1946

VICTORIA

INTERIM REPORT (No. 3)

OF THE

BOARD OF INQUIRY

APPOINTED TO EXAMINE SUGGESTIONS FOR

AMENDMENT AND

OF THE FACTORIES SHOPS ACTS

PRESENTED TO BOTH HOUSES OF PARLIAMENT BY HIS EXCELLENCY'S COMMAXD

[Ca~t of Rl'"port :-Preparation-Noli given. Printing (400 copies), £18.]

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8\)} ~nttumt,: J. J, GOURLEY, GOVERNMENT PRJNTD, MELBOURNE.

[Extract fltflfiiJif~, Gooernment Gazette, 26th November, 1940.J

BOARD OF INQUIRY FACTORIES AND SHOPS ACTS.

At tlte E:r,ecutit-e Council Chamber, Melbourne, the twenty-sixth day of November, 1940.

PRESENT: llis Excellency the Governor of Victoria

Mr. Old I Mr. Hyland

WHEREAS representations have been made that the Factories and Shops Acts require amendment: And whereas it is deemed expedient that an expert examination be made of any proposals for amendment: Now therefore His Excellency the Governor of the State of Victoria, in the Commonwealth of Australia, by and with the advice of the Executive Council of the said State, doth by this Order constitute and appoint:-

The Honourable PERCY JoHN CLAREY, M.L.C., CHARLEs HERBERT GRAXT, Esquire, GEORGE HAYES, Esquire, PEBCY CoLLINGwoon 0AKE, Esquire, JAMES VICTOR S·rouT, Esquire, and ERNEST WILLIAM TREND, Esquire,

to be a Board to invite and examine suggestions for amendment of the Factories and Shops Acts and to report upon the same with full power and authority to call before them or any four of them, any person whose evidence in the judgment of the Board, or of any member thereof, is material to the subject­matter of the inquiry to be made by the Board, and to inquire of and concerning the premises by all other lawful means whatsoever: A,nd it is hereby directed that the members of the said Board shall, from time to time, select a Chairman from their own number: And it is further directed that the said Percy John Clarey, Charles Herbert Grant, George Hayes, Percy Collingwood Oake, James Victor Stout, and Ernest William Trend shall, with as little delay as possible, report under their hands their opinions resulting from this inquiry, provid0d that in making such report only suggestions for amendment which are unanimously approved by the said Board shall be included, and where a difference of opinion is entertained both the subject-matter and the contending views shall be stated.

Whereof the said Percy John Clarey, Charles Herbert Grant, George Ha yes, Percy Collingwood Oake, James Victor Stout, and Ernest "\Villiam Trend, and all other persons whom it may concern, are to take notice and govern themselves accordingly.

And the Honorable Henry Stephen Bailey, His Majesty's Chief Secretary for the State of Victoria, shall give the necessary directions herein accordingly.

C. W. KINSMAN, Clerk of the Executive Council.

t:Extract froin Victoria Gov81'n'1'1U!Jnt Gazette, 3rd March. 1943.]

BOARD OF INQUIRY -FACTORIES AND SHOPS ACTS.

At the Executive Council Chamber, Melbourne, the first day of March, 1943.

PRESENT: His Excellency the Governor of Victoria

l\1r. Dunstan l Mr. Hogan Mr. Lind Mr. Hyland

WHEREAS by an Order made on the twenty·sixth day of November, 1940:­The Honorable PERCY JoHN CLAREY, M.L.C., CHARLES HERBERT GRANT, Esquire, GEORGE HAYES, Esquire, PERCY CoLLINGWOOD OAKE, Esquire, JAMES VICTOR STOUT, Esquire, and ERNEST WILLIAM TREND, Esquire,

were constituted and appointed a Board to invite and examine suggestions for amendment of the Factories and Shops Acts and to report upon the same :

And whereas Perey Collingwood Oake, Esquire, one of the persons, aforesaid has since died :

And whereas it is considered expedient to appoint another person to be a member of the Board in place of the said Percy Collingwood Oake :

Now therefore His Excellency the Governor of the State of Victoria, in the Commonwealth of Australia, by and with the advice of the Executive Council of the said State, doth by this Order appoint:-

RoBERT OsWALD SNAPE, Esquire, to be a member of the said Board.

Whereof the said Percy John (}larey, Charles Herbert Grant, George Hayes, James Victor Stont, Emest William Trend, and Robert Oswald Snape, and all other persons whom it may concern, are to take notice and govern themselves accordingly.

And the Honorable Henry Stephen Bailey, His Majesty's Chief Secretary for the State of Victoria, shall give the necessary directions herein accordingly.

C. W. KINSMAN, Clerk of the Executive Council.

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[Extract from Victoria G()f)flfnment Gazette, 20th December, 1944.]

BOARD OF INQUIRY FACTORIES AND SHOPS ACTS.

At the Executive Council Charnher, Melbourne, the eighteenth day of Decernher, 1944.

PRESENTl: His Excellency the Lieutenant-Governor of Victoria

Mr. Tuckett I Mr. Chandler

WHEREAS by an Order made on the twenty-sixth day of November, 1940:­

The Honorable PERCY JoHN CLAREY, M.L.C., CHARLES HERBERT GRANT, Esquire, GEORGE HAYES, Esquire, PERCY CoLLINGWOOD 0AKE, Esquire, J.ums VICTOR SToUT, Esquire, and ERNEST WILLIAM TREND, Esquire,

were constituted and appointed a Board to invite and examine suggestions for amendment of the Factories and Shops Acts, and to report upon the same :

And whereas by an Order made on the 1st day of March, 1943, Robert Oswald Snape, Esquire, was appointed to be a member of the said Board in place of the said Percy Collingwood Oake, Esquire:

And whereas the said Robert Oswald Snape, Esquire, has since resigned:

And whereas it is considered expedient to appoint another person to be a member of the Board in place of the said Robert Oswald Snape :

Now therefore His Excellency the Lieutenant-Governor of the State of Victoria, in the Commonwealth of Australia, by and with the advice of 'the Executive Council of the said State, doth by this Order appoint:-

KENNETH HERBERT BoYKETT, Esquire, to be a member of the said Board.

