Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 2004 5
THE ORIGINS OF COMPULSORY
ARBITRATION IN WESTERN AUSTRALIA
DAVID H. PLOWMAN* AND GENEVIEVE CALKIN*
W
estern Australia was the first of the Australian states to legislate for compulsory
arbitration. It did so in 1900. The paper presented here examines the paradox
of this legislation. It was passed through an Upper House in which employers, who opposed
the Bill, decided not to kill the legislation as had happened in other states. Instead, they
so amended the Bill that the resultant Act proved inoperable. This Westralian legislation
challenges some of the explanations offered for the introduction of compulsory arbitration
in other states. Sweating was not an issue in Western Australia—at least not for those
who were the intended beneficiaries of the Act. Voluntary arbitration had been tried, and
unlike the experience in other parts of Australia, it had proved successful. This would
suggest that there was no need to bypass the ad hoc, informal and voluntary dispute
settlement system that had been employed. Employers, claimed by some as the architects
of compulsion in the eastern states, did not initiate the Westralian legislation and opposed
it. In contrast, unions, also claimed as the source of arbitration legislation, were in their
embryonic stage and did not have the capacity to directly affect legislation. The same
could be said of labour’s political wing. There was only one Labor member of the Lower
House when the legislation was passed. Thus, Labor had little scope to support the
legislation or to affect its form. The role of ‘liberals’, which has been seen as an important
ingredient in arbitration in other states, was small and insufficient to affect outcomes in
the Western Australian parliament. It is contended that a conflux of local factors explains
the origins of compulsory arbitration legislation in WA. The first was political expediency
that enabled Western Australia’s long-time premier to maintain office and thus secure
a role in the first Australian parliament. The second was the need to modernise the
state’s employment laws to take account of the collective activities that had increasingly
accompanied employment relations since the early 1890s. The third factor was employers’
capacity to reduce the effectiveness of the compulsory elements of the legislation and to
use it to chloroform unions.
INTRODUCTION
The year 2002 marked the centenary of the first judgement issued by a Court of
Arbitration in Australia. This occurred in Western Australia, that state being
the first to make provision for compulsory arbitration. It did so at a time of
industrial peace; at a time of economic prosperity; at a time when unionism
in the state was still in its embryonic development; and at a time when neither
*Graduate School of Management, The University of Western Australia, Crawley, Western
Australia 6009. The authors wish to thank a number of colleagues who provided comments on
earlier drafts. Special thanks to Naomi Segal and the Journal’s anonymous referees. Any errors
remain the responsibility of the authors. Email: dplowman@ecel.uwa.edu.au
THE JOURNAL OF INDUSTRIAL RELATIONS, VOL. 46, NO. 1, MARCH 2004, 53–83
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Labor nor ‘liberals’ were sufficiently well represented in Parliament to determine
legislative outcomes. These factors challenge much of the received wisdom
regarding the adoption of arbitration by Australian legislatures.1
The paper presented here explores the origins of compulsory arbitration in
WA. The next five sections examine the Westralian experience in the light of
factors that have been claimed to have influenced the adoption of compulsory
arbitration in eastern Australia and in New Zealand, namely: the elimination of
sweating; the failure of voluntary arbitration; employer initiation; union influence;
and ‘Lib-Lab’ legislation. The penultimate section examines the special circumstances in Western Australia and argues that taken together, three factors go a
long way in explaining the Western Australia paradox: political expediency;
the need to take account of changing economic circumstances and to remove
collective industrial action from the laws of conspiracy; and employers’ capacity
to minimise the reach of compulsory arbitration. The final section is by way of
summary and conclusion.
ELIMINATION
2
OF SWEATING
During the 1890s there was significant concern with sweating in Britain and in
parts of Australasia. Royal Commissions in the UK, New Zealand and Victoria
highlighted the pervasiveness of sweating and recommended State interference
to overcome it.
The development of compulsory arbitration in the context of public concern
about sweating gave rise to arbitration being associated with the prevention and
removal of sweating. Writing of the New Zealand experience, one in which
compulsory arbitration had been introduced in 1894, Woods notes that:
. . . within a few years the Act led to widespread wage-fixing by a state tribunal,
and since one of the benefits claimed for this innovation was the elimination of
‘sweating’, there has been a tendency to see the Arbitration Act as a piece of
social legislation which was deliberately aimed at establishing minimum wage
levels (Woods 1974: 37).
One who sees a direct link between sweating and arbitration is Fairburn. He
describes the (New Zealand) Arbitration Act as ‘legislation against sweating’
(Fairburn 1975: 11). This connection was also openly canvassed by the architect
of the New Zealand system, William Pember Reeves. The New Zealand experiment resulted in much foreign interest including the English Webbs (1897), the
French Metin (1901), and the American Henry Demarest Lloyd. Lloyd’s book,
A Country Without Strikes (1900) includes an introduction by Reeves in which he
makes claims for the social effects of compulsory arbitration. Reeves articulated
this in greater detail in his two-volume book State Experiments in Australia
and New Zealand. In it, he ascribed the origins of labour laws largely in terms of
sweating (Reeves 1902: 1–36). The main object of the Act, he wrote, ‘was to
put an end to the larger and more dangerous class of strikes and lockouts’ but
a second objective ‘of the Act’s framer was to set up tribunals to regulate
conditions of labour’ (ibid: 135).
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This view has been questioned. Thus, in his treatise on the first 40 years of
arbitration in New Zealand, Holt comments:
Reeves never talked about regulating the conditions of labour or eliminating
sweating when the Bill was before parliament in the early 1890s, although he may
have shared the view, spelt out by the Sweating Commission of 1890, that where
unions existed ‘wages do not sink below a living minimum’. Moreover, Reeves had
predicted on many occasions that most disputes would be settled voluntarily before
conciliation boards and that appeals to the Arbitration Court would be ‘very few
and far between’. Had this turned out to be true it is hard to see how any general
system of wage-fixing by the state could have emerged. To describe the Arbitration
Act as ‘legislation against sweating’ is to confuse intention with outcome (Holt 1986:
33–4).
Though it is undoubtedly true that the New Zealand system, and subsequently
the Australian arbitration systems, had the capacity to remove sweating through
their establishment of minimum wages and conditions of employment, this
was not the reason for their introduction. Such was a subsidiary function, an
unintended consequence of establishing machinery to prevent and settle industrial
disputes. Indeed, it gives rise to what may be termed the ‘arbitration paradox’,
namely ‘that a system set up to solve one set of problems flourishes by solving
completely different ones’ (Walsh & Fougere 1987: 189). That is to say, having
been introduced to prevent and settle industrial disputes, the Court’s major
function turned into providing minimum standards of employment. ‘None of
this would have happened’, writes Holt, ‘without Reeve’s Act and in this sense
Reeve’s experiment was a success, but it was the kind of success achieved by
the hunter who went out seeking wild boar and came back bearing a stag’ (Holt
1986: 53).
Thus, despite subsequent rhetoric to the contrary, it would be wrong to
think that the Westralian architects of arbitration were seeking machinery that
would remove the evils of sweating. If the intent was the removal of sweating, a
simpler method was provided by the wages boards system established in Victoria,
and subsequently adopted in Tasmania, New South Wales, South Australia and
Queensland. In the last three states, compulsory arbitration operated, in large
measure, in concert with the wages boards system, a further suggestion that the
removal of sweating was not the intent of compulsory arbitration. Indeed, Western
Australia was the only state not to establish wages boards—yet another way in
which its industrial legislation differed from other states.
There is little evidence from the parliamentary debates that sweating was a
consideration in the Westralian case. Indeed, members of parliament eschewed
the need for any definition of a ‘living wage’ in the Act3 (WAPD 1900: 927).
The Statistical Records of Western Australia provides details on the hours worked
and the wages paid for different occupations at this time. At face value these
statistics do not suggest exploitation. The slim evidence available on sweating
relates to an anti-sweating campaign in the printing trades in 1892 but the
‘campaign seems to have taken the term to mean the employment of women,
and employers with anti-union sentiments’ (Gibbney 1949: 17).4
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OF VOLUNTARY ARBITRATION
Voluntary arbitration was an established part of industrial relations in Australia
and other countries by the 1890s. In the Australian context, voluntary arbitration
had been common in industries with strong unions such as building, coal mining
and seafaring (Fitzpatrick 1941: 289–97; Coghlan 1918: 1488). This private
voluntary system did not survive the test of the 1890s. Neither did Barton’s
voluntary arbitration Act of 1892 (NSW).
Following the maritime strikes, the Royal Commission on Strikes in New South
Wales recommended the establishment of state machinery for the resolution of
industrial disputes. The Commission noted:
No quarrel should be allowed to fester if either party were willing to accept a
settlement by the State tribunal. . . . Industrial quarrels cannot continue without
the risk of their growing to dangerous dimensions, and the State has a right in the
public interest to call upon all who are protected by the law to conform to any
provision the law may establish for settling quarrels dangerous to the public peace.
Reeves comments: ‘Pity that the Commission did not advise, and the New South
Wales Parliament thereupon enact, a law effectual to give force to this excellent
declaration of principle’ (Reeves 1902: 81). Voluntary arbitration machinery
proved ineffective since employers refused to allow the voluntary machinery to
hear union grievances. Indeed, not only did employers avoid state arbitration
machinery, they also repudiated agreements made with unions prior to the strikes
to refer disputes to voluntary arbitration (Fitzpatrick 1941: 313–14). Coghlan
notes of the NSW voluntary arbitration Act that:
The Act had no success. It required for its proper working an amount of goodwill
between employers and employees entirely lacking under the conditions then existing
in the colony, and during the year following its enactment only two cases, one of
conciliation and one of arbitration, were carried to a successful issue. In six other
cases negotiations were instituted fruitlessly and in eight cases the employees applied
to the councils but the employers refused to accept mediation. The important strike
at Broken Hill in 1892 was among the last class of cases (Coghlan 1918: 1476).
