State regulation of labour and labour disputes in New Zealand. A description and a criticism

Front matter

CORNELL UNIVERSITY

LIBRARY

NEW YORK STATE SCHOOL

Contents

Ohap. Faob

I. Historical Inteoduction ... ... 1

(i.) The Sweating Commission, 1890 ... 1

Chapter I. Historical Introduction

The labour conditions, as they existed in New Zealand for some years prior to 1892, have been frequently referred to as having led to the introduction of the Hon. Mr. Reeves' measure in that year. Only recently an American writer states that that measure "was the outcome of a study of the problems brought forcibly to view by the great maritime strike of 1890, which devastated New Zealand as well as the Australian Colonies. ' '

It was, of course, after the maritime strike had terminated that the labour party agitated for legislation which would, it hoped, enable it to secure conditions it had failed to obtain through the strike, but it need not be inferred from this that the industrial conditions of the Colony generally were at any time such as to call imperatively for the special legislation asked for.

It is proposed in this chapter to give a short account of the two chief labour events of the year 1890, namely, the Sweating Commission and the Maritime Strike, and this, it is hoped, will enable the reader to form a fairly accurate opinion of the actual condition of things as it prevailed in that year.

(i.) — Sweating Commission.

It having been alleged that sweating to some extent prevailed in the Colony, a Commission was appointed "to enquire into the mode and terms in and on which persons are engaged or employed in shops, in wholesale and retail trading and manufacturing business establishments, and in hotels and other licensed houses of public resort — and in particular as to the mode and terms in and on which persons are engaged or employed in any maimer in supplying or making goods or articles for the owners or occupiers of such shops or wholesale or retail trading or manufacturing places of business or otherwise, and upon the relations generally of employer and employed, and the best machinery for determining matters and questions arising between them and relating to their respective interests." The Commission held sittings at the four chief centres, and in May, 1890, issued its report, from which the following are extracts : —

"With satisfaction we report that the system known in London and elsewhere as 'sweating,' and which seemed at one time likely to obtain a footing in some of our cities, does not exist. It is true there are complaints in many eases of long hours and of reduced rates of pay, but these seem almost inevitable wherever competition is keen, unless checked by a healthy public opinion."

' ' That the employment of those young persons to the exclusion of skilled and trained workers is the chief grievance among artisans in the various trades. Where trades unions have been formed, the proportion of lads to men has been strictly defined, in some cases with the avowed intention of keeping up the supply of skilled workers, but in the majority of cases only with a view to self-preservation, and without regard to the larger question of finding employment for the hundreds of youths growing up in our midst. ' '

Of the nine commissioners, three disagreed with the finding of the Commission with regard to the existence of "sweating." Their opinion was that sweating existed, "although only to a very limited extent."

The Commission recommended, among other things, that the Factories Act should be amended in the direction of conferring larger powers on the inspectors, providing for sanitary workrooms, and limiting the employment of children. It also recommended that regulations should be made for providing for seats for saleswomen, that a bureau of labour statistics be established, and that steps should be taken to establish boards of conciliation and arbitration "based upon an equitable representation of labour and capital."

As a reflection of labour opinion at the time concerning the powers of the suggested Arbitration Court, it may be worth while to quote from the evidence given before the Commission by Mr. R. Slater and Captain Millar. The former is the present representative of the workers on the Arbitration Court, while

HISTORICAL INTRODUCTION 3:

the latter has been one of the leading representatives of labourin the House of Representatives for some years, and is now Minister for Labour.

Mr. Slater: I would not approve of Boards of Arbitration that would take the power of striking out of the hands of the Union.

After giving his opinion as to the constitution of a Court of Arbitration for the settlement of disputes, Captain Millar said : —

I do not mean that the decision of the Court should be binding for all time, but for six or twleve months.

(ii.) — The Maritime Strike.