Whereof the said Percy John Clarey, Charles Herbert Grant, George Hayes, James Victor Stout, Ernest William Trend, and Kenneth Herbert Boykett, and all other persons whom it may concern, are to take notice and govern themselves accordingly.

And the Honorable Herbert John Thornhill Hvland, His Majesty's Chief Secretary for the State of Victoria, shall give the necessary directions herein accordingly.

C. W. KINSMAN, Clerk of the Executive Council.

The Honorable the Premier,

SIR, WAGE FIXING SYSTEMS.

Having last year visited New South 'Vales, Queensland, South Australia, and Western Australia, as indicated in its Interim Report No. 2, the Board of Inquiry, appointed to invite and examine suggestions for amendment of the Factories and Shops Acts, made a thorough examination of the systems operating in those States.

In carrying out the investigations every facility was afforded the members by all those whom they approached for information. Ministerial Heads of Departments, Departmental Officers, Members of Industrial Courts and their Officers, as well as the Representatives of Employers and of Employees were all most helpful and did their utmost to ensure that the Board secured all available information concerning the method of wage fixation obtaining in each State.

· Having completed our survey of these systems we find ourselves in a position in which we are unable to unanimously recommend either that a change should be made from the Wages Board system to any of the Court systems set up in other States or that the Wages Board system should be continued unaltered.

However, because of the vital importance of this matter, we feel it desirable to furnish this Interim Report No. 3 devoted exclusively to the views of members concerning the different systems under which wages and conditions are fixed in Victoria and those States visited by the Board.

Three separate submissions were placed before the Board and are attached hereto as appendices :-

Submission " A " by Messrs. K. H. Boykett and C. H. Grant (two of the three Employers' Representatives).

Submission "B" by Mr. E. W. Trend (Employers' Representative). Submission "C" by Hon. P. J. Clarey, 1\LL.C., and Messrs .. G. Hayes and

J. V. Stout (Employees' Representatives).

Messrs. Boykett and Grant expressed the opinion that the Wages Board system should be supplanted by a Court system.

Mr. Trend's view is that, with alterations as suggested in his submission, the Wages Board is the best form of tribunal for dealing with Victoria's Industrial problems.

Messrs. Clarey, Hayes, and Stout favour the retention of the Wages Board system but believe the powers of Wages Boards should be extended.

As a majority of the Board favours the retention of the Wages Board system the Board is now considering what amendments are necessary to this system to achieve greater efficiency.

The forwarding of this further Report will, it is felt, enable the Government to be informed as to the progress of the work of the Board which is continuing the duty imposed upon it of examining suggestions for amendment of the Acts.

It is with profound regret that, when submitting this Report we have to record the death of Mr. C. H. Grant, which occurred on the lOth instant in the Tasmanian aeroplane disaster.

Mr. Grant had been a member of the Board since its appointment in 1940. Because of his wide industrial experience and ability, his sound opinions, strong; character, and agreeable personality his loss is severely felt:

H. N. JONEs, Secretary, Melbourne, 29th March, 1946.

P. J. CLAREY, Chairman. K. H. BOYKETT, Member. GEO. HA YES, Member. J. V. STOUT, Member. ERNEST W. TREND, Member.

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. it J :·y ~·: l '': ; ~ . ; . . -,' .

,_., ' APPENDIX " A "

SUBMISSioN' '.BY 1\t:-RS. K. H. BOYKETT AND C. H. GRANT. When the Factorie{ ~ s~~. Act was originally enacted with the introduction of the wages Board

system, the sponsors beJWVed \bat the system was one which would have overcome the continual conflict existing between the ~plqyer and the employee in respect to conditions of employment. The problem is still with us and it is extremely doubtful whether it will ever be completely solved. Nevertheless, the experience gained since the inception can be used to analyse the effect it has had upon the question of industrial relationship; Theoretically, the principle of the two parties directly concerned being given an opportunity to settle their disputes is undoubtedly a good one, and for this reason, the Wages Board system has had many staunch supporters, who ·are still in favour of its retention. On the other hand, there are students of the system who hav~ to acknowledge the question from a practical point of view and who are of the opinion that the system needs changing in the light of experience and the recognition of modern trends.

About twenty years ago there began a radical change in the industrial set-up; Unions of employees were becoming larger and more numerous and a natural corollary to this was a wide-spread organization of employers. Although the Commonwealth Parliament had enacted industrial legislation on a Federal basis a good deal of scepticism bad been displayed towards it by both employer and employee bodies. It was about the early 1920's that a few of the larger Federal Unions utilized the Federal system and, following this, applications for the settlement of disputes in the Federal sphere became more numerous and it became apparent that organization of employees on a Federal basis was definitely established and would increase. It was evident that State Unions intended to link up with similar bodies in the various States and come within the control of the Commonwealth Court of Conciliation and Arbitration. The decision of the High Court that Federal Law and therefore a Federal Award had precedence. not only over a State Award but also State Law made it obvious that State Industrial Authorities would be limited in their sphere of jurisdiction. As recently as December, 1944, an attempt was made by the New South Wales Government to maintain the jurisdiction of one of its Acts as overriding a Federal Award in respect to the employment of females on certain machine operations. The case went before the High Court which was unanimous in upholding previous decisions and, therefore, it C•mld now be contended that the States in their Industrial Legislation must play a secondary part to the Federal Arbitration Court. This fact, while limiting the scope of the State, does not/ weaken its authority in industry or occupations not covered by a Federal Award and it is important that the State should provide a tribunal for. the many industries and occupations which are not, and probably never will be, covered by the Federal jurisdiction. For this reason it is necessary for the State Government to have a system which will operate in such a way as to recognize the distincton between the Federal and State functions and to have a tribunal capable of administering a system with full regard and power to observe the differences of the Federal and State Laws. ·

The framers of the Wages Board system designed it upon the recognition of an employee and employer being a citizen of the State, without any recognition of the employee or the employer having any collective rights. Theoretically, this idea may be sound, but it is difficult to conceive of any system of wage regulation today being instituted without a form of collective bargaining. The right of organization has been accepted as a principle by members of the League of Nations throughout the world. Thcrefor~, this principle of organization must be recognized and acknowledged by any system designed for tl1e fixation of wages and conditions of employment.

