A NEW PROBLEM

New Zealand Herald, Volume LXXIV, Issue 22694, 5 April 1937, Page 11

A NEW PROBLEM

CALCULATION OF WAGES, SERIOUS COMPLICATIONS WIDE EFFECTS OF JUDGMENT The Court's judgment has been anxiously awaited by all who are concerned with the employment of apprentices, as doubt regarding the application of the wages provisions of the Factories Amendment Act arose shortly after the passing of that legislation, and employers were unable to obtain an authoritative interpretation of the law. "The view that the Factories Amendment Act does not apply to apprentices has been held by the Court to be correct in respect of apprentices indentured before July 1, 1936," said Mr. W. E. Anderson, secretary of the Employers' Association,- on Saturday. "The Court has, however, decided-that, contracts made after that date must bo read subject to the Act, not bv reason of any provision in the new legislation, but as a result of. a clause, which is incorporated in probably all apprenticeship orders, providing that an apprenticeship contract shall not contravene any statutory provision relating to the employment of boys or youths. More Difficult Task "The judgment makes the position in regard to contracts in existence prior to July 1, 1936, perfectly clear. The apprentices concerned are to be paid the wages fixed by the relative apprenticeship orders, subject to the provisions of the Finance Act restoring 1931 rates of wages. "The administration of the law, as it has now been interpreted, will be more difficult in regard to apprentices under contracts made after July 1. Apprenticeship orders contain scales of wages for five or six' years, and in many cases the total amount payable in the first .three years is substantially higher than the minimum required by the Factories Act. Nevertheless, as a result of the Court's judgment, each scale of wages will have to be amended by adding to the prescribed commencing wage the half-yearly increments of 4s. This will obviously produce difficulties in administration and anomalies in operation. For instance, an apprentice in the Wellington furniture trade whose contract was made on ' July 2, 1936, will be entitled to wages amounting in four years to £2B 12s, or over 10 per cent more than one whose contract was made on June 30, 1936." Increases Involved Mr. Anderson added that in its judgment the Court observed that "the substantial question" to be decided was whether apprenticeship orders were to be read subject to the Factories Act. The Court had apparently considered the interpretation of section 12 as a question of minor importance, and its judgment might not be accepted as ,final. The Court had merely expressed an opinion in one sentence. When the identical problem was submitted to the Court of Appeal in 1934 each of the Judges delivered a judgment.*\ "Whereas the Appeal Court in 1934 j decided that the intention and the I effect of the legislation were to prescribe minimum wages during each year of employment, permitting employers to pay more than the minimum rates, the Arbitration Court has decided that last year's amending legislation not only increases the minimum rates, but also .compels employers to pay increments upon wages in excess of those minima, whether the higher wages are offered by the employer voluntarily or are dictated by awards or apprenticeship orders. The second part of section 12 also directs that the whole period of employment in any factory must be taken into consideration in computing wages. In the case of an apprentice who has worked in a factory, even in a different trade, before commencing his apprenticeship, the wages payable during his contract will be affected by the length of that previous employment, the completed stage of the apprenticeship, and the Court's interpretation of section 12. Thus instead sgsr a, precise scale of wages in each industry, the law has introduced complicated rules that will . cause confusion, embarrass- 3 ment, and anomalies. Department's View "There is another serious aspect. The Department of Labour has hitherto taken the view that section 12 applies only to wages up to £2. The Arbitration Court's opinion implies that it applies to every worker during the first three years of his employment in a, factory. This interpretation concerns nearly all employers, since the provisions of the Factories Act are repeated in the Shops and Offices Act. The old section clearly applied only to wages not exceeding 30s a week. There is nothing; in the new section to say that it applies oii'ly to wages not exceeding £2. If the Court is correct in saying that half-yearly increments must bo paid on the rate agreed'on, then the operation of the section is not limited to wages up to £2, but applies in every case of employment during the first three years.

"This interpretation is entirely contrary to the view taken by the Department of Labour in the administration of the amending legislation and it cannot be supposed that the Government and Parliament intended to produce such results. Now that attention lias been directed to the matter it may be expected that the Government will make an authoritative statement that the law .will be enforced only in respect of wages up to £2 a week and that if necessary the legislation will be amended. Until the position has been more clearly defined, employers may be advised to adhere to the interpretation adopted by the Department of Labour." * •