The Maritime Strike had its origin in Australia, and broke out in New Zealand purely out of the local workers' sympathy with the Australians. As early as ten years before the striketook place, the aggressiveness of the Maritime Labour Council in Australia was keenly felt. When any employer did not bow to the dictation of the Council, he was boycotted, and had tO' go under. It was not until 1890 that employers combined to> protect themselves, stern necessity compelling them to do so. The following will serve as an example of the coercive demandsmade at this time by the Council : — ^At Adelaide, it was required that any men not members of a Union, or of the Working- Men's Association, or of the Seamen's Union, should not beallowed to handle any goods that were to be shipped in ketches, or steamers trading out of the port, and that draymen should not be allowed to handle any goods touched by storemen orothers in warehouses not members of the Union. The employers, refusing to give way, the strike followed. The former, however, made a very determined fight, which resulted in the unconditional surrender of the Council.

The general maritime strike, in which all the Australian States were involved, afterwards followed, the leading facts of the dispute being as follows: — The Seamen's Union demanded an advance in wages, which the shipowners declined to grant on the ground that they could not afford it. Public sympathywas not with the Union, and it therefore hesitated whether it should withdraw its demands or strike. Just at this time thesteamship officers came to the Union's assistance in an unexpected manner. The officers asked for an increase of pay, but before doing so had, with the view of strengthening their position, become affiliated with the Trades HaU in Melbourne. The shipowners expressed their readiness substantially to grant, the increase demanded on condition that the officers withdrew

4 STATE REGULATION OP LABOUK IN NEW ZEALAND

from the Trades Hall. They contended that the shipowners liad to rely for the protection of their interests upon the 'OfScers, and that being so, the existence of the necessary -confidential relations between them and the officers would be impossible if, at any moment, the officers and all labour employed in the shipping trade, were liable to take combined action against them. The officers refused to break off their relations with the "Trades and Labour Unions, and the great strike then began. 'The Seamen's Union, which was apparently unwilling to strike on its own account, quickly took advantage of the difficulty ^th the officers, and threw in its lot with the latter.

Shortly afterwards the strike spread to New Zealand. The Seamen's Union called out the men on board the Union Steam- !ship Company's steamers, the reason given for the interference with the Union Company being that it belonged to the Shipowners' Association, which had been formed in Australia as a Tesult of the maritime trouble. A further reason given for the laction of the Seamen's Union was that the Union Company had ■begun to man the steamers in Dunedin with free or non-union labour. A manifesto issued by the Union Company from Dunedin in August, 1890, sums up the situation from its point lof view: —

"The directors of the Union Steamship Co. of New Zealand iiave arrived at the conclusion, with much regret, that the present ipolicy of the labour unions of all Australasia, which has led to the imminent paralysis of trade in all the Colonies, and which ias kept up constant irritation and unbearable uncertainty in .all departments of trade for some months past, is the outcome ^f a general determination on their part to try their strength with all employers of labour. There has been no dispute of any rserious character in New Zealand, and the disputes in Australia tcannot be considered to bear any relation to the measures ^adopted by the unions. The directors have therefore no altermative left but to fall in with the resolutions of the Steamship ■Owners' Association and other employers of labour, and to isupport them to the utmost of their power in opposing the •encroachments of labour unions by every possible means until it is found that negotiations can be re-opened and some prospect •of such a settlement as will enable them to conduct business with some degree of comfort and confidence. They have no hesitation in declaring that the wages paid by them for many j'ears are such as they have a right to regard with satisfaction, ■and therefore unhesitatingly throw the whole responsibility of

HISTOEICAL INTEODUCTION O

the very serious disorganisation which is about to ensue upon the shoulders of the leaders of the unions."

