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ARBITRATION IN AUSTRALIA

TASTE for experimental industrial legislation seems to be characteristic of all young democratic communities in these days. It prevails strongly in Australia and New Zealandcountries which, among other distinctions, enjoy that of being the only places in the world where, failing amicable agreement between the parties engaged in an industrial dispute, arbitration with a view to its settlement is legally compulsory. The latter term is of course used subject to two important reservations. The common law forbids the compulsion of any man not convicted of a criminal offence, or maintained in a State charitable institution, to work on terms he is unwilling to accept. And sheer necessity forbids an employer to carry on operations continuously under conditions which mean loss rather than profit. State arbitration therefore, in a country where free institutions prevail, can only be compulsory in this sense, that in certain circumstances both employers and employees may be compelled to choose between carrying on an industry under conditions laid down by a judicial tribunal and ceasing work altogether. At first sight, setting aside the rather important question of the public interest, this seems equal treatment for both sides. But when it is remembered that the employer may have his whole capital in the form of buildings, machinery, technical knowledge, etc., locked up in the industry adversely affected by an award, whereas the capital of the worker -that is his physical strength and skill-is mobile and can easily be diverted to some new sphere of enterprise, the inherent injustice of the principle on which compulsory arbitration is based becomes at once apparent. This injustice is accentuated by the fact, only too clearly demonstrated by Australian experience, that whereas heavy penalties can be exacted from employers who fail to observe the terms of any award, since they possess property open to seizure, yet graver breaches on the part of their employees entail no punishment whatever. In the Commonwealth of Australia, where over 700,000 persons out of a total population of little more than 5 millions belong to trade unions, no politician dares to hold the latter formidable bodies responsible for the

misdeeds of their members. Fear of the big battalions of voters is the beginning-and sometimes the end-of political wisdom in all countries where adult franchise prevails. There is thus an inherent weakness in the moral foundations of the compulsory arbitration system. For while in theory the latter extends equal treatment to both industrial classes, in practice, for reasons just indicated, it places the one which is numerically preponderant in a decidedly privileged position.

The genesis of compulsory arbitration in Australia may briefly be sketched. The Act which created the Commonwealth empowered the Federal Parliament inter alia to legislate with respect to "conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State." This power was very reluctantly conceded to the new legislature by the majority of the delegates at the convention where the draft constitution was drawn up for submission to the electors by referendum, and the clause embodying it represented a compromise between the views of the conservative section that advocated State rights and industrial home rule, and those of the Labour delegation, which were strongly in favour of the bestowal of absolute authority over all Australian industries in the Commonwealth. As should have been foreseen by the supporters of State organization of industries, the terms of the arrangement accepted were extremely favourable to their opponents, seeing that practically all the important industries, both primary and secondary, carried on in Australia are represented in more than one State. By the organization of the workers engaged in such industries as mining, shearing, timberworking, etc., which are scattered all over Australia, the emissaries of the trade unions soon found themselves in a position to ignore the State tribunals and avail themselves of the services of the Federal Court. Once, for instance, the waterside workers of Sydney and Melbourne became members of the same union it was quite easy for an experienced agitator to arrange for the simultaneous outbreak of disputes at both places so as to assure Commonwealth intervention. In a very short time, as a matter of fact, the Federal tribunal became the predominant partner in the sphere of industrial jurisdiction.

The Commonwealth Court of Conciliation and Arbitration, constituted under the provisions of an Act passed in the year 1904,

is an entirely unique institution. A single functionary, who must be a Judge of the High Court, presides over it, and for some years he alone wielded its full powers. About two years ago however, owing to the overwhelming congestion of business from which the court suffered, two deputy judges were appointed (for some time previously there had been one, Mr. Justice Powers, who became President on the retirement of Mr. Justice Higgins) to hear cases of minor importance. Those of the very first rank are heard by the three judges sitting together. The powers of the court are most ample, and extend, subject to a right of veto reserved by Parliament-but for reasons unnecessary to explain never yet exercised to all industrial matters. The breadth of its jurisdiction may be estimated from the statutory definition of the expression just used, viz., “all matters relating to work, pay, wages, reward, hours, privileges, rights or duties of employers and employees, and the employment, preferential employment, dismissal or non-employment of any particular persons or of persons of any particular sex or age, or being or not being members of any organization, association or body; and any claim arising under an industrial agreement; and all questions of what is fair and right in relation to any industrial matter having regard to the interests of persons immediately concerned and of society as a whole." The phraseology of this elaborate definition is rather distressing, but at all events it certainly does not lack comprehensiveness. Subject to the purely nominal right of veto retained by the Federal Parliament, and an almost equally nominal limitation in regard to its territorial jurisdiction, the court was invested with what, in law at least, almost amounted to an industrial dictatorship. Indeed, as long ago pointed out by the present Chief Justice of Victoria, it combined the dual functions of a judicial tribunal and a legislature.

