The Pamphlet Collection of Sir Robert Stout: Volume 76
Industrial Arbitration in New Zealand. — By J. Macgregor. — No. I
Industrial Arbitration in New Zealand.
By J. Macgregor.
Let no man who begins an innovation in a State expect that he shall stop it at his pleasure, or regulate it according to his intention.
Of all the labour laws of New Zealand the Industrial Conciliation and Arbitration Act has attracted most attention beyond the colony, and that mainly on account of the generally recognised difficulty of the problem dealt with, and the novelty and boldness of the attempt at a solution. Visitors from Britain, the United States, France, and the other colonies have inquired into the working of this and our other labour laws; numerous articles upon the subject have appeared in the newspapers and magazines. A well-known writer on industrial and social subjects, Mr Henry Demarest Lloyd, of Chicago, after spending some months in New Zealand, published a book with the title "A Land Without Strikes," eulogising our system; and now we have the report of a Royal Commission sent from New South Wales for the express purpose of reporting upon the subject for the guidance of the Government and people of that colony. One thing that must strike such visitors is the fact that we in New Zealand have so soon come to regard as mere matters of course experiments which to them appear so novel and interesting on this and other subjects—such, for example, as that of woman suffrage. The Arbitration Act has been in operation now for six years, and it is indeed truly remarkable how little attention has been paid by the people of the colony generally, and especially by employers, to the question of the probable ultimate effects of legislation so novel and far-reaching. What little discussion has taken place has been until quite recently somewhat optimistic in tone, and the explanation probably is that during the whole period the colony has been in the enjoyment of a gradually, increasing prosperity; employers and workers have been in the position of a healthy man of good digestion and with plenty to eat, who is unconscious of having digestive organs, and has no occasion to observe, still less to study, the processes going on. Thus it happens that up till now the opinion of employers upon the working of the system has been of so little value, and it is impossible to imagine an experiment being tried under circumstances more favourable; everybody wished it to have a successful issue. Three years ago the writer ventured to question whether the system was serving the purpose for which it was intended, but his voice was like that of one crying in the wilderness; now, however, when symptoms of waning prosperity are beginning to appear, and our Premier admits that the state of our public finance is causing him much anxiety, our general tone is not quite so optimistic, and now at length the question is being seriously discussed whether our much-vaunted system may not do more harm than good. Hitherto our newspapers—with, I think, only one important exception, the (Auckland) New Zealand Herald—have been friendly in their attitude towards the system; but now there are signs of a change. The employers have been too busy to pay much attention to the proceedings of the Conciliation Boards and Arbitration Court, or to form combinations to resist the multitudinous demands of the workers; they have, indeed, shown a remarkable lack of foresight and regard for their common interests, which they will probably have cause to regret. Another thing that renders the opinion of the employers almost valueless is that they are so completely at the mercy of the unions; they are afraid to say a word against the system, whilst many of them who enjoy Government patronage are afraid of giving offence in that quarter, for real liberty decreases as Liberalism increases. Whilst the em page 6 ployers have been content to shut their eyes to the future—content with making hay while the sun shines—the workers have been forming unions and working the machinery of the act at full speed for the purpose of raising wages, reducing hours, and generally making the utmost of their opportunities. There are at last some signs that the employers are beginning to see what the tyranny of trade unionism means, and to realise the necessity for laying aside their petty jealousies and making common cause against it.
To the question at the head of this article—Has compulsory arbitration been a success?—the answers will, of course, vary a good deal; but it would probably be correct to say that, till quite recently, few thought of raising the question. Of course the Liberals and the Liberal Government declare that not only has the law been a success, but that it has largely contributed to the prosperity of the country; and there is no doubt that working people generally, but especially the unionists, are so satisfied of this that they regard as their enemy any man who dares to so much as question it. As for the employers, their attitude has been that of indifference, with, perhaps, a general inclination to regard the act as a success on account of their immunity from strikes. Their policy has been simply to make the best of the good times while they lasted, and to let the future take care of itself—a very short-sighted and dangerous policy, as they are even now beginning to find out. It is safe to say that if the employers in England had pursued a like policy, instead of combining to fight the great strike in the engineering trade in 1893, the result would have been irreparable injury to all concerned.
Proceeding, then, to endeavour to arrive at an answer to the question whether the act has been a success, we have first to recall to mind the object in view, and the circumstances under which the act was passed. It must be remembered, then, that the act was the direct outcome of the great maritime strike of 1890, which, so far as concerned New Zealand, was a purely "sympathetic" strike, and was really the only strike of any magnitude we have ever had. Defeated in the strike, the workers rushed to the poll at the general election which took place at the end of the year, and resulted in a great victory for the Liberal party under Mr Ballance. The Labour party, having identified itself with the Liberal cause, set itself to use to the utmost the powers of the Legislature for the attainment of their ends, and the passing of the act in 1894 was one of its great triumphs.
Obviously, then, the object of the Legislature in passing the act and of Mr Reeves in drafting and introducing it was to provide means by which strikes and lock-out and disputes likely to result in such might be prevented or settled.