To this there was a prompt and lengthy reply from the Maritime Council. It denied that the labour unions had been anxious to have a trial of strength, but that "the Steamship Owners' Association, seeing that the various unions throughout Australasia were becoming, in their opinion, too powerful, decided to endeavour to crush them out with' the object of effecting a rupture." It considered that "it was arbitrary and unjust" on the part of the shipowners to seek to prevent the officers from affiliating with the Council, while the shipowners themselves exercised the right to band together. It alleged that efforts had repeatedly been made by the officers and seamen to have their demands considered, but that they had proved fruitless "owing to the offhand and contemptuous action of the Shipowners' Association." The Council admits that it had no direct quarrel with the Union Company, "but the Union Company being portion of an Association which has openly expressed its intention of crashing labour unions, cannot expect to be allowed to run through."

A daily newspaper, commenting on the reasons given by the Maritime Council for attacking the Union Company, remarked that "the whole Colony of New Zealand is to be put to all this turmoil and distress on account of a private quarrel between the shipowners and the other Colonies and their men, with which the New Zealand labour market has nothing to do." The same paper also pointed out that the men of the Union Company had not asked for the wages the Australian shipowners had refused to concede to their men. As a matter of fact, nothing but a feeling of loyalty to the strikers in Australia made the seamen and a certain number of the officers in the Union Company's service quit their posts when requested by the Maritime Council. Many, indeed, expressed regret at striking.

To effect a complete paralysis of trade between the various ports, it was necessary that there should be no wharf labourers to load the vessels, and aeordingly the Maritime Council called these workers out. Soon afterwards it was feared that the railway hands would cease work. At one centre at least, they met and passed a resolution expressing sympathy with the strikers, and declaring their readiness to come out whenever required. The Railway Commissioners showed their disapproval of this action by dismissiag four servants, and no further step was taken by the men. It was evident from the commencement of the strike that the general public had no sympathy with it. A general stoppage of trade in all quarters was hardly likely to find favour with the people, no matter what grievances the Australian officers and seamen had against their employers. It was not merely the business community which suffered. The price of coal alone advanced fully 100 per cent., and the general condition of things was, of course, felt worse by the working people. There can be no doubt, however, that a number of the unionist artisans in the Colony sympathised with the strikers. There were fears, indeed, that all trades would be called out, and thus "try their strength with all employers of labour." It was because of a threatened general rising of Labour against Capital that employers' associations were formed in the chief centres. Their object was to take combined action in combating the demands of labour unions, and otherwise to protect their interests. A somewhat novel association was formed at Napier. It was styled ' ' The Free Association of Employers and Workmen of Hawke's Bay." At the public meeting at which this organisation was started, reference was made by the speakers to the strike leaders and their responsibility for the labour agitation then going on. The Chairman said:

A large part of the community were being led by a certain number of agitators into a line of action which five men out of six did not at all agree with. . . . Yet they had been firmly impressed with the idea that they must join the unions, not because they knew why or had any grievances, but because they were told so.

Another speaker said :

If they knew what the Maritime Council had to complain of, they would be able to see whether there was any grievance to redress. But all the men said they were very sorry to strike, but had to do so because they were told to do so by the Council.

In an article explaining the objects of the combination of employers and workmen, the "Hawke's Bay Herald," of September 5th, 1890, says:

The Association is not directed against unionism in its legitimate exercise of power — ^but it is distinctly directed against the surrender of individual liberty to an irresponsible central power like the Maritime Council at Dunedin. In short, it aims at two things — ^first, the thoroughly efficient protection of free labour against the attacks of illegitimate unionism; and second, at bringing unionism back into its old and legitimate channels in which it was a power for good instead of for widespread mischief.

Fortunately for the workers as well as for the employers, the persistent efforts of the labour leaders to bring about a

HISTORICAL INTEODUCTION 7

general labour war in the Colony were unsuccessful. There was, for a short time, trouble with the workers in one small industry which attracted a good deal of attention owing to the excitement prevalent at the time, but the other trades appeared to have no real grievance. The struggle between the Union Company and the Maritime Council was itself serious enough, untU the Company succeeded in fOlling the gaps left by the strikers. As has already been stated, the general public had no sympathy with the strike, and when the wharf labourers came out, there was, as we learn from one newspaper, quite a rush on the part of men to help to load cargoes. Farmers and employers of labour furnished assistance, and the Railway ■Commissioners sent permanent railway hands to work at the docks. Some feeling was, of course, manifested by the strikers against the "blacklegs," but the precautionary measures taken "by the authorities prevented any serious disturbance.

