Evening Post. TUESDAY, MARCH 24, 1931. "BREAKING AGREEMENTS"

Evening Post, Volume CXI, Issue 70, 24 March 1931, Page 8

Evening Post. TUESDAY, MARCH 24, 1931. "BREAKING AGREEMENTS"

An exceptionally interesting part of the spirited speech in which the Minister of Labour replied to the critics of the Finance Bill was concerned with the allegation that the proposals relating to the reduction of award wages involve, a breach of contract. So far as the Public Service cut was concerned the Minister was able to say that he had lived the life of the lower-paid Civil Servant for twenty years, and for that reason it was harder for him to agree to the proposals than for any other member of the Cabinet. But there was really no need to confine the comparison either to the other members of the Cabinet or to the Public Service proposals. Both as private member and as Minister, Mr. S. G. Smith has always shown himself keenly alive to the interests of the workers, and there is probably nobody who has toiled more laboriously or more unostentatiously on their behalf than he has during the last six months. And it is probable that not the least painful part of his task has been the. recognition of the fact that even in the interests of the workers themselves wages must come down and the shouldering of the special responsibility attaching to himself as Minister of Labour in giving effect to this conclusion. NBut, whatever may have been the doubts that embarrassed the process, no sign of wavering now remains. The resolute and even aggressive manner in which he dealt with the criticisms and interjections of the Labour Party made his speech one of the most effective in the debate. The legal problem raised by the proposal to empower the Arbitration Court to .revise its awards was touched by the Prime Minister in the speech with which he moved the second reading of the Finance Bill. To enable the country to-, como through what was one of the _ most serious economic crises in 'its history, power was to be given to the Arbitration Court to vary awards. A Labour member: "Breaking agreements." Mr. Forbes aaid that was an absolute misuse of words. When an omployer and employees went to the Court asking for au award conditions wero laid down by the Court, but they were not binding upon the employee as far as his obligation to work was concerned. Tho worker could put on his coat and walk out of his job. It could not bo said there was a contract in that respect. A contract was an agreement between two persons, but the award made by the Court was .binding in a different way. The same argument was adopted and amplified by the Minister of Labour. In answer to Mr. H. E. Holland's question whether an industrial agreement was not registered as an award, he said:— "Whatever point of view the honourable gentleman, takes, an Arbitration Court award is not a contract between employer and employee. The law of freedom of contracts is,still left to both parties. There is nothing to prevent any employer or worker agreeing _to work at any old figure above the minimum rate. The agreement the honourable gentleman talks about fixes the minimum rates which must be paid. I have it on the highest authority in New Zealand that an Arbitration Court award is not a contract between employer and employee. Most of ■ the wages are fixed in normal times, but when conditions become abnormal, the State is justified in taking action, to enable wages to be brought into line with current economic conditions. As "the highest authority in New Zealand" can only mean the highest legal authority, we may accept his opinion as establishing beyond"challenge the contention of the Prime Minister and his colleague that an award of the Arbitration Court is not a contract between employer and employee. Indeed, to look at the matter at all closely is to see that there is no need to rely upon a legal opinion for assurance that an industrial award is not a contract of the kind alleged. An industrial award of an industrial agreement is not a contract of service, since it does not bind either the worker to work or the employer to employ. But from - the standpoint of Labour it must be admitted that there is cold comfort, especially at such a time as this, in the reminder of the Prime Minister that a worker under an award has always been at liberty to put his coat on and walk out, or that there has never been anything to prevent employer and worker from agreeing upon "any, old figure above the minimum rale." The point is that the minimum rate has normally become the standard rate, and that the parties have not been free to agree upon any irate below the minimum fixed by the award. It is of this protection that the worker is being led to suppose that he will be deprived by the proposals of the Government, and attempts are being made to inflame his resentment by the dishonourable associations attaching to the "breaking of agreements" and "the repudiation of contracts" and by the suggestion that he is being oppressed by his natural enemies. The Government has the right to resent these charges and insinuations, and to plead the legal opinion that we have quoted, but, .while availing themselves of this plea, both the Prime Minister and his colleague wisely took broader ground for the positive justification of their policy. - It is, of course, quite wrong to say that the Government is violating the principle on which our industrial arbitration s)rstem is based, or is legislating to cut the rates fixed by the Court. , The Bill now before die House does not propose to deprive

the award worker of his shelter and [throw him unprotected upon the market. It does not propose to abolish or reduce the minimum rates as they now stand. Parliament is not seeking to usurp the functions of the Arbitration Court, or to vary its awards, or to make that Court the 'instrument of its own will. The Finance Bill merely proposes to eni large, the powers of the Court in order that the same judicial body by which these awards have been made shall have the power to revise and amend them in the light of the present economic conditions. If the rates fixed by any award still seem fair and equitable, they will stand. If on the contrary they are not fair and equitable; but so high as to cripple industry, increase unemployment, and aggravate the difficulties with which we are all struggling, would Labour desire to retain them? It is difficult to believe that it does, but that is in effect the attitude adopted by its leaders, and they base upon the sanctity of contracts a demand which appears to be essentially selfish and unjust. As Mr. Downie Stewart and the Minister of Labour have pointed out, the Labour leaders did not invoke this principle when a similar power of amending awards was conferred upon the Court in 1918, but that, as one of them naively explains, was "legislation to increase wages." In view of that precedent and of the Labour Party's attitude to the Mortgagors Relief Bill, the less that it says about the violation of contracts by the Finance Bill, the better.