The Wages Board system in fact, although not legally compelled to do so, has functionetl in this way over the years. The methods adopted rest entirely upon the viewpoint of the administrators and this situation should not be allowed to remain.

The Factories and Shops Act failed to recognize the growth of organization of employees and employers, and consequently, provision was not made for such a system. These organizations have expanded and recognition by Governments is inevitable.

It is conceded that the Wages Board system as now operating is a very simple one, but that very simplicity has become, because of the present situation and trends, a grave wealmess. The Court changes which have occurred since the system was introduced demand a knowledge far beyond that which the average employer or employee can be expected to acquire. Even long before the war the handling of industrial matters was becoming highly specialized and the interlocking and overlapping of various systems, determinations, awards, etc., implied that the legal technicalities were becoming so involved that it became necessary for specialists acting for the respective parties in industry to become almost an institution. .

With the advent of the present war, the regulations became so intense that these specialists were called upon to accept responsibilities which were never thought of when the Wages Board system came into force. With the progress of industry it is obvious that regulations associated with industrial legislation will remain to a large extent, and probably in the future the duties of specialists will become more important than ever in the past, so that industrial authorities must recognize this fact and change any system which does not permit of the

'i.~#~!~~~ of the alteration in the powers and the duties of the various parties involved in the operations of

J11;:,•H 'lt'is th& duty of the State to provide proper means for organizations to· function and at the same time t~tQ~ lmder Statute, machinery which will allow justice to be given to the employee, permit the industry function efficiently, and protect the interests of the community .

• , ,.,, I!Jt{ ~ ·l.'elating to wage fixation rely upon the complexities of economic factors, and whatever system · is' cle;;~ tJ1ef lhttltority' when dealing with industry must discard loose methods of " give and take " and

OO.opt'a; ~bl}.11'bel&lleed proportion" 'Which will necessitate cousideration of economic factors beyond an individual in.d'll8ti1:'Jl_.,._ 11. Cfonp, having in mind thit etieet upon the State.

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In Victoria, the State is not directly concerned with tariff policy. Nevertheless, industry generally is greatly concerned and costs h~ve a marked affect upon thi!l aspect of industrial relationship. Capacity of industry to pay is a vital question when costs are being imposed, and requires an inquiry of a highly technical nature, which it can be said, the Wages Board system as we know it is not qualified to conduct.

The function of any wage fixing tribunal should be to accept the responsibility for its decision. If an award is made which has the effect of reducing employment, then that tribunal in the interests of all concerned, must rectify any mistake which it may have made. A tribunal in this way is safeguarding the interests of the parties concerned. It is granted that it is open to a Wages Board to alter its decision at any time, but as no reasons are given for making any decision which may be on the basis of "give and take" then any interested party is at a grave disadvantage in making representations to the Board. ·

Another object of a tribunal should be to maintain a uniformity of conditions associated with iudu<>try or with groups of industries. Probably one of the greatest causes of discontent is the variation of conditions which apply between various small industries and various occupations in an industry, and such variations may have been obtained in bargaining circumstances. It has been a common practice under the Wages Board system for employees to apply for more advantageous conditions than those existing under their own Wages Board simply because another Wages Board has granted them for no reason ascertainable in the recordA,

Uniform conditions for specific matters such as annual leave, holidays, sick leave, overtime, etc., are desirable and would remove the creation of unsatisfactory anomalies. The Wages Board system does not permit principles such as this to be established. It can only be done by a competent central tribunal and only after parties concerned are given the opportunity to debate the questions before such a tribunal. The Wages Board system does not permit the Chairman to institute such an inquiry. Objection may be taken to the aspect of uniformity which may be interpreted to mean regimentation, but such is not the case because those principles are basic and differentiation is permitted by variation of marginal rates in respect to classifications, and specific conditions, because of some peculiarity in an industry.

The principle of regimentation could only apply in respect to a specific industry, which is undoubtedly highly desirable because removal of anomalies in an industry is most essential. When a person enters an occupation in an industry he knows those conditions-which again points to the need for a tribunal allowing industry awards. An illustration of this can be forcibly given in the case of Commonwealth Aircraft Corporation. When this industry began in Victoria it automatically came under the jurisdiction of the State authority and the classifications employed in that industry would come under Yery many Wages Board determinations with different conditions of employment. It would be quite safe to say that no Department could po'l~ibly sup3rVise that establishment in respect to determinations, aud also that it would be impossible for the comp,~ny, ilincerely or legally, to carry out the conditions of the determinations which applied to the various operations. The Wages Board system is too cumbersome to permit of a case such as this being allowed to work under exclusively industrial conditions. Many other instances could be quoted to show the inability of the Wages Board system being permitted to cater for such large industries or even a group of such industries upon an industrial basis.

The composition of the Wages Board is something which has to be seriously considered in the light of modern ideas. The theory of both parties sitting around a table and discussing matters of mutual interest has changed with the complexities of trading. Industry for many years has been charged with the duty of absorbing or passing on increased costs which have been laid upon it by decisions of tribunals. When claims are made by employe~s, it is no longer the right of individual employers to consider these demands without proper invest.igation into the ability of industry to pay. While a member of a Wages Board can decide matters of increases by reference to his personal position, the duty of representatives has greater significance than mere personal views, and it is wrong to expect individuals to decide such matters by personal reasoning in preference to a consensus of opinion obtained by collective methods.

