THE ARBITRATION COURT.

New Zealand Herald, Volume LVIII, Issue 17889, 17 September 1921, Page 1 (Supplement)

THE ARBITRATION COURT.

TESTING TIM€ AHEAD.

ST H. W. SEGAB, M.A., V.X.Z. INST.

There may reasonably be some anxiety as to the future of the Arbitration Court. It was founded by the Seddon Government in 1894. It was due largely to the influence of the great Australasian Maritime strike of 1890, in which the men and unionism met with defeat. The general election in New Zealand, held soon after the collapse of the strike, returned the Bal-lanoe-Seddon Government to power. Two years later, Mr. Pember Reeves, as Minister for Labour, introduced a "Bill to encourage the formation of industrial unions," which provided for conciliation and, if necessary, compulsory arbitration in labour disputes. The Act was welcomed by the unions, but employers generally were so strongly opposed to compulsion that it was not till 1894 that the Government succeeded in placing the Act on the istatute Book.

It is curious now to recall Mr. Beeves' opinion of the probable efficacy of conciliation "I do not think," he said, in moving the second reading of the Bill, "the Arbitration Court willlje very often called mto requisition; on the contrary, I think that, in 89 cases, out of 100 in which labour disputes arise, they will be settled by the conciliation boards; but unless you fc "* he ckTOlu ? d Arbitration uourt, the conciliation boards will not be respected and they will be virtually useAnticipations, however, were not fulfil ii. It concll i at ion boards soon fall into the background. In 1902, for instance, out of 92 disputes, in only 'four were recommendations of conciliation boards accepted. In fact, *"! the previous year,: it had been found advisable to amend the Act so as to allow disputes to be taken direct to the Court, instead of to one of tne conciliation boards, which had "proved themselves much more provocative than conciliatory Moreover, the attitudes with respect to the system, of both Labour and employer, ultimately changed. Disaffection spread among unionists, fchile employers generally came over to support th« Act, and the satisfaction of the 'one class concerned served to grow as that of the other dwindled. Nor have strikes ceased to be, as we all know, in spite of Dr. Findlay's forecast that »' one day here ft strike will be felt by every honest worker to he a crime." The" strike is made illegal by the Act, and not merely discouraged or discredited. Fines and punishments are provided. But when strikes do occur there is Hot and there cannot be any method by which the worker can be forced to return to his work. The Bystem of fining breaks down. The employer must stick to his bargain; the worker may break it when it suits him, and he generally escapes.

As Others See It. The Arbitration Act excited great interest throughout the world. With other legislation, it largely assisted to establish the reputation of New Zealand as somewhat of an economic laboratory. Visitors, including professors, came to investigate its success on the spot. Governments even sent representatives to report. But the New Zealand system has net spread outside of Australasia. Outside criticism has not always been flattering. It has fotad faults and flaws in the system. The Court has fixed a legal wage which, regarded as a minimum to be earned by the less efficient worker, is " harmfully high." Courts have granted a minimum which could only be earned by the most competent, and not by "far the greater number'* of workers. The continual strikes and the results of many of them had clearly shown that arbitration was, after all. not really compulsory. The workers will only uphold the Arbitration Courts so long "as they grant them better terms than could be procured from the employers themselves. There is confusion between the legislative and executive functions, the judge having personally to decide on his scheme and principles of wage fixation. There is peace while Labour is dictating to the. State, but trouble when the State dictates to Labour. And so on.

In other and more industrially advanced countries the worker and the employer have alike set their faces against the establishment of a compulsory system. In Canada the Industrial Disputes Investigation Act only goes so far as to compel industrial differences to be referred to some tribunal before any strike or lock-out is permitted in the case of certain industries in which there is reason to believe a stoppage of work would prove exceptionally injurious to the community as a whole. This provision brings about delay, discussion, publicity, and permits of the formation of a public opinion which may go far in preventing or shortening a strike. In England there is a great variety of arrangements for the settlement of disputes, with a tendency to favour conciliation rather than arbitration. In the United States the proposal to allow the conditions under which they shall work to be determined by an outsider is, we are told, " peculiarly obnoxioub " to the workmen, who will never agree Wit till conferences have failed and no other resort is left.

The Future of the Court. That a system that has been so extensively repudiated has been in the past at least something of a success in New Zealand may perhaps be mainly attributed to two causes. The population is small and its occupations mainly pastoral and agricultural. Its manufacturing industries are not very numerous, and are for the most part small and simple. A system that proves possible here might well fail where industries are larger and more variable and complicated. The second feature is of the utmost importance. The existence and operation of the Arbitration Court in New Zealand has coincided exactly with the period of rising prices which started in 1895, and has only now apparently come to an end. Wages, generally speaking, rise when prices rise and fall when prices fall. Wages in New Zealand would have risen continuously, as elsewhere, during the last 25 years, even if there had been no Arbitration Court. The Court has had the kudos of awarding increases of wages which generally were inevitable on each occasion then or soon after. Even in spite of this the workers have been far from satisfied with the system. The real test of the system will come when the Court is obliged to award deceasing wages. The smaller wages may have the same spending power as the larger had, but attention will be fixed on the pounds and shillings in the wage, and the Court will get the discredit for reducing those. Will not the "outsider" here, as in America, become "peculiarly obnoxious"? Already the first case that has arisen under the new conditions gives us food for thought. In the shearing dispute, the judge had to practically act alone. No doubt he will now quite commonly have to do so. He will gather the reputation of a dictator. Wages have not risen here so high, proportionately, as in most other places, and so the reaction which has set in in England and America will not be so violent here, and may even be delayed as a whole. But if and when the time of general reduction of wages comes about, the Arbitration Court will be severely tried. Not only will the workers probably lose faith in the Court, but the employers may sometimes be hard hit, if not ruined in having to wait for a decision of the Court. Wages fixed for a matter of years and unalterable in practice, except by the decision of a single Court which has to attend to the wages of a whole country, are conditions awkward for many industries at a time of falling prices. They contrast strongly with the many English arrangements which provide for quick changes in wages, up or down, according to the conditions of the industry concerned! It remains to be seen whether, under the new the administration of even so fair-minded and well-equipped a president as Mr. Justice Frazer can save our arbitration system from very radical alteration.