The strike, which lasted barely three months, ended in a victory for the employers. The labour unions involved naturally felt sore over the employment of free or non-union labour, but in their terms of capitulation, they were understood to agree to the following: — (1) That employers retain the men engaged during the strike; (2) that the unions admit the right of employers to employ either free or union labour; (3) that the unions agree to work with free labour.

In Australia, the labour unions were obliged to agree to similar terms. In the Annual Eeport of the New South Wales Employers' Union for 1891, we find the following references to the strike: —

On the 7th of November last [1890], the 'Labour Defence Committee,' finding that they were defeated, and being unable to carry on any longer declared the strike 'off,' and the intention of the body which had been published throughout the country, to 'reconstruct society,' was for the time abandoned. . . . The employers having, in self- •defence, and with a view of carrying on the business of the country, filled the places left vacant by the strikers it became impossible that the free labourers should be sacrificed to find places for those who had deserted their posts. A heavy indictment lies against the leaders who arrogantly dragged the men into an utterly unprovoked industrial war, which ended in a disastrous rout.

It must be admitted that the strike, viewed merely from the financial standpoint, was a most deplorable one. The loss in wages alone must have been enormous; in one Australian Colony it was estimated to exceed half-a-million pounds ^sterling.

Chapter II. Enactment Of The Industrial Conciliation And Arbitration Act

About a month after the termination of the strike, the triennial general election took place, and resulted in a decided victory for the Liberal Party. This put great heart into the Labour Party, as its prospects of being able to accomplish its ends were now brighter than ever before. It lost little time in urging Parliament to pass labour legislation in harmony with its views, and eventually, in 1892, the "Industrial Conciliation and Arbitration Bill" was introduced by the Hon. "W. P. Reeves. A few extracts from Mr. Reeves' speech when moving the second reading of the Bill are worth giving: —

"I am not blind to the fact that the Bill is more or less of a novel character in New Zealand. There is nothing at aU like it on the Statute Book, and it is a measure which may be distinctly called of an experimental kind. In the first place, I may say, that the Bill was one of a character somewhat troublesome to draw. There are not in the British Empire any large number of statutes in force for the reference of industrial disputes to councils of conciliation or courts of arbitration."

Mr. Reeves went on to say that the Massachusetts Council was almost an ideal tribunal, its one fault being that it had not sufficient power; it was entirely voluntary. He admitted, however, that great, good work, had been effected by that Council.

"If," he said, "I thought that the opinion of the people of the Colony or of this House would favour a tribunal somewhat of that character, and somewhat also like the tribunal that exists in Germany, I should not have brought in anything like the more elaborate provisions that I propose in this Bill.

. . . I cannot help thinking, after devoting many hours to the study of this subject, that the ideal Board is one consisting of three persons appointed by the State, paid an annual salary, and able to go to any part of New Zealand where a dispute arises, — a Board which should have the power to transform itself into a judicial tribunal able to compel parties to come before it, and to make its decisions legally binding. But I do not think that public opinion is ripe for that yet. . . . I do not think

ENACTMENT OP ABBITEATION ACT V

that it is desiraile to send cases to the Court of Ariitration if they can possibly be settled in a voluntary and peaceful way by the local Boar(k of Conciliation. The Court of Arbitratior» is the last resort when every other means has failed.