The Wages Board system does not provide for the tendering of evidence by those who will be affected by a decision. The freedom. and rights of individuals are denied because only the members of a Board are notified as to matters which will be discussed at a Wages. Board meeting. When aHy variation of a determin;ttion is contemplated it should he common justice for anyone concerned to participate in the proceedings as the decision of the Board has legal application upon all parties affected. An illustration emphasizing this aspect was given recently when some firewood cutters were involved and the only notification they received was when the alteration to the determination was made. It transpired that members of the Board representing the employers did ·not represent the particular group of employers, and it must be concede!! that a member of a Wages Board should not have bestowed upon him the responsibility of not.ifying all people concerned.

The present system does not permit any employer to seek a judical interpretation of a determination. The only \Wty this is given is hy a prosecution, whereas an individual may sincerely interpret a determination wrongly, and, if he is proved to be wrong, he is branded as a quasi criminal. Any party shouhl have the right of making a simple application to a competent tribunal for a judicial interpretation of any detf~rmination. His Honour, Judge Stretton, dealing with a case in the Appeals Court on 6th November, 194·1, said:

"Again, one can point to the unsatisfactory condition of the law when there has to be a prosecution in order to obtain a definition. That is a vdry unfortunate situation."

The set-up in Victoria is unjudicial, and the opinion is expressed that any decision of a tribunal with such a far-reaching effect should bear the imprint of the judiciary if it is to command respect. Victoria and Tasmania are the only two States which do not have the judicial imprimatur upon the findings of a Board. The South Australian system of Industrial Court with original and appellate jurisdiction operating as an overriding authority on the Wages Boards has the effect desired.

When the Board of Inquiry was constituted, it was felt by some members that it was for the purpose of investigating whether. a new. system sh?u~d be created, b1;1t ~t the ~ime of its. appo.int_ment the Government limited its activities to 1mprovmg the ex1stmg system. This mstruet10n was d1sappomtmg to some members ; nevertheless, it did agree to variations which were later embodied in amending legislation.

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Later the Government asked the Board to investigate the matter to see if it wa;; possible to create a system whi:h would. be up to. date and suitable for this State, an.d for that reason the Board was. ~rmitted to conduct inquiries m the vanous States of the Commonwealth, winch were duly undertaken. The VISits to the other States were fully appreciated, and every facility was placed at the disposal of the Board to inquire into the systems and have submitted to it opinions from practically every representative body which was associated with the working of the systems.

. The Board covered fully all aspects of industrial legislation which have been enacted, and a remarkable feature of the inquiries elicited the opinion that nearly every person cousidered his own State's system the beBt in the Commonwealth. This opinion may be perfectly justified because different conditions operate in each State, either industrially, socially, or geographically.

One of the outstanding factors in the other States is the fostering of organizations of both employers and employees and it is well to recall that the Federal system is based upon the establishment of recognition of such associations ; in fact that system could not function properly wit.hout organization of employees.

The Victorian system does not provide for the registration of organizations, and, despite what is considered its original intention, its operation so far as employer or employee is concerned is notable for the absence of recognition of individual rights. Western Australia seems to be the only State in which provision is made not only for the recognition of employer and employee Unions but also for the individual to know what was projected. In a democratic system the right of an individual must be provided for and the Government whose responsibility it is to provide legislation for the whole of the people must make provision for the safeguarding of an individual's rights-this the Victorian system fails to do.

The Federal Court obtains its jurisdiction by the creation of a dispute and therefore its Awards apply only to the named disputants, but most of the State systems provide for the Awards or Determinations to be a common rule within the industry and locality in which they operate, and so the rights and obligations of the individuals are covered. While it is contended very strongly that the individual citizen, whether employer or employee, must ~e recognized it cannot be gainsaid that by the encouragement and recognition of organizations an industrial system works much more smoothly. There is no such encouragement in Victoria. It is felt that association of persons is a freedom which is firmly established in our Australian community. Therefore, any system of wage regulation must be based upon a recognition of association of employers and employees without in any way minimizing the right1:! of an individual. The States make provision for the registration of unions in conjunction with the respective system;;, but some do not concede the same power as under the Wei'ltern Australian Act. The power given under that Act concedes a responsibility which has proved effective and is probably one of the reasons why strikes or cessations have been so few in number.

The Act also makes it necessary for a registered body to advertise in the public press its intention to call a meeting for the purpose of deciding whether or not proceedings in the Court shall be instituted, thus giving wide-spread publicity in a way which is extremely foreign to the Victorian method.

The penalty for non-compliance with the directions of the Court is suspension or cancellation of the award or jurisdiction, which in !urn deprives the Union of all power to sue for subscriptions and breaches of the ,award, and eliminates it from all association with the Court. It will be noticed that there is no monetary penalty attached, but witnesses informed the Board that the penalties prescribed were very effective.

Any wage-fixing system must provide penalties of somB description for non-compliance with decisions of tribunals. Victoria does not make this provision.

The Government has asked this Board for an opinion. From our experience, which is based upon close association with the working of the Wages Boards, knowledge of the Federal Arbitm1iion Court system, etc., the opinion is expressed that the future for wage regulation makes it desirable for the Wages Board system to be substituted by a Court system.

During our inquiries the consensus of opinion was that a person possessed of legal qualifications should preside over a tribunal comprised of two lay members, one representing employers and one ing employees, who should be appointed from nominations. of the respective bodies for a term o five to Heven year~, and be eligible for re-appointment by the Govemment. Mr. President Dwyer of Western Australia confirms this opinion. It can be said that the Judge still remains the arbiter, but the experience of the learned Judge emphasises the assistance which he has received from the two lay members. Another aspect of this constitution is tl1at it adds assurance to the respective parties. •

There is no doubt that if such a system were established in Victoria, a tribunal of this nature could deal with matters simply, expeditiously, and cheaply. It seems reasonable to contemplate that such a method could be introduced, modified more liberally than what is existing in other States, and any fear that such a tribunal would be unable to cope with the amount of work it would be called upon to do is unfounded.