There is strong evidence to suggest that the failure of voluntary arbitration
led to the introduction of compulsory arbitration in both New Zealand and
New South Wales. Reeves, the originator of the New Zealand Arbitration Act,
spent much of his Second Reading speech outlining the problems and failures
associated with voluntary arbitration machinery in Britain, France, Germany
and the USA. Much of his reasoning is reproduced in the second volume of his
book (Reeves 1902: 69–107). After describing the work of some 53 permanent
conciliation boards in the UK and that of the voluntary conciliation and arbitration boards established by Sir Rupert Kettle and Mr Mundella he writes:
Take up a magazine article or pamphlet by some sanguine disciple of Sir Rupert
Kettle or Mr. Mundella; read that in seventeen years the board of arbitration for
the manufactured iron trade settled 800 disputes; that the London Chamber of
Commerce has drawn up a series of admirable conciliation rules . . . [and] you are
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stirred to hope that the industrial millennium is above the horizon. Yet turn to hard,
matter-of-fact records, and note that the number of labour conflicts in the thirteen
years, 1889–1901, has been 10,792. Clearly the ‘growth of industrial peace’ so cheerfully, almost jauntily, chronicled by enthusiastic believers in voluntary arrangement,
is about as slow as the conversion of the Jews to Christianity. Voluntary arrangement has been earnestly urged and patiently tried for many years in England. What
is the outcome? Eleven thousand conflicts in thirteen years. In the United States—
not to speak of France, Italy, and Spain—the picture is darker. There mercenaries
shoot down strikers, unpopular managers are assassinated, the militia has to be called
out and has to fire on rioters, cavalry charge crowds, and unionists are put on their
trial charged with poisoning ‘blacklegs’ (ibid: 80).
In his Second Reading speech Reeves concluded:
What I think is this—after closely studying the working of these boards elsewhere
that unless you have in the background an arbitration court, the conciliation boards
will not be respected, and they will be virtually useless (quoted in WAPD 1900: 477).
It is evident from the marginal notes in the Westralian Act that it was strongly
influenced by the New Zealand Act. The New Zealand experience was a recurring
theme in the parliamentary debates. Both advocates and opponents of the Bill
found much from the New Zealand experience to garnish their own cases. Indeed,
Mr James, a strong advocate of the Bill, was referred to in debates as ‘The Member
for New Zealand’ (ibid: 415). The establishment of district-based Boards of
Conciliation and a central Court of Arbitration were but two of the many
features copied from the New Zealand Act.
Though voluntary arbitration proved deficient in the case of the eastern
colonies, the same cannot be said for Western Australia. The first major strike
in the colony occurred in the Perth building industry in 1897. It lasted just over
one week when unions capitulated (Merritt 1962). In 1899 there was a second
major strike brought on by employers seeking to extend their freedom of contract
victories in the eastern ports to Fremantle. The dispute, in which employers lost
public support, was settled by voluntary arbitration. Workers chose Catholic
Bishop Gibney as their representative; employers chose the Chair of the
Methodist Conference; and these two chose Anglican Bishop Riley as Chair.5
The Salvation Army, ‘incensed by what it considered to be the employers’ intransigence’ made its own contribution and declared that their members would
not ‘take passage by any of the steamers owned by the Steamship Owners’
Association’ (Vanden Driesen 1981). This situation may be compared with the
Eastern States where Cardinal Moran strongly supported wharf strikers while
the Anglican Archbishop of Queensland worked on the wharves as a strike breaker
(Fitzpatrick 1941: 309).
The third major dispute was the railways strike. The Rev. Wheaton was
successful in having the parties agree to arbitration by the Lord Mayors of
Perth and Fremantle (Gibbney 1949: 42). Thus, the Westralian situation did not
suggest the need to go beyond ad hoc, informal, voluntary arbitration. Neither
did it suggest the need to establish a relatively expensive standing tribunal
system predicated upon compulsory arbitration.
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INITIATION
The notion that compulsory arbitration was an employer attempt to keep defeated
unions down is suggested by Fitzpatrick and the early school of union writers.
Fitzpatrick writes:
When the great strikes were over, and there was no longer any doubt as to
whether Capital could maintain the right to control industry without reference to
Labour, a modus vivendi had to be found, by which the beaten unionists could
be induced to accept their lowly status. The system resolved upon by the
responsible government of the colonies was the compulsory conciliation and
arbitration of industrial disputes, and it was within this system, during the ‘nineties
and the early years of the twentieth century, that Australian and New Zealand
trade unionism was reorganized on a reconstructed basis; legal and political
preoccupations displaced ‘industrial’ or ‘direct’ action in primacy in trade union
affairs (Fitzpatrick 1941: 256).
Fitzpatrick has been most keen to prove that arbitration was not a Labor Party
contribution. After reviewing developments in New South Wales during the 1880s
and 1890s, developments that included three attempts by employer-dominated
legislatures to introduce arbitration, the last (and successful attempt) just after
the strikes of the 1890s, he concludes:
In other words, arbitration legislation came from the employers’ side of politics within
a month or two of the smashing of the shearers’ strike in New South Wales and
Queensland. . . . The arbitration system was of the masters’ making, not the men’s
(Fitzpatrick 1968: 153).
Fitzpatrick claims that by the time Kingston introduced the Arbitration Bill
into Federal Parliament employers had begun to be repelled by their own
invention:
By that time, the capitalist invention of state arbitration had begun to take on the
aspect of Frankenstein’s monster, to the capitalists. E.E. Smith, president of
the Australian Employers’ Federation, furiously attacked the Commonwealth Act
of 1904, in his address to the employers’ federal conference next year. ‘It is
purely class legislation’, he said, ‘and is for the purpose of strengthening the
labor unions’ (ibid.).
A major problem for the Fitzpatrick analysis is that it does not differentiate
between different types of arbitration despite his reference to compulsory
arbitration in the first quotation. Employers were not particularly opposed to
voluntary arbitration, the type of arbitration sponsored in New South Wales
in 1892. Voluntary arbitration provided machinery which employers could seek
when it suited, but also implied that they did not have to refer their disputes
to arbitration when they chose not to. This was not the case with compulsory
arbitration, and there is no doubt that employers bitterly opposed this form of
settlement. In practice, all of the employer-initiated schemes involved voluntary
arbitration. Employers’ revulsion of, and attacks upon, the Commonwealth Act
of 1904 were because of its compulsory features.
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In South Australia, Kingston’s compulsory arbitration Bill of 1890, the first
Bill for compulsory arbitration, suffered at the hands of the employer-dominated
Legislative Council. After being ‘the sport of three sessions’ it was discharged
without any of its compulsory elements (Coghlan 1918: 2104). South Australia
finally legislated for compulsory arbitration in 1912. In Victoria, the Employers’
Union considered compulsion ‘dangerous in principle and inoperative in
practice’ and used its parliamentary influence to prevent such legislation
(Chan 1971). Trenwith introduced Conciliation and Arbitration Bills into the
Victorian parliament in 1900 and 1901 but to no avail (Mitchell & Stern 1989:
127). Bills were again unsuccessfully introduced into this parliament in 1904 and
1905, again to be rejected by the employer-dominated legislature (ibid). Through
Supreme Court action and open defiance, Victorian employers were also
successful in removing any casting vote arbitration by the Chairmen of
wages boards (Plowman 1988: 378). Tasmania, with its employer-dominated
Legislative Council, rejected Industrial Arbitration Bills introduced in 1900, 1901,
1903 and 1904 before opting for wages boards. Queensland’s parliament rejected
the Industrial Conciliation and Arbitration Bill 1894 and had to wait for the advent
of a Labor government before legislating for arbitration.
By 1904, four Australasian parliaments had legislated for compulsory
arbitration, the first being that of New Zealand. We are told that:
When Reeves circulated a proposed arbitration law the opposition of employer
associations was so ferocious that he did not even bother to introduce it in the
House. He tried again in 1892 but his proposals for reform were simply blocked in
the Legislative Council…In 1894, as Minister for Labour in a government returned
with a thumping majority and the automatic veto of the Legislative Council largely
removed, he returned to the charge in introducing his revised Industrial Conciliation
and Arbitration Bill. [The arbitration legislation was passed] in the teeth of continuing and rancorous opposition from employers, landowners and their parliamentary
spokesmen (Simpson 1987: 149).
In 1901 New South Wales legislated for a seven-year trial period of compulsory
arbitration. Employers did their utmost to ensure the failure of the legislation.
They refused to register their own organisations under the Act; they had registered bogus unions; they sought to choke the Court with work and to lengthen
proceedings; they used legal representation to increase costs to unions; they
successfully used the Supreme Court to reduce the Industrial Court to a
‘sinking hulk’ (Plowman 2002: 2–3). With the change in government shortly
after the passage of the Act, employers used their majority in the Legislative
Council ‘to kill the Act by inaction and refused for years to make any amendments
which were required in consequence of unexpected legal decisions’ (McCarthy
1968: 190).