Mr. Reeves referred to the fact that the problem of settlingindustrial disputes had engaged the attention of some of the' acutest men, and the most experienced minds of many nations, and no final solution of it had yet been come to. He spoke of the great evils of labour wars in larger countries, but said nothing suggesting that New Zealand was a country given to strikes. He knew, of course, that the strikes which had taken place in the Colony — ^with the exception of the Maritime Strike — had been on a small scale, and that, moreover, they had not beeo of frequent occurrence. He was undoubtedly anxious to prevent strikes of any kind, and to do this by a measure which, to use his own words, was "absolutely experimental, and in New Zealand, absolutely novel."

"I think," he said, "that the time is .opportune for the experiment, for undoubtedly public opinion is growing up, even among those who might have at one time thought that they had most to gain by strikes, that strikes are at best injurious to alJ parties, and that conciliation is what must be looked to."

"While the Bill was before Parliament, from 1892 to 1894, ita compulsory provisions were opposed throughout by the employers of the Colony. The following copy of resolution, forwarded to« the Minister for Labour by an employers' association, in 1893^ expressed the views of most of the New Zealand employers ia regard to the measure: —

That while agreeing to the principle of settling industrial disputes; by means of voluntary Boards of Conciliation and Arbitration, this Association is strongly opposed to compulsory State Arbitration, and i» of opinion that unless the initial proceedings in such matters are' voluntary, the present Bill, if it becomes law, will prove prejudicial ta the trade of the Colony, also to the best interests of both employers and wage-earners, and to the generally satisfactory relations subsistingbetween them; but when once an industrial agreement is come to by means of voluntary conciliation or arbitration the law should enforce its observance.

The trades unions gave the Bill, as it stood, their steadysupport.

Notwithstanding the opposition to the compulsory clauses by the employers, and the deletion of them twice by the Legislative Council, Mr. Beeves insisted on their retention, as he considered that they formed an integral part of the measure. Whea moving the second reading in 1894, he said: —

10 STATE REGULATION OP LABOUR IN NEW 2EALAND

"I do not think the Arbitration Court will be very often •called into requisition ; on the contrary, I think that in 99 cases in 100 in which labour disputes arise, they will be settled by the Conciliation Boards; but unless you have in the back- :ground an Arbitration Court, the Conciliation Boards will not be respected, and they will be virtually useless."

To what extent Mr. Eeeves' expectation, that practically the whole of the disputes that would arise would be settled by ■conciliation, has been realised, will be shown in a subsequent ■chapter.

The Bill became law on the 31st August, 1894, and the interest it aroused at the time was astonishingly little. Its author had succeeded in persuading Parliament to pass it as an experiment, and if it proved a failure, it could be repealed. But Mr. Reeves perhaps did not then realise that it is usually «asier to pass a law than it is to get one repealed.

Numerous amendments to the original law have been made, and every year the Trades and Labour Councils call upon the Government to amend it still further. It is not my intention to explain the 1894 Act, and each subsequent amendment in detail. I purpose rather describing the principal features of the law as embodied in the "Industrial Conciliation and Arbitration Acts Compilation Act, 1905," and the amending Act of the same year, pointing out some of the more important alterations made since the original Act came into force.

Chapter III

THE INDUSTRIAL CONCILIATION AND ARBITRATION ACTS COMPILATION ACT, 1905.

(i.) — Title.

The title of the 1894 Act read: "An Act to encourage the formation of industrial unions and associations, and to facilitate the settlement of Industrial Disputes by Conciliation and Arbitration." By the amendment Act of 1898, the words, "to encourage the formation of industrial unions and associations," were left out.

( ii. ) — Interpret ATiON.

Included in the interpretation Clauses are the following: —

* ' Industrial Matters ' ' embrace —

(d) "The claim of members of an industrial union of employers to preference of service from unemployed members of an industrial union of workers," and

(e.) "The claim of members of industrial unions of workers

to be employed in preference to non-members."

It was not until 1900 that these provisions were introduced. A decision of the Appeal Court upholding the right of the Arbitration Court to grant preference to unionist workers had been given prior to the passing of the 1900 Act.

