ver^ much preoccupied, but, not-
withstanding, we believe it to be of the highest importance that our
proposals should be put before those concerned without delay, so that
employers and employed may meet in the near future and discuss the
problems before them,

5,	The circumstances of the present time are admitted on all sides
to offer a great opportunity for securing a permanent improvement in the
relations between employers and employed, while failure to utilize the
opportunity nay involve the nation in grave industrial difficulties at the
end of the war.

It is generally allowed that the war almost enforced some reconstruc-
tion of industry, and in considering the subjects referred to us we have
kept in view the need for securing in the development of reconstruction
the largest possible measure of co-operation between employers and
employed.

In the interests of the community it is vital that after the war
the co-operation of all classes, established'!during the war, should continue,
and more especially with regard to the relations between employers and
employed. For securing improvement in the latter, it is essential that
and proposals put forward should offer to workpeople the means of attain-
ing improved conditions of employment and. a higher standard of comfort
generally, and involve the enlistment of their active and continuous co-
operation in the promotion of industry.

To this end, the establishment for each industry of an organization,
representative of employers and workpeople, to have as its object the
regular consideration of natters affecting the progress and well-being of
the trade from the point of view of all those engaged in it, so far as this
is consistent with the general interest of the community, appears to us
necessary,

6,	Llany complicated problems have arisen during the war which
have a bearing both on employers and workpeople, and may affect the
relations between them. It is clear that industrial conditions will
need careful handling if grave difficulties and strained relations areto toe avoided after the war has ended* The precise nature of the
problems to toe faced naturally varies from industry to industry,
and even from branch to branch within the same industry* Their
treatment consequently will need an intimate knowledge of the facts
and circumstances of each trade, and such knowledge is to be found
only among those directly connected with the trade*

7. With a view to providing means for carrying out the poli.cy
outlined above, we recommend that His Majesty's Government should
propose without delay to the various associations of employers and
employed the formation of Joint Standing Industrial Councils in the
several industries, where they do not already exist, composed of
representatives of employers and employed, regard being paid to
the various sections of the industry and the various c3asses of labour
engaged*

8» The appointment of a Chairman or Chairmen should, we think,
be left to the Council who may decide that these should be -

(1)	A Chairman for each side of the Council;

(2)	A Chairman and Vice-Chairman selected from the mem-
bers of the Council (one from each side of the Council)j

(3)	A Chairman chosen by the Council from independent
persons outside the industry; or

(4)	A Chairman nominated by such person or authority as
the Council may determine or, failing agreement, by the
Government.

9* The Council should meet at regular and frequent intervals*

10* The objects to"which the consideration of the Councils
should be directed should be appropriate matters affecting the sever-
al industries and particularly the establishment of a closer co-opera-
tion between employers and employed. Questions connected with demobili-
zation will call for early attention*

11.	One of the chief factors in the problem, as it at first
presents itself, consists of the guarantees given by the Government,
with Parliamentary sanction, and the various undertakings entered
into by employers, to restore the Trade Union rules and customs sus-
pended during the war. While this docs not mean that all the lessons
learnt during the, war should be ignored, it does mean that the definite
co-operation and acquiescence by both employers and employed must

be a condition of any setting aside of these guarantees or under-
takings, and that, if new arrangements are to be reached, in them-
selves more satisfactory to all parties but not in strict accordance
with the guarantees, they must be the joint work of employers and
employed.

12.	The matters to be considered by the Councils must inevitably
differ widely from industry to industry, as different circumstances
and conditions call for different treatment, but we are of opinion
that the suggestion set forth below ought to be taken into account,
subject to such modification in each case as may serve to adapt them
to the needs of the various industries.

1?, In the well-organized industries, one of the first questions
to be Considered should be the establishment of local and works
organizations to supplement and make more effective the work of the
central bodies. It is not enough to secure co-operation at the centre
between the national organizations; it is equally necessary to enlist
the activity and support of employers and employed in the districts
and in individual establishments. The National Industrial Council
should not"be regarded as complete in itself; what is needed is a
triple organization-in the workshops, the districts, and nationally.

2Moreover» it is essential that the organization at eaoh of these
three stages should proceed on a common principle, and that the
greatest measure of common action between them should be secured*

14* With this end in view, we are of opinion that the following
proposals should be laid before the National Industrial Councils

(a)	That District Councils, representative of the Trade
Unions and of the Employers* Association in the industry, should
be created, or developed out of the existing maohinery for
negotiation in the various trades*

(b)	That Works Committees, representative of the man-
agement and of the workers employed, should be instituted in
particular works to act in ^loac co-operation witlj. the district
and national machinery*

As it is of the lightest importance that the scheme making pro-
vision for these Committees should be such as to secure the support
of the Trade Unions and Employers* Associations concerned, its design
should be a matter for agreement between these organizations*

Just as regular meetings and continuity of co-operation are essen-
'tial in the case of the National Industrial Councils, so they seem
to be necessary in the case of the district and works organizations.

The object is to secure co-operation by granting to workpeople a
greater share in the consideration of matters affecting their industry,
and this can only be achieved by keeping employers and workpeople in
constant touch*

15,	The respective functions of Works Committees, District Coun-
cils, and National Councils will n© doubt require to be determined
separately in accordance with the varying conditions of different
industries, Care will need to be taken in each case to delimit
accurately their respective functions, in order to avoid overlapping
and resulting friction. Per instance, where conditions of employ-
ment are determined by national agreements, the District Counoils

or Works Committees should not be allowed to contract out of con-
ditions so laid down, nor, where conditions are determined by local
agreements, should such power be allowed to Works Committees*

16,	Among the questions with which it is suggested that the
National Councils should deal or allocate to District Councils or
Works Committees the following may be selected for special
mention}-

(i)	The better utilization of the practical knowledge and
experience of the workpeople.

(ii)	Means for securing to the workpeople a greater share
in and responsibility for the determination and observance of

' the conditions under which their work is carried on*

(iii)	The settlement of the general principles governing the
conditions of employment, including the methods of fixing, pay-
ing, and readjusting wages, having regard to the need for
securing to the workpeople a share in the increased prosperity

of the industry,	*\

(iv)	The establishment of regular methods of negotiation
for issues arising between employers and workpeople* with a
view both to the prevention of differences, and to their better
adjustment when they appear.

(v)	Means of ensuring to the workpeople the greatest pos-
sible security of earnings and employment, without undue
restriction upon change of occupation or employer,

(vif Methods of fixing and adjusting earnings, piecework
prices, &C*. and of dealing with the many difficulties which arise
with regard to the method and amount of payment apart from the
fixing of general standard rates, which are already covered bv
paragraph (iii),	*

3(vii) technical education and training

(viiil Industrial research and the full utilization of its
results*

fix) The provision of facilities for the full considera-
tion and utilization of inventions and improvement designed by
workpeople* and for the adequate safeguarding of the rights of
the designers of such improvements.

(x)	Improvements of processes* machinery and organiza-
tion and appropriate questions relating to management and the
examination of industrial experiments, with speoial reference
to co-operation in carrying new ideas into effect and full con-
sideration of the workpeople’s point of view in relation to them*

(xi)	Proposed legislation affecting the industry.

17* The methods by which the functions of the proposed Coun-
cils should be correlated to those of joint bodies in the different
districts, and in the various works within the districts, must neoes-
sarily vary according to the trade* It may* therefore, be the best
policy to leave it to the trades themselves to formulate schemes suit-
able to their special circumstances, it being understood that it is
essential to secure in each industry the fullest measure of co-opera-
tion between employers and employed, both generally, through the
National Councils, and specifically, through district Committees and
workshop Committees*

18* It would seem advisable that the Government should put the
proposals relating to National Industrial Councils before the em-
ployers’ and workpeoples* associations and request them to adopt
such measures as are needful for their establishment where they
do not already exist* Suitable steps should also be taken, at the
proper time, tp put the matter before the general public*

19* In forwarding the proposals to the parties concerned, we
think the Government should offer to be represented in an advisory
capacity at the preliminary meetings of a Council, if the parties so
desire, ¥e are also of opinion that the Government should under-
take to supply to the various Councils such information on industrial
subjects as may be available and likely to prove of value,.

20,	It has been suggested that means must be devised to safe-
guard the interests of the community against possible action of an
anti-social character on the part of the Councils, We have, however,
here assumed that the Councils, in their work of promoting the
interests of their own industries, will have regard for the National
interest* If they fulfil their functions they will be the best
builders of national prosperity. The State never parts with its
in&arent over-riding power, but such power may be least needed when
least obtruded,

21.	It appears to us that it may be desirable at some later
stage for the State to give the sanction of law to agreements made
by the Councils, but the initiative in this direction should come
from the Councils themselves.

22# The plans sketched in the foregoing paragraphs are applica-
ble in the form in which they are given only to industries in which
there are responsible association of employers and workpeople which
can claim to be fairly representative. The case of the less well-
organized trades or sections of a trade necessarily needs further
consideration. We hope to be in a position shortly to put forward
recommendations that will prepare the way for the active utilization in

4these trades of the same practical oo-operation as is foreshadowed
in the proposals made above for the more highly organized trades,

23* It may be desirable to state here our considered opinion
that an essential condition of seouring a permanent improvement
in the relations between employers and employed is that there
should be adequate organisation on the part of both employers and
workpeople* The proposals outlined for joint co-operation throughout
the several indust-?iee depend for their ultimate success upon there
being such organization on both sides; and such organization is
necessary also to provide means whereby the arrangements and agree-
ments made for the industry may be effectively oarried out*

24* We have thought it well to refrain from making sugges-
tions or offering opinions with regard to suoh matters as profit-
sharing, oo-partnership, or particular systems of wages, &u. It would
be impracticable for us to make any useful general recommendations
on such matters, having regard to the varying conditions in
different trades* We are convinced, moreover, that a permanent
improvement in the relations between employers and employed must
be founded upon something other than a cash basis* What is wanted
is that the workpeople should have a greater opportunity of par-
ticipating in the discussion about and adjustment of those parts of
industry by whioh they are most affected*

25,	The schemes recommended in this Report are intended not
merely for the treatment of industrial problems when they have
beoome acute, but also, and more especially, to prevent their becom-
ing aoute. We believe that regular meetings to discuss industrial
questions, apart from and prior to any differences with regard to
them that may have begun to cause friction, will materially reduce
the number of occasions on whioh, in the view of either employers

or employed, it is necessary to contemplate recourse to a stoppage
of work*

26,	We venture to hope that representative men in each indus-
try* with pride in their calling and oare for its plaoe as a contributor
to the national well-being, will come together in the manner her®
suggested, and apply themselves to promoting industrial harmony and
efficiency and removing the obstacles that have hitherto stood in the
way,

Yfe have the honour to be, Sir,

Your obedient Servants,

J, H. Whitley, Chairman.