At the Commonwealth level, employers’ association with compulsory arbitration has been described as a ‘forced march’ (Plowman 1989). Here they imitated
their New South Wales counterparts and expended considerable resources on
High Court action against the Act and the Commonwealth Court of Conciliation
and Arbitration. Until 1913, they were highly successful in constraining and
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circumscribing the Court’s role. After 1913, however, their legal actions were
counterproductive and served to open up the ‘new province for law and order’
(Plowman 1989: 147–52). The frequency of employer High Court challenges was
such that Attorney General Garran noted that the industrial power came to play
‘a greater part in political history and legal controversy than the whole of the
rest of the Constitution put together’ (Garran 1958: 464).
The above would suggest that Fitzpatrick’s view that compulsory arbitration
was an employer initiative is misplaced. It is unlikely that employers, who wrecked
voluntary arbitration because of its third party adjudication mechanisms, would
then seek a system of compulsory third party adjudication.
The Western Australian experience does not support the contention that
employers initiated compulsory arbitration. The Industrial Arbitration Act 1900
was passed against the wishes of many employers; in the face of veiled threats by
mining companies to close their operations; in the light of threats by British
investment companies to refrain from lending capital to the State if the legislation was passed; after significant delays; and after amendments that made the
Act unworkable.
This lack of initiation, however, evokes yet another paradox in the Westralian
legislation for compulsory arbitration. Despite opposition to the Bill, employers
did not vote the Bill down. This calls for explanation, a matter dealt with in a
subsequent section.
UNION
INFLUENCE
There is a line of literature that sees compulsory arbitration deriving from union
needs and interests. The acceptance of compulsory arbitration by unions is a
necessary condition for its initiation and its success. As Wise, author of the
NSW Arbitration Act noted, ‘arbitration without unions would be like having
the play ‘Hamlet’ without the part of Hamlet’ (Wise 1909: 314).
The essence of compulsory arbitration is that unions make a choice: the open
market where strikes and lockouts form part of negotiations; or compulsory
arbitration where the ‘barbarous expedients’ are replaced by court-imposed
settlements. Generally, unions around the world have been divided on the
merits of arbitration. Those unions with the capacity to force recognition upon,
and wring concessions out of, employers have been opposed to compulsory
arbitration. To these unions compulsory arbitration means ‘surrendering control
of their own destiny to an unpredictable and untrustworthy judge who would
almost certainly be a man of upper or middle class’ (Holt 1986: 23). Weak unions,
on the other hand, have seen merit in accepting the impositions of compulsory
arbitration.
The unqualified support of unions for compulsion added to the grist of those
opposing arbitration at the end of the 19th century:
Opponents of compulsory arbitration asked what an arbitration court or tribunal
could do to compel, say, 10,000 striking coalminers to return to work at rates less
than they were demanding. This difficulty appeared to be especially great where trade
unionists rejected the whole idea of compulsory arbitration, and in Britain and the
United States they did reject it. . . . Arbitration was despised by Samuel Gompers
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[President of the American Federation of Labor] as a weapon of the weak, and the
same attitude dominated the British Trade Union movement (ibid: 22).
In the UK the ‘majority who opposed compulsory arbitration in the TUC was
composed, in the main, of the older, stronger, and abler unions’ (Hobson 1902:
604). For weaker unions, compulsory arbitration did have an appeal. In the TUC
its leading champion was Ben Tillett of the dockers, a weak union by 1899, and
Richard Bell of the railway servants, an organisation that had been unable to secure
recognition by the major railway companies. Opponents of arbitration were
described by one delegate, as ‘the big dogs that can wag their own tails’ (Holt
1986: 23).
As Holt notes, for most proponents of compulsory arbitration it was the strong
rather than the weak unions that were the principal consideration, for they were
the organisations most likely to engage in serious disputes.
And if strong unions objected to the very idea of compulsory arbitration, what chances
was there that it would been enforced. On this obstacle most proposals for
compulsory arbitration foundered (ibid).
Where compulsory arbitration legislation was enacted in the face of strong
opposing unions it was rendered unworkable. Such was the situation in Kansas
in the 1920s (Gagliardo 1941), France in the 1930s (Colton 1951) and Britain in
the 1970s (Weekes et al. 1975).
Though Reeves argued that compulsory arbitration was necessary to prevent
confrontations by strong unions and strongly organised employers (the situation
that prevailed in the maritime strike), it was precisely because few strong unions
existed in New Zealand that the Act was resorted to. Holt describes New Zealand
unions at this time as ‘pathetically weak’. As such, they ‘were willing to tolerate
a degree of state interference in their affairs that a better organised movement
should not have borne’ (Holt 1986: 23–5).
The Australian situation on the eastern seaboard was not that different to New
Zealand’s. There unions had been significantly affected by the strikes of the 1890s
and the subsequent depression. Turner notes that ‘when voluntary conciliation
proved ineffective to avert the defeats of the 1890s, labour opinion consolidated
behind compulsion’ (Turner 1965: 25). The evidence is unambiguous that unions,
including the many unions that had not been involved in strikes, came through
the 1890s a mere rump of the organisations that had existed a decade earlier.
Unionisation, estimated at about 20 per cent of the work force in 1890 (Gollan
1963: 86) was only about five per cent a decade later (Deery et al. 2001: 217).
Many of the Trades and Labour Councils had to close their doors and union funds
soon dissipated (Labor Council of NSW, 1981). More importantly, unions were
not accorded recognition rights by employers. For these unions, compulsory
arbitration held out much: it meant that their survival did not rely upon
membership strength; that they could compel recognition from employers
notwithstanding their penury; and that their awards, particularly if including
union preference clauses, would be useful marketing tools. Walsh and Fougere
(1987: 10) observe:
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The attraction of the arbitration system was that it made [such] considerations largely
irrelevant to trade unions who wished to work within it. The system guaranteed
unions employer recognition, provided a bargaining forum in which employers were
compelled to appear, and enforced minimum wages and conditions according to
the Court’s determinations. All that was required was registration under the Act,
application to the Court for an award and observance of the procedures for conciliation and arbitration. Any seven (later 15) workers could form a union and activate
this process. . . . The great bulk of [New Zealand] unions registered under the Act
to take advantage of its provisions, their officials more at home in the courtroom
than on the picket line.
Australian unions, in the main, were attracted to the New Zealand Act, which
described itself as ‘An Act to encourage the Formation of Industrial Unions and
Associations, and to facilitate the Settlement of Industrial Disputes by Conciliation
and Arbitration’. There is little doubt that many unions previously opposed to
compulsory arbitration during the 1880s had become ardent advocates of that
system by the turn of the century (Gollan 1960; McCarthy 1967; Rickard 1976;
Portus 1979). This did not mean that there was universal endorsement.
Nevertheless, Coghlan’s general conclusion holds true: strike, financial and
membership losses had converted the labour movement from a ‘vague and
hesitating’ stance towards arbitration to one of firm commitment (Coghlan
1918: 2097).6
If union support is a necessary condition for arbitration, there is no doubt that
this condition was met in the eastern colonies. What of Western Australia?
Though unions in the West had not suffered strike losses and had been less
affected by economic downturn in the 1890s, nevertheless they were also in a
weak position. This general weakness stemmed from the fact that the conditions
for trade union development had not existed prior to the gold rushes. Gibbney
(1949) has recorded their slow growth. As late as 1880 the colony ‘did not
contain a single organisation which could protect working men in their employment’ (ibid: 1). The first union ‘for which there is clear information available’
was formed in 1887. Two years later delegates from Adelaide helped establish
the Fremantle Lumpers’ Union and by 1890 there were six unions in existence.
Unions not only had difficulty in getting established, but also in maintaining their
existence. Thus the Builders’ Labourers’ Union was formed and reformed three
times between 1891 and 1897. Three Trades and Labour Councils (TLCs)
were brought into being—one in Perth, one in Fremantle and one in the gold
fields. There was a degree of friction between the first two, and the Perth TLC
collapsed on three occasions before being put on a permanent basis in 1896. The
immediate effect of the gold discoveries was to hamper the development of unions
for several years.
In the ferment of the gold rush, only those men who were lacking in initiative felt
any urgent need to maintain their standards as workers since wealth seemed to be
only a matter of time and effort (Gibbney 1968: 3).
The longterm result of the gold strikes was to provide unions with a better
environment for growth. By the end of the century there were 15 unions in the
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metropolitan area with about 750 members (Gibbney 1949: 36). This represented
about five per cent of workers in Perth (Merritt 1965: 24), though in the
building trades it was higher—‘no more than one tradesman or labourer in five’
(Merritt 1962: 11). In the gold fields, employers estimated unionisation rates at
‘20 per cent or less’ (Segal 2002: 74).
Of the unions in existence at the turn of the century probably only four had
the capacity to operate autonomously: the Lumpers’ Union; the Amalgamated
Workers Association; the Amalgamated Society of Engineers; and the
Boilermakers Union. Significantly, the first did not join the Fremantle TLC
and the last did not register once compulsory arbitration was enacted. The
general weakness of unions, and therefore their support for arbitration, is
illustrated by developments following the enactment of the Industrial Conciliation
and Arbitration Act. In many cases, unions complained that the registration requirement of 15 members was too onerous. Further, they registered notwithstanding
the heavy surety that they were required to pay. The number of unions, and
of unionists, in Western Australia expanded significantly with the advent of
arbitration, the latter increasing by 72% in the first six years following the Act
(Wise 1909: 319).