The Victorian system has numerous Wages Boards which it is undesirable and unnecessary to maintain. It is impossible to function in respect to a large mixed industry. Under a court system it would be able to deal with matters in the same way as under the Federal court system. Many of the present Determinations could be consolidated.

Supporters of the Wages Board system in Victoria realize the anomalies which are being created in various determinations because there arc no means by which uniformity can be adopted.

In conclusion, it is felt that Victoria has the opportunity of scrapping a wage-reguhtting system which has served its purpose and is now obsolete, and substituting an up to date and simple method which is consistent with the trend of organization based upon democratic principles, giving the right tQ individuals and ensuring justice to those people who are to be bound by a legal enactment and to the community at large, at the same time placing an obligation upon those who desire to band themselves together in an organization. •

K. H. BOYKETT.

OHAS. GRANT.

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APPENDIX " B."

SUBMISSION BY MR. E. W. TREND. Following on the visit of the members of the Board of Inquiry to New South Wales, Queensland,

South Australia, and Western Australia, to investigate the arbitration systems operating in those States, and after comparing same with the Wages Board system operating in Victoria, I am of the opinion that a Wages Board, constituted as follows, would be the best system to adopt in this State.

My recommendations are :-(1) A Wages Board to consist of:-

(a} A Chairman who would be a specially-selected legal man. (b) One member representing employers in industry generally, and one member representing

employees in industry generally. These two members to be known as "permanent members ".

The Chairman to have a life tenure and the two permanent members to have a tenure of, say, ten years.

(c) Three representatives of employers and three representatives of employees, appointed for one year, as at present, for the particular trade covered by the Wages Board, and to be known by some expression such as " temporary members".

(2) The Board, as so constituted, would continue to function as Wages Boards do at present, except that when a majority of the temporary members cannot come to a decision, the matter shall be decided by a majority decision of the Chairman and permanent members.

The advantages of the set-up, as outlined above, compared with a State Arbitration Court, would be :­(1) The present simplicity of the existing Wages Board system would be retained. (2) The Board would still be easy of approach. (3) There would be an absence of the more or less long legal arguments and complicated judgments

usual with an Arbitration Court. (4) The decisions of the Board would· be much sounder than many of those given under the

e.xisting system, this due to the higher calibre of the Chairman, assisted by the experienced lay members of the Board.

(5) The Clauses in the various Determinations would be more expertly drafted and, as a consequence, would be more easily interpreted than at present.

(6) With a set-up as outlined, there may not be any necessity for an Industrial Appeals Court. (7) The three permanent members of the Board could constitute i Tribunal to give interpretations

regarding Clauses in the various Determinations.

ERNEST W. TREND.

APPENDIX H C."

SUBMISSION BY HON. P. J. CLAREY, M.L.C., AND MESSRS. G. HAYES AND J. V. STOUT.

The Board of Inquiry appointed by the Victorian State Government to consider and report upon suggested amendments to the Victorian Shops and Factories Acts, having been empowered by the Victorian Government to visit the States of Queensland, New South Wales, South Australia, and Western Australia in order to investigate the arbitration systems operating in such States, during the course of the year has duly visited the cities of Brisbane, Sydney, Adelaide, and Perth, and conducted extensive investigatons into the arbitration systems current in such centres.

In each centre the Board met representatives of the Unions, the organized employers, the State authority administering Factories, Shops, and Arbitration legislation, and members of the various industrial tribunals.

In Queensland, New South Wales, and Western Australia, court systems operated. In the State of South Australia, a court system was the dominant authority, but this system was assisted by a Board of Industry and by Wages Boards in the task of the fixation of wages and working conditions generally.

In all centres all information and every assistance desired by the members of the Board were made available to them so as to enable their investigation to be thorough and complete.

The Board, having made its investigation, is now faced with the task of deciding whether the existing Wages Board system in Victoria is to be replaced by a court system. In order that this might be done, it is advisable that the advantages and disadvantages of the court system and the wages board system should be examined.

Any system established for the regulation of wages and working conditions in industry so as to enable the differences between employers and employees to be .determined in order that industry might work as smoothly as possible, must be based on certain fundamental principles. These principles can be clearly and concisely stated. The system must be simple in its operation, efficient in action, expeditious in its decisions, and be inexpensive in its cost to those using it. Unless these four things can be complied with by any industrial arbitration system, it will fail to give satisfaction both to employer and employee.

Victoria is the second largest industrial State in the Commonwealth : within its boundaries exists almost every conceivable type of industry. This is evident from the fact that no less than 196 Wages Board Determinations arc in operation in the State. This important factor should be borne in mind, even if a system, which might work fairly effectively, though not prescribing to the four fundamental points mentioned above, is considered satisfactory in other States where the industries and persons covered may be relatively small as compared with the State of Victoria.

It is important also to bear in mind that when considering which form of industrial arbitration is to be preferred for the State of Victoria, the fundamental principles necessary for successful functioning must not be disregarded merely because of faulty legislation or weaknesses in the powers possessed by tribunals. Faulty legislation can be cured by amending legislation : weaknesses through lack of power or authority can be corrected by granting_ the necessary power or authority which is lacking.

It is equally necessary to bear in mind that the type of tribunal created as in the Federal sphere, which exists only in order to prevent and settle by conciliation and arbitration industrial disputes extending, beyond the limits of any one State, may result in the creation of industrial machinery that would not be tolerated if the Commonwealth possessed full sovereign powers to deal with all matters affecting the relationships between employers and employees.

