ARBITRATION

Dominion, Volume 20, Issue 296, 13 September 1927, Page 7

ARBITRATION

NEW ZEALAND’S SYSTEM RECENT ATTACKS ON THE COURT CRITICISMS ANSWERED In this—the final—article of his series of three, “Maxim” answers recent charges which have been levelled at our arbitration system. Is the public conscience of New Zealand, he asks, such as would permit of scrapping a useful adjunct to our social system in favour of a return to the law of the jungle?

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“Maxim.”)

111. The Court of Arbitration has always been subject to criticism from one or other of the parties to industrial disputes. In prosperous times when prices are high the workers have criticised and claimed higher wages, and in times of financial depression the employers, finding themselves in difficulties, have criticised on the grounds that wages were not falling with falling prices. The twd sides have, as it were, balanced each other, and the natural inference is that the Court has been at any rate, not far wrong. The Latest Attack. During the last few months the attack on the Court has been stronger than ever before, and coming from a new source. From one end of the Dominion to the other farmers’ organisations have been condemning the Arbitration Court, and they have been supported by the University School of Economics. Before discussing the complaints of these new critics it is worth while examining their motives. The .farmers have received a collective cheque for exported produce abdut ten to twelve million pounds less than they received for the 1924-25 season. They are, therefore, finding themselves hard put to it to make their income and expenditure balance. It is only human for people in this situation to complain, and natural that they should criticise the Government, the Arbitration Court, the business community, in, fact, everything not of their own doing and everybody but themselves just as they are doing. A witty English writer recently said of England: “We are a nation of grumblers searching for a scapegoat!” It is a remark worth thinking over. To the extent that their judgment at the present time is naturally influenced by their own difficulties and is not the outcome of calm consideration in normal times, the criticism of the farmers must be discounted. A brief reference fo (he so-called science of economics is also worth while. To the extent that they are pure theorists and do not give recognition Io tlie all-important human factor in discussing industrial relationships Hie criticism of the economists must also be discounted. The Case Against Arbitration. Coming now to the charges most often levelled at the arbitration system. These are:— 1. That it is uneconomic. 2. That it has failed to achieve its avowed objects. 3. That it fixes wages for a section of the community at the expense of other sections on a cost of living basis. 4. That it grants preference of ■ employment to unionists. 5. That in framing awards insufficient consideration is given to the interests of sections of the community not actually concerned in the dispute." 6. That in making awards insufficient consideration is given to the probable effect- upon the industry. Taking these in order; (1) That the system is uneconomic—lt must be at once admitted that like almost every other statutory regulation of human affairs it is entirely against all the rules of the quasi-science of economics. It is a restraint of the free play of economic forces, and so is every code of business ethics and every law governing business which has been framed to meet I the needs of civilised society. The point is that civilisation would collapse without restraint of economic forces, and our arbitration system is but a portion of the general restraint. The question to be'answered is: Has it worked on the whole to the advantage of the country? The answer will be elaborated a little later on. (2) That it lias failed to achieve its avowed objects.—ln support of this charge the critics quote the figures pub lished by the Department of Labour as showing the number of industrial stop pages in the Dominion each year. A recent article stated that there had been 695 stoppages of work in 19 years. That seems rather, a shocking total but after all it is an average of 36 per annum, which does not seem quite so dreadful, and this record includes every trivial little stoppage which may have lasted only an hour and involved very few men. The fact is that as regards industrial stoppages New Zealand has been the envy of (he whole world since the Arbitration Act came into force. The number of strikes worthy of being recorded during the period 1906 to 1927 can be counted on the fingers, and in that one of its objects the arbitration system most certainly has not failed. We have enjoyed a degree of industrial peace and happiness attained nowhere else in the world, and we have actually suffered a greater' economic loss by reason of strikes in England (where there is no arbitration) than from the strikes in New'Zealand. No law can ever be expected to prevent strikes entirely, but our law has gone wonderfully far towards that end The Cost of Living Basis. (3) That it fixes wages on a cost of living basis for one section of the community at the expense of other sections.— This "is the farmers’ great complaint, that tlie high wages prevalent in industries other than farming, have raised the price-against the farmers of everything they have to buy and they have no redress because the prices of their products are fixed by the world’s markets. On the face of it ..this wears an appearance of truth, but a ittle deeper analysis is necessary to establish it, and, if the analysis iias ever been made it lias never been published, lhe cost of living has been the principal factor considered by the Court in adjusting wages though not the only one. This may be not strictly economic, but it is at least human, and after all workers must live if they are to work. The critics say, “Pay a man according to the value of his work.” It sounds very well indeed, but no one has ever yet put forward a method of ascertaining beforehand what that value is going to be. The Court Ims endeavoured to maintain for the workers under its awards the purchasing power of their 1914 wages, which were determined before the so-called uneconomic cost of living factor came so much into play. Is any one prepared to seriously assert that anything Jess than this should have been done? Before it is admitted that the farmers have been greatly affected by the wages in other industries it must be shown what proportion of the average yearly expenditure on a farm is affected by such wages. This is difficult to ascertain excepting by the farmers themselves, and no one acting on their behalf has made the information public , A close approximation (o lhe truth can be obtained by a process of deduction from a comparatively .recent award of the Arbitration Court. It must be admitted that an award which has a direct bearing upon one class of farming must have a greater effect upon farm economics than an award for engineers, cabinetmakers, or similar workers whose products are only occasionally required by the farmer. Therefore, the effect of the freezing workers’ award, since freezing is applied only Io farm products, will bo adnrffcdly greater than the effect of any other award exeenting those covering shearers and thrashing-null