LABOR
AND LIBERALS
Union support for compulsory arbitration may be a necessary condition. It is not
a sufficient condition. In no Australian legislature could unions control legislation.
An explanation of compulsory arbitration necessitates consideration of parliamentary organisations. In this respect three contenders have been put forward:
the newly emergent Labor parties; the new forms of liberalism that emerged in
Australasia in the 1880s and 1890s; and in some cases, the coalition of these two
into what has become known as ‘Lib-Lab’ fusions. For reasons that will become
apparent from the following two sections of this paper, the last case is not
relevant to Western Australia.
Labor
Different authors have taken different views on the significance of the
Labor Party in achieving compulsory arbitration legislation. What might
be termed the ‘orthodox school’ sees Labor as a critical element in such
legislation. This school includes such authors as Gollan (1960), McCarthy
(1967), Spence (1909), Turner (1965) and Pearce (1951). In this view, Labor
was able to exercise a disproportionate influence by capitalising on its balance
of power:
Fortuitously, party alignments and personality rivalries enabled the new labour
parties to exercise influence disproportionately to their numbers by capitalising
on their strategic position in holding the balance of power in colonial, state and
commonwealth [sic] parliaments (McCarthy 1967: 74).
Labor’s opportunistic approach is exemplified by the 1903 electioneering of its
leader in the Senate, Senator McGregor:
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We are for sale, and will get the auctioneer in and take care that he is the right man.
. . . I want to show the Government what they have to do to secure our support
(Turner 1965: 63).
Though a good case can be made for Labor’s capacity to influence arbitration
legislation while holding the balance of power, and subsequently to introduce
and improve upon such legislation when in Office, the orthodox view is not
altogether satisfactory. It presupposes that Labor did hold the balance of power
in all states. In some cases this did not exist for some time after the introduction
of industrial legislation (South Australia, Tasmania, Victoria, Western Australia).
In the case of Queensland, Labor’s capacity to become the outright Opposition
from the start reduced its capacity to influence legislation.
Commenting on the ‘orthodox’ view Macintyre notes:
Purely on the Australian evidence, this explanation is open to challenge. It exaggerates both the commitment to arbitration within the labour movement and the
influence that the movement wielded. These objections apply with particular force
in South Australia and Victoria, where Labor remained under the wing of liberals
until after the turn of the century; in Western Australia, where arbitration was enacted
in 1900 before Labor made its parliamentary debut; and in Tasmania, where Labor
still remained a negligible force. In NSW, Queensland and the Commonwealth, the
minimum requirements of the hypothesis—an independent Labor Party with significant political strength—were at least in evidence, but even there its validity is still
doubtful. Labor held the balance of power in New South Wales from 1891 but
had to wait until 1901 for a non-Labor administration to introduce compulsory
arbitration. In Queensland the wait was even more protracted and the best that Labor
could achieve until it won office itself in 1915 was wages boards. And in the
Commonwealth parliament the two non-Labor parties called Labor’s bluff, so that
it was a coalition drawn from both that framed the measure finally adopted in 1904
(Macintyre 1987: 155).
One who sees little role for Labor in initiating compulsory arbitration is
Fitzpatrick. He claims that:
. . . the industrial arbitration systems which were soon established in all parts of
Australia did not derive from the Labor Party, though all . . . took some of their
character from Labor pressure on the Government which introduced them.
Fitzpatrick adds:
. . . the pioneers of arbitration were not Labor Parliamentarians, or Labor men outside Parliament; [they] were such Liberals as William Pember Reeves, C.G. Kingston,
and Alexander Peacock (factory and wages boards legislation, Victoria) (Fitzpatrick
1968: 151).
To the extent that Fitzpatrick is correct and that it was the liberals who introduced
arbitration legislation, the advent of Labor may have had the contrary effect
argued by the ‘orthodox school’ and actually retarded the development of arbitration. Macintyre is one who argues such a case. He notes that it was ‘non-Labor
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forces that initiated the measure [arbitration] along lines and according to a
timetable that they controlled’ (Macintyre 1987: 155). In this view, the advent
of Labor, by creating politic opponents, ‘weakened the liberal rump that was
forced to take up an increasingly unsympathetic stance’. He adds: ‘insofar as
arbitration was meant to mediate class antagonisms in industry, it was more
likely to win acceptance where class antagonism had not become the organising
principle of political life’ (ibid).
In Western Australia, Labor played a marginal role in the initiation and
passage of the Industrial Conciliation and Arbitration Act 1900. Indeed, the party,
as currently understood, did not come into being until after the passage of this
legislation. Gibbney (1975) has given a succinct development of the Labor Party
in the period 1880 to 1920. After several failed attempts at political organising,
in 1896 the Political Labor Party (PLP) was formed and contested the elections
of the following year. One member, Charles Oldham, was successful in being
elected. In 1898 the party appointed its first fulltime officer and in the following
year the combined Trades Union and Labor Congress (TULC) determined
a three-pronged parliamentary platform: payment of members of parliament;
redistribution of seats according to population; compulsory arbitration ‘on the
New Zealand lines’. The first objective was soon realised. Payment of members
of parliament was accepted in principle in 1899 and came into effect in 1900.
This removed the most serious obstacle to the development of the PLP. This
was further augmented by the subsequent introduction of universal suffrage. In
1899, the second Congress proposed contesting 22 electorates, with the decision
in another 11 electorates to be determined by local party members. In the final
outcome six members were elected and took their seats in May 1901, some months
after the passage of the Act.
One line of thought is that despite the insignificant representation at the time,
the expectation of impending political success on the part of Labor encouraged
existing members to pass legislation so as to obviate more ‘labour friendly’ statutes
in the future. Indeed, this seems to be the import of Hackett’s views in the
Legislative Council. A strong supporter of Forrest (Bolton 2000: 73), and though
not himself a supporter of compulsory arbitration, he urged support for the Bill.
He further urged his fellow Council members to recognise that ‘the day of
organized labour is at hand’ and contended that the Council must bend to
public opinion (WAPD 1900: 1816; Segal 2002: 91). It is difficult to know whether
Hackett, as a government supporter, was merely presenting reasons for the
passage of the Bill or whether he genuinely thought Labor might be a future
force that could get its own way. The experience in the other colonies where
Labor Parties had existed for some time would have suggested that despite their
apparent ‘well-drilled’ appearance, Labor fell short of the mark in commanding
control of Parliaments. Further, despite Hackett’s contention that the Council
must take account of the people, in practice, this chamber remained under
conservative control for the next century. The Council was not reluctant to
disallow Labor legislation. Thus, in Labor’s first session of continuous office in
19127 the Legislative Council ‘killed twenty of the twenty-nine government bills’
(Gibbney 1975: 365). In this respect it had the capacity to emulate its Victorian
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counterpart where, in the view of Spence (1909: 199) ‘the rich minority were
able to resist the masses in every step taken in legislation. As employers they used
the boycott at every opportunity.’
It can be concluded that the Industrial Conciliation and Arbitration Act was not
initiated by Labor. Further, it can also be concluded that Labor had minimal
involvement in determining the scope and outcome of the Act. The Bill was
processed at a time when ‘labour or working class representation in Parliament
was meagre, if not negligible’ (Crowley 1954: 15).
New liberalism
Much of the social legislation in the decade before and after federation has
been attributed to ‘new’ liberalism. The records show that the initiation and
carriage of arbitration Bills was undertaken by persons with liberalist creeds.
These included Pember Reeves in New Zealand, Kingston in South
Australia; Wise in New South Wales; and Kingston, Deakin, Higgins, Isaacs,
O’Connor and others in the Commonwealth. Thus, Richardson (1987: 169)
writes, ‘Compulsion resulted from the conjunction of a particular stage of
union development, a heightened predisposition towards what might be called
‘liberal rationality’ or a belief in the possibility of resolving clashes of interest
by negotiation.’ He adds, ‘There is much to commend this general explanation
for the adoption of compulsory arbitration throughout Australasia. It is an
historical framework which Jim Holt’s Compulsory arbitration in New Zealand
endorses.’
The emergence of liberalism was at odds with the orthodoxy of the day that
held that the state should not interfere with economic and social matters (Simpson
1987: 145). Economic depression, the great strikes of the 1890s, and the reports
of the Royal Commissions on sweating were factors contributing to the growth
of liberalism. As Simpson notes:
Some members of the political class, i.e. those who constituted the parliamentary
recruiting ground, had by the 1880s become thoroughly perturbed by the social
consequences of economic downturn. Expressions of concern were not confined to
those who were later to be at the centre of what became the Liberal governments.
But one on those who did, Robert Stout, will serve as an exemplar of that concern.
Stout began as an orthodox Benthamite liberal. He though the state should not interfere under any circumstances in social economic matters. Between 1875 and 1890
his views underwent a profound change. . . . What changed the minds of Stout and
many middle-class people like him was the evidence before their eyes of the widespread distress caused by leaving things to take care of themselves. They honestly
believed that when they came to a new land they had left behind them such social
cankers as industrial class conflict, economic exploitation, and so forth. The revelations of the Sweating Commission which provided only the most dramatic evidence
that their presumption was wrong was profoundly shocking to many hitherto
complacent middle-class colonists (ibid: 145).