P. S. Button*

Geo. J. Carter,

S. J. Chapman*

G. H, Claughton,

J* R, Clynes,

J. A. Hobson.

A. Susan lawrenoe,

J. J. Mallon,

Thos* R* Ratcliffe-Ellis,

Robt, Smillie,

Allan M. Smith*

Mona Wilson,

8th Maroh, 1917,	H* J* Wilson, ) Seoretay4ea

Arthur Greenwood, )

5APBSNDIX,

The following questions were addressed by the Reconstruction
Committee to the Sub-Committee on the Relations between
Employers and Employed in order to make clear certain points
which appeared to call for further elucidation# The answers given
are subjoined,

Q, 1. In what classes of Industries does the Interim Report
propose that Industrial Councils shall be established? iZhat basis
of classification has the Sub-Committee in view?

A» 1# It has been suggested that, for the purpose of consider-
ing the establishment of Industrial Councils, or other bodies de-
signed to assist in the improvement of relations between employers and
employed, the various industries should be grouped into three classes-
(a) industries in which organization on the part of employers and
employed is sufficiently developed to render the Councils representa-
tive; (b) industries in which either as regards employers and em-
ployed, or both, the degree of organization, though considerable, is
less marked than in (a) and is insufficient to be regarded as repre-
sentative; and (c) industries in which organization is so imperfect,
either as regards employers or employed, or both, that no Asso-
ciations can be said adequately to represent those engaged in the
trade,

It will be clear that an analysis of industries will show a number
which are on the border lines between these groups and special con-
sideration will have to be given to such trades* So far as groups
(a) and (o) are concerned, a fairly large number of trades can
readily be assigned to them; grou^ (b) is necessarily more indeter-
minate#

For trades in group (a) the Committee have proposed the estab-
lishment of Joint Standing Industrial Councils in the several trades*

In dealing with the various industries it may be necessary to conr
sider specially the case of parts of industries in group (a) where
organization is not fully developed*

Q» 2. Is the machinery proposed intended to be in addition to
or in substitution for existing machinery? Is it proposed that
existing machinery should be superseded? By "existing machinery" is
meant Conciliation Boards and all other organizations for joint con-
ference and discussion between Employers and Employed,

A* 2* In most organized trades there already exist joint bodies
for particular purposes* It is not proposed that the Industrial Coun-
cils should necessarily disturb these existing bodies* A council would
be free, if it chose and if the bodies concerned approved, to merge
existing Committees, &ce, in the Council or to link them with the
Council as Sub-Committees,

Q. 3. Is it understood that membership of the Councils is to
be confined to representatives elected by Employers’ Associations and
Trade Unions? What is the view of the Sub-Committee regarding the
entry of new organizations established after the Councils have been
set up?

6A, 3* It is intended that the Councils should be composed only
of representatives of Trade Unions and Employers' Associations, and
that new organizations should be admitted only with the approval Of
the particular side of the Council of which the organization would
form a part,

Q* 4. {a) Is it intended that decisions reached by the Coun-
cils shall be binding upon the bodies comprising them? If so, is such
binding effect to be conditional upon the consent of each Employers'
Association or Trade Union affected?

A, 4. (a) It is contemplated that agreements reached by Indus-
trial Councils should (whilst not, of course, possessing the binding
force of law) carry with them the same obligation of observance as
exists in the case of Other agreements between Employers' Associa-
tions and Trade Unions. A Council, being on its workmen's side
based on the Trade Unions concerned in the industry, its powers or
authority could only be such as the constituent Trade Unions freely
agreed to.

Q. 4, (b) In particular, is it intended that all pledges given
either by the Government or employers for the restoration of Trade
Union rules and practices after the war shall be redemmed without
qualification unless the particular Trade Union concerned agrees to
alteration; or, on the contrary, that the Industrial Council shall
have power to decide such question by a majority vote of the workmen's
representatives from all the Trade Unions in the industry?

A, 4. (b) It is clearly intended that all pledges relating to
the restoration of Trade Union rules shall be redemmed without quali-
fication unless the particular Trade Union concerned agrees to altera-
tion; and it is not intended that the Council shall have power to
decide such questions by a majority vote of the workmen’s repre-
sentatives from all the Trade Unions in the industry.

7SECOND REPORT

on

JOINT STANDING INDUSTRIAL

COUNCILS,

8PEEFACTORY BOTE

This Report of the Committee on Relations between Employers
and Employed is now receiving the joint consideration of the Minis-
ter of Labour and myself, in the light of the practical experience
Which has been gained in establishing Joint Industrial Councils in
accordance with the proposals of the First Beport, A statement will
shortly be published with regard to any modification of the recom-
mendations of this Second Report whioh may be considered expedient
from the administrative point of view.

C, ALLISON,

February 28th, 1918,

MINISTRY OF RECONSTRUCTION,

f

Committee on Belations between Employers and Employed,

SECOND BEPORT ON JOINT STABLING INDUSTRIAL
COUNCILS,

The Right Hon, J, H, WHITLEY, M,P*, Chairman,

Mr, F* S. Button*

Sir George J* Carter, K.B.E.

Professor S. J, Chapman, C*B*E,

Sir Gilbert Claughton, Bart,

Mr, J. R. Clynes, M, P,

*Mr, S, N. Hepvvorth,

*Mr, W, Hill,

Mr, J, A, Hobson.	'

Miss Susan Lawrence,

*Sir Maurice Levy, Bart, M.P.

Mr, J« J* Mallon.

Sir Thos, B* Ratcliffe-Ellis»

Mr. Robert Smillie*

Mr* Allan M, Smith,

♦Mr* D. R. H. Williams,

Miss Mona Wilson,

Mr* H* J, Wilson, C.B*E,, Ministry of Labour, ) „	,

Mr* Arthur Greenwood, Ministry *f Reconstruction, ) eore aries»

*	*Additional members of the Committee, appointed in connection

with the present Report,

Ministry of Reconstruction,

2, Queen Anne’s Gate Buildings, London, S.W»1*

9MINISTRY OP RECONSTRUCTION.

Committee on Relations between Employers and Employed,

SECOND REPORT ON JOINT STANDING INDUSTRIAL
COUNCILS,

T» the Right Honourable D. Lloyd George, M*P», Prime Minister.
Sir,

Following the proposals made in our first Report, we have now
the honour to present further recommendations dealing with industries
in which organization on the part of employers and employed is
less completely established than in the industries covered by the
previous Report, and with industries in which such organization is
weak or non-existent,

2,Before commencing the examination of these industries the
Committee came to the conclusion that it would materially assist
their enquiries if they could have the direct advantage of the knowl-
edge and experience of some representative employers whe were
connected with industries of the kind with which the Committee were
about to deal; and it was arranged, with your approval, that Sir
Maurice Levy, Mr, F. N, Hepworth, Mr, W. Hill, and Mr, D.R. H.
Williams should be appointed to act with the Committee while these
industries were under consideration. This arrangement made it pos-
sible to release from attendance at the earlier meetings of the Com-
mittee Sir Gilbert Claughton, Sir T. Ratcliffe-Ellis, Sir George J.
Carter, and Mr. Allan Smith, whose time is greatly occupied in other
public work and whose experience is more particularly related to the
organized trades covered by our former Report*

5, It is difficult to classify industries according to the
degree of organization among employers and employed, but for conven-
ience of consideration the industries of the country may be divided
into three groups

«''Group A,-Consisting of industries in which organization on
the part of employers and employed is sufficiently developed to
render their respective associations representative of the great
majority of those engaged in the industry. These are the indus-
tries which we had in mind in our first Interim Report,

Group B,-Comprising these industries in which, either as
regards employers and employed, or both, the degree of organiza-
tion, though considerable, is less marked than in Group A,

Group C,-Consisting of industries in which organization is
so imperfect, either as regards employers or employed, or both,
that no associations can be said adequately to represent those
engaged in the industry.

The present Report is concerned with Groups B. and C.

104,	So far as Groups A. and C* are concerned, a number of
industries can be definitely assigned to them* Group B., however*
is necessarily more indeterminate. Some of the industries in this
group approach closely to industries in Group A., while others verge
upon Group C, Further, most industries, in whatever class they may
fall, possess a ’Hail,1' consisting of badly organized areas* or
secions of the industry. These facts we have borne in mind in formulat-
ing our further proposals,

5,	So far as industries in Group B, are concerned, we are of
opinion that the proposals of our First Report should, in their main
lines, be applied to those which* on examination by the Ministry of
Labour in consultation with the Associations concerned, are found to
be relatively well organized, We suggest, however, that where in
these industries a national Industrial Council is formed there should
be appointed one or at most two official representatives to assist in
the initiation of the Council* and continue after its establishment to
act in an advisory capacity and serve as a link with the Government.

We do not contemplate that a representative so appointed should be

a member of the National Industrial Council, in the sense that he
should have power, by a vote, to influence the decisions #f the Council,
hut that h&sshould attend its meetings and assist in any way which
may be found acceptable to it. By so doing he would acquire a continuous
knowledge of the conditions of the industry of which the Government
could avail itself, and so avoid many mistakes that under present
conditions are inevitable.

The question of the retention of the official representatives should
be considered by the Councils in the light of experienoe gained wheh
an adequate time has elapsed* We anticipate that in many cases their
continued assistance will be found of value even after an industry has
attained a high degree of organization, but in no case should they
remain except at the express wish of the Councils concerned.

6,	It may be that in some Group B. industries in which a Rational
Industrial Council is formed certain areas are well suited to the
establishment of District Councils, while in other areas the organi-
zation of employers or employed, or both, is too weak to be deemed
representative. There appears to be no good reason why in the former
areas there should not be District Industrial Councils, acting in con-
junction with the National Industrial Councils, in accordance with
the principles formulated in the Committee’s earlier report on the
well-organized trades,

7,	An examination of some of the industries coming within
Group B, may show that there are some which, owing to the pecu-
liarities of the trades and their geographical distribution, cannot
at present be brought readily within the scope of the proposals for

a National industrial Council, though they may be quite well organized
in two or more separate districts. In such a case we think there
might well be formed one or more District Industrial Councils. We
anticipate that in course of time the influence of the District
Councils would be such that the industry would become suitable for
the establishment of a National Industrial Council.

8,	In the case of industries in Group B» (as in the industries
covered by our first Report), we consider that the members of the
National Councils and of the District Councils should be representa-
tives of the Employers' Associations and Trade Unions concerned*

In the formation of the Councils, regard should be paid to the various
sections of the industry and the various classes of labour engaged, and
the representatives should include representatives of women's organiza-
tions* In view of the extent to which women are employed in these

11industries, we think the Trade Unions, when selecting their repre-
sentatives for the Councils, should include a number of women among
those who are appointed to be members,

9,	It does not appear to us necessary or desirable to suggest
any fixed standard of organization which should exist in any industry
before a National Industrial Council should be established. The case
of each industry will need to be considered separately, regard being
paid to its particular circumstances and characteristics.

