THE New Zealand Herald AND DAILY SOUTHERN CROSS. WEDNESDAY, JUKE 2, 1920. THE ARBITRATION COURT.

New Zealand Herald, Volume LVII, Issue 17486, 2 June 1920, Page 6

THE New Zealand Herald AND DAILY SOUTHERN CROSS. WEDNESDAY, JUKE 2, 1920. THE ARBITRATION COURT.

There is a considerable element of justice in' the criticism which the president of the Auckland Emplovers' Association directs against the industrial arbitration system. Some, indeed most, of the faults complained of are preventable. There is, for instance, no reason why the law should not be as rigidly enforced against unions as it is against employers. That illegal strikes and breaches of awards are not . punished as promptly and sharply as illegal lock-outs and underpayment of workmen is not a defect inherent in the system but is due to slack administration of the Act. Nevertheless it. is a defect which, as Mr. Spencer indicates, prejudices the whole system by destroying confidence in its impartiality. Similarly the failure of the Court to keep pace with its work is remediable, but is nevertheless very irritating. The essence of successful arbitration is that it should be offered before disputes have had time to rankle. It was intended by the authors of the Act to be a bandage for a clean wound, not a poultice for a festering sore. Delays are all the more mischievous because there is at the present time a constant movement in wages. Employees are entitled to receive bonuses compensating them for increases in the cost of living when they are economically due. Employers, for their part, are entitled to know in advance the rates of wages they are expected to pay. Retrospective bonuses are a disturbance to industry. They make it impossible for a manufacturer t-o calculate accurately the cost of production, and as he will averagely allow a safe margin for the risk they probably tend to the unnecessary inflation of' prices. In defence of the Court it may be pleaded that the members are overworked; probably they are. Much of the work of the Court bears the stamp of haste. Trade unionists have complained of the terseness of the Court's policy statements and its avoidance of the full and closely-reasoned judgments which illuminate the record of the Arbitration Court. It is also a common complaint that the New Zealand Court does not master the technicalities of the trades upon which it adjudicates, often a very necessary piece of spade work in framing a fair award. Whether the remedy for this is to ease the burden on the Court or to associate with it expert assessors with a technical knowledge of the points in dispute may be a matter of opinion. It is difficult to avoid the conclusion that the Court is overworked and that it might do better if it were not so hard driven.

These shortcomings of the arbitration system are a legitimate subject for criticism, but no one who approaches the subject impartially should" omit to pay tribute to positive merits. The Arbitration Court has served and is still serving New Zealand well. It has contributed much to industrial peace and in this respect it has proved at least as useful during and since the war as at any other period of its career. Its function of recent years has been to increase wages more or less automatically in accordance with the cost of living and the vast majority of employers and workmen will admit that it has done so quite fairly. It is probable that wages would have risen to about their present level without the aid of the Court, but it can at least be claimed for the New Zealand system that it has permitted of a more scientific and even adjustment of wages than would have been possible without such machinery and with less friction than has occurred in most countries. Whether the Court would emerge so well from a

period of falling prices— far more searching test of such : tribunalsmay be doubted, . in view of the weakness already i manifested, ' but the : Court is iof sufficient value to be worth preserving until a better instrument can be shaped for the maintenance of industrial peace. It will not be easy to create such an instrument and for this reason the iight-heartedness -with . which Mr. Spencer would throw the Court aside is to be deprecated. With all its faults the Court at least represents a definite system for the settling of industrial disputes and few countries hayc attained even to the rudiments of any other system. As has been indicated, many of the pre--1 sent faults are incidental to and not | inherent in, the operation of the Arbitration Act. An exception must be made in respect to one point mentioned by Mr. Spencer, the tendency to bring wages rates to a dead level. It is a misnomer to say that the Court now fixes a minimum wage; rather it fixes a wage based upon the capacity of the average worker, and above this few are in practice able to rise. To quote Dr. Victor S. Clark, an American critic of the New Zealand and Australian Acts, awards tend to become ultimately " mere formal statements of average conditions of employment." The tendency is a vicious one, but it is not peculiaf to arbitration ] indeed it is inseparable from all systems of collective bargaining and time wages. A more equitable arrangement, as Mr. Spencer suggests, would be to " pay for production," but it should be noted that piecework is not applicable to many industries now coming under the review of the Court, while

the wholly illogical but nevertheless strong antagonism of organised labour to the principle of payment by result is a factor which cannot be ignored. There is plenty of scope for constructive work on the part of critics of the Act, but these considerations suggest that they should seek to supplement the arbitration system with new enactments rather than to displace it. The mere fact that such important sections of labour as the miners, waterside workers; seamen and State employees generally dispense with the Court shows that the Arbitration Act has lost whatever claim it had to cover the whole field of New Zealand industry. Additional machinery for preserving the peace is required, and if the proposed conference of employers and employees is called it can do nothing more useful than make joint suggestions on this head. But until alternative machinery has been tested it would be imprudent to scrap the Court, which is doing good if imperfect work in a large and important fie'd. . To amend, not end, should be t;he aim of reformers. •