The notion that strikes and lockouts were intolerable, barbaric methods of
settling industrial disputes in a civilised society took hold in Australia and
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New Zealand (Holt 1986: 15). The ‘intellectual provenance’ of such views, writes
Macintyre,
lay abroad in the so-called ‘new liberalism’ that shifted the relationship between the
state and the citizen. Since the earlier liberalism that enshrined freedom from state
interference had failed manifestly to solve problems of poverty and inequality that
threatened to poison public life, the new generation of liberals asserted the need for
collectivist measures that would enhance the capacity of citizens (Macintyre 1987:
154).
If Liberalism is interpreted merely as a readiness to involve the state in economic
affairs, then the Western Australian parliament of the time met this description.
This is evident from the Attorney General’s speech when introducing the
Industrial Conciliation and Arbitration Bill: ‘The State after all is the parent,
and labour and capital are her children, and it is her duty . . . to preserve the
domestic peace’ (WAPD 1900: 461).
State interference in Western Australia, however, was not a manifestation of
a desire for social change but rather a matter of pragmatic necessity. The state
had been called upon to provide the infrastructure of commerce, industry and
social well-being, and in many cases had to engage in undertakings when private
enterprise had failed. The arbitration Act was initiated by Forrest. He has been
called many things—liberal is not one of them.8 Far from being a radical or
liberal, he was a shrewd pragmatic politician with not a little liking for the British
way of things. Segal notes that he ‘responded to the structural transformation
of the colony with social measures only, in the main, under duress and for
short-term political advantage’ (Segal 2002: 81). Segal quotes Vosper’s view that
Forrest led ‘only in the...sense that a wheelbarrow leads its driver or a mule a
plough . . . under harness, whip and spur’ (ibid). Deakin aptly summed up Forrest’s
conservatism in his book on federation: ‘Sir John Forrest was to the fore as leader
of the stalwart Conservatives in resisting with undaunted courage and inexhaustible persistency common-sense objections to every innovation’ (Deakin 1944:
88). The social gains achieved during the 1890s, in the view of Gibbney, resulted
not from Forrest’s liberalism, but rather his ‘intellectually pragmatic government’.
Forrest, he notes, ‘was always prepared to concede moderate demands which had
some show of political backing’ (Gibbney 1975: 346). Forrest’s pragmatism, in
which he sought public support while not alienating tradition interests, reduced
the effectiveness of much legislation. He ‘frequently diluted reformist legislation
to pacify his old colonial supporters and other vested interests, often to such
an extent that his measures proved to be ‘simulacra’ (phantoms) and of only
limited benefit to their proponents (Segal 2002: 82 quoting WAPD 1900: 81).
Is it contended that the Industrial Conciliation and Arbitration Act was such a
simulacrum.
The Western Australian parliament at this time was not devoid of ‘liberals’.
However, their influence was neither uniform nor decisive. Claydon notes that
in the absence of working class or union representation in parliament, unions
‘tended to support the election of sympathetic liberal politicians such as James
and Oldham’ (Claydon 1988: 45). As already noted, Oldham was elected in 1897.
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James was first elected in 1894 with TLC ‘endorsement’ and frequently attended
meetings of the TLCâ€
ARBITRATION IN WESTERN AUSTRALIA
DAVID H. PLOWMAN* AND GENEVIEVE CALKIN*
W
estern Australia was the first of the Australian states to legislate for compulsory
arbitration. It did so in 1900. The paper presented here examines the paradox
of this legislation. It was passed through an Upper House in which employers, who opposed
the Bill, decided not to kill the legislation as had happened in other states. Instead, they
so amended the Bill that the resultant Act proved inoperable. This Westralian legislation
challenges some of the explanations offered for the introduction of compulsory arbitration
in other states. Sweating was not an issue in Western Australia—at least not for those
who were the intended beneficiaries of the Act. Voluntary arbitration had been tried, and
unlike the experience in other parts of Australia, it had proved successful. This would
suggest that there was no need to bypass the ad hoc, informal and voluntary dispute
settlement system that had been employed. Employers, claimed by some as the architects
of compulsion in the eastern states, did not initiate the Westralian legislation and opposed
it. In contrast, unions, also claimed as the source of arbitration legislation, were in their
embryonic stage and did not have the capacity to directly affect legislation. The same
could be said of labour’s political wing. There was only one Labor member of the Lower
House when the legislation was passed. Thus, Labor had little scope to support the
legislation or to affect its form. The role of ‘liberals’, which has been seen as an important
ingredient in arbitration in other states, was small and insufficient to affect outcomes in
the Western Australian parliament. It is contended that a conflux of local factors explains
the origins of compulsory arbitration legislation in WA. The first was political expediency
that enabled Western Australia’s long-time premier to maintain office and thus secure
a role in the first Australian parliament. The second was the need to modernise the
state’s employment laws to take account of the collective activities that had increasingly
accompanied employment relations since the early 1890s. The third factor was employers’
capacity to reduce the effectiveness of the compulsory elements of the legislation and to
use it to chloroform unions.
INTRODUCTION
The year 2002 marked the centenary of the first judgement issued by a Court of
Arbitration in Australia. This occurred in Western Australia, that state being
the first to make provision for compulsory arbitration. It did so at a time of
industrial peace; at a time of economic prosperity; at a time when unionism
in the state was still in its embryonic development; and at a time when neither
*Graduate School of Management, The University of Western Australia, Crawley, Western
Australia 6009. The authors wish to thank a number of colleagues who provided comments on
earlier drafts. Special thanks to Naomi Segal and the Journal’s anonymous referees. Any errors
remain the responsibility of the authors. Email: dplowman@ecel.uwa.edu.au
THE JOURNAL OF INDUSTRIAL RELATIONS, VOL. 46, NO. 1, MARCH 2004, 53–83
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Labor nor ‘liberals’ were sufficiently well represented in Parliament to determine
legislative outcomes. These factors challenge much of the received wisdom
regarding the adoption of arbitration by Australian legislatures.1
The paper presented here explores the origins of compulsory arbitration in
WA. The next five sections examine the Westralian experience in the light of
factors that have been claimed to have influenced the adoption of compulsory
arbitration in eastern Australia and in New Zealand, namely: the elimination of
sweating; the failure of voluntary arbitration; employer initiation; union influence;
and ‘Lib-Lab’ legislation. The penultimate section examines the special circumstances in Western Australia and argues that taken together, three factors go a
long way in explaining the Western Australia paradox: political expediency;
the need to take account of changing economic circumstances and to remove
collective industrial action from the laws of conspiracy; and employers’ capacity
to minimise the reach of compulsory arbitration. The final section is by way of
summary and conclusion.
ELIMINATION
2
OF SWEATING
During the 1890s there was significant concern with sweating in Britain and in
parts of Australasia. Royal Commissions in the UK, New Zealand and Victoria
highlighted the pervasiveness of sweating and recommended State interference
to overcome it.
The development of compulsory arbitration in the context of public concern
about sweating gave rise to arbitration being associated with the prevention and
removal of sweating. Writing of the New Zealand experience, one in which
compulsory arbitration had been introduced in 1894, Woods notes that:
. . . within a few years the Act led to widespread wage-fixing by a state tribunal,
and since one of the benefits claimed for this innovation was the elimination of
‘sweating’, there has been a tendency to see the Arbitration Act as a piece of
social legislation which was deliberately aimed at establishing minimum wage
levels (Woods 1974: 37).
One who sees a direct link between sweating and arbitration is Fairburn. He
describes the (New Zealand) Arbitration Act as ‘legislation against sweating’
(Fairburn 1975: 11). This connection was also openly canvassed by the architect
of the New Zealand system, William Pember Reeves. The New Zealand experiment resulted in much foreign interest including the English Webbs (1897), the
French Metin (1901), and the American Henry Demarest Lloyd. Lloyd’s book,
A Country Without Strikes (1900) includes an introduction by Reeves in which he
makes claims for the social effects of compulsory arbitration. Reeves articulated
this in greater detail in his two-volume book State Experiments in Australia
and New Zealand. In it, he ascribed the origins of labour laws largely in terms of
sweating (Reeves 1902: 1–36). The main object of the Act, he wrote, ‘was to
put an end to the larger and more dangerous class of strikes and lockouts’ but
a second objective ‘of the Act’s framer was to set up tribunals to regulate
conditions of labour’ (ibid: 135).
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This view has been questioned. Thus, in his treatise on the first 40 years of
arbitration in New Zealand, Holt comments:
Reeves never talked about regulating the conditions of labour or eliminating
sweating when the Bill was before parliament in the early 1890s, although he may
have shared the view, spelt out by the Sweating Commission of 1890, that where
unions existed ‘wages do not sink below a living minimum’. Moreover, Reeves had
predicted on many occasions that most disputes would be settled voluntarily before
conciliation boards and that appeals to the Arbitration Court would be ‘very few
and far between’. Had this turned out to be true it is hard to see how any general
system of wage-fixing by the state could have emerged. To describe the Arbitration
Act as ‘legislation against sweating’ is to confuse intention with outcome (Holt 1986:
33–4).
Though it is undoubtedly true that the New Zealand system, and subsequently
the Australian arbitration systems, had the capacity to remove sweating through
their establishment of minimum wages and conditions of employment, this
was not the reason for their introduction. Such was a subsidiary function, an
unintended consequence of establishing machinery to prevent and settle industrial
disputes. Indeed, it gives rise to what may be termed the ‘arbitration paradox’,
namely ‘that a system set up to solve one set of problems flourishes by solving
completely different ones’ (Walsh & Fougere 1987: 189). That is to say, having
been introduced to prevent and settle industrial disputes, the Court’s major
function turned into providing minimum standards of employment. ‘None of
this would have happened’, writes Holt, ‘without Reeve’s Act and in this sense
Reeve’s experiment was a success, but it was the kind of success achieved by
the hunter who went out seeking wild boar and came back bearing a stag’ (Holt
1986: 53).