In the discussion of this matter, we have considered whether it
would be feasible to indicate a percentage of organization which should
be reached before a Council is formed, but, in view of the great
diversity of circumstances in these industries and of the differing
degrees to which the several sections of some of them are organized,
we have come to the conclusion that it is more desirable to leave the
matter to the decision of the Ministry of Labour and the organizations
concerned, Whatever theoretical standard may be contemplated, we
think its application should not be restrictive in either direction.

10,	The level of organization in industries in Croup C. is such
as to make the scheme we have proposed for National or District
Industrial Councils inapplicable. To these industries the machinery
of the Trade Boards Act might well be applied, pending the develop-
ment of such degree of organization as would render feasible the
establishment of a National Council or District Councils,

11,	The Trade Boards Act was originally intended to secure the
establishment of a minimum standard of wages in certain unorganized
industries* but we consider that the Trade Boards should be regarded
also as a means of supplying a regular machinery for negotiation and
decision on certain groups of questions dealt with in other circum-
stances by collective bargaining between employers' organizations and
trade unions.

In order that the Trade Boards Act may be of greater utility in
connection with unorganized and badly organized industries or sections
of industries, we oonsider that certain modifications are needed
to enlarge the functions of the Trade Boards, We suggest that they
should be empowered to deal not only with minimum rates of wages,
but with hours of labour and questions cognate to wages and hours,

We are of opinion also that the functions of the Trade Boards should
be extended so as to enable them to initiate and conduct enquiries on
all matters affecting the industry or the section of the industry
concerned,

12,	If these proposals were adopted, there would be set>up, in a
number of industries or sections of industries, Trade Boards (con-
sisting of representatives of employers and employed, together with
"appointed members") who would, within the scope of their functions,
establish minimum standard rates and conditions applicable to the
industry or section of the industry which they represented, and con-
sider systematically matters affecting the well-being of the industry,

13,	Where an industry in Group C, becomes sufficiently organized
to admit of the institution of National and District Councils, we con-
sider that these bodies should be set up on lines already indicated.
Where it appears to a Trade Board that an Industrial Council should

be appointed in the industry concerned, they should have power (a)
to make application to the Minister of Labour, asking him to approach
the organizations of employers and employed, and (b) to suggest a
scheme by which the representation.of the workers* and employers'
sides of the Trade Board could be secured.

1214* Whether in industries in Group C« the establishment of
Works Committees is to be recommended is a question xvhich calls
for very careful examination, and we have made the g-enenal question
of works Committees the subject of a separate Beport.

*

15« We have already pointed out that most of the industries in
Groups A» and B. have sections ot areas in which the degree of organ-
ization among the employers and employed falls much below what is
normal in the rest of the industry; and it appears to us desirable
that the general body of employers and employed in any industry should
have some means whereby they may bring the whole of the trade up
to the standard of minimum conditions which have been agreed upon
by a substantial majority of the industry* We therefore recommend
that, on the application of a National Industrial Council sufficient-
ly representative of- to industry, the Minister of Labour should be
empowered, if satisfied that the case is a suitable one, to make an
Order either instituting for a section of the industry a Trade Board
on which the National Industrial Council,ishould be represented, or
constituting the Industrial Council a Trade Board under the provisions
of the Trade Boards Act* These proposals are not intended to limit,
but to be in addition to, the powers at present held by the Ministry
of Labour with regard to the establishment of Trade Boards in trades
and industries where they are considered by the Ministry to be
necessary.

16* We jfctave already indicated (paragraph 9) that the circum-
stances and characteristics of each of the several industries will
need to be considered before it can be decided definitely how far
any of our proposals can be applied in particular instances, and we
have refrained from attempting to suggest any exact degree of organiza-
tion which would be requisite before a particular proposal could be
applied* We think, however, that the suggestion we have made in the
preceding paragraph to confer upon a National Industrial Council the
powers of a Trad© Board should be adopted only in those oases in
which the Minister of Labour is satisfied that the Council represents
a substantial majority of the industry concerned,

17.	We are of opinion that most of the chief industries of the
country could be brought under one or other of the schemes contained
in this and the preceding Report, There would then be broadly two
classes or industries in the country-industries with Industrial Coun-
cils and industries with Trade Boards.

18.	In the former group the National Industrial Councils would
be constituted either in the manner we have indicated in our first
Report, carrying With them District Councils and Works Committees,
or on the lines suggested in the present Beport, i,e., each Council
coming within the scope of this Beport having associated with it one,
dr two, official representatives to aot in an advisory capacity and as
a link with the Government, in addition to the representatives of the
employers and employed.

19.	It should be noted that in the case of industries in which
there is a National Industrial Council, Trade Boards might, in some
instances, be associated with the Council in order to determine wages
and hours, &c,, in certain sections or areas. It is possible that in
some allied trades, really forming part of the same industry, both sets
of proposals might, in the first instance, be in operation side by side,
one trade having its Industrial Council and the other its Trade Board,
Where these circumstances obtain, we anticipate that the Trade Board
would be a stepping stone to the full Industrial Council status,

1320.	It may be useful to present a brief outline of the proposals
which we have so far put forward:-

(a)	In zhe more highly organized industries (Group A,)
we propose a triple organization of national, .district, and
workshop bodies, as outlined in our first Report,

(b)	In industries where there are representative associations
of employers and employed, which, however, do not possess the
authority of those in Gx-oup A, industries, we propose that the
triple organization should be modified by attaching to each
National Industrial Council one or at most two representatives

of the Ministry of Labour to act in an advisory capacity.

(c)	In industries in both Groups A, and B,, we propose that
unorganized areas or branches of an industry should be provided,
on the application of the National Industry Council and with the
Approval of the Ministry of Labour, with Trade Boards for such
areas or branches, the Trade Boards being linked with the
Industrial Council,

(d)	In industries having no adequate organization of em-
ployers or employed, we reoommend that Trade Boards should be
continued or established, and that these should, with the approval
of the Ministry of Labour, be enabled to formulate a scheme for
an Industrial Council, which might include in an advisory capacity

the "appointed members" of the Trade Board,	,

\

21.	It will be observed that the policy we recommend is based
upon organization on the part of both employers and employed. Where
this is adequate,as in Group A, industries, there is no.need of
external assistance. In Group B. industries, we think chat the
organizations ccaierned would be glad to have the services of an
official representative who would act as adviser and as a link with
the Government, In unorganized sections of both groups of industries
we believe that a larger measure of Government assistance will be both
desirable and acceptable, and we have therefore suggested the adoption
of the machinery of the Trade Boards Act in this connection. In
Group C.industries we think that organization will be encouraged by
the use of the pavers under the Trade Boards Act, and where National
Industrial Councils are set up we recommend that the "appointed
members" of the Trad© Board shopld act on the Councils in an advis-
ory capacity. Briefly, our proposals are that the extent of State
assistance should vary inversely with the degree of organization in
industries,

22.	We do not, however, regard Government assistance as an
alternative to the organization of employers and employed. »0n the
contrary, we regard it as a means of furthering the growth and
development of such organization,

23.	We think it advisable in this connection to repeat the fol-
lowing paragraph from our former Report:-

"It may be desirable to state here our considered opinion
that an essential condition of securing a permanent improvement
in the relations between employers and employed is that there
should be adequate organization on the part of both employers and
workpeople. The proposals outlined for joint co-operation through-
out the several industries depend for their ultimate success upon
there being such organization on both sides; and such organization
is necessary also to provide means whereby the arrangements and
agreements made for the industry may be effectively carried out,"

1424. In considering the scope of the matters referred to us
we have formed t$e opinion that the expression ’’employers and
workmen" in our reference covers State and Municipal authorities
and persons employed by them. Accordingly we recommend that such
authorities and their workpeople should take into consideration
the proposals made in this and in our first Report, with a view
to determining how far such proposals can suitably be adopted
in their case,

We understand that the Ministry of Labour has up to the
present circulated our first Report only to employers’ and
workpeople’s associations in the ordinary private industries*

Fe think, however, that both it and the present Report should
also be brought to the notice of State Departments and Municipal
Authorities employing labour.

25* The proposals we have set forth above do not require
legislation except on three points, namely, to provide-

(1)	That the Trade Boards shall have power, in addition
to determining minimum rates of wages, to deal with hours of
labour and questions cognate to wages and hours*

(2)	That the Trade Boards shall have power to initiate
enquiries, and make proposals in the Government Departments
ooncerned, on matters affecting the industrial conditions
of the trade, as well as on questions of general interest
to the industries concerned respectively.

(3)	That when an Industrial Council sufficiently representa-
tive of an industry makes application, the Minister of labour
shall have power, if satisfied that the case is a suitable one,
to make an Order instituting for a section of the industry a
Trade Board on which the Industrial Council shall be represented,
or constituting the Council a Trade Board under the Trade
Boards Act.

26. The proposals which we have made must necessarily be
adapted to meet the varying needs and circumstances of different
industries, and it is not anticipated that there will be uniformi-
ty in practice* Our recommendations are intended merely to set
forth the main lines of development which we believe to be
essential to ensure better relations between employers and employed.
Their application to the several industries we can safely leave
to those intimately concerned, with the conviction that the
flexibility and adaptability of industrial organization which
have been so large a factor in enabling industry to stand the
enormous strain of the war will not fail the country when peace
returns.

27, Other problems affecting the relations between employers
and employed are engaging our attention, but we believe that, what-
ever further steps may be necessary to accomplish the object we
have in view, the lines of development suggested in the present
Report and the one which preceded it are fundamental, We believe
that in each industry there is a sufficiently large body of
opinion willing to adopt the proposals we have made as a means
of establishing a new relation in industry.

We have the honour to be,

Sir,

Tour obedient Servants,*

15J.H, Whitley, Chairman,
F.S, Button#

S.J* Chapman.

G»II* Claughton#

J#B. Clynes,

F, H, Hepworth,

Wilfrid Hill,

J,A» Hobson,

A,Susan Lawrence,

Maurice Levy,

J. J.Mallon.

Tlios. B» Eat cliff e*El 1 is,
Allan M, Smith,

D.B.H. Williams,

Mona Wilson,

H. J. Wilson,)
A, Greenwood,}

Secretaries,

18 Ootober 1917.

*Sir G» J. Carter and Mr, Smillie were unable to attend any
of the meetings at which this Report was considered and they
therefore do not sign it.

