STATE REGULATION OF INDUSTRIES IN NEW ZEALAND.

Otago Witness, Issue 3864, 3 April 1928, Page 14

STATE REGULATION OF INDUSTRIES IN NEW ZEALAND.

J. MacGregor, M.L.C.

By

I. Let no man who begins an innovation in a State expect that he shall stop it at his pleasure, or regulate it according to his intention.—Montesquieu. For a good many years the people of New Zealand have been carrying on their industries under a system of State regulation enforced by means of a court clothed with legislative powers, and the remarkable thing is that they have during all those years been under the impression that the system is one of conciliation and arbitration, and they still are under that impression. Some years ago the present writer expressed surprise that, in these days of Royal Commissions, no such commission had been set up to investigate and report upon the results of the system that has been so long in operation; and the Wellington Trades and Labour Council, after 12 years’, experience of it, sent to a Labour conference sitting in Dunedin as a remit the following resolution:— That the conference consider in committee and advise the councils and unions of the colony on the following matters, namely: 1. The underlying principle of the Act. 2. The present and probable future effects of the Act upon the character, standing, and progress of the trade union movement, and 3. The present and probable future effects of the Act upon the economic and social conditions of the workers.

The passing of such a resolution by such a body would seem to indicate that some of the Labour leaders must have had some doubts as to the ultimate effects of the system, .although, only a' few years before, members of the same council had assured an eminent French economist (one of many investigators who visited New Zealand for the purpose of studying our wonderful system) that “ belief in the system was a part of their religion.” But nothing seems to have come of this excellent suggestion. Now, however, that the Government has _at last discovered through its experience in the case of the Bill of last session that there is a limit to the possibilities of tinkering the system, we are to have an inquiry on a grand scale by a conference. But, wide as the scope of the inquiry is, it might be advisable to add a question whether the system and our Labour legislation generally have had a really beneficial effect upon - the morale (the manhood) of our working people and upon the employers generally. As a test question one might suggest this—Does the New Zealand worker impress one as being specially desirous of giving a fair day’s work for a wage fixed by a court? The original (Reeves) Aet was passed in 1894, and Sir Joseph Ward is, I believe, the only member of the House-of Representatives who was then a member, and pr< bably very few of the present members or of the members of the conference know anything about the real Reeves Act. I would appear that without a knowledge of that Act, and of the many phases through dahich the system has passed, it would be imposisble for the members of the conference to perform their task with any satisfaction to themselves or advantage to the community, and •it has occurred to the present writer that a sketch of its history by one who has known it from its commencement, and has observed it closely, may be of some service. The short title of the Reeves Act was “ The Industrial Conciliation and Arbi-tration-Act, 1894,” and the title (that is, the descriptive title) was “An Act to enco rage the formation of industrial unions and associations, and to facilitate th.- settlement of industrial disputes by conciliation and arbitration.” This title was truck out of the Act many years ago on the ground that it had been invoked by Mr Justice Edwards, as president of the court, for the purpose of justifying the granting of preference to unionists. Thus, it has come about that all that remains is the “ short title,” and that is not merely a misnomer, but a positive deception, inasmuch as the Act was so altered, within a few years after its passing, that, as a system of real conciliation and arbitration in the ordinary sense, it has never been tried. . That Mr Reeves regarded conciliation m the proper sense of the word as the very soul of his Act was made clear in his speeches as reported in Hansard. Here is one such passage:—

I do not think the Arbitration Court nil be very often called into requisition; on the contrary, I think that in 99 cases in 10ft. m which labour disputes arise they will % e settled by the conciliation boards; but unless you have in the background an Arbitration Court the conciliation boards will not be reless Cted ’ and they W * U be virtualJ y useHere is a passage from another of Mr Reeves’s speeches:— !f this measure fails it will be because it will be ineffectual, and not because it will do any active harm. If U fafi, ds failure will probably be because its provisions are not taken advantage J•-x • » 1 , ope that ’t may be so administered and so worked, that the employers in days to come will welcome it as their best friend

There is no reason to doubt that, if Mr Reeves s Act had been applied in the manner and for the purpose for which it was intended by its author and by the Parliament that enacted it, namely—the prevention of industrial strife, and the promo tion of a spirit of conciliation and goodwill between employers and employees it would have proved a blessing to both If it has proved a failure (as it apparently has), the cause obviously is that it has never been applied for the purpose and in the manner for which it was intended. Instead of such a system we have a court which undertakes to regulate all our industries down to the minutest detail. ‘

Now the- main object of the present writer in writing this series of articles is to get the members of the conference to realise that they have to choose between some sort of system of conciliation and one of State regulation by means of a court.

He has tried to make it clear that the Reeves system was intended to be one of conciliation, and that it has never been tried m actual operation. Mr Reeves left New Zealand shortly after the passing of hi s Act, and about 12 years later, the present writer, believing that Mr Reeves did not realise the fact that, his system had not been tried, sent him an open letter on the subject. As it is not unlikely that members of the conference, misled by the title of the Act. are under an erroneous impression as to the real nature of tho system in its actual operation, some extracts from this letter may be useful.