Thus, despite subsequent rhetoric to the contrary, it would be wrong to
think that the Westralian architects of arbitration were seeking machinery that
would remove the evils of sweating. If the intent was the removal of sweating, a
simpler method was provided by the wages boards system established in Victoria,
and subsequently adopted in Tasmania, New South Wales, South Australia and
Queensland. In the last three states, compulsory arbitration operated, in large
measure, in concert with the wages boards system, a further suggestion that the
removal of sweating was not the intent of compulsory arbitration. Indeed, Western
Australia was the only state not to establish wages boards—yet another way in
which its industrial legislation differed from other states.
There is little evidence from the parliamentary debates that sweating was a
consideration in the Westralian case. Indeed, members of parliament eschewed
the need for any definition of a ‘living wage’ in the Act3 (WAPD 1900: 927).
The Statistical Records of Western Australia provides details on the hours worked
and the wages paid for different occupations at this time. At face value these
statistics do not suggest exploitation. The slim evidence available on sweating
relates to an anti-sweating campaign in the printing trades in 1892 but the
‘campaign seems to have taken the term to mean the employment of women,
and employers with anti-union sentiments’ (Gibbney 1949: 17).4
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OF VOLUNTARY ARBITRATION
Voluntary arbitration was an established part of industrial relations in Australia
and other countries by the 1890s. In the Australian context, voluntary arbitration
had been common in industries with strong unions such as building, coal mining
and seafaring (Fitzpatrick 1941: 289–97; Coghlan 1918: 1488). This private
voluntary system did not survive the test of the 1890s. Neither did Barton’s
voluntary arbitration Act of 1892 (NSW).
Following the maritime strikes, the Royal Commission on Strikes in New South
Wales recommended the establishment of state machinery for the resolution of
industrial disputes. The Commission noted:
No quarrel should be allowed to fester if either party were willing to accept a
settlement by the State tribunal. . . . Industrial quarrels cannot continue without
the risk of their growing to dangerous dimensions, and the State has a right in the
public interest to call upon all who are protected by the law to conform to any
provision the law may establish for settling quarrels dangerous to the public peace.
Reeves comments: ‘Pity that the Commission did not advise, and the New South
Wales Parliament thereupon enact, a law effectual to give force to this excellent
declaration of principle’ (Reeves 1902: 81). Voluntary arbitration machinery
proved ineffective since employers refused to allow the voluntary machinery to
hear union grievances. Indeed, not only did employers avoid state arbitration
machinery, they also repudiated agreements made with unions prior to the strikes
to refer disputes to voluntary arbitration (Fitzpatrick 1941: 313–14). Coghlan
notes of the NSW voluntary arbitration Act that:
The Act had no success. It required for its proper working an amount of goodwill
between employers and employees entirely lacking under the conditions then existing
in the colony, and during the year following its enactment only two cases, one of
conciliation and one of arbitration, were carried to a successful issue. In six other
cases negotiations were instituted fruitlessly and in eight cases the employees applied
to the councils but the employers refused to accept mediation. The important strike
at Broken Hill in 1892 was among the last class of cases (Coghlan 1918: 1476).
There is strong evidence to suggest that the failure of voluntary arbitration
led to the introduction of compulsory arbitration in both New Zealand and
New South Wales. Reeves, the originator of the New Zealand Arbitration Act,
spent much of his Second Reading speech outlining the problems and failures
associated with voluntary arbitration machinery in Britain, France, Germany
and the USA. Much of his reasoning is reproduced in the second volume of his
book (Reeves 1902: 69–107). After describing the work of some 53 permanent
conciliation boards in the UK and that of the voluntary conciliation and arbitration boards established by Sir Rupert Kettle and Mr Mundella he writes:
Take up a magazine article or pamphlet by some sanguine disciple of Sir Rupert
Kettle or Mr. Mundella; read that in seventeen years the board of arbitration for
the manufactured iron trade settled 800 disputes; that the London Chamber of
Commerce has drawn up a series of admirable conciliation rules . . . [and] you are
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stirred to hope that the industrial millennium is above the horizon. Yet turn to hard,
matter-of-fact records, and note that the number of labour conflicts in the thirteen
years, 1889–1901, has been 10,792. Clearly the ‘growth of industrial peace’ so cheerfully, almost jauntily, chronicled by enthusiastic believers in voluntary arrangement,
is about as slow as the conversion of the Jews to Christianity. Voluntary arrangement has been earnestly urged and patiently tried for many years in England. What
is the outcome? Eleven thousand conflicts in thirteen years. In the United States—
not to speak of France, Italy, and Spain—the picture is darker. There mercenaries
shoot down strikers, unpopular managers are assassinated, the militia has to be called
out and has to fire on rioters, cavalry charge crowds, and unionists are put on their
trial charged with poisoning ‘blacklegs’ (ibid: 80).
In his Second Reading speech Reeves concluded:
What I think is this—after closely studying the working of these boards elsewhere
that unless you have in the background an arbitration court, the conciliation boards
will not be respected, and they will be virtually useless (quoted in WAPD 1900: 477).
It is evident from the marginal notes in the Westralian Act that it was strongly
influenced by the New Zealand Act. The New Zealand experience was a recurring
theme in the parliamentary debates. Both advocates and opponents of the Bill
found much from the New Zealand experience to garnish their own cases. Indeed,
Mr James, a strong advocate of the Bill, was referred to in debates as ‘The Member
for New Zealand’ (ibid: 415). The establishment of district-based Boards of
Conciliation and a central Court of Arbitration were but two of the many
features copied from the New Zealand Act.
Though voluntary arbitration proved deficient in the case of the eastern
colonies, the same cannot be said for Western Australia. The first major strike
in the colony occurred in the Perth building industry in 1897. It lasted just over
one week when unions capitulated (Merritt 1962). In 1899 there was a second
major strike brought on by employers seeking to extend their freedom of contract
victories in the eastern ports to Fremantle. The dispute, in which employers lost
public support, was settled by voluntary arbitration. Workers chose Catholic
Bishop Gibney as their representative; employers chose the Chair of the
Methodist Conference; and these two chose Anglican Bishop Riley as Chair.5
The Salvation Army, ‘incensed by what it considered to be the employers’ intransigence’ made its own contribution and declared that their members would
not ‘take passage by any of the steamers owned by the Steamship Owners’
Association’ (Vanden Driesen 1981). This situation may be compared with the
Eastern States where Cardinal Moran strongly supported wharf strikers while
the Anglican Archbishop of Queensland worked on the wharves as a strike breaker
(Fitzpatrick 1941: 309).
The third major dispute was the railways strike. The Rev. Wheaton was
successful in having the parties agree to arbitration by the Lord Mayors of
Perth and Fremantle (Gibbney 1949: 42). Thus, the Westralian situation did not
suggest the need to go beyond ad hoc, informal, voluntary arbitration. Neither
did it suggest the need to establish a relatively expensive standing tribunal
system predicated upon compulsory arbitration.
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INITIATION
The notion that compulsory arbitration was an employer attempt to keep defeated
unions down is suggested by Fitzpatrick and the early school of union writers.
Fitzpatrick writes:
When the great strikes were over, and there was no longer any doubt as to
whether Capital could maintain the right to control industry without reference to
Labour, a modus vivendi had to be found, by which the beaten unionists could
be induced to accept their lowly status. The system resolved upon by the
responsible government of the colonies was the compulsory conciliation and
arbitration of industrial disputes, and it was within this system, during the ‘nineties
and the early years of the twentieth century, that Australian and New Zealand
trade unionism was reorganized on a reconstructed basis; legal and political
preoccupations displaced ‘industrial’ or ‘direct’ action in primacy in trade union
affairs (Fitzpatrick 1941: 256).
Fitzpatrick has been most keen to prove that arbitration was not a Labor Party
contribution. After reviewing developments in New South Wales during the 1880s
and 1890s, developments that included three attempts by employer-dominated
legislatures to introduce arbitration, the last (and successful attempt) just after
the strikes of the 1890s, he concludes:
In other words, arbitration legislation came from the employers’ side of politics within
a month or two of the smashing of the shearers’ strike in New South Wales and
Queensland. . . . The arbitration system was of the masters’ making, not the men’s
(Fitzpatrick 1968: 153).
Fitzpatrick claims that by the time Kingston introduced the Arbitration Bill
into Federal Parliament employers had begun to be repelled by their own
invention:
By that time, the capitalist invention of state arbitration had begun to take on the
aspect of Frankenstein’s monster, to the capitalists. E.E. Smith, president of
the Australian Employers’ Federation, furiously attacked the Commonwealth Act
of 1904, in his address to the employers’ federal conference next year. ‘It is
purely class legislation’, he said, ‘and is for the purpose of strengthening the
labor unions’ (ibid.).
A major problem for the Fitzpatrick analysis is that it does not differentiate
between different types of arbitration despite his reference to compulsory
arbitration in the first quotation. Employers were not particularly opposed to
voluntary arbitration, the type of arbitration sponsored in New South Wales
in 1892. Voluntary arbitration provided machinery which employers could seek
when it suited, but also implied that they did not have to refer their disputes
to arbitration when they chose not to. This was not the case with compulsory
arbitration, and there is no doubt that employers bitterly opposed this form of
settlement. In practice, all of the employer-initiated schemes involved voluntary
arbitration. Employers’ revulsion of, and attacks upon, the Commonwealth Act
of 1904 were because of its compulsory features.