16JOINT MEMORANDUM OF THE MINISTER

OF RECONS AUCTION

and the

MINISTER OF LABOUR,

Explaining the Governmentfs view of the Proposals

of the

SECOND WHITLEY REFORT,

17INIUSTRIAL councils MI TRAIE BOARDS

Joint Memorandum by the Minister of Reconstruction and the

Minister of Labour.

1,	The proposals contained in the First Report on Joint Stand-
ing Industrial Councils of the Committee on Relations between
Employers and Employed have been adopted by the Government* The
steps which have been taken to establish Industrial Councils have
enabled the Government to consider the proposals of the Second Re-
port on Joint Standing Industrial Councils in the light ol exper-
ience* This Report, which deals with industries other than those
which are highly organized, follows naturally upon the First Report
of the Committee, and develops the line of policy therein proposed.

It has not been found possible from the administrative point of
view to adopt the whole of the recommendations contained in the
Second Report, but such modifications as it seems desirable to make
do not affect the principles underlying the Committee's proposal
for the establishment of Joint Industrial Councils, They are de-
signed to take advantage of the administrative experience of the
Ministry of Labour with regard to both Industrial Councils and
Trade Boards. In view of the growing interest which is being
taken in the establishment of Industrial Councils and of the pro-
posed extension of Trade Boards, it appears desirable to set forth
the modifications which the Government regard as necessary in
putting into operation the recommendations of the Second Report,
and also to make clear the relations between Trade Boards and In-
dustrial Councils.

2.	The First Report on Joint Standing Industrial Counoils
referred only to the well-organized industries. The Second Report
deals with the less organized and unorganized trades, and suggests

the classification of the industries of the country into three groupet-
"Group A,-Consisting of industries in which organization
on the part of employers and employed is sufficiently developed
to render their respective associations representative of the
great majority of those engaged in the industry. These are
the industries whioh we had in mind in our first Interim Report,
"Group B,-Comprising those industries in which, either
as regards employers and employed, or both, the degree of organ-
ization though considerable, is less marked than in Group A,

"Group C,-Consisting of industries in which organization
is so imperfeot, either as regards employers or employed, or
both, that no associations can be said adequately to represent
those engaged in the industry,"

The proposals of the Committee on Relations between Employers
and Employed are summarized in paragraph 20 Of their Second Report
as follows!--

"(a) In the more highly organized industries (Group A,}
we propose a triple organization of national, distriot, and
workshop bodies, as outlined in our First Report,

"(b) In industries where there are representative associa-
tions of employers and employed, whioh, however, do not possess
the authority of those in Group A. industries, we propose that
the triple organization should be modified, by attaching to
eaoh National Industrial Counoil one, or at most two, representa-
tives of the Ministry of Labour to act in an advisory capacity,

18"(c) la industries in both Group A. and B», we propose
that unorganized areas or branches of an industry should be
provided, on the application of the National Industrial
Council, and with the approval of the Ministry of Labour,
with Trade Boards for such areas or branches, the Trade
Boards being linked with the Industrial Council.

"(d) In industries having no adequate organization of
employers or employed, we recommend that Trade Boards should
be continued or established, and that these should, with the
approval of the Ministry of Labour, be enabled to formulate
a scheme for an Industrial Council, which might include, in
an advisory capacity, the appointed members of the Trade Board.'*

It may be convenient to set out briefly the modifications of
the above proposals, which it has been found necessary to make*

(1)	As regards (b) it has been decided to recognize one
type of Industrial Council only, and not to attach official
representatives to the Council, except on the application of
the Industrial Council itself*

(2)	As regards (c) and (d) the relations between Trade
Boards and Industrial Councils raise a number of serious admin-
istrative difficulties due to the wide differences in the
purpose and structure of the two types of bodies. It is not
regarded as advisable that a Trade Board should formulate a
scheme for an Industrial Council, nor ib it probable that
Trade Boards for unorganized areas will be set up in conjunc-
tion with a Joint Industrial Council.

3. It is necessary at the outset to emphasize the fundamental
differences between Industrial Councils and Trade Boards. A Joint
Industrial Council is voluntary in its character and can only be
brought into existence with the agreement of the organizations of
employers and workpeople in the particular industry, and the
Council itself is composed exclusively of persons nominated by
the Employers' Assocaitions and Trade Unions concerned. The In-
dustrial Council is, moreover, within very wide limits, able to
determine its own functions, machinery and methods of working.

Its functions in almost all cases will probably cover a wide range
and will be concerned with many matters other than wages. Its
machinery and methods will be based upon past experience of the
industry and the existing organization of both employers and
employed. Industrial Councils will, therefore, vary in structure
and functions as can be seen from the provisional constitutions
already submitted to the Ministry of Labour. Financially they
will be self-supporting, and will receive no monetary aid from
the Government. The Government proposes to recognize the Indus-
trial Council in an industry as the representative organization
to which it can refer. This was made clear in the Minister of
Labour's circular letter of October 20th, 1917, in which it is
said that "the Government "desire it to be understood that the
"Councils will be recognized as the official standing consultative
"Committee to the Government on all future questions affecting the
"industries which they represent, and that they will be the normal
"channel through which the opinion and experience of an industry
"will be sought on all questions in which the industry is concerned."

A Trade Board, on the other hand, is a statutory body established
by the Minister of Labour and constituted in accordance with Regu-
lations made by him in pursuance of the Trade Boards Act; and its
expenses, in so far as authorized by the Minister of Labour and
sanctioned by the Treasury, are defrayed out of public money.

19The Regulations may provide for the election of the representatives of
employers and workers or for their nomination by the Minister of Labour*
but in either ca.se provision must be made for the due representation of
homeworkers in trades in which a considerable proportion of homeworkers
are engaged,* On account of the comparative lack of organization in the trades
to which the Act at present applies* the method of nomination by the Minister
has proved in pract Lee to be p?*eferable to that of election,and in nearly
all cases the representative members of Trade Boards are now nominated by
the Minister, The Employers"Associations and Trade Unions in the several
trades are invited to submit the names of candidates for the Minister’s con-
sideration, and full weight is attached to their recommendation, but where
the trade organizations do not fully represent all sections of the trade,
it is necessary to look outside them to find representatives of the different
processes and districts affected,

A further distinction between Trade Boards and Industrial Councils is,
that while Industrial Councils are composed entirely of representatives of •
the Employers’ Associations and Trade Unions in the industry, every Trade
Board includes, in addition to the representative members, a small number
usually three) of "appointed members,” one of whom is appointed by the
Ministor to act as Chairman and one as Deputy Chairman of the Board, The
appointed members arc unconnected with the trade and are appointed by the
Minister as impartial persons. The primary function of a Trade Board is
the determination of minimum rates of wages, and when the minimum rates
of wages fixed by a Trade Board have been confirmed by the Minister of
Labour, they are enforceable by criminal proceedings, and officers are
appointed to secure their observance* The minimum rates thus become part
of the law of the land, and are enforced in the same manner as, for example,
the provisions of the Factory Acts. The purpose, structure, and functions
of Industrial Councils and Trade Boards are therefore fundamentally different.
Their respective areas of operation are also determined by different considera-
tions. An Industrial Council will exercise direct influence only over the
organizations represented upon it. It will comprise those employers'associa-
tions with common interests and common problems; similarly its trade union
side will be composed of representatives of organizations whose interests
are directly inter-dependent. An Industrial Council therefore is representative
of organizations whose objects and interests, whilst not identical, are
sufficiently interlocked to render common action desirable. The various organ-
isations represent the interests of employers and workers engaged in the pro-
duction of a particular commodity or service (or an allied group of commodi-
ties or services),

A Trade Board, on the other hand, is not based on existing organizations
of employers and employed, but covers the whole of the trade for which it is
established. As the minimum rates are enforceable by law, it is necessary
that the boundaries of the trade should bo precisely defined; this is done,
within the limits prescribed by statute, by the Regulations made by the
Minister of Labour, Natural divisions of industry are, of course, followed
as far as possible, but in many cases the line of demarcation must necessarily
be somewhat arbitrary* In the case of Industrial Councils difficult demarca-
tion problems also arise, but the considerations involved are somewhat
different, as the object is to determine whether the interests represented by
given organizations are sufficiently allied to justify the co-operation of
these organizations in one Industrial Council*

4. The reports received from those who are engaged in assisting the
formation of Joint Industrial Councils show that certain paragraphs in the
Second Report of the Committee on Relations between Employers and Employed have
caused some confusion as to the character and scope of Joint Industrial
Councils and Trade Boards respectively. It is essential to the future
development of Joint Industrial Councils that their distinctive aim and
character should be maintained. It is necessary therefore to keep clearly in
mind the respective functions of the Joint Industrial Council and the Trade
Board, in considering the recommendations contained in the following paragraphs
of the Second Reporti-

(a) Paragraphs 3, 4 and 5, dealing with the division of Joint In-
dustrial Councils into those that cover Group A,industries, and those

that cover Group B, industries.

20(b)	Paragraph 7, dealing with district Industrial Councils in
industries where nft National Council exists*

(c)	Paragraphs 10,13,15 and 16, dealing with Trade Boards in
relation to Joint Industrial Councils*

(d)	Paragraphs 11 and 12, dealing with Trade Boards in indus-
tries which are not suitably organized for the establishment of a
Joint Industrial Council*

5# Distinction drawn between Joint Industrial Councils in Group A.
Industries and Group B» Industries,- In paragraph 9 of the Second Report
it is implied that the Ministry of Labour would determine whether the
standard of organization in any given industry has reached such a stage
as to justify the official recognition of a Joint Industrial Council in
that industry. It is clear, however, that it would be impossible for the
Ministry to discover any satisfactory basis for distinguishing between
an industry which falls in Group A,, and one which falls into Group B,

It is admitted in paragraph 9 of the Second Report, that no arbitrary
standard of organization could be adopted, and it would be both invidious
and impracticable for the Ministry of Labour, upon whom the responsibility
would fall, to draw a distinction between A, and B« Industries, The only
clear distinction is between industries which are sufficiently organized
to justify the formation of a Joint Industrial Council and those which
are not sufficiently organized* Individual cases must be judged on their
merits after a consideration of the scope and effectiveness of the
organization, the complexity of the industry and the wishes of those
concerned.