"Industry" is defined as meaning "any business, trade, manufacture, undertaking, calling, or employment in which workers are employed," and

"Worker" as "any person of any age of either sex employed

by any employer to do any skilled or unskilled manual or clerical

work for hire or reward. ' '

In the original Act there was no definition of "worker", and ■"industry" was defined as any "business, trade, manufacture, undertaking, calling, or employment of an industrial character." By a decision of Mr. Justice Edwards in 1899 on the application of the Christchureh Grocers' Assistants to the Arbitration Court for an award, it was made clear that the Act, as it then stood, could not be applied to the retail trades, as they were not of "an industrial character." In the consolidating Act of 1900 the words "of an industrial character" were struck out, and the words "in which workers are employed," were substituted. A new sub-clause, however, was introduced defining a "worker." It read: " 'Worker' means any person of any age of either sex employed by any employer to do any skilled or unskilled

12 STATE BEGULATION OP LABOUE IN NEW ZEALAND

manual or clerical work for hire or reward in any industry." These amendments were evidently intended to bring all the retail trades, and in fact, every kind of employment, within the meaning of the Act, and there would have been no doubt as to the scope of their application had the words "in any industry" in the definition of "worker" been left out. It was considered by the Christehurch Master Hairdressers that these words prevented their trade coming under the Act, and the matter was not placed beyond doubt until they were struck out by the Amending Act of 1901.

The following extended definition of "employer" and "worker" was included in the amending Act of 1904: —

"In order to remove any doubt as to the application of the foregoing definitions of the terms 'employer,' 'industry,' and 'worker,' it is hereby declared that for all the purposes of this Act an employer shall be deemed to be engaged in an industry when he employs workers who, by reason of being so employed, are themselves engaged in that industry, whether he employs them in the course of his trade or business or not."

This clause, it is understood, was inserted chiefly at the instance of some builders in consequence of a decision of the Arbitration Court in a case in which an Auckland draper, when building a house for himself, employed certain men at less than the minimum wage fixed by the Builders and Contractors' Labourers' Award. It was sought to bind the draper by the award ruling in the district, but the Court held that a person in the respondent's position was not engaged in the industry to which the award related.

In a decision given in December, 1906 (Book of Awards, volume 7, page 709) the Court of Arbitration held that the definition of "worker" in clause 2 of the Act did not include shipmasters. A number of New Zealand shipmasters had formed an "Association of Workers", which was registered under the Act. The Association applied to the Arbitration Court for an Award, the Wellington Harbour Board being the respondent. The demands of the Association were briefly thus: Salaries. — Harbourmasters, £500 per annum, this amount to be increased to £600 by yearly increases of £25 per annum; chief pilot or deputy harbourmaster, £350 per annum; pilots £300 per annum; tug or dredge masters, £240 per annum. Uniforms and holidays were also asked for. The Harbour Board argued that for reasons to be found in the Arbitration Act and the Harbours Act of 1878, the Court had no jurisdiction to make an award. The Court, in its judgment, quoted the definitions of "industry" and "worker" in clause 2, and said that unless "the persons in respect of whom the union makes the claim are workers within this definition, there is no jurisdiction to make an award." The Court did not think that a shipmaster was "really primarily employed to do either manual or clerical work, but to command and navigate ships, and that the duties of harbourmasters, whether on vessels or on the wharves, the duties of pilots, and the duties of tug or dredge masters are substantially of the same nature. So dominant are the factors 'skill' and 'command' that the merely incidental manual or clerical work goes out of sight, as it does in many other highly skilled occupations, such as those of schoolmasters, factory managers, &e. " It was further held by the Court that to make an award would be to assume that the Legislature intended in part to repeal the Harbour Act, section 49 of which empowered the Harbour

Board to appoint or remove its own officers, and to fix what salaries were to be paid to such officials. If the salaries were unpaid they were not to be sued for as upon a contract of service, "but the Supreme Court may be applied to to command payment out of the Harbour Fund."