It is now over 12 years since the. passing of your Industrial Conciliation and Arbitration Act, and it has occurred to mo that you might like to get an account of the working of the system since you left New Zealand in 1896 from one who has watched its working and development on the spot. From infancy your offspring had to be left to the care of others, and . the result is that, if you were to revisit New Zealand now, you would have some difficulty in recognising it as your child, and I doubt whether you would be inclined to father it. Because I protested from time to time that it was not being trained and developed or put to the work for which you intended it, I have come to be regarded as an enemy, and even you have referred to me as its most “ pertinacious enemy.” I shall try to explain how this departure from what I take to have been your design has come about. I have always understood that what you contemplated was that the machinery of the Act was to be brought into requisition only for the purpose of “ Preventing that elass of labour disputes which cause loss or danger to the community,” and I am safe in saying that it never occurred to you as a 'possibility that the outcome of the Act would be the multiplication oi disputes—that “disputes” would be got up for the express purpose of being brought before the Court of Arbitration. You no doubt remember having said in Parliament, that “ it would take years before the public could say whether or not they consider it a good and useful measure,” and that, too, because the machinery of the system, more especially of the Court of Arbitration, would be so seldom put in operation. Now. as you are aware, prior to the passing of the Act serious disputes were not of frequent occurrence, strikes were rare, and lockouts unknown; and it was the occurrence of a single great strike that led to the passing of the Act of 1894. This was. as you know, a purely sympathetic strike so far as New Zealand was concerned. Now, my purpose in referring to this is not to contrast with the rarity of disputes prior to the Act their frequency subsequently to it. This would be obviously unfair, since “ dispute ” has come to mean simply an application filed -with the registrar of the court, not for the settlement of a dispute in the ordinary sense, but for an “award” regulating the conditions under which the industry in question is to be carried on. The difference is, of course, of the utmost importance, for it means that the court has become a legislative body set in motion by the unions for the purpose of converting into ordinances (awards) their lists-of demands. That the creation of a body with such a function was never contemplated either by you, as the author of the measure, or by the Parliament that enacted it. you will, I have no doubt, admit. What we thought we were setting up was a system making provision for the composing of serious industrial disputes by means of conciliation, with a tribunal in the background to adjudicate upon and settle, uno ictu, any dispute that had baffled a Conciliation Board, and threatened to result in a strike or a lockout.

One of the greatest difficulties in the drafting of a measure so novel was, as you have good reason to remember, the definition of the term “ dispute,” Two elements had to be combined which are almost incompatible, namely, precision and generality, and the generality of the definition, or rather, description. is what has. led to the divergence. From the very outset the court found that the unions were putting, a very wide construction upon the term “ dispute.” In one trade after, another the unions prepared for submission to the employers lists comprising all the usual trade union demands, such as higher wages, shorter hours, restriction of the number of apprentices, etc.: the employers refused compliance alleging (as was usually the fact) that there was no dispute between ther.i and their workmen. Thereupon the union filed the prescribed application alleging the existence of a dispute, and the court found itself in the position of having to decide whether or not, in such circumstances, a dispute, could be said to exist. The president, being a judge of the Supreme Court, applied himself to the task of arriving at the meaning of the term “ dispute,” and in doing this he naturally guided himself by legal canons. Finding that the definition was wide enough to include “ disputes ” that are aot disputes in the ordinary sense, the court decided that the unions had the right to invoke the intervetnion of the court in this way. Consequently the judge-president treated the-question as one of jurisdiction, and it followed, on legal principles. that, having held that it had jurisdiction in such a case, the court was bound to exercise it. And thus we arrive at the extraordinary result that the Legislature without knowing or intending it, had endowed this “ court ” with legislative powers of a most important kind, and had placed the trade unions in the position of being able to call upon this legislative court to legislate for the regulation of every industry in the. colony, and to pass new enactments at intervals of two years in any particular industry! That Parliament never intended such a result, I feel sure you will admit; and it is clear from the general tenor of your Act. It is simply inconceivable that the Parliament of a, British community could knowingly and intentionally endow a court with such powers: it is contrary to all principle and precedent that a court should enact laws, adjudicate upon charges of breach of those laws and enforce its judgments. Under onr Constitution no enactment of any kind can be passed without the concurrence of

two Houses of Parliament, and yet we find this court, composed of three members. who do not necessarily possess any special qualifieation~for the work, undertaking to exercise functions which neither of the Houses of Parliament could exercise apart from the other.

seems to have taken the court a good many years to realise the real nature of the powers which it has been SXVM 5 an(l ifc isMoubtfM whether Parliament has even vet realised the difference between the court as it is, and the court as Parliament noting d to 'i 6. Ministers in proposing, and members and newspapers in discussing the amendments made in the s S sei .°” after session, refer to the principle of the Act” as if it were merely the settlement of disputes in the S.h™™ the <,rigi ” al A,t - bs '

This departure, then, from the original idea accounts for what first strikes one with regard to the svatem of nro/ th r mul£ j plicit y of disputes and +L tlOn j-° f em Ployers for offences against the ordinances of the court. In-i-Of beiD ? ca Ued upon to sit, peras was 1 «n° P r A ie +i times a year almost, as expected, the court is kept grindis S still tbe year r 9 un< l> and Not lone no- b e tO °, ver take its work, in nff™ g a ’\ e . m Pl°yer charged with difficultto colnpla that he found it the aivA. r^ m cmber the provisions of rne awards, as he was carrying on his a smill P ”v- h President remarked with Mr Burt 5 o^ are ,. not badly off as was wnrL-in f D,s ? edln ’ ’"'ho told me he was woikino- under 14 awards.”