The experience already gained in connection with Joint Industrial
Councils indicates that it would be inadvisable in the case of industries
in Group B, to adopt the proposal that "there should be appointed one or
"at most two official representatives to assist in the initiation of the
"Council and continue after its establishment to act in an advisory capacity
"and serve as a link with the Government," It is fundamental to the idea
of a Joint Industrial Council that it is a voluntary body set up by the
industry itself, acting as an independent body and entirely free from
all State control, Whilst the Minister of Labour would be willing to
give every assistance to Industrial Councils, he would prefer that any
suggestion of this kind should come from the industry, rather than from
the Ministry,

The main idea of the Joint Industrial Council as a Joint Body repre-
sentative of an industry and independent of State control has not become^
familiar and the introduction of a second type of Joint Industrial Counoil
for B, industries would be likely to cause confusion and possibly to preju-
dice the future growth of Joint Industrial Councils,

In view of these circumstances, therefore, it'has been decided to
adapt a single type of Industrial Council,

6.	District Industrial Councils, - Paragraph 7 of the Second Report
suggests that in certain industries in which a National Industrial Council
is not likely to be formed, in the immediate future, it might none the
less be possible to form one or more "District" Industrial Councils.

In certain cases the formation of joint bodies covering a limited area
is probable, It would, however, avoid confusion if the term "Distriet"were
not part of the title of suoh Councils,and if the use of it were confined
to District Councils in an industry where a National Council exists. In-
dependent local Councils might well have a territorial designation instead,

7,	Trade Boards in Relation to Joint Industrial Councils*- The distinc-
tion between Trade Boards and Joint Industrial Councils has been set forth
in paragraph 3 above. The question whether an Industrial Council should be
formed for a given industry depends on the degree of organization achieved
by the employers and workers in the industry, whereas the question whether

a Trade Board should be established depends primarily on the rates of wages
prevailing in the industry or in any part of the industry. This distinction
makes it clear that the question whether a Trade Board should or should noli
be set up by the Minister of Labour for a given industry must be decided
apart from the question whether a Joint Industrial Council should or should
not be recognized in that industry by the Minister of Labour,

It follows from this that it is passible that both a Joint Industrial
Council and a Trade Board may be necessary within the same industry*

21In highly organized industries tho rates of wages prevailing will
not, as a rule, he so low as to necessitate the establishment of a Trade
Board* In some cases, however, a well-defined section of an otherwise
well-organized industry or group of industries may he unorganized and
ill-paid; in such a case it would clearly be desirable for a Trade Board
to be established for the ill-paid section,while there should at the
same time be an Industrial Council for the remaining sections,or even
for the whole,of the industry or industrial group.

In case of other industries sufficiently organized, to justify the
establishment of an Industrial Council, the organizations represented on
the Council may nevertheless not be comprehensive enough to regulate
wages effectively throughout the industry. In. such cases a Trade Board
for the whole industry may possibly be needed#

Vifiiere a Trade Board covers the whole or part of an industry covered
by a Joint Industrial Council, the relations between them may, in order
to avoid any confusion or misunderstanding, be defined as follows

{1) Where Government Departments wish to consult the industry,
the Joint Industrial Council, and not the Trade Board, will be
recognized as the body to be consulted#

(2)	In order to make use of the experience of the Trade Board,
the constitution of the Industrial Council should be s» drawn as to
make full provision for consultation between the Council and the Trade
Board on matters referred to the former by. a Government Department;
and to allow of the representation of the Trade Board on any Sub-
Committee of the Council dealing with questions with which the

Trade Board is concerned,

(3)	The Joint Industrial Council clearly cannot under any
circumstances over-ride the statutory powers conferred upon the
Trade Board, and if the Government at any future time adopted the
suggesvion contained in Section 21 of the First Report that the
sanction of law should he given on the application of an Industrial
Council to agreements made by the Council, such agreements could not
be made binding on any part of a trade governed by a Trade Board,

so far as the statutory powers of the Trade Board are concerned,

The Minister of Labour will not ordinarily set up a Trade Board
to deal with an industry or branch of an industry, in which the majority
of employers and workpeople are covered by wage agreements, but in which
a minority, possibly in certain areas, are outside the agreement. It
would .appear that the proposal in Section 21 of the First Report was
specially designed to meet such cases. Experience has shown that there
are great difficulties in the way of establishing a Trade Board for one
area only in 'which an industry is carried on, without covering the whole
of a Trade, though the Trade Boards Act allows of this procedure,

8# Trade Boards in industries which are not sufficiently organized
for the establishment of a Joint Industrial Council*-Section 3 of the
Trade Boards Act, 1909, provides that "a Trade Board for any trade shall
"consider, as occasion requires, any mattdr referred to them by a
"Secretary of State, the Board of Trade, or any other Government Depart-
ment, with reference to the industrial conditions of the trade, and shall
"make a report upon the matter to the department by whom the question
"has been referred,"

In case of an industry in which a Trade Board has been established,
but an Industrial Council has not been formed, the Trade Board is the
only body that can claim to be representative of the industry as a whole,

It is already under a statutory obligation to consider questions
referred to it by a Government Department; and where there is
a Trade Board but no Industrial Council in an industry it will
be suggested to Government Departments that they should consult
the Trade Board as occasion required in the same manner as they
would consult Industrial Councils,

22On the other hand, for the reasons whiph have been fully-
set out above, Industrial Councils must be kept distinct from
Trade Boards, and the latter, owing to their constitution,
cannot be converted into the former* If an industry in which
a Trade Board is established becomes sufficiently organized for
the formation of an Industrial Council, the Council would have to
be formed on quite different lines from the Trade Board, and the
initiative should come, not from the Trade Board, which is a
body mainly nominated by the Minister of Labour, but from the
organizations in the industry. Hence it would not be desirable
that Trade Boards should undertake the formation of schemes for
Industrial Councils#

7th June, 1918,

ZSSUPPLEMENTARY REPORT

on

WORKS COMMITTEES.

24MINISTRY OF RECONSTRUCTION

Committee on Relations between Employers and Employed,

Supplementary Report on Works Committees.

The Right Hon, J.H. Whitley,M.P» .Chairman,

Mr.F.S. Button.

Sir George J. Carter, K.B.R.

Professor S.J»Chapman,C,B.B.

Sir Gilbert Claughton,Bart.

Mr. J. R. Clynes, M.P.

*Mr» F, N. Hepworth,

*Mr, W. Hill*

Mr. J. A. HobsOn.

Miss Susan Lawrence.

*Sir Maurice Levy, Bart,,1,P,

Mr.J. J. Mallon,

Sir Thos, R. Ratcliffe-Ellis,

Mr. Robert Smillie,

Mr. Allan M, Smith,

*Mr, D.R.H.Williams,

Miss Mona Wilson,

Mr, H.J,Wilson,C,B.B., Ministry of Labour,	) secretaries,

Mr. Arthur Greenwood,Ministry of Reconstruction, )

*Additional members Of the Committee, appointed in connec-
tion with the present Report,

Ministry of Reconstruction,

,	2, Queen Anne's Gate Buildings,

London, S.W.l,

24SUPPLEMENTARY REPORT ON WORKS COMMITTEES »

To the Right Honourable D« Lloyd. George, M»P»,Prime Minister.

Sir,

In our first and second Reports we have referred to the
establishment of Works Committees ^representative of the manage-
ment and of the workpeople, and appointed from within the works,
as an essential part of the scheme of organization suggested to
secure improved relations between Employers and Employed. The
purpose of the present Report is to deal more fully with the pro-
posal to institute such Committees*

2, Better relations between employers and their workpeople can
best be arrived at by granting to the latter a greater share in the
consideration of matters with which they are concerned. In every
industry there are certain questions, such as rates of wages and
hours of work, which should be settled by District or National
Agreement, and with any matter so settled on Works Committee should
b® allowed to interfere; but there are also many questions closely
affecting daily life and comfort in, and the success of, the busi-
ness, and affecting in no small degree efficiency of working, which
are peculiar to the individual workshop or factory. The purpose
of a Works Committee is to establish and maintain a' system of
co-operation in all these workshop matters*

3* We have throughout our recommendations proceeded upon the
assumption that the greatest success is likely to be achieved by
leaving to the representative bodies of employers and employed in
each industry the maximum degree of freedom to settle for themselves
the precise form of Council or Committee which should be adopted,
having regard in eaoh case to the particular circumstances of the
trade; and, in accordance with this principle, we refrain from in-
dicating any definite form of constitution for the Works Committees,
Our proposals as a whole assume the existence of organizations of
both employers and employed and a frank and full recognition of
such organizations. Works Committees established otherwise than
in accordance with these principles could not be regarded as a
part of the soheme we have recommended, and might indeed be a
hindrance to the development of the new relations in industry to
which we look forward. We think the aim should be the complete
and coherent organization of the trade on both sides, and Works
ommittees will be of value in so far as they contribute to
such a result,

4. We are of opinion that the complete success of Works Com-
mittees necessarily depends largely upon the degree and efficiency
of organization in the trade, and upon the extent to which the
Committees can be linked up, through organizations that we have in
mind, with the remainder of the scheme which we are proposing, viz,,
the District and National Councils, We think it important to state
that the success of the Works Committees would be very seriously
interfered with if the idea existed that such Committees were used,
or likely to be used, by employers in opposition to Trade Unionism.

It is strongly felt that the setting up of Works Committees without
the co-operation of the Trade Unions and the Employers1 Associations

25

*In the use of the term "Works Committees" in this Report it is not
intended to use the word "‘works" in a technical sense; in such an
industry as the Coal Trade, for example, the term "Pit Committees"
would probably be the term used in adopting the scheme.in the trade or branch of trade concerned would stand in the way
of the improved industrial relationships which in these Reports
we are endeavoring to further*

5.	In an industry where the workpeople are unorganized* or
only very partially organized, there is a danger that Works
Committees may be used, or thought to be used, in opposition to
Trade Unionism, It is important that suoh fears should be guard-
ed against in the initiation of any scheme. We look upon success-
ful Works Committees as the broad base of the Industrial Struoture
which w© have recommended, and as the means of enlisting the
interest of the workers in the success both of the industry to
which they are attached and of the workshop or factory where so
much of their life is spent* These Committees should not, in
constitution or methods of working, discourage Trade organizations.

6.	Works Committees, in our opinion, should have regular meet-
ings at fixed times, and,as a general rule, not less frequently than
once a fortnight. They should always keep in the forefront the idea
of constructive co-operation in the improvement of the industry to
which they belong. Suggestions of all kinds tending to improvement
should be frankly welcomed and freely discussed. Practical pro-
posals should be examined from all points of view, There is an
undeveloped asset of constructive ability-valuable alike to the
industry and to the State- awaiting the means of realization^problems,
old and new, will find their solution in a frank partnership of
knowledge, experience and goodwill. Works Committees would fail in
IfeeiRfpygi purpose if they existed only to smooth over grievances.

