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ciliation is found impracticable, arbitration. The arbitration is compulsory in the sense that an award, if made, binds the parties. The Act makes a strike or a lockout an offence if the dispute is within the ambit of the Act if the dispute is one that extends. beyond the limits of one State. In other words, the process of conciliation, with arbitration in the background, is substituted for the rude and barbarous processes of strike and lockout. Reason is to displace force; the might of the State is to enforce peace between industrial combatants as well as between other combatants; and all in the interest of the public.

Under the Act, the Court consists of a President, who must be one of the justices of the High Court of Australia. The High Court is modelled on the Supreme Court of the United States, having often to decide whether Acts are constitutional, but it is also a Court of Appeal from the Supreme Courts of the States. The first President of the Court of Conciliation was appointed February 10, 1905, and, on his resignation in September, 1907, I was appointed as his successor.

The first task that I had to face was not, strictly speaking, conciliation or arbitration. The Federal Parliament imposed certain excise duties on agricultural implements manufactured, but it provided for the remission of the duties in the case of goods manufactured under conditions, as to the remuneration of labour, which the President of the Court should certify to be "fair and reasonable." The Act gave no guidance as to the model or criterion by which fairness and reasonableness were to be determined. In dealing with the first employer who applied to me for a certificate, I came to the conclusion that the Act was designed for the benefit of employees, and that it was meant to secure for them something which they could not get by individual bargaining with their employers. If A let B have the use of his horse on the terms that B give the horse fair and reasonable treatment, B would have to give the horse proper food and water, shelter and rest. I decided therefore to adopt a standard based on "the normal needs of the average employee, regarded as a human being living in a civilized community." This was to be the primary test in ascertaining the minimum wage that would be treated as "fair and reasonable" in

2 Excise Tariff 1906.

the case of unskilled labourers. At my suggestion, many household budgets were stated in evidence, principally by housekeeping women of the labouring class; and, after selecting such of the budgets as were suitable for working out an average, I found that in Melbourne, the city concerned, the average necessary expenditure in 1907 on rent, food and fuel, in a labourer's household of about five persons, was £1.12s. 5d. (about $7.80, taking a dollar as equivalent to 4s. 2d.); but that, as these figures did not cover light, clothes, boots, furniture, utensils, rates, life insurance, savings, accident or benefit societies, loss of employment, union pay, books and newspapers, tram or train fares, sewing machine, mangle, school requisites, amusements and holidays, liquors, tobacco, sickness or death, religion or charity, I could not certify that any wages less than 42s. per week for an unskilled labourer would be fair and reasonable. Then, in finding the wages which should be treated as fair and reasonable in the cases of the skilled employees, I relied mainly on the existing ratios found in the practice of employers. If, for instance, the sheet-iron worker got 8s. per day when the labourer got 6s., the sheet-iron worker should get, at the least, 9s. when the labourer's minimum was raised to 75.

In the case referred to, the employer did not raise before me the point that the Act was invalid; but, having failed in his application for a certificate, he refused to pay the excise duty, and defended an action to recover the duty before the High Court on the ground that the Act was invalid; and he succeeded, by a majority of three justices to two, on the ground that the Act was not really a taxation Act at all, but an Act to regulate labour conditions, and as such beyond the competence of the Federal Parliament. But the principles adopted in the case for ascertaining a "fair and reasonable" minimum wage have survived and are substantially accepted, I believe universally, in the industrial life of Australia.

In the first true arbitration case that relating to ship's cooks, bakers, etc.—the standard of 7s. per day was attacked by employers, but I do not think that it has been attacked since, probably because the cost of living has been rising. The Court announced that it would ascertain first the necessary living wage for the unskilled labourer, and then the secondary wage due to skill

* King v. Barger, Commonwealth v. McKay, 6 Com. Law Rep. 41 (1908).

or other exceptional qualifications necessary. Treating marriage as the usual fate of adult men, a wage which does not allow of the matrimonial condition and the maintenance of about five persons in a home, would not be treated as a living wage. As for the secondary wage, it seemed to be the safest course, for an arbitrator not initiated into the mysteries of the several crafts, to follow the distinctions in grade between employees as expressed in wages for

many years.

The distinction between the basic or primary or living wage and the secondary wage attributable to exceptional qualifications necessary for the performance of the function is not fanciful; it was forced on the Court by the problems presented and by the facts of industrial life. Yet it has to be borne in mind that though the essential natural needs come first, the conventional needs (e. g., of artisans as distinguished from labourers) become, by usage, almost equally imperative.1

The following propositions may, I think, be taken to be established in the settlement of minimum wages by the Court; and it is surprising to find how often, as the principles of the Court's action come to be understood and appreciated, they guide parties disputing to friendly collective agreements, without any award made by the Court.

1. One cannot conceive of industrial peace unless the employee has secured to him wages sufficient for the essentials of human existence.5

2. This, the basic wage, must secure to the employee enough wherewith to renew his strength and to maintain his home from day to day.

3. The basic wage is the same for the employee with no family as for the employee with a large family. It rests on Walt Whitman's “divine average," and the employer need not concern himself with his employee's domestic affairs.

