EFFECT OF WAGES CUT ON CONTRACTS

Star (Christchurch), Volume XLIV, Issue 77, 31 March 1931, Page 9

EFFECT OF WAGES CUT ON CONTRACTS

UNION OFFICIAL RAISES AN INTERESTING POINT. An interesting point in connection with the provision in the Finance Bill to give the Arbitration Court power to review industrial awards has been raised by Mr E. C. Sutcliffe, secretary of the Amalgamated Carpenters’ and Joiners’ Union. Mr Sutcliffe said that, following on the remarks made at Monday’s meeting of the City Council by the Mayor (the Rev J. K. Archer), he had looked closely into the question of how existing contracts would be affected by a revision of Arbitration Court awards. He had arrived at the conclusion that the building industry employees would be required to take advantage of the clause in the Bill providing for the granting of exemptions from orders of the Court. When Wages Were Rising. Mr Sutcliffe said that when wages were rising between 1916 and 1920, the Court, at the request of the employers, inserted the following clause in awards: “ Nothing in this award shall apply to any contract entered into before the date of the delivery of this award and uncompleted: provided that no employer shall be entitled to the benefit of this clause unless he shall, within one calendar month after the date of filing this award, give to the local inspector of factories notice in writing of the contract or contracts in respect of which he claimed exemption, stating the date of such contract, the name of the person or persons with whom the same has been entered into, the nature of the work and where the same is to be performed.” Substantially the same clause appeared in twelve awards of that period, one of them being particularly mteresting in that it applied to one contract in Invercargill, which evidently was the only one in operation at that time. “ The Court has carried this exemption further,” Mr Sutcliffe continued. “In the existing General Labourers’ Award, made in 1926, the following exemption appears:— * Contractors carrying on existing contracts shall not be required to pay the rates prescribed in clause 2/ Clause 2 deals with a rise of a few pence above the former award rate of wages. Protection For Contractors. “The exemption clause already referred to dealt with rises of 2d and 3d an hour. These exemptions were made at the request of contractors to protect them against increases in wages, although they were already protected in another direction, as contracts operating in the latter part of the War and few years afterwards carried a provision that rises in wages and the cost of materials were to be considered in the price. Because it was more expedient to do that class of work on a commission basis, that system was widely adopted at the time. “ Now the pendulum is swinging in the opposite direction. The workers are threatened with a reduction in their wages. Therefore it is only right that similar protection to that given to employers in the period from 1916 to 1920 should be given to the workers in 1931. " Large Contracts In Operation. “ There are many large contracts in operation, involving thousands of pounds. While the Finance Bill leaves the matter of wage reductions to the discretion of the Court, it is presumed that the Court will follow the example of the Public Service cut of 10 per cent. If that is done it will be equivalent to making a present of 10 per cent on the wage price of each contract to the contractor personally. It will be interesting to see if there are any contractors so highly patriotic as to hand this money to Mr Forbes with the idea of helping him to ease the country’s financial position. Effect Of Wages Cut “ Provision is made in the Finance Bill for the Court in the general order or at any subsequent order, on its own motion, on the application of any party interested, to vary the general order as it affects the financial condition of any trade or industry. It may take into consideration any relevant facts. I therefore submit that, if it was just and equitable for the Court to provide protection for employers under existing contracts in years gone, by the same argument must prevail and the same policy must actuate the Court in dealing with any applications made to it under the provisions contained in the Finance Bill.” No Question Of Gambling. Mr Sutcliffe said that, in connection with the big contracts in operation at the present time, the conditions affecting wages had been clearly set out in the awards governing the industry. An employer could not plead before the Court with any hope of success that he had gambled on the possibility of a reduction in wages before the completion of the contract. There was a big contract closing at once and, notwithstanding the fact that the Finance Bill was now before Parliament, a contractor putting in a tender would have no justification for reducing his labour costs by gambling on a reduction in wages. It should be made clear, he added, that it was the intention of his union to apply to the Arbitration Court for exemption from wage reductions in respect of existing contracts.