7.	We recognize that, from time to time, matters will arise
which the management or the workmen consider to be questions they
cannot discuss in these joint meetings. When this occurs, we antici-
pate that nothing but good will come from the friendly statement of
the reasons why the reservation is made,

8* We regard the successful development and utilization of Works
Committees in any business on the basis recommended in this Report
as of equal importance with its commercial and scientific efficiency;
and we think that in every case one of the partners or directors,, or
some other responsible representative of the management, would be
well advised to devote a substantial part of his time and thought
to the good working and development of such a committee*

9, There has been some experience, both before the war and
during the war, of the benefits of Works Committees, and we think
it should be recommended most strongly to employers and employed
that, in connection with the scheme for the establishment of National
and District Industrial Councils, they should examine this experience
with a view to the institution of Works Committees on proper lines,
in works where the conditions render their formation practicable. We
have recommended that the Ministry of labour should prepare a sum-
mary of the experience available with reference to works Committees,
both before and during the war, including information as to any
rules or reports relating to suoh Committees, and should issue a
memorandum thereon for the guidance of employers and workpeople
generally, and we understand that such a memorandum is now in course
of preparation,*

26

♦This Memorandum is now completed and will be published
immediately by the Ministry of Labour,10.	In order to ensure uniform and common principles of aotion,
it is essential that where National and District Industrial Councils
exist the Works Committees should he in close touch with them, and
the scheme for linking up Works Committees with the Councils should
he considered and determined by the National Councils,

11,	We have considered it better not to attempt to indicate
any specific form of Works Committees. Industrial establishments
show such infinite variation in size, number of persons employed,
multiplicity of departments, and other conditions, that the particu-
lar form of Works Committees mast necessarily be adapted to the
circumstances of each case. It would, therefore, be impossible to
formulate any satisfactory scheme which does not provide a large
measure of elasticity.

We are confident that the nature of the particular organization
necessary for the various oases will be settled without difficulty
by the examine of goodwill on both Aides.

We Havo tlrve hxvncmr to bo,

Sir,

Your obedient Servants,*

J. H. Y/hitley, Chairman,

F.	S, Button,

S« J. Chapman

G,	H. Claughton.

J. R. Clynes,

F. N. Hepworth.

Wilfrid Hill.

J. A. Hobson,

A, Susan Lawrence,

Maurice Levy*

J, J. Mallon,

Thos, R» Ratcliffe-Ellis*

Allan M, Smith,

D. R. H. Williams*

Mona. Wilson,

H.	Wilson,
A, Greenwood,

Secretaries.

18th October 1917,

*Sir G. Jv Carter and Fir. Smillie were unable to attend any
of the meetings at which this Report was considered and they there-
fore do not sign it. Sir G. J. Carter has intimated that in his
view, in accordance with the principles indicated in paragraphs 3,4
and 5 of the Report, it is important that 7/orks Committees should
not deal with matters which ought to be directly dealt with by the
firms concerned or their respective Associations in conjunction
with the recognized representatives of the Trade Unions #hose
members are affected*

27REPORT

on

CONCILIATION and AREITHATIOR,

(In substitution of (Cd«908i.)}

2824INISTRY OF RECONSTRUCTION,

Committee on Relations between Employers and Employed,

The Eight Hon. J.H. WHITLEYjM.P,, Chairman
Mr. F. S. Button
Sir George J* Carter, K.B.E.

Professor S. J. Chapman, C.B.E.

,	Sir Gilbert Claughton, Bart.

Mr. J» B. Clynes, M. P.

*Mr, F.-N. Hepworth.

*Hr, W. Hill*

Mr, J. A, Hobson*

Miss Susan Lawrence.

*Sir Maurice Levy, Bart.,M,P.

Mr. J. J. MaiIon

Sir Thos, R, Ratcliffe-Ellis.

Mr. Robert Smillie,

Mr. Allan M, Smith*

*Mr, D, R. H* Williams,

Miss Mona Wilsen*

Mr, H. J. Wilson, C. B, E*, Ministry «f Labour, ) secretaries.
Mr. Arthur Greenwood, Ministry of Reconstruction, )

*Additional members of the Committee, appointed in connection
with the present Report,

Ministry of Reconstruction,

2* Queen Anne’s Gate Buildings,

London, S.W.l,

39REPORT ON CONCILIATION AND ARDlTRAI'ION.

To the Right Honourable D. Lloyd. George, M. P.» Prime Minister.

Sir,

We believe that the recommendation made in our earlier Reports
for the establishment of Industrial Councils will provide facilities
for full and free discussion of matters affecting the several in-
dustries and so improve the relations between Employers and Employed*
We have thought it necessary, however, to give some attention to
the cases in which the parties may desire voluntarily to refer some
difference that has arisen to Arbitration or Conciliation. But it
must be understood that we do not intend to express any views on
the extent to which disputes oan be equitably or satisfactorily
settled in this way. As regards arbitration, our sole concern in
this Report is with the question of the machinery to he provided
when it is the expressed wish, of both parties, for any reason, to
have recourse to it.

2,	We are opposed to any system of Compulsory Arbitration;
there is no reason to believe that such a system is generally de-
sired by employers and employed and, in the absence of such, general
acceptance, it is obvious that its imposition would lead to unrest.
The experience of Compulsory Arbitration during the war has shown
that it is not a successful method of avoiding strikes, and in
normal times it would undoubtedly prove even less successful. Dis-
putes can only be avoided by agreement between employers and workers
and by giving to the latter the greater measure of interest in the
industry advocated in our former reports; but agreement may
naturally include the decision of both parties to refer any specified
matter or matters to arbitration, whether this decision is reached
before or after a dispute arises.

3,	For the same reason we do not recommend any scheme relating
to oonciliation which compulsorily prevents strikes or lock-outs
pending injury. But it is obviously possible and desirable that in
some instances arrangements should be voluntarily made in organized
trades for holding an inquiry before recourse to extreme measures;
and we suggest that the Ministry of Labour should be authorized to
.hold a full inquiry when satisfied that it was desirable, without
prejudice to the power of the disputing parties to declare a strike
or lock-out before or during the progress of the inquiry,

4.	It is important that it should be clearly understood that
we do not contemplate the imposition ©f an elaborate system of
oonciliation and Arbitration upon industry,'in place of the present
well-recognized voluntary oonciliation and arbitration machinery
which exists in so many of the important trades of the country.

On the contrary, we desire to emphasize the advisability of a
continuance, as far as possible, of the present system whereby
industries make their own agreements and settle their differences
themselves*

5.	The extent to which machinery for th§ conciliatory adjust-
ment of disputes exists in the important trades of this country

is one of the most marked features of its industrial organization,
and the valuable work that has been done by the numerous Concilia-
tion and Arbitration Boards in the. past has rendered it possible
for the State to remaih very jnuoh...in the background. There seems

30no reason to suppose that after the war these Boards will not
continue to work effectively, and it may he (especially in so
far as they may become merged in or correlated with the Joint
Industrial Councils, whose establishment the Committee have
recommended) that they will achieve an even larger degree of
success in securing the settlement of points that may arise be-
tween employers and employed, whan regular joint meetings, apart
from any disputes, have been established, and their benefit-
experienced*

6. It is desirable* however, to consider the part that should
be taken by the State in the event of those directly concerned in
industry being unable to adjust their differences themselves. The
interest of the community may require that there should be an
unbiassed and independent examination of the facts and circumstances
connected with any dispute between employers and employed, On this
point the Committee have had mirier consideration the Canadian
Industrial Disputes Investigation Act, and the Bepcrt on the work-
ing of that Act mio.de by Sir Gaorge Askwith (Cd.6603), They have
also had under consideration the recommendations contained in
the Beport of the Industrial Council {Gd, 6952 of 1913),

The Committee endorse'the view that there should be means by
which an independent inquiry may be made into the facts.and cir-
cumstances of a dispute fend an authoritative pronouncement'made
thereon, although this does not carry with it any compulsory power
of delaying strikes or lookouts,

7* Section 2 (l) (a) of the Conciliation Act, 1896, empowers
the Ministry of Labour to cause an inquiry to be held into the
facts and circumstances,of disputes. Presumably the existing
Act empowers the Ministry of Labour to publish reports marie as a
result of inquiries of this character, but, if not, the necessary
power should be obtained, so that there may be immediate publica-
tion, for the information of those affected by the dispute and
of the publio generally, of an independent and authoritative account
of the matters in difference.

The question whether these powers should be exercised in
respect of particular esses is one of which must be left to the
discretion of the Government Department concerned*

8,	Arbitration being recognized as an appropriate method
whereby the parties to industrial differences may voluntarily seek
to have those differences adjusted, it is necessary to consider
what form of arbitration tribunals are calculated to command the
confidence of those who may appeal to them. Under the Conciliation
Act the usual form of arbitration tribunal was the "single arbitrator,*'
an independent person appointed by the Board of Trade sitting as

sole judge except in cases where the points in 'dispute.necessitated
the assistance of technical assessors* Courts of Arbitration
(an employer's representative, a workmen' representative., ana an
independent chairman), were established in 1908, but comparatively
few cases are referred to this form of tribunal*

9,	Under the Munitions of War Act, in addition to single arbitra-
tors and Courts of Arbitration, two other forms of tribunal were
established-the Committee on Production and the Special Arbitration
Tribunal for Women's Wages. The Committee on Production consisted.

of three independent persons appointed by the Government, and
the majority of the. disputes referred* to arbitration during the
war other than those affecting the wages of women on munitions work

31have been settled by that tribunal* Its personnel has recently
been changed and it is now constituted on lines similar to
a Court of Arbitration, except that its members hold continuous
office and are not appointed ad hoc. The Special Arbitration
Tribunal for Women's Wages consists of an independent Chairman
and members chosen either for their official experience or their
speoial knowledge of the interests of employers and workpeople
respectively*

10.	As arbitrations affecting the same trade or section of
trades may recur, there are advantages to both employers and
workpeople in knowing that the tribunal to which they submit any
differences which they may have failed themselves to settle is
one to which previous differences have been submitted, and which
therefore has become to some extent familiar with the conditions
of the trade*

11,	For these reasons it would appear desirable that there
should be a Standing Arbitration Council on the lines of the
present temporary Committee on Production to which differences
of general principles and differences affecting whole industries
in large sections of industries may be referred in cases where
the parties have failed to come to an agreement through their
ordinary procedure, and wish to refer the differences to arbitra-
tion.

Such tribunal should include in its membership persons who
have practical experience and knowledge of industry, and who are
acquainted with the respective standpoints of employers and work-
people.