4. The secondary wage is remuneration for any exceptional gifts or qualifications,' not of the individual employee, but gifts or quali

Engine-drivers, 7 Com. Arb. 132, 139 (1913).

Boot-factories, 4 Com. Arb. 1, 10 (1910); Seamen, 5 Com. Arb. 147, 164 (1911).

6 Broken Hill Mine, 3 Com. Arb. 1, 20 (1909).

Boot-factories, 4 Com. Arb. 1, 10 (1910); Postal Electricians, 7 Com. Arb. 5, 10 (1913); Builders' Labourers, 7 Com. Arb. 210, 217 (1913).

fications necessary for the performance of the functions, e. g., skill as a tradesman, exceptional heart and physique, as in the case of a gas stoker, exceptional muscular training and power, as in the case of a shearer, exceptional responsibility, e. g., for human life, as in the case of winding or locomotive engine-drivers.10

5. The secondary wage, as far as possible, preserves the old margin between the unskilled labourer and the employee of the skilled or exceptional class."

6. After ascertaining the proper wages, basic and secondary, the Court considers any evidence adduced to show that the employers ought not to be asked to pay such wages.12 It will consider grounds of finance, of competition with imports, of unfairness to other workers, of undue increase in prices of the product, of injury to the public, etc.

7. The wages cannot be allowed to depend on the profits made by the individual employer, but the profits of which the industry is capable may be taken into account. If the industry is novel, and those who undertake it have to proceed economically, there may be a good cause for keeping down wages, but not below the basic wage, which must be sacrosanct. Above the basic wage, bargaining of the skilled employee may, with caution, be allowed to operate.13

8. The fact that a mine is becoming exhausted or poorer in its ores is not a ground for prescribing a lower rate than would otherwise be proper. If shareholders are willing to stake their own money on a speculation, they should not stake part of the employee's proper wages also. The Court cannot endanger industrial peace in order to keep unprofitable mines going.14

9. The Court does not increase the minimum on the ground of affluence of the employer. It is not affected by the fact that one of the employers can, by skilful management, by enterprise, or by good fortune, make very large profits.15

8 Gas Employees, 7 Com. Arb. 58, 71 (1913).

9 Shearers, 5 Com. Arb. 48, 79 (1911).

10 Engine-drivers, 5 Com. Arb. 9, 21 (1911).

11 McKay, 2 Com. Arb. 1, 16 (1907); Ship's Cooks, 2 Com. Arb. 55, 65, 66 (1908). 12 Broken Hill Mine, 3 Com. Arb. 1, 31 (1909).

13 Ibid., 32; Shearers, 5 Com. Arb. 48, 73 (1911); Ship's Officers, 6 Com. Arb. 6, 21 (1912).

14 Broken Hill Mine, supra, 33-34; Engine-drivers, 7 Com. Arb. 132, 139 (1913). 15 Seamen, 5 Com. Arb. 147, 164 (1911); Gas Employees, 7 Com. Arb. 58, 72 (1913).

10. The minimum rate must be based on the highest function that the employee may be called on to exercise. The employer must not give a plumber labourer's work and pay him labourer's wages if he has also to do plumbing."

II. In finding the proper minimum rate, the Court tries to find what would be proper for an employee of average capacity called upon to do work of the class required. If the employer desires to secure the services of an exceptional workman, he is free to do so. The payment of higher rates is left to the play of bargaining."7

12. The Court does not attempt to discriminate in wages on the ground of comparative laboriousness. Discrimination on such a ground is neither safe nor sound. The Court declined to give an extra rate to hodmen if they carry beyond a certain height.18

13. The Court will not discriminate in wages as between the several States so as to interfere with the freedom of trade between the States provided by the Constitution.19

14. The Court will not keep down wages on steamers so as to enable them to beat State railways in competition or to help one competitor against another.20

15. The Court accepts and follows the usual practice of making rates for casual employment higher than the corresponding rates for continuous employment.21

16. The Court, in obedience to the Act, provides exceptions to the minimum rate in the case of aged, slow or infirm workers, but the exceptional cases must be disclosed to the representative of the Union, and be well safeguarded.22

17. But the Court will not provide exceptions to the minimum rate for "improvers," men paid more than boys and less than journeymen, men who are used to beat down the claims of competent journeymen, and are thus a perpetual menace to the peace of the community.23

16 Postal Electricians, 7 Com. Arb. 5, 8–9 (1913).

17 Ship's Stewards, 4 Com. Arb. 61, 63, 68 (1910); Engine-drivers, 5 Com. Arb. 9, 15 (1911); Shearers, 5 Com. Arb. 48, 91 (1911); Builders' Labourers, 7 Com. Arb. 210, 223 (1913).

18 Ibid., 231.

19 CONSTITUTION, Sec. 92; Boot-factories, 4 Com. Arb. 1, 13 (1910).

20 Ship's Officers, 6 Com. Arb. 6, 22 (1912).

21 Builders' Labourers, 7 Com. Arb. 210, 218 (1913).

22 ACT, Sec. 40; Boot-factories, 4 Com. Arb. 1, 24 (1910).

23 Ibid., 16.

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