All of the :Members of the Board have a thorough knowledge of the Wages Board system; some of them kave had considerable experience in the Commonwealth Court of Conciliation and Arbitration, and others have also had actual experience of industrial courts in other States.

ANALYSIS oF CouRT SYsTEMS.

The investigation of the Court systems of the various States revealed that a complex system of court procedure surrounded by forms and formalities, and tending to become more complex, operated in all four States.

In Queensland, the system is the least rigid and formal. The State is less industrially developed than either New South Wales or Victoria. The Court consists of three persons. The bulk of the work seemed to be performed by the two lay members of the Court, who apparently aimed at reducing formality to a minimum and who could, singly, deal with any matter. A refreshing feature of the Queensland system was the expeditio~ with which cases were dealt, the brevity of judgments, and the wisdom, in many cases, of dispensing with judgments entirely.

The New South Wales Court consisted of six judges. Three of the six judges constituted a Full Bench, which could hear appeals and decide major matters of Court policy. Notwithstanding all the efforts of this Court, the personnel of which are enthusiastic and active in their duties, the work of the Court was hopelessly in arrears. Forms, formality, and all the traditional emblems and practices of Court procedure held full sway. Proceedings were undoubtedly expensive to both sides. The records of Court proceedings and judgments have reached colossal dimensions, creating a position confusing and incomprehensible to both employet and worker.

In regard to South Australia and Western Australia, similar circumstances were evident. South Autrali& divided the matter of wage fixation between three authorities ; one deals with the basic wage . another •n deal, within limitations, with wages and working conditions in the metropolitan area ; whilst the tlmd;, \h.e Court. itself, is an overriding authority with powers to make awards and also to act as a Court 9t Arpeal.

In Western Australia, a Court somewhat similar to the Queensland Court exists, but with none of the flexibility of the Queensland system. It is a Court consisting of a judge and a representative of the Employers and a representative of the Employees.

A system of court procedure, somewhat complicated in character, has been evolved, whilst legal difficulties as to the Court's power and authority at times arise. A series of principles, which might be regarded as a trap for the unwary, faces applicants in court proceedings, and tends to lengthen the hearing of matters and confuses the parties.

The features of all court systems investigated seem to be, first,. forms of varied description, such as applications, affidavits, summonses, etc.; and second, with variations in the different States, full-dress hearings in court, addresses, interminable witnesses, further addresses, exhibits, transcript of proceedings, and judgments. Whilst all authorities stressed that conciliation was always available, one saw much evidence of arbitration, but little of conciliation. It was clear that the principles laid down by the Court became legal battlegrounds. Employers, in the main, seemed to seize principles as immutable doctrines, with employees constantly striving to break down their rigidity. No matter how much Industry may change due to many diverse factors, the court systems seem slow to make changes. The courts seemed to have the idea th~~;t Industry revolved round them rather than that the Court's function is to serve Industry.

It was noticeable, particularly in Western Australia, that progressive employers made agreements with employees giving conditions much in advance of Court conditions ; whilst less progressive employers a~cepted the less advanced Court conditions and policies as the maximum employees should receive.

As compared with the Wages Board system, the Court system could not be said to have the four essential features for the satisfactory solution of the problems arising from the relationship of employer and employee. Of these four essentials, three seem to be definitely lacking, namely, simplicity of approach, expedition in hearing and settling matters, and being non-expensive to both parties. Efficiency of decisions is a matter on which opinions might well vary. If the system has proved efficient in regard to its decisions, it is no more efficient than that which is operating in Victoria under the Wages Board system.

The inevitable reaction to a close study of the Court system is that it has resulted in making what should be simple proceedings and decisions between employers and employees into a totally unnecessary complex system inevitably creating an army of specialists to study and understand the complex decisions.

Because court practices and procedure with the traditional following of court methods has created complexities, it is then argued because industrial relations and their problems have become complex through such procedure, the settlement of such matters requires special machinery, trained speciali;,ts and an imposing judicial institution to cope with the questions involved. The truth seems to be that the practices have become complex-not the matters to be determined.

ANALYSIS oF THE WAGES BoARD SYSTEM.

The Wages Board system in practice is quite contracy to the Court system. The system does not rely on trained legal minds to probe and explore in order, first of all to understand the Industry before it; and secondly, to make a decision on matters which in the main are quite within the powers and capacity of the parties to determine. It is based on the principle that the parties can, by negotiation with one another, solve their difficulties; and, failing that, can thereupon without delay have the subject-matter determined by themselves with the aid of the Chairman. It is, in effect, a simple working method by which conciliation may be exercised and the resultant decision reached through conciliation then becomes binding upon all persons who are involved as employers in the industry or occupation covered by the Board.

The system has proved singularly satisfactory because it enables the employer and the employee, the people who understand the Industry, and the people who work in the Industry, to consider and discuss amongst themselves the matters relating to employment in an industry with which they are familiar and thoroughly understand. Such discussions do not require formality, court procedure, court practices, and complex machinery for recording discussion, argument, and decisions. It does not make the matters of deciding conditions of employment complex questions requiring legal minds, legal jargon, and a legal atmosphere in order to arrive at a decision. The system keeps the whole question of how employer and employee can settle their differences on a simple, easily understandable plane that prevents confusion, misunderstanding, and the hostility and animosity which aie so often associated with protracted proceedings before an arbitration court.

The matter of approach to the Wages Board system in Victoria could not be simpler. Whereas in the Court application forms of a prescribed nature, together with affidavits, summonses, etc., involving much work and considerable expense, must be followed; under the Wages Board system a telephone call or a letter in th;} simplest terms will permit of the Wages Board being called together.

Members of the Wages Board holding their positions by Government appointment are easily called together by letter or by telephone. Being appointed by Organizations, they are representative of collective interests ; they can readily obtain the views of the substantial majority of the interests which they represent. The functioning of the Board in the interests of the parties represented is therefore easy and sim pie.