Four methods by which the interference of the court with any industry can be brought about are prescribed by the Act. When an industrial dispute extends to two or more States the President himself on his own initiative may summon representatives of the contending parties to meet at a compulsory conference over which he presides, with the object of arranging an amicable settlement. Failing the latter he can refer the matters in dispute to himself as judge, hear evidence from both sides and pronounce an authoritative decision. An official known

as the Registrar of Trade Unions may certify that a dispute has occurred necessitating the court's intervention. The disputants, or one of them, may submit the case by plaint in a manner allowed by the Act. (In this eventuality sometimes there are long and expensive proceedings at the outset to decide whether a legal dispute " exists, and the decision of the President on the point has on one or two occasions been annulled on appeal to the High Court.) Finally, a State industrial authority or Government may submit a difference with its employees to the court's decision. Naturally this privilege has only been exercised in very exceptional cases.

Here a very important recent development deserves notice. When the Arbitration Act was passed there was a distinct understanding that the officers and employees of the State Governments should be forbidden access to the Federal Court against the will of their employers. All the leading jurists in Australia were unanimous in the opinion that the Constitution Act itself forbade such extension of Federal jurisdiction. Twice the Labour Party tried in vain by referendum to have the constitution amended in such a way as to confer on the Commonwealth unfettered industrial powers, and on two occasions the High Court decided that the President of the Federal Arbitration Court had no jurisdiction over State employees. In 1906 the question was considered to have been finally settled by the judgment of the High Court in a well-known case where the union of railwaymen tried unsuccessfully to have an award of the Arbitration Court extended to the State services. Unhappily however, within the last few years the position has changed in a manner which threatens grave future consequences. Towards the end of 1922 the Amalgamated Society of Engineers obtained an award from the Federal Arbitration Court affecting, among others, members of the society employed by several State Governments. A subsequent application made by all the States, save Queensland alone, to the High Court to have the award, so far as it applied to State employees, declared ultra vires was refused by a majority of the judges who, reversing both previous decisions, ruled that the Commonwealth had power under the constitution to legislate for the prevention and settlement of disputes between State Governments and their employees. On the delivery of this astounding judgment the Governments concerned applied to the

High Court for a certificate under section 74 of the Constitution Act for leave to appeal to the Privy Council, but the application, for reasons difficult to understand, was summarily rejected. In view of the great importance of the question at issue, and the fact that the interpretation given to the terms of the Act by the judges was entirely at variance with that twice accepted by their predecessors on the bench, it would have been far more satisfactory had the question been referred for final decision to the highest judicial tribunal in the Empire.

The situation brought about by the judgment of the High Court is both dangerous and ludicrous. A tribunal which may be presided over by a single judge, though he may avail himself of the assistance of two others, has virtually absolute power to fix the hours of work, rates of pay, number of holidays, etc., for each one of the many thousands of trade unionists employed on the State railways, irrigation and hydro-electrical works and other similar public utilities throughout the whole Australian continent, if its services be invoked by the trade unions. By one award this formidable tribunal may render any great State enterprise unprofitable and so increase the burdens of the taxpayers. Indeed the recent judgment of the High Court, apart from the evil moral and financial consequences likely to follow it, indirectly violates a constitutional principle of a fundamental character. In effect it sanctions taxation without representation; for increased charges of management of public enterprises must entail increased taxation, while the functionary (or functionaries) responsible for those increases most certainly cannot be considered as representative of the people who have to pay the enhanced taxes. Already taking advantage of the opportunity offered--the officials of the railway unions have prepared an elaborate list of claims for increased wages and various privileges on behalf of some 90,000 men employed on the Australian railways; and as the acceptance of these claims by all the Governments concerned is highly improbable the case will most likely come before the court early this year. The judges, who are trained lawyers but not railway experts, will find themselves confronted with a gigantic task, and the cost of the proceedings is likely to be fabulous. Needless to add the authority assigned to the Arbitration Court to over-ride the decisions of the State Governments in dealing with their own servants must have the

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