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Salient. Victoria University Student Newspaper. Volume 36, Number 8. 19th April 1973

Industrial Relations Bill: Workers Must Fight New System

page 5

Industrial Relations Bill: Workers Must Fight New System

Aerial photo of a striking crowd

1951 Waterfront Lockout: Police struggle with watersiders outside Auckland's Town Hall on the morning the scab waterfront union was formed, April 28 1950. One of the features of the Lockout was the bitter conflict between militant unions like the watersiders who opposed any form of arbitration, and the moderates led by the Federation of Labour.

"No doubt the workers' fight will go on regardless, but they will find it somewhat easier with only one hand tied behind the back instead of both arms fettered", writes Bert Roth in reply to Mike Law's analysis of the Industrial Relations Bill in Salient, March 21st.

Law argued that if the Bill was enacted with all its penal clauses against strikes intact it would inevitably produce bitter conflict, especially in the transport and freezing industries. Roth however believes that the discussion an the Industrial Relations Bill should not be entirely negative. "While hoping and working for the millenium, when all our problems will find their ideal solution, we still have to make the most of the present Bill here and now".

In the article below Roth focuses attention on the demand of many trade unions that the right to bargain directly with employers, as opposed to a system of compulsory arbitration, should be included in the Bill.

The Industrial Relations Bill constitutes the first thorough revision of our industrial labour law since the Arbitration Act was passed in 1894. For this reason alone it deserves serious consideration. Inevitably, workers in confronting the employers will continue to press for the best possible deal, regardless of what laws are imposed from above. But this does not mean that we can be indifferent to the laws that are enacted, or that we should wish to sec the worst possible laws passed because this would "inevitably produce bitter conflict". Back in the thirties, some people on the left looked forward to the day when Hitler came to power, because after that it would be "our turn". Unfortunately, very few survived the experience.

It was to counter radical-sounding but essentially defeatist arguments of this nature that Georgi Dimitrov, in his speech to the seventh world congress of the Communist International in 1935, reminded his audience that "the millions of toilers living under capitalism are faced with the necessity of taking a definite stand on these forms in which the rule of the bourgeoisie is clad in the various countries. We are not anarchists and it is not at all a matter of indifference to us what kind of political regime exists in any given country: whether a bourgeois dictatorship in the form of bourgeois democracy, even with democratic rights and liberties greatly curtailed, or a bourgeois dictatorship in its open, fascist form".

Struggle for Collective Bargaining

Dimitrov referred to the great sacrifices made by the British working class before it secured the right to strike, a legal status for its trade unions, the right of assembly and freedom of the press, extension of the franchise, and other rights, and he quoted Lenin to the effect that "the proletariat will be unable to prepare for victory over the bourgeoisie unless it wages a many-sided consistent and revolutionary struggle for democracy".

What does "struggle for democracy" mean in the context of the Industrial Relations Bill? I see the key issue in the provisions relating to direct, collective bargaining or, more correctly, in the provisions which seek to restrict such bargaining and replace it once again with compulsory conciliation and arbitration.

Throughout the present century at least, the Arbitration Act has acted as a bridle (as "Labour's leg-iron", in the words of Harry Holland) on active, militant unions, which could have gained better wages and conditions in direct confrontation with the employers. Whenever these unions tried to get out from under, as they did during the "Red Fed" offensive of 1908-13, they were forced back into the arbitration system, by the batons of "Massey's Cossacks" as much as by new laws such as the Labour Disputes Investigation Act. During the depression of the thirties, however, it was the employers who found the arbitration machinery irksome because it did not allow them to cut wages fast enough, and this time a compliant Government, in 1932, abolished compulsory arbitration.