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In South Australia, Kingston’s compulsory arbitration Bill of 1890, the first
Bill for compulsory arbitration, suffered at the hands of the employer-dominated
Legislative Council. After being ‘the sport of three sessions’ it was discharged
without any of its compulsory elements (Coghlan 1918: 2104). South Australia
finally legislated for compulsory arbitration in 1912. In Victoria, the Employers’
Union considered compulsion ‘dangerous in principle and inoperative in
practice’ and used its parliamentary influence to prevent such legislation
(Chan 1971). Trenwith introduced Conciliation and Arbitration Bills into the
Victorian parliament in 1900 and 1901 but to no avail (Mitchell & Stern 1989:
127). Bills were again unsuccessfully introduced into this parliament in 1904 and
1905, again to be rejected by the employer-dominated legislature (ibid). Through
Supreme Court action and open defiance, Victorian employers were also
successful in removing any casting vote arbitration by the Chairmen of
wages boards (Plowman 1988: 378). Tasmania, with its employer-dominated
Legislative Council, rejected Industrial Arbitration Bills introduced in 1900, 1901,
1903 and 1904 before opting for wages boards. Queensland’s parliament rejected
the Industrial Conciliation and Arbitration Bill 1894 and had to wait for the advent
of a Labor government before legislating for arbitration.
By 1904, four Australasian parliaments had legislated for compulsory
arbitration, the first being that of New Zealand. We are told that:
When Reeves circulated a proposed arbitration law the opposition of employer
associations was so ferocious that he did not even bother to introduce it in the
House. He tried again in 1892 but his proposals for reform were simply blocked in
the Legislative Council…In 1894, as Minister for Labour in a government returned
with a thumping majority and the automatic veto of the Legislative Council largely
removed, he returned to the charge in introducing his revised Industrial Conciliation
and Arbitration Bill. [The arbitration legislation was passed] in the teeth of continuing and rancorous opposition from employers, landowners and their parliamentary
spokesmen (Simpson 1987: 149).
In 1901 New South Wales legislated for a seven-year trial period of compulsory
arbitration. Employers did their utmost to ensure the failure of the legislation.
They refused to register their own organisations under the Act; they had registered bogus unions; they sought to choke the Court with work and to lengthen
proceedings; they used legal representation to increase costs to unions; they
successfully used the Supreme Court to reduce the Industrial Court to a
‘sinking hulk’ (Plowman 2002: 2–3). With the change in government shortly
after the passage of the Act, employers used their majority in the Legislative
Council ‘to kill the Act by inaction and refused for years to make any amendments
which were required in consequence of unexpected legal decisions’ (McCarthy
1968: 190).
At the Commonwealth level, employers’ association with compulsory arbitration has been described as a ‘forced march’ (Plowman 1989). Here they imitated
their New South Wales counterparts and expended considerable resources on
High Court action against the Act and the Commonwealth Court of Conciliation
and Arbitration. Until 1913, they were highly successful in constraining and
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circumscribing the Court’s role. After 1913, however, their legal actions were
counterproductive and served to open up the ‘new province for law and order’
(Plowman 1989: 147–52). The frequency of employer High Court challenges was
such that Attorney General Garran noted that the industrial power came to play
‘a greater part in political history and legal controversy than the whole of the
rest of the Constitution put together’ (Garran 1958: 464).
The above would suggest that Fitzpatrick’s view that compulsory arbitration
was an employer initiative is misplaced. It is unlikely that employers, who wrecked
voluntary arbitration because of its third party adjudication mechanisms, would
then seek a system of compulsory third party adjudication.
The Western Australian experience does not support the contention that
employers initiated compulsory arbitration. The Industrial Arbitration Act 1900
was passed against the wishes of many employers; in the face of veiled threats by
mining companies to close their operations; in the light of threats by British
investment companies to refrain from lending capital to the State if the legislation was passed; after significant delays; and after amendments that made the
Act unworkable.
This lack of initiation, however, evokes yet another paradox in the Westralian
legislation for compulsory arbitration. Despite opposition to the Bill, employers
did not vote the Bill down. This calls for explanation, a matter dealt with in a
subsequent section.
UNION
INFLUENCE
There is a line of literature that sees compulsory arbitration deriving from union
needs and interests. The acceptance of compulsory arbitration by unions is a
necessary condition for its initiation and its success. As Wise, author of the
NSW Arbitration Act noted, ‘arbitration without unions would be like having
the play ‘Hamlet’ without the part of Hamlet’ (Wise 1909: 314).
The essence of compulsory arbitration is that unions make a choice: the open
market where strikes and lockouts form part of negotiations; or compulsory
arbitration where the ‘barbarous expedients’ are replaced by court-imposed
settlements. Generally, unions around the world have been divided on the
merits of arbitration. Those unions with the capacity to force recognition upon,
and wring concessions out of, employers have been opposed to compulsory
arbitration. To these unions compulsory arbitration means ‘surrendering control
of their own destiny to an unpredictable and untrustworthy judge who would
almost certainly be a man of upper or middle class’ (Holt 1986: 23). Weak unions,
on the other hand, have seen merit in accepting the impositions of compulsory
arbitration.
The unqualified support of unions for compulsion added to the grist of those
opposing arbitration at the end of the 19th century:
Opponents of compulsory arbitration asked what an arbitration court or tribunal
could do to compel, say, 10,000 striking coalminers to return to work at rates less
than they were demanding. This difficulty appeared to be especially great where trade
unionists rejected the whole idea of compulsory arbitration, and in Britain and the
United States they did reject it. . . . Arbitration was despised by Samuel Gompers
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[President of the American Federation of Labor] as a weapon of the weak, and the
same attitude dominated the British Trade Union movement (ibid: 22).
In the UK the ‘majority who opposed compulsory arbitration in the TUC was
composed, in the main, of the older, stronger, and abler unions’ (Hobson 1902:
604). For weaker unions, compulsory arbitration did have an appeal. In the TUC
its leading champion was Ben Tillett of the dockers, a weak union by 1899, and
Richard Bell of the railway servants, an organisation that had been unable to secure
recognition by the major railway companies. Opponents of arbitration were
described by one delegate, as ‘the big dogs that can wag their own tails’ (Holt
1986: 23).
As Holt notes, for most proponents of compulsory arbitration it was the strong
rather than the weak unions that were the principal consideration, for they were
the organisations most likely to engage in serious disputes.
And if strong unions objected to the very idea of compulsory arbitration, what chances
was there that it would been enforced. On this obstacle most proposals for
compulsory arbitration foundered (ibid).
Where compulsory arbitration legislation was enacted in the face of strong
opposing unions it was rendered unworkable. Such was the situation in Kansas
in the 1920s (Gagliardo 1941), France in the 1930s (Colton 1951) and Britain in
the 1970s (Weekes et al. 1975).
Though Reeves argued that compulsory arbitration was necessary to prevent
confrontations by strong unions and strongly organised employers (the situation
that prevailed in the maritime strike), it was precisely because few strong unions
existed in New Zealand that the Act was resorted to. Holt describes New Zealand
unions at this time as ‘pathetically weak’. As such, they ‘were willing to tolerate
a degree of state interference in their affairs that a better organised movement
should not have borne’ (Holt 1986: 23–5).
The Australian situation on the eastern seaboard was not that different to New
Zealand’s. There unions had been significantly affected by the strikes of the 1890s
and the subsequent depression. Turner notes that ‘when voluntary conciliation
proved ineffective to avert the defeats of the 1890s, labour opinion consolidated
behind compulsion’ (Turner 1965: 25). The evidence is unambiguous that unions,
including the many unions that had not been involved in strikes, came through
the 1890s a mere rump of the organisations that had existed a decade earlier.
Unionisation, estimated at about 20 per cent of the work force in 1890 (Gollan
1963: 86) was only about five per cent a decade later (Deery et al. 2001: 217).
Many of the Trades and Labour Councils had to close their doors and union funds
soon dissipated (Labor Council of NSW, 1981). More importantly, unions were
not accorded recognition rights by employers. For these unions, compulsory
arbitration held out much: it meant that their survival did not rely upon
membership strength; that they could compel recognition from employers
notwithstanding their penury; and that their awards, particularly if including
union preference clauses, would be useful marketing tools. Walsh and Fougere
(1987: 10) observe:
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The attraction of the arbitration system was that it made [such] considerations largely
irrelevant to trade unions who wished to work within it. The system guaranteed
unions employer recognition, provided a bargaining forum in which employers were
compelled to appear, and enforced minimum wages and conditions according to
the Court’s determinations. All that was required was registration under the Act,
application to the Court for an award and observance of the procedures for conciliation and arbitration. Any seven (later 15) workers could form a union and activate
this process. . . . The great bulk of [New Zealand] unions registered under the Act
to take advantage of its provisions, their officials more at home in the courtroom
than on the picket line.
Australian unions, in the main, were attracted to the New Zealand Act, which
described itself as ‘An Act to encourage the Formation of Industrial Unions and
Associations, and to facilitate the Settlement of Industrial Disputes by Conciliation
and Arbitration’. There is little doubt that many unions previously opposed to
compulsory arbitration during the 1880s had become ardent advocates of that
system by the turn of the century (Gollan 1960; McCarthy 1967; Rickard 1976;
Portus 1979). This did not mean that there was universal endorsement.