In order to see how completely the Ensure has been diverted from its real purpose we have only to refer to Mr Reeve's speeches in Hansard. In volume 77, at page 30, we read:—"This House is only asked by public opinion to legislate to prevent that class of labour disputes which cause loss or danger to the community—loss to those concerned and danger inasmuch as they may arrest the processes of industry." One wonders what he would have said if any one had suggested that, instead of being brought into requisition in such disputes as he describes, the act would be plied daily for the purpose of creating disputes? And by answer may be inferred from the reasons be gave for preventing individual workmen from invoking the powers of the act. "I determined to confine its operation to deputes between masters and trade unions. . . . I was induced to take that course for several reasons, one of which is this: that, if you allow one workman or two or three unorganised workmen to drag an employer before the Board of Conciliation, not only would that be grossly unfair to the employer, but it would soon make a laughing stock of the whole system. It would make the measure so extremely unpopular that a succeeding Parliament would probably sweep it away." We have reason to suppose that Mr Reeves thinks his pet measure is being made a laughing stock is spite of his precautions, for in the Legislative Council in 1898 one of the representatives of Labour in that Chamber read from a letter a passage in which Mr Reeves expressed the fear that the act was even then in danger of being ridden to death. But the pace at that time was a mere canter compared with the galloping pace at which it is being driven now. Is it credible that he would have secured the passing of such a measure had he foreseen that, instead of being used for the settlement of strikes, or disputes likely to lead to strikes, it was destined to be perverted into a means of getting up disputes and of creating unions for no other purpose than that of creating disputes and haling employers—almost every, employer in the colony—before the Court of Arbitration? Listen to Mr Reeves when he declares: "If this measure fails it will be because it will be ineffectual, and not because it will do any active harm. If it fail, its failure will probably be because its provisions are not taken advantage of. . . . I can honestly say that the measure is not introduced as a one-sided or class measure. I hope that it may be so administered and so worked that the employers page 7 in days to come will welcome it as their best friend"! Unquestionably the employers would have welcomed the system if it had been administered as its author and as the Legislature expected and intended, and they would welcome it still more now after their experience of it as an engine of warfare rather than as a messenger of peace and goodwill.
If anything further were required to show how completely the system has been perverted we find it in Mr Reeves's references to the Massachusetts system: "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 make its decisions legally binding. But I do not think public opinion is ripe for that yet. I think objection would be raised to pay three permanent officers suitable salaries. This passage shows quite clearly that our Court of Arbitration was intended to discharge the same function as the Massachusetts Board—namely, to settle strikes and lock-outs and such disputes as inevitably arise in the ordinary course of industry. Instead of this we have a court of law constantly moving about from end to end of the colony, like a Court of Assize, to adjudicate upon a long list of cases that have been got up by the unions and hurried through before the Conciliation Boards in order to be ready for trial by the court. Instead of one strike or dispute at a time, the court has long lists of cases awaiting for it at every centre, and it cannot overtake the work.
To complete the proof of this part of my thesis it only remains to mention the fact that Mr Reeves's act contemplated the imposition of only one fine, and that of a maximum sum of £500, under one award, the idea being that an employer locking out his men or a union persisting in a strike in defiance of an award could be brought to reason by the imposition of such a penalty. Instead of this we have a court that undertakes to regulate all the industries and most of the other businesses of the country down to the minutest details, simply because a union of perhaps only seven men, or even seven girls, has got up a "dispute" with the employers, and cited them before the court to have all the details of their business which the union has thought proper to mention adjudicated upon by the court! And thus it has come about that this statutory court, which has enormous powers against which there is no appeal, is seen perambulating the country like a peripatetic police court, inflicting fines of a few shillings upon some employer who has dared to give a job to a starving youth who has the misfortune to be a non-unionist!
At this point, then, our answer to the question, Has the system been a success? must be this : that as a scheme for the settlement of industrial disputes in the ordinary sense it has never been tried; and the ordinary argument in its favour—that it has saved the country from strikes—reminds one of the saying about the number of jives saved by pins—by people not swallowing them. The reply will probably be that it has made strikes impossible by reason of the fact that all industries are regulated by the decrees of the court. So be it; but let the system be judged as one used for that purpose and not for the purpose for which it was intended. The man who wrote "A Land without Strikes" shows by the very title of his book that he failed to realise the real nature and operation of the system. The same remark applies to Sir W. J. Lyne, Edmund Barton, and the other Australian politicians (not statesmen), who propose to introduce the system into Australia on the ground that it has been such a success in New Zealand as a means of preventing strikes. Mr Reeves said in Parliament "that it would take years before the public can say whether or not they consider it a good and useful measure—experience alone will show that"; obviously because he thought the compulsory clauses might not be invoked for years, inasmuch as they were not to be used except as a last resort for the settlement of some strike, lock-out, or dispute likely to" cause loss or danger to the community." For such a purpose the act has never been tried, and yet responsible Ministers of the Crown are ready to apply it to the whole of Australia on the strength of our experience, and a sentimental English bishop and that prince of cranks and faddists, W. T. Stead, are ready to run the risk of applying it to the enormous industries of Great Britain!
If there is any lesson to be learnt by other countries from the experience of New Zealand it is this: that, if they want a system of arbitration for the settlement of strikes and real disputes rather than one for the creation and multiplication of factitious disputes, they should adopt some such system as that of Massachusetts.
So far, then, our answer to our question is that the system cannot be said to have been a success, inasmuch as it has never been tried for the purpose for which it was intended; whether it can be pronounced a success as a system for the regulation of all the conditions of all industries, trade, and occupations is quite another matter, which we propose to consider later on.