12,	There are, however, certain administrative difficulties
connected with the utilization of tribunals of three or more per-
sons, particularly where the parties desire that their case should
be heard locally, and where the matter is one of relatively small
importance, and it is desirable that suitable persons should be
available to act as single arbitrators, where the parties agree
to submit their case to a single arbitrator, Persons possessing
experience of industrial conditions and acquainted with industrial
and workshop life, including representatives of labour, would seem
the most likely to command the respeot and confidence of the parties.
It will be obvious that the efficiency of an arbitrator, provided
that he possesses the right personal qualifications, increases with
practice and the study of the conditions with which he has to deal*

13* The question whether, and if so, by what means, awards
of single arbitrators should be co-ordinated with the more general
awards of the Standing Arbitration Council is one of considerable
difficulty, as there are important reasons why the several awards
should not conflict*

The experience which has been gained of the various forms of
arbitration tribunals suggests that there are great advantages to
all parties in facilitating co-ordination of decisions, Conflict-
ing decisions given by different tribunals are bound to cause
dissatisfaction to one or other party. With the object of avoiding
such conflict as much as possible it is of paramount importance
that the Department charged with the appointment of arbitrators
should be in a position t« ensure that the several arbitrators
should have opportunities of interchanging views and experiences.

The means to. ensure reasonable co-ordination should be provided
through the secretariat of the Standing Arbitration Council.

The awards and decisions of that Council would be circulated
among the single arbitrators who would thus be kept in touch
with the more general and comprehensive cases,

3214.	In order that there might he the requisite differentia-
tion between questions of general importance or principle and
questions of comparatively less importance, the Department responsi-
ble for referring cases to arbitration should pass all cases to

the secretariat of the Standing Arbitration Council, This secretariat
should include a highly trained staff with experience of industry ,
and knowledge of arbitration work so that proper differentiation
would be made btween the various cases and, subject to the con-
currence of the parties, the several cases referred to the form
of tribunal most competent to deal with them to the satisfaction
of those concerned*

15.	The question whether awards and agreements should be
made enforceable by means of monetary or other penalties was
examined exhaustively by the Industrial Council in an inquiry
commenced in 1912, and the Committee concur generally in the
views expressed in the Report made by the Council in 1913

(Gd, 6952) to the effect that, while it is to the interests of
both employers and workpeople and the community generally that
industrial agreements should be duly fulfilled, in the long run
this object is more likely to be secured by an increased regard
for moral obligation, respect for an instructed public opinion,
and reliance on the principles of mutual consent, rather than
by the establishment of a system of monetary penalties#

16.	Our conclusions,therefore, are thats-

(a)	Whilst we are opposed to any system of Compulsory
Arbitration, we are in favour of an extension of voluntary
machinery for the adjustment of disputes# Where the parties
are unable to adjust their differences, we think that there
should be means by which an independent inquiry may be
made into facts and circumstances of a dispute, and an
authoritative pronouncement made thereon, though we do not
think that there should be any compulsory power of delaying
strikes and lockouts,

(b)	We further recommend that there should be established
a Standing Arbitration Council for cases where the parties wish
to refer any dispute to arbitration, though it is desirable
that suitable single arbitrators should be available, where

the parties so desire#

We have the honour to be,

Sir,

Your obedient Servants,*

H, J, Wilson,
A. Greenwood,

J. H, Whitley, Chairman#

F.	S. Button#

Geo, J* Carter,

S. J. Chapman*

G,	H. Claughton#

J. R. Clynes*

F. N# Hepworth*

Wilfrid Hill,

‘J. A. Hobson,

A, Susan Lawrence.
Maurice Levy.

J. J, Mallon.	1

Thos* R. Ratcliffe-Ellis.
Allan M, Smith#

D, R. H. Williams.

Mona Wilson#

| Secretaries.

31st January 1918*

33*Mr« Smilie wag unable to attend any of the meetings
at which this Report was considered and therefore does not
sign it. Mr. Allan M, Smith has not signed the Report, but
makes the following statement{-"Without expressing any
opinion on the views contained in the Arbitration Report
of the Committee, I have refrained from sighing the Report,
because I oonsider that the subject dealt with is one which,
unprejudiced by any pronouncement of the Committee, should
be left, to the free discussion and consideration of the
employers and workpeople in each branch of Industry.”

34LETTER ADDRESSED

by the

MINISTER OP LABOUR

to the leading

EMPLOYERS' ASSOCIATIONS AND

IRAIffi UNIONSLETTER ADDRESSED BY SHE MINISTER CF LABOUR.
TO THE LEADING EMPLOYERS' ASSOCIATIONS
AND TRADE UNIONS.

Ministry of Labour, Montagu House, Whitehall,S,W,1*

20th October,1917,

Sir,

In July last a circular letter was addressed by the Ministry
of Labour to all the principal Employers' Associations and Trade
Unions asking for their views on the proposals made in the Report
of the Whitley Committee on Joint Standing Industrial Councils, a
further copy of which is enclosed. As a result of the replies
which have been received from a large number of Employers' organiza-
tions and Trade Unions generally favouring the adoption of those
proposals, the War Cabinet have decided to adopt the Report as
part of the policy which they hope to see carried into effect in
the field of industrial reconstruction.

In order that the precise effect of this decision may not be
misunderstood, I desire to draw attention to one or two points
which have been raised in the communications made to the Ministry
on the subjeot, and on which some misapprehension appears to
exist in some quarters.

In the first place, fears have been expressed that the proposal
to set up Industrial Councils indicates an intention to introduce
an element of State interference which has hitherto not existed
in industry. This is not the case. The formation and constitution
of the Councils must be principally the work of the indtistries
themselves. Although, for reasons which will be explained later,
the Government are very anxious that such Councils should be estab-
lished in all the well-organized industries with as little delay
as possible, they fully realize that the success of the scheme
must depend upon a general agreement among the various organiza-
tions within a given industry and a clearly expressed demand
for the creation of a Council, Moreover, when formed, the Councils
would be independent bodies electing their own officers and free
to determine their own functions and procedure with reference to
the peculiar needs of each trade. In fact, they would be autonomous
bodies, and they would, in effect, make possible a larger degree of
self-government in industry than exists today.

Secondly, the Report has been interpreted as meaning that the
general constitution which it suggests should be applied without
modification to each industry* This is entirely contrary to the
view of the Government on the matter. To anyone with a knowledge
of the diverse kinds of machinery already in operation, and the
varying geographical and industrial conditions which affect
different industries it will be obvious that no rigid scheme
can be applied to all of them, Each industry must therefore adapt
the proposals made in the Report as may seem most suitable to its
own needs* In some industries, for instance, it may be considered
by both employers and employed that a system of Works Committee
is necessary owing to the perfection of the arrangements already
4n operation for dealing with the difficulties arising in particular
works between the management and the trade union officials* In
others, Works Committees have done very valuable work where they
have been introduced and their extension on agreed lines deserves
every encouragement, Again, in industries-which are largely based

36on district organizations it will probably be found desirable
to assign more important functions to the District Councils than
would be the oase in trades which are more completely centralized
in national bodies. All these questions will have to be threshed
out by the industries themselves and settled in harmony with their
particular needs,

Thirdly, it should be made clear that representation on the
Industrial Councils is intended to be on the basis of existing
organizations among employers and workmen concerned in each in-
dustry, although it will, of course, be open to the Councils,
when formed, to grant representation to any new bodies which may
come into existence and which may be entitled to representation.
The authority, and consequently the usefulness of the Councils
will depend entirely on the extent to whioh they represent the
different interests and enjoy the wholerhesftdd support of the
existing organizations, and it is therefore desirable that repre-
sentation should be determined on as broad a basis as possible,

Lastly, it has been suggested that the scheme is intended
to promote compulsory arbitration. This is certainly not the
case. Whatever agreements may be made for dealing with disputes
must be left to the industry itself to frame, and their efficacy
must depend upon the voluntary co-operation of the organizations
concerned in carrying them out.

I should not like to explain some of the reasons which have
made the Government anxious to see Industrial Councils established
as soon as possible in the organized trades, The experience of
the war has shown the need for frequent consultation between the
Government and the chosen representatives of both employers and
workmen on vital questions concerning those industries which have
been most affected by war conditions, In some instances different
Government Departments have approached different organizations in
the same industry, and in many cases the absence of joint repre-
sentative bodies which can speak for their industries as a whole
and voice the joint opinion of employers and workmen, has been
found to render negotiations much more difficult than they would
otherwise have been, The case of the cotton trade, where the
industry is being regulated during a very difficult time by a
Joint Board of Control, indicates how greatly the task of the
State can be alleviated by a self-governing body capable of taking
charge of the interests of the whole industry* The problems
of the period of transition and reconstruction will not be less
difficult than those which the war has oreated, and the Govern-
ment accordingly feel that the task of rebuilding the social
and economic fabric on a broader and surer foundation will be
rendered much easier if in the organized trades there exist
representative bodies to which the various questions of difficulty
oan be feferred for consideration and advice as they arise, There
are a number of such questions on which the Government will need
the tfnited and considered opinion of each large industry,
such as the demobilization of the Forces, the re-settlement
of munition workers in civil industries, apprenticeship
(especially where interrupted by war service), the training and
employment of disabled soldiers, and the control of raw materials;
and the more it is able to avail itself cf such an opinion the
more satisfactory and stable the solution cf these questions
is likely to be.

Further, it will be necessary in the national interest to
ensure a settlement of the more permanent questions which have
caused differences between employers and employed in the past,
on such a basis as to prevent the occurrence of disputes and of
serious stoppages in the difficult period during whioh the
problems just referred to will have to be solved. It is felt

37that this object can only be secured by the existence of permanent
bodies on the lines suggested by the Whitley Beport, which will

@ capable not merely of dealing with disputes when they arise, but
of settling the big questions at issue so far as possible on such
a basis as to prevent serious conflicts arising at all*

. ™ke ak°ve statement of the functions of the Councils is not
intended to be exhaustive, but only to indicate some of the more
immediate questions which they will be called upon to deal with
when set Up, Their general objects are described in the words of the
Beport as being "to offer to workpeople the means of attaining
improved conditions of employment and a higher standard of comfort
generally, and involve the enlistment of their active and continu-
ous co-operation in the promotion of industry," Some further
specific questions, which the Councils might consider, were
indicated by the Committee in paragraph 16 of the Beport, and
it will be for the Councils themselves to determine what matters
they shall deal with, Further, such Councils would obviously be
the suitable bodies to make representations to the Government as
to legislation, which they think would be of advantage to their
industry,

In otder, therefore, that the Councils may be able to fulfil
the duties which they will be asked to undertake, and that they
may have the requisite status for doing so, the Government desire
it to be understood that the Councils will be recognized as the
official standing Consultative Committees to the Government on
all future questions affecting the industries which they represent,
and that they will be the normal channel through which the opinion
and experience of an industry will be sought on all questions with
which the industry is concerned. It will be seen, therefore, that
it is intended that Industrial Councils should play a definite
and permanent part in the economic life of the country, and the
Government feels that it can relay on both employers and workmen
to co-operate in order to make that part a worthy one,

I hope, therefore, that you will take this letter as a formal
request to your organization on the part of the Government to con-
sider the question of carrying out the recommendations of the
Beport so far as they are applicable to your industry. The Ministry
of Labour will be willing to give every assistance in its power
in the establishment of Industrial Councils, and will be glad to
receive suggestions as to the way in which it can be given most
effectively,. In particular, it will be ready to assist in the
convening of representative conferences to discuss the establish-
ment of Counoils, to provide secretarial assistance and to be
represented, if desired, in a consultative capacity at the prelimin-
ary meetings. The Ministry will be glad to be kept informed
of any progress made in the direction of forming Councils* Although
the scheme is only intended, and indeed can only be applied, in
trades which are well organized on both sides, I would point out
that it rests with those trades which do not at present possess a
sufficient organization to bring it about if they desire to apply
it to themselves,

In conclusion, I would again emphasise the pressing need for
the representative organization of, employers and workpeople to
come together in the organized trades and to prepare themselves
for the problems of reconstruction by forming Councils competent
to deal with them# The Government trust that they will approach
these problems not as two opposing forces eaoh bent on getting
as much and giving as little as can be contrived, but as forces
having a common interest in working together for the welfare of
their industry, not merely for the sake of those concerned in it,
but also for the sake of the nation which depends so largely on
its industries for its well-being. If the spirit which has enabled all
classes to overcome by willing co-rperation the innumerable dangers and
difficulties which have beset us during the war is applied to the problems
of Reconstruction, I am convinced that they can be solved in a way which
will lay the foundation of the future prosperity in the country and of
those engaged in its great industries.

