ARBITRATION COURT

Dominion, Volume 14, Issue 299, 12 September 1921, Page 6

ARBITRATION COURT

MEMORANDUM BY THE JUDGE ON THE RESIGNATION OF MR. M'CULLOUGH ' 4 UNDERSTANDING ABOUT / STABILISATION I A statement In reply to the charges made by Mr.' J. M'Cullough (employees’ assessor) upon his resignation from the Arbitr.a- ' tion Court has been prepared for the Minister of Labour by the President of the-Court (Mr;. Justice Frazer), with the concurrence of the employers' assessor (Mr. W, ' Scott). His Honour states emphatically that there was no breach of any “gentlemen’s agreement” arrived rat by the three members of tho Court. He refers to Mr. M'Cullough’s resignation as having arisen put of a misunder- 1 standing. "The stab!lisation spronouncement,” His Honour says, "was intended to be as far as possible of general application, and fa remain unaltered unless the x general financial and industrial situation became such-.as to render reconsideration necessary from a Dominion standpoint; but it was recognised that circumstances might justify the Court In treating certain applications'as special We desire to refute emphatically the suggestion that 'there was an /agreement, written or unwritten, that the members of the Court would prejudge any and every application . . . ( . for nearly’ 12 months ahead, and therebyreduce the functions of the Court for that period to the level of an empty farce.” TEXT OF MEMORANDUM. Tho full text of Hie Honour’s memorandum to tho Minister is given below:— “Some statements contained in Mr. J. 1 M'Cullough’s published explanation of his reasons for resigning his office as a nominated member of this Court call for a reply from Mr. Scott and myself. We should feel that wo were on somewhat delicate ground if wo wore compelled to rely solely on our memories for the details of a discussion that took place nearly four months ago, for in a matter of memory there might be an element of doubt aa to whether tho recollection of a majority holding one view was necessarily more accurate than the recollection of a minority holding a different view. fortunately there exists documentary evidence for the refutation of the suggestion? that two members of the Court had‘broken faith with the third, and of the (in our mind) more serious suggestion that all three members had combined to mislead litigants and the public generally. There is not only the stabilisation pronouncement itself, but there is also the draft of the pronouncement in its original form,, as it appeared before the wording of the concluding paragraph was finally settled. This draft is so unmistakably clear in its wording of the matter specifically in issue that it is in itself a sufficient contradiction of the statement that the members of the Court had agreed among themselves that, as the price of Mr. M'Cullough’s assent to tlie? withholding r J of a bonus, existing rates of wages would ■ in no case be reduced before May 1, 1922, notwithstanding proof of the inability of the industry or industries concerned to pay those wages. "Mt. M'Cullough’s explanation of his position is based on tho concluding paragraph of the Court’s stabilisation ... pronouncement of May 14 last. Th" paragraph is as follows: t This pronouncement is of a. general nature, and is issued for tho information and guidance of partips. It will /not be subject to review until . after April 30, 1922, except as hereinafter mentioned. It is not intended to take away the right of either party to an award or industrial agreement to make an the Court under the existing legislation, but the Court will require proof of extraordinary circumstances before departing - from the principles herein laid down, unless the parties agree to a modification. "Mr. M'Cullough says, rn effect, that this paragraph was mere camouflage, and that the members of tho Court had agreed among themselves to ignore it altogether, and to apply the stabilisation principle rigidly in every case, without regard io the evidence. THE ORIGINAL DRAFT. "The stabilisation scheme was debated by the members of the Court for several days, and was adopted only after very considerable discussion. After the draft of the pronouncement had been prepared and approved, - the members of the Court thought that some difficulty might arise over the wording of the final paragraph, which in the original draft was as follows: This decision is unanimous, and will not be subject to review until May 1, 1922. except on behalf of individual industries wherein it is proved to the satisfaction'of the Court tha t ’ the economic continuance of such industries is imperilled,. or in cases where the. parties agree before the Court to the matter being. reopened, or in the event of unforeseen circumstances leading the Court, of its own motion, to review its pronouncement at a date earlier than that specified. "The paragraph as originally drafted was agreed upon by all tho members, but it was thought on further consideration, after a copy of tho pronouncement had been typed) for final revision, that 1 1 might be construed as a refusal to deal with applications for bonuses filed by unions in respect of the awards ✓ affecting them. We were, of course, bound to consider such applications on their merits, subject to mny general rules laid down by the Court. The members of the Court agreed all along that, though we could! not shut, the door against individual applications from employers or workers, ft was not desirable to encourage the belief that ths prin- ' ciplo underlying' the pronouncement would lightly bo departed from, on the application of either party to an award. This is. wo have no doubt, the 'gentlemen's agreement.’ to which Mr. M'Cullough refers, though we are at a loss to' understand' how he can have interpreted it as a cast-iron undertaking that wages would not in any circumstances be reduced, no matter what evidence might be placed before the Court. The pronouncement was intended to be as far os possible of general application, and to remain unaltered unless the general financial and industrial situation became such as to render necessary from a Dominion, standpoint. At tho same time, however, it was fully recognised that the Court 'could not prevent applications for reductions or increases of wages being filed by employers or workers bound by particular awards, and it was also recognised that circumstances might arise that would justify the Court in treating certain applications ae special cases That this was tho case is. we think, clearly proved hy tho reference in tho original _ draft to tho economic continuance of individual Industries being Imperilled. »

INTENTION QUITE CLEAR. "Tho members of the Court were quite clear in their minds as to what was intended by the final paragraph, but there was a difficulty in agreeing upon an appropriate form of expression. After discussing a number of alternative suggestions, we finally agreed on tho adoption. of the phrase 'extraordinary circumstances.' as indicating both the Court’s reluctance to depart from its pronouncement and its recognition of the possibility of its'havi'ng to do so, “Mr. Scott and I have no hesitation in affirming that the final paragraph, as printed, expresses tho agreement of the members of the Court. The only remaining unwritten understanding was that wo would give a strict interpretation to the phrase 'extraordinary circumstances'; that is. that we would take that phrase to mean exactly what It implies. This was not in tho nature of a bargain, but was freely agreed upon by us ■ all, and will not bo departed from. “In our judgment of Juno 16. 1921, which was given after we had heard a test case in which a union had made application for the withheld bonus, we said: 'Owing to tho uncertainty of tho financial and economic situation, we cannot be sure that the scheme will work out satisfactorily.' We- eAid, also, 'A suggestion that the Court has not adhered to what was regarded as a promise is refuted by the obvious answer that the Court cannot control financial and economic conditions, but can only indicate the policy 'it wishes to carry out if circumstances permit.* These passages surely indicate that the memhoi's of tho Court were fully aware of the difficnltio« attendant on an Attempt to stabilise, even though we realised that the attempt ought to be made; they indicate, too, that the Court, with those difficulties in mind, would deliberately tie its own hands in such a way as to prevent it from dealing with them whenS they arose. It must be . remembered that cost-of-living, bonuses are not grantable as a .matter of course, but that the Court has only a discretionary power to grant such a bonus if. after taking all relevant considerations into account, it is satisfied that it is fair and equitable to employers as well as to workers to grant it. and that the economic continuance of the industry will not be imperilled thereby. NO AGREEMENT TO PREJUDGE “We have to point out. moreover, that the pronouncement of May 14 and the judgment of June 16 last were written primarily with reference to applications under the War Legislation and Statute Law Amendment Act, 1918, for the amendment of existing awards; but we are I willing to concede that tho principles stated in those decisions should logically extend to the making of new awards, and were intended to apply in ouch cases. We desire, however, to refute emphatically the suggestion that there was an agreement, written or unwritten, that the members of the Court would prejudge any / and every application, whether for an amendment of an award or for a new award, for nearly twelve months ahead, and thereby reduce the functions of the Court for that period to the level of an empty farce. The stabilisation policy has not prevented, the Court on numerous occasions, when making new awards, from raising wages to the present standard rates, and in the sheafers’ case all that was done was to reduce wages to that standard when it was found that the industry was unable to stand the higher rates. We may add, too, that as shearing is carried on only during the summer months, the shearers were not, in strictness, entitled to be regarded as being covered by the stabilisation pronouncement, the effect of which was to set off an <scertained increase for the May-October period against a prospective reduction for the November-April period. We do not, however, stress this point, but merely mention it in passing. “We regret that Mr. M'Culloughf should have so misconceived the position. Wo had no knowledge 'of his view of the meaning to be attached to the last paragraph of the stabilisation pronouncement until September 5, notwithstanding the fact tnat we had on several occasions discussed the possibilities of the shearers' case. Prior to that date, we knew only that he had explained the general scheme of the bonus pronouncement to representatives of various unions, and had given them a pledge that the cost-of-living adjustment would be found to ‘fyivq worked out satisfactorily when the stabilisation period ended on April 30 next. “IN HONOUR BOUND.”

“We think, however, that the wording of the original draft of the pronouncement of May 14 settles the i matter. We do not impute to our former colleague any intention of wilfully misleading the public or of discrediting the Court, but we deem it necessary to give our version of the history of the making of the stabilisation pronouncement. Nobody regrets more than we do tho fact of Mr. M'Cullough’s resignation, the more especially because it arises out tof a mi;/ understanding. We urged him to reconsider his decision, but he considered that, even though his promise to the unions might have been y rash promise, he was bound by its terms to resign his office if the Court in any instance, or in any circumstances, reduced wages before May 1, 1922. We made it perfectly plain in the memorandum annexed to the shearers’ award that his dissent was unqualified, so that he could not bo regarded. as having in any way acquiesced in the decision. We agree, though wo regret the necessity, that having made tho promise referred to, he was in honour bound to keep it unless the Labour organisations released him from his obligation. < “Mr. Scott desires me to say, in conclusion, that ho has on a number of occasions explained the stabilisation pionouncement to meetings of employers in different, parts of the Dominion, and that his explanation of the meaning of tin concluding paragraph has always been exactly as we have stated it to-day.

"We had intended to make a statement from the bench on the foregoing lines, but owing to there being an element of uncertainty as to the date oi the next sitting of the Court, we think it desirable to acquaint you with our views without delay. We have no objection to your making such use of this memorandum as you think fit. “F. V. FRAZER. "I concur in tho above memorandum in its entirety. 4 "WILLIAM SCOTT.” , MR. REARDON’S POSITION Up to the present Mr. M. J. Reardon has not decided whether he will agree to sit on the Arbitration Court as workers’ assessor ponding the election of a substitute for Mr. M'Cullough. Mr. Reardon informed a reporter on Saturday morning that the following was the text of a telegram he had received from tho Christchurch Trades and Labour Council: —"TJiat this meeting of union secretaries and Labour members endorse conference decision, and are recommending all. unions to again nominate M'Cullough. For purpose of effective protest, we urge you not to sit ns deputy till election complete." MR. MTULLOUGH~AND~ RENOMINATION Mr. M'Cullough. according to a Press Association message received from Christchurch on Saturday, has stated definitely that he will not accept renomlnation. A meeting of the Wellington Trades and Labour Council on Saturday night ordered the following-telegram to be sent to Mr. M'Cullough in Christchurch: —"Special meeting Trades Council unanimously nominate you position on Arbitration Court. Will you accept?" Mr. M'Cullough’s reply will probably bo received to-day. A MISAPPREHENSION Some misapprehension appears to hpvo beoa created over the wording of the

resolution passed by the recent conference of trades union representatives, lhe resolution stated: “That this conference requests the doputj*-representat\vo of Labour on tho Court not to occupy the position vacated ■by Mr. M Cullough, and recommends organised. Labour not to nominate any other persona as representative of the workers on the Arbitration Court.” Mr. J. Roberts, secretary/of the AHiniics of Labour, said on Saturday that tho resolution asked the workers not to Dominate “any other’ person ■ e position; it did not. prevent them from renominating Mr. M'Cullough, who had resigned?’ "As a matter of fact, said Mr. Roberts, "the conference was unanimously in favour of Mr. M'Cullough being renominated.- There is no doubt about that whatever. The Alliance of Labour is also in favour of Mr. M Cullough e renomination, r.nd all telegrams . which have been received since tho passing of the resolution are in favour of iu« renomi nation/' t _____