This simplicity is again revealed when the determination of a Wages Board is made. An entirely new determination is issued in which all amendments are incorporated. This means the issuing of a consolidated determination. Such procedure results in all parties affected having a single document, giving full information in respect of all matters affecting wages and working conditions. Contrast this sensible method of making parties aware of their obligation with that of any award made by an Arbitration Court, and which award has been in operation for any length of time.

Any party to the award has a mass of documents to consult in order to ascertain the up-to-the-minute position. These documents would range from the original judgment and award to all subsequent judgments and actual decisions on every application for variations or interpretation since the original award was made.

Nothing is more calculated to cause industrial unrest or turmoil than delay in deciding matters in dispute between employers and employees. Men in the mass become impatient and irritable at delay in determining their industrial grievances. This affects relationship on the job in a detrimental fashion as well as production.

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Expedition in determining industrial matters in dispute, therefore, is o£ the utmost importance. The Wages Board system functions much more expeditiously than does any Arbitration Court system in Australia. It can be called together quickly, and meet as frequently as its members decide, and can come to a decision without interminable delays such as are associated with the procedure of Arbitration Courts. Every Union associated with both Federal and State Courts can give any number of instances in delays of hearing applications ranging from months to years. Expedition in determining matters in dispute is undoubtedly a characteristic of the Wages Board system.

The question of the efficiency of any system of determining wages and working conditions is bound up partly with the simplicity and expedition with which it works ; but principally with whether the decisions given to the parties concerned are deemed satisfactory by them and promote industrial contentment and goodwill between the parties.

Where the right of appeal exists as exists in all State Indnstrial systems, to what extent is it exercised ; and where no appeal exists, as in the Federal system, to what extent does either party to an award revolt against the terms of an award: judged by any of these tests the Wages Board system can easily be regarded as the most efficient of all existing systems. The appeals lodged since the system commenced are remarkably few in number, averaging probably not more than three or four a year, and then often on relatively minor matters.

Revolts against Wages Board determinations have been very few in number, the only serious one being that of the Builders Laborers in 1913.

On the question of costs to the parties nsing the system, the Wages Board system stands alone as the most inexpensive of all systems. The cost of placing a case before a Wages Board is extremely small and insignificant as compared with the cost involved in proceedings before any Arbitration Court. It is the only system in Australia where Government recognition for services rendered to the community is made and Board Members are paid for their services. The absence of legal representatives, the absence of transcript of proceedings, and the little need for witnesses because of the knowledge of the trade or occupation concerned held by members of the Board reduces costs to all parties affected to.~ minimum.

On all four fundamental principles, it is obvious the Wages Board system answers the test much more satisfactorily than does any other system at present operating in Australia.

GENERAL OBSERVATIONS.

Some objections of a general character have been advanced both to the Shops and Factories Act and the Wages Board system which might well be examined.

One of these is the failure of the Act to recognise Employers' and Employees' Organizations by means of regishation. Whilst no such statutory recognition of these very important organizations exists, in fact in administration both of the Act and the Wages Board system full recognition of the organizations of both employers and employees is given. It is doubtful whether the efficient administration of the Act, or the successful functioning of the Wages Board system would be possible without such recognition.

If such statutory recognition is neceBsary, it can be effected by a simple amendment of the Act itself. It has been sugj:rested that the registration of Trade Unions is necessary to enforce compliance by Unions

and their m em hers of Wages Boards' determinations secured to their advantage. Deregistration and loss of Wages Board rights would be the penalty imposed for revolt against a determination or any provisions of a determination. A survey of the history of the Wages Board system would indicate such a penal provision is entirely unneces8ary. In any case, such a provision is no cure for an industrial dispute arising from dissatisfaction with the decision of an industrial authority.

Such an enactment would only add another problem to be solved in settling the dispute. This is amply demonstrated in the deadlock now existing in the Port Kembla-Newcastle dispute.

Even if such a provision is regarded as necessary in a mono-cameral system such as an Arbitration Court, from the decisions of which there is no appeal, in a bi-cameral system such as operating in Victoria of Walles Board and Appeal Courts, the need for such a provision would disappear. The Appeal Court gives either party the opportunity of taking the necessary steps to correct either injustices OJ,' unfair provisions.

The present provision in the Act permitting the Governor in Council to su,pend a W a~es Board because of a strike against the decisions of the Board, or for any other reason, is ample. Further, it does not increase the bitterness of an industrial dispute as would union de-registration.

Overlapping of Wages Board determinations has been advanced as a reason for scrapping the system in favour of the Court system. Under Court systems similar overlapping can, and does, occur. It occurs in the Commonwealth Arbitration Court at the present time. Where a general award covers an industry, as in the Aircraft Industry, it has been evolved and secured by the consent of both Employers' and Employees'. Organizations or interests.

The provision now exists in the Act for the grouping together or amalgamation of Wages Boards so as to cover ail industry or occupations of a similar nature or of similar interests. When employers and employees agree to such a course it can be accomplished by administrative act. The principle involved in the plea of overlapping has no substance in fact.

Another plea which has been put forward with much insistence is that the determinatiOIJS can be made without the knowledge, and without the opportunity of being heard, of parties who can and will be affected by the decision. This plea is much more theoretical in character than it is real in fact.

In these days of organizations of employers and employees, it is difficult to conceive of such a happening. The Storemen and Packers' Union knows to its cost th·at it does and can happen, even in the Commonwealth Arbitration Court, where its members were bound by lower wages than already being paid, by a provision in the Metal Trades' award without the knowledge and consent of the Union. Every effort to free itself of this unwelcome attachment with the Arbitration Court failed. It is, therefore, evident that the introduction of an Arbitration Court system is no guarantee that every party affected or likely to be affected by a Court decision, will be notified and heard before a decision is made.