Labour Government Support for Arbitration

It is one of the myths of New Zealand labour history that the unions clamoured for the return of the compulsory powers of the Arbitration Court, and that the new Labour Government, in 1936, acceded to their demands when it restored compulsory arbitration in industrial disputes. The unions certainly took a battering during the depression. Wages were cut ruthlessly and union membership fell until at one point there were more unemployed than union members. Nevertheless, when the Labour Government set to drafting its new labour code, the Alliance of Labour (the predecessor of the present Federation of Labour) reaffirmed its longstanding opposition to compulsory arbitration. Later, in its final submissions to the Government, in deference to the opinions of many weak and small unions, the Alliance accepted compulsory arbitration but with the proviso that "unions or associations which desire to settle their disputes by direct negotiations with the employers shall not be forced under the jurisdiction of the (Arbitration) Court". "We consider", said the Alliance, "that direct negotiation by the parties is the best method of settling industrial disputes".

The Labour Government ignored this view and reimposed compulsory arbitration on all registered industrial unions. The Federation of Labour, which came into being in 1937, expressed its support for the principles of conciliation and arbitration, even though some of its constituent unions, such as the United Mine Workers, continued to settle their disputes outside the Court.

Militants more successful than Moderates

The turning point came in 1961, when the National Government abolished compulsory union membership. In retaliation, the Federation of Labour withdrew its endorsement of conciliation and arbitration and, as if to show the Government's foolishness in tampering with the arbitration law, Walsh, the Federation's president, henceforth made a point of bypassing the arbitration machinery. Encouraged by the Federation's example, direct bargaining with the employers spread quickly and it brought amazing results. A so-called "wage drift" developed which by 1965 exceeded 30%. In other words, average actual wages ("ruling rates") were 30% higher that year than the award rates laid down by the Arbitration Court. The militant unions, mostly in the Auckland area, benefitted most. "It must unfortunately be acknowledged", the N.Z. Employers' Federation told the Minister of Labour, "that militant unions have achieved greater results than have the unions which take a more moderate line". That was in May 1970, but the wage escalation continued and unions were able to gain increases of at least I 5% in the calendar year 1970, well in excess of rises in the cost of living.

In a desperate attempt to halt the spread of direct bargaining, the National Government introduced the Stabilisation of Remuneration Act and set up a new Remuneration Authority over and above the discredited Arbitration Cout. This was a holding operation pending the introduction of a new Industrial Relations Bill which was to restore the old compulsory arbitration set-up in a refurbished form and under a different name.

Direct Bargaining Forgotten

Speaking to a seminar in Dunedin in March of last year, Mr G.H. Andersen, the Secretary of the Northern Drivers Union, stressed that "direct bargaining had provided the basis for improved conditions and had strengthened the unions". Once the new Bill was introduced, with its vicious penalties for political strikes this point was lost sight of. Unions concentrated their attack on the penalty provisions, but while it is almost certain that these clauses will be dropped from the Labour Government's new draft, it is equally clear that the new draft will restore the powers of compulsory arbitration and will seriously curtail the opportunities for direct bargaining. The new Minister of Labour spelled this out when he told the Accountants' Society early last month that "direct bargaining between employers and unions would almost certainly be discouraged in the new Industrial Relations Bill" because "we have got to get back to a system of conciliation first and arbitration later".

When presenting evidence to the Parliamentary Labour Bills Committee, Mr W.J. Anton, of the Federated Labourers' Association, demanded that the Bill be redrafted to allow free collective bargaining with a minimum of restriction, but with a right of the parties to agree to arbitration. Mr Skinner, who gave evidence on behalf of the Federation of Labour, was more cautious, but he too stressed that "workers are entitled to bargain and use all the strength at their command in the making of agreements with employers concerning wages and conditions". More recently still, in their wage dispute the freezing workers successfully resisted all attempts by the employers to force them into arbitration.

There are of course some weak and small unions, with little economic punch, which will wish to rely on the proposed new Industrial Commission for their wages and conditions, but the policy of the Alliance of Labour in 1936 still holds good, that direct negotiation between unions and employers is the best method of settling disputes, and that if unions wish to use this method they must be able to do so by law. If the Government succeeds in imposing compulsory arbitration on everybody, this can only work to the detriment of wage and salary earners, for it will force the sellers of labour power to accept a poorer price for it than they could obtain on an open market.