Nevertheless, Coghlan’s general conclusion holds true: strike, financial and
membership losses had converted the labour movement from a ‘vague and
hesitating’ stance towards arbitration to one of firm commitment (Coghlan
1918: 2097).6
If union support is a necessary condition for arbitration, there is no doubt that
this condition was met in the eastern colonies. What of Western Australia?
Though unions in the West had not suffered strike losses and had been less
affected by economic downturn in the 1890s, nevertheless they were also in a
weak position. This general weakness stemmed from the fact that the conditions
for trade union development had not existed prior to the gold rushes. Gibbney
(1949) has recorded their slow growth. As late as 1880 the colony ‘did not
contain a single organisation which could protect working men in their employment’ (ibid: 1). The first union ‘for which there is clear information available’
was formed in 1887. Two years later delegates from Adelaide helped establish
the Fremantle Lumpers’ Union and by 1890 there were six unions in existence.
Unions not only had difficulty in getting established, but also in maintaining their
existence. Thus the Builders’ Labourers’ Union was formed and reformed three
times between 1891 and 1897. Three Trades and Labour Councils (TLCs)
were brought into being—one in Perth, one in Fremantle and one in the gold
fields. There was a degree of friction between the first two, and the Perth TLC
collapsed on three occasions before being put on a permanent basis in 1896. The
immediate effect of the gold discoveries was to hamper the development of unions
for several years.
In the ferment of the gold rush, only those men who were lacking in initiative felt
any urgent need to maintain their standards as workers since wealth seemed to be
only a matter of time and effort (Gibbney 1968: 3).
The longterm result of the gold strikes was to provide unions with a better
environment for growth. By the end of the century there were 15 unions in the
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metropolitan area with about 750 members (Gibbney 1949: 36). This represented
about five per cent of workers in Perth (Merritt 1965: 24), though in the
building trades it was higher—‘no more than one tradesman or labourer in five’
(Merritt 1962: 11). In the gold fields, employers estimated unionisation rates at
‘20 per cent or less’ (Segal 2002: 74).
Of the unions in existence at the turn of the century probably only four had
the capacity to operate autonomously: the Lumpers’ Union; the Amalgamated
Workers Association; the Amalgamated Society of Engineers; and the
Boilermakers Union. Significantly, the first did not join the Fremantle TLC
and the last did not register once compulsory arbitration was enacted. The
general weakness of unions, and therefore their support for arbitration, is
illustrated by developments following the enactment of the Industrial Conciliation
and Arbitration Act. In many cases, unions complained that the registration requirement of 15 members was too onerous. Further, they registered notwithstanding
the heavy surety that they were required to pay. The number of unions, and
of unionists, in Western Australia expanded significantly with the advent of
arbitration, the latter increasing by 72% in the first six years following the Act
(Wise 1909: 319).
LABOR
AND LIBERALS
Union support for compulsory arbitration may be a necessary condition. It is not
a sufficient condition. In no Australian legislature could unions control legislation.
An explanation of compulsory arbitration necessitates consideration of parliamentary organisations. In this respect three contenders have been put forward:
the newly emergent Labor parties; the new forms of liberalism that emerged in
Australasia in the 1880s and 1890s; and in some cases, the coalition of these two
into what has become known as ‘Lib-Lab’ fusions. For reasons that will become
apparent from the following two sections of this paper, the last case is not
relevant to Western Australia.
Labor
Different authors have taken different views on the significance of the
Labor Party in achieving compulsory arbitration legislation. What might
be termed the ‘orthodox school’ sees Labor as a critical element in such
legislation. This school includes such authors as Gollan (1960), McCarthy
(1967), Spence (1909), Turner (1965) and Pearce (1951). In this view, Labor
was able to exercise a disproportionate influence by capitalising on its balance
of power:
Fortuitously, party alignments and personality rivalries enabled the new labour
parties to exercise influence disproportionately to their numbers by capitalising
on their strategic position in holding the balance of power in colonial, state and
commonwealth [sic] parliaments (McCarthy 1967: 74).
Labor’s opportunistic approach is exemplified by the 1903 electioneering of its
leader in the Senate, Senator McGregor:
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We are for sale, and will get the auctioneer in and take care that he is the right man.
. . . I want to show the Government what they have to do to secure our support
(Turner 1965: 63).
Though a good case can be made for Labor’s capacity to influence arbitration
legislation while holding the balance of power, and subsequently to introduce
and improve upon such legislation when in Office, the orthodox view is not
altogether satisfactory. It presupposes that Labor did hold the balance of power
in all states. In some cases this did not exist for some time after the introduction
of industrial legislation (South Australia, Tasmania, Victoria, Western Australia).
In the case of Queensland, Labor’s capacity to become the outright Opposition
from the start reduced its capacity to influence legislation.
Commenting on the ‘orthodox’ view Macintyre notes:
Purely on the Australian evidence, this explanation is open to challenge. It exaggerates both the commitment to arbitration within the labour movement and the
influence that the movement wielded. These objections apply with particular force
in South Australia and Victoria, where Labor remained under the wing of liberals
until after the turn of the century; in Western Australia, where arbitration was enacted
in 1900 before Labor made its parliamentary debut; and in Tasmania, where Labor
still remained a negligible force. In NSW, Queensland and the Commonwealth, the
minimum requirements of the hypothesis—an independent Labor Party with significant political strength—were at least in evidence, but even there its validity is still
doubtful. Labor held the balance of power in New South Wales from 1891 but
had to wait until 1901 for a non-Labor administration to introduce compulsory
arbitration. In Queensland the wait was even more protracted and the best that Labor
could achieve until it won office itself in 1915 was wages boards. And in the
Commonwealth parliament the two non-Labor parties called Labor’s bluff, so that
it was a coalition drawn from both that framed the measure finally adopted in 1904
(Macintyre 1987: 155).
One who sees little role for Labor in initiating compulsory arbitration is
Fitzpatrick. He claims that:
. . . the industrial arbitration systems which were soon established in all parts of
Australia did not derive from the Labor Party, though all . . . took some of their
character from Labor pressure on the Government which introduced them.
Fitzpatrick adds:
. . . the pioneers of arbitration were not Labor Parliamentarians, or Labor men outside Parliament; [they] were such Liberals as William Pember Reeves, C.G. Kingston,
and Alexander Peacock (factory and wages boards legislation, Victoria) (Fitzpatrick
1968: 151).
To the extent that Fitzpatrick is correct and that it was the liberals who introduced
arbitration legislation, the advent of Labor may have had the contrary effect
argued by the ‘orthodox school’ and actually retarded the development of arbitration. Macintyre is one who argues such a case. He notes that it was ‘non-Labor
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forces that initiated the measure [arbitration] along lines and according to a
timetable that they controlled’ (Macintyre 1987: 155). In this view, the advent
of Labor, by creating politic opponents, ‘weakened the liberal rump that was
forced to take up an increasingly unsympathetic stance’. He adds: ‘insofar as
arbitration was meant to mediate class antagonisms in industry, it was more
likely to win acceptance where class antagonism had not become the organising
principle of political life’ (ibid).
In Western Australia, Labor played a marginal role in the initiation and
passage of the Industrial Conciliation and Arbitration Act 1900. Indeed, the party,
as currently understood, did not come into being until after the passage of this
legislation. Gibbney (1975) has given a succinct development of the Labor Party
in the period 1880 to 1920. After several failed attempts at political organising,
in 1896 the Political Labor Party (PLP) was formed and contested the elections
of the following year. One member, Charles Oldham, was successful in being
elected. In 1898 the party appointed its first fulltime officer and in the following
year the combined Trades Union and Labor Congress (TULC) determined
a three-pronged parliamentary platform: payment of members of parliament;
redistribution of seats according to population; compulsory arbitration ‘on the
New Zealand lines’. The first objective was soon realised. Payment of members
of parliament was accepted in principle in 1899 and came into effect in 1900.
This removed the most serious obstacle to the development of the PLP. This
was further augmented by the subsequent introduction of universal suffrage. In
1899, the second Congress proposed contesting 22 electorates, with the decision
in another 11 electorates to be determined by local party members. In the final
outcome six members were elected and took their seats in May 1901, some months
after the passage of the Act.
One line of thought is that despite the insignificant representation at the time,
the expectation of impending political success on the part of Labor encouraged
existing members to pass legislation so as to obviate more ‘labour friendly’ statutes
in the future. Indeed, this seems to be the import of Hackett’s views in the
Legislative Council. A strong supporter of Forrest (Bolton 2000: 73), and though
not himself a supporter of compulsory arbitration, he urged support for the Bill.
He further urged his fellow Council members to recognise that ‘the day of
organized labour is at hand’ and contended that the Council must bend to
public opinion (WAPD 1900: 1816; Segal 2002: 91). It is difficult to know whether
Hackett, as a government supporter, was merely presenting reasons for the
passage of the Bill or whether he genuinely thought Labor might be a future
force that could get its own way. The experience in the other colonies where
Labor Parties had existed for some time would have suggested that despite their
apparent ‘well-drilled’ appearance, Labor fell short of the mark in commanding
control of Parliaments. Further, despite Hackett’s contention that the Council
must take account of the people, in practice, this chamber remained under
conservative control for the next century. The Council was not reluctant to
disallow Labor legislation. Thus, in Labor’s first session of continuous office in
19127 the Legislative Council ‘killed twenty