Such a position, if it does arise, is much more expeditiously and justly righted under the Wages Board system than would be the case under the Court system. The Board can be called together immediately to rectify an injustice, can hear the parties, take such evidence as it desires, and make a fresh determination if such is necessary to right any wrqng,which max:nave been infiicted. The legal complexities which arise in such a case under a Court system are ·well-nigh inatttmounta.ble. ·

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. -~ ·, . . ~'~ Jlt; 1my case, organiz~fibft&. ef ~::~p~ fQil"'~mifj.by~s! Whb ~-iOJh\Paite' 'Tepre:sentatives to i'

Bo-ard, h:a ve a responsibility· to ~.!bl1at~tb1?i'"'ilemst8tthey~sWt~are~ 'lt~'of applications before Board, and eventual Board llecisions 'thereon~ If they ·filil t(l• .osrly'~u~#1i~ 10,bligations (one of respqns(bilitkis of organizations, and the ll'fght to act lind speO.K'~~:f'-f,~li~iqt:ereats), they cannot ~pe 'blame 'by demanding the machinery be scrapped because of their,':Mii:sN;£-J1)~J~., " · · '· · · 'The Wages Board system could be improved by giving Wages Boardi! po~~r to'ln~i:~;t'lieif:~etermina tion s,

with the right of appealqn the pa,rt of any interested party who is aggrieved or diss.a~isfiE:d V):rtht~e interpretation. 1t certainly should not require the prosecution of an employer to determine the meartinf Of' sQllie clause jn a tletermi.hation, the wording of which may be obscure. The Act might well be aniendea to give this power to Wages Boards. ··

• THE PLACE OF WAGES BOARDS IN THE GENERAL SCHEME OF WAGE AND WORKING

CONDITIONS FIXATION.

It is evident from the growing dissatisfaction and irritation at the legalisms of the Commonwealth Court of Conciliation and Arbitration, and also of the New South Wales Industrial system, that extensive amendments to the methods and procedure of industrial courts is likely to occur in the future. It is undoubted, however, ,, that because so much of Australian Industry is inter-state in character, and is subject to extreme competition, within its own field of production and distribution from similar interests in different States, the leading authority in the fixation and settlement of wages and working conditions in Australia will become more and more Federal. iiifil .. It can be said with truth that the Federal Arbitration Court is the dominant industrial tribunal of the "'¥:. Commonwealth. It is also clear that, in the main, the general principles laid down by the Commonwealth Court of Conciliation and Arbitration will, to a very large extent, become the principles which will be followed by the various State systems. This is already shown in the provisions contained in the New South Wales State legislation that the basic wage fixed from time to time by the Arbitration Court shall be the basic wage for New South Wales. It is equally clear that whatever basic wage operates from time to time in the Commonwealth Court of Conciliation and Arbitration or whatever form of conciliation and arbitration may be evolved in the Commonwealth sphere in the future, will more or less determine the rates to operate in any State.

It is evident that where State Tribunals do fix wages, they fix a wage which is very close to the wages operating in their own centre under the Awards of the Commonwealth Arbitration Court. This will also apply to hours, sick leave, annual leave, and other general conditions of employment, which have a general application throughout industry.

These observations are necessary in order to indicate that whether the State systems like it or not, there will be the general tendency on the part of all State systems to follow somewhat along the lines of the decisions made by the Federal Conciliation and Arbitration Authority.

When one looks back over the history of the State and Federal Courts during the last twenty years, one secs thi:-; tendency developing more and more strongly. In such circumstances the suggestion put forward that there should be constituted in Victoria an Arbitration Court which at great expense and probably after much labour, is going to go through all the things which the Arbitration Court goes through, and then makes <leterminations on similar lines to those which the Arbitration Court makes, or somewhere thereabouts, means "imply the creation of another piece of legal machinery that is going to cause greater confusion both in the minds of the employers and employees, do a lot of unnecessary work, cost a lot of money, and achieve no real purpose :-;o far as industry is concerned.

In the main, it can be said t~at the effective Wages Board determinations in the State of Victoria will be rleterminations in connexion with small industries, services, and a number of occupations which are local in character, and carrying on either production or ·commerce in some form or other that is not seriously threatened by competition from other States ; the general tendency will be for all industries which are interstate in character to become more and more controlled by the Federal Arbitration Court. One sees that now as regards railways, road transport, all industries connected with the waterfront, the principal industries such as the Metal Industries, the Printing Industry, the Textile Industry, general manufacture, such as rubber, food, body building and Kimilar classes of work, whilst rural production such as pastoral work, timber getting, &c., mining, are all within the ambit of the Court.

It is undoubted, also, that so far as the Victorian Wages Board system is concerned, whilst it by no means has lost its individuality and its right to deal with the conditions of the industries which each Board covers as employers and employees think best, it has more or less fitted in with the general pattern of wages and working co11ditions prescribed by the Arbitration Court ; that it has not slavishly followed those conditions is to the credit of the Wages Board system, not to its detriment.

A review of the Court systems of the States of Queensland, New South Wales, South Australia, and Western Australia, together with a knowledge of the Commonwealth Conciliation and Arbitration Court, with all the legal problems arising in connexion with the functions of those Courts, the gargantuan pile of records which has accumulated as a result of the functioning of those Courts, the difficulties which are being experienced by those engaged in industry in keeping pace with the varying decisions in regard to all types of matters in connexion with arbitration, and the growing discontent amongst workers at the legal complexities and delays aHsociated with the systems, indicate that the adoption of such a system would not be in the best interests of Victoria. On the other hand, the relative freedom from industrial discontent which exists as a result of the Wages Board system indicates that the retention of such a system is necessary in the interests of both employers and employees.

By Authority: J. J. GOURLEY, Government Printer, MelbouriiL

P. J. CLAREY. GEO. HAYES. J. V. STOUT.