I-.am, Sir,

Your obedient servant,

GEO* H. BOEERTS.

38#2683

MINISTER OP BECONSTBUCTION

COMMITTEE ON RELATIONS

BETWEEN

EMPLOYEES AJU) EMPLOYED

PHIAL BEPOBT

Presented to Parliament by Command of His Majesty.

Cd. 9153MINISTRY OP RECONSTRUCTION

Committee on Relations between Employers and Employed*

The Right Hon, J. H. WHITLEY, M.P., Chairman,

Mr, F» S. Button

Sir George J. Carter, E.B. E.

Mr. S. J, Chapman, C,B.E.

Sir Gilbert Claughton, Bart.

Mr, J. R. Clynes, M.P.

*Mr. F. N. Hepworth.

*Mr» W. Hill
Mr. J. A. Hobson,

Miss Susan Lawrence,

♦Sir Maurice Levy, Bart*, M.P.

Mr* J. J. MaiIon*

Sir Thos. R, Ratcliffe-Ellis?.

Mr* Robert Smillie

Sir Allan M. Smith, E.B.E,

*Mr. D, R, E* Williams*

Miss Mona Wilson.

Mr* H. J* Wilson, C*B.E., Ministry of Labour, )	.

Mr* Arthur Greenwood, Ministry of Reconstruction,) *“eei'eoa’r'--es^

* Additional members of the Committee, appointed in connection with

the present Report,

Ministry of Reconstruction,

2, Queen Anne's Gate Buildings,
London, S* W. I.3

FINAL EFFORT.

To the fit. Hon. D. LLOYD GEORGE, M. E., Prime Minister.

SIR,

The Committee was appointed by the Prime Minister in October, 1916, with the
following terms of reference:-

(1} To make and consider suggestions for securing a permanent improvement
in the relations between employers and workmen.

(2) To recommend means for securing that industrial conditions affecting

the relations between employers and workmen shall be systematically
reviewed by those concerned, with a view to improving conditions in
the future. *

This reference might be held to invite us to recommend in detail schemes appli-
cable to varied industries* From this we have refrained, in the belief that it is
wiser to indicate a ground plan only, and invite the persons actually engaged in the
several industries to build the fabric suited to their own conditions*

2,	We have presented four Reports, In our first Report on Joint Industrial
Councils (Cd. 8606) we recommend the establishment for each of the principal well-
organised industries of a triple form of organisation, representative of employers
and employed, consisting of Joint Industrial Councils, Joint District Councils, and
Works Committees, each, of the three forms of organisation being linked up with the
ethers so as to constitute an organisation covering the whole of the trade, capable
*f considering and advising upon matters affecting the welfare of the industry, and

-giving to labour a definite and enlarged share in the discussion and settlement of
industrial matters with which employers and employed are jointly concerned.

3,	In our second Report cn Joint Industrial Councils (Cd. 9002) we proposed
for trades where organisation is at present very weak or non-existent an adaptation
and expansion of the system of Trade Boards working under an amended Trade Boards
Act; and for trades in which organisation is considerable, but not yet general, a
system of Joint Councils with some Government assistance which may be dispensed with
as these industries advance to the stage dealt with in our first Report,

In the second Report we proposed also a plan whereby the Joint Council of an
Industry when it has agreed upon a minimum standard of working conditions for those
employed in the industry may have the means of making those conditions general in any
district or over the whole country*

Taking our first and second Reports together they constitute a scheme designed
tc cover all the chief industries of the country and to equip each of them with a
representative joint body capable of dealing with matters affecting the welfare of
the industry in which employers and employed are concerned, and of caring for the
progressive improvement of the industry as an integral part of the national prosper-
ity*

4,	We have considered it no less important that in each factory or workshop,
where the circumstances of the industry permit, and when the conditions which we
have stated are fulfilled, there should be a Works Committee, representative of the
management and the men and women employed, meeting regularly to consider questions
peculiar to the individual faotory or workshop, which affect the daily life and
comfort of the workers and in no small degree the efficiency of the work, and in
which practical experience will bring a valuable contribution to the improvement of
methtds. This question was the subject of our third Report* (Cd, 9085.)

5* We wish to re-affirm our conviction, expressed in the first Report, of the
urgency of the matter. In our opinion there is pressing need that every organised
industry should equip itself with a representative machinery capable of dealing with
the large questions of common interest to employers and employed arising in war
Hime, during demobilisation and in the period after the war* Further, we believe
that when the Joint Councils have gained confidence and experience in dealing with4 ' •

the urgent problems of the moment they will .find their sphere of usefulness to he
much wider than they themselves imagined at their first inception.

Similarly, Works Committees, beginning perhaps with limited functions, will,
we anticipate, without in any way trenching upon matters appropriate to the Indus-
trial Councils find a continual growth.in the list of questions appertaining to the
individual factory or workshop that can be dealt with by mutual agreement. We have
purposely refrained, throughout our Reports, from making proposals in detail with
regard to the constitution of the Councils and Committees or the scope of their
functions because we are convinced that this can only be done satisfactorily by the
people engaged in an industry and familiar with all its circumstances.

We note with satisfaction that, following the approval of our first Report by
the War Cabinet, the Ministry of labour has established a special Department to give
assistance and information where it-may be desired, snd to collect and codify the •
results of the activities-and experience of the Councils that have been formed or
are coming into existence.

6. In our fourth Report (Cd, 9099) we have made recommendations on Concilia-
tion and Arbitration, Relying in the main on the methods built up by agreement with
in the various industries and looking to an expansion and improvement of these meth-
ods resulting from the habit of dealing with common questions in Joint Council, we
have limited our new proposals to the establishment of a small Standing Arbitration
Council, on the lines of the present Committee an Production, to deal with cases
where the parties have failed to come to an agreement under their ordinary procedure
and.wish to refer their differences to this Council.

In this connection we have made suggestions designed to minimise the occurrence
of conflicting awards and to•secure an interchange of knowledge and experience be-
tween persons called upon to act. as Arbitrators,

?» On the question of the adoption of schemes of profit-sharing and Co-part-
nership we have considered the evidence at present available and have felt bound to
come to the conclusion that it does not justify us in putting forward any general
recommendations*

8* Our recommendations have the effect of conferring upon the Joint Industri-
al Councils, and through them upon the several industries, a large measure of self-'
government. Many of the subjects which might perhaps have been suggested as form-
ing objects of enquiry by the present Committee are matters which, in our opinion,
can more usefully and profitably be considered by the Joint organisations, composed
as they are of those actually concerned in the various trades* Moreover, since our
Committee was constituted two new Departments of State have been set up, via*, the
Ministry of labour and the Ministry of Reconstruction.

The functions of these Departments and the activities of the various Advisory
Committees which they have established will necessarily include the consideration
of the relations between employers and employed and of.the.problems connected there-
with, and the Departments will no dcubt be better able (through and with the assist-
ance ®f the Industrial Councils which we have recommended) to offer such advice and
guidance as may be found necessary than the present Committee.

It is clear therefore that if we were to undertake further enquiries ther'e
would be a considerable amount ®f overlapping either with the work that is now being
carried on by the Central Departments er with the duties and functions of the In-
dustrial Councils,

For these reasons we beg to be allowed to present this as our Final Report.

9. Throughout our work we have received most valuable assistance from our
Secretaries, Mr. H. J. Wilson., and Mr, Arthur Greenwood, and we wish to record our
gratitude to them for the services they have rendered*

We have the honour to be,

Sir,

your obedient Servants,*

J. H. WRIT LEST (Chairman).

F. S. BUTTON.

• GEO. J. CARTER,

S. J, CHAPMAN.5

Gr» H* C LAUGHTON.

4 J. E. CLYNES.

F. N. HEPWOETH.

WILFBED Hill.

4 J. A. HOBSON.

4 A. SUSAN LAWRENCE*
MAUEICE LEVY.

4 J. J. MAHON. '

THOS. E. RATCLIFFE-ELLIS.
D. H. B. WILLIAMS.

4 MONA WILSON.

H. J. WILSON ) „	^	.

A. GREENWOOD j 3ecretaries’

1st July, 1918.

NOTE.

By attaching our signatures to the general Reports we desire to render hearty
support to the recommendations that Industrial Councils or Trade Boards, according
to whichever are the more suitable in the circumstances, should be established for
the several industries or businesses and that these bodies, representative of em-
ployers and employed, should concern themselves with the establishment of minimum
conditions and the furtherance of the common interests of their trades.

But while recognising that the more amicable relations thus established between
capital and labour will afford an atmosphere generally favourable to industrial
peace and progress, we desire to express our view that a complete identity of inter-
ests between capital and labour cannot be thus affected, and that such machinery
cannot be expected to furnish a settlement for the more serious conflicts of interest
involved in the working of an economic system primarily governed and directed by
motives of private profit.

J. B. CLYNES.

J, A. HOBSON,

A. SUSAN LAWRENCE.
J. J. 1ALL0N.

MONA WILSON.

* Mr. Smillie was unable to attend any of the meetings at which this Report was con-
sidered, and therefore does not sign it. Sir Allan M. Smith signs subject to his
note to the Report on Conciliation and Arbitration.

The members whose names are marked 4 sign subject to the note appended.