employees who are the only classes of actual farm labour covered by awards. In his memorandum to the last freezing workers’ award the Judge of the Court showed that the effect of an increase of Id. per hour in the wages of time workers, coupled with the increase in piece-work rates, was to add Ils. per annum to the expenses of the average sheep farm It is safe to assume that the extent to which the average farmer’s expenditure on essential things is affected either directly or indirectly by awards of the Arbitration Court is negligible. Preference to Unionists. (4) That it grants preference of employment to unionists. This is perfectly true. The awards of the Court do provide a certain measure of preference of employment to unionists. In the first article it was shown that one of the objects of the Arbitration Act was to give workers’ unions a legal status and secure to them due recognition by employers with a view to' establishing collective bargaining on a firm basis Preference of employment to unionists in the logical Sequence. The unions are recognised by the law as the channels through which negotiations with employers are to be conducted. It follows that workers should belong to unions. Those who attack preference to unionists, whether they are aware of it or not, are really going further than their criticism implies and attacking unionism itself. Anyone wth the smallest experience of labour matters or the least knowledge of the history of industrial affairs will recognise that the time when unionism could be successfully attacked has long since gon; by. (5) That in framing awards insufficient consideration is given to sections of the community not actually concerned in the dispute. One of the claims persistently made by critics of the system is that in all hearings of the Arbitration Court third parties indirectly interested should have an opportunity cf being represented. If this amounts to anything at al) it can only mean that any person or organisation of any kind concerned at all in the prices of the product of any commodity produced in an industry for which an award is sought, should have the right to be heard in the dispute. Every consumer of coal, whether for domestic or for power purposes, should have the right to be heard in coal-min-ing disputes. Every person in New Zealand would have the right to be heard m disputes connected with transport, end so on, without limit. Looked at from a practical viewpoint, the claim is an absurdity. Moreover, there is no need for any other representative of the public than Jie Judge of the Court, who is selected to safeguard the public interest, and is more capable of doing so than any chance representative could possibly be.

. (6) That, in making awards, insufficient consideration is given to the possible effect upon industry. This again is a criticism launched in ignorance of the practical working of arbitration. 1 hose responsible for it forget apparently that t’o-e is another side to tlie picture and that if in fixing a wage the t.ourt be required to take into consideration the fact that certain industries are tar from flourishing with the idea that in such industries wages lower than the Court’s standard should be fixed, it must follow that in industries which are prosperous and profitable, wages higher than the Court’s standard should be fixed, and at once the whole value of the stability and uniformity in industry-, which has come from the Arbitration system disappears. “Fight It Out!” The great weakness of the criticism levelled at the arbitration system is that with two executions recent critics have suggested no alternative. One of the exceptions was Professor Murphy, of Victoria College, Wellington, whose suggestion as published in the Press was an unpractical combination of the present Arbitration Act and the Labour Disputes Investigation Act; and the other was a writer in the “Mercantile Gazette,” who, with quite unconscious humour, said in answer to the charge that those who sought abolition of the Arbitration Court had nothing to put iu its place—"of course we have. Let the employers and the ivorkers fight it out.” That is exactly what would happen if the arbitration system of New Zealand were abolished. Employers and workers would have to fight it out as they did in the days before the Act became law. Human nature has not changed in the meantime and all the old evils of fightinc it out would again make themselves i'f-lt. Is th? public .conscience of New Zealand such" as would permit of scrapping a useful adjunct to our social system in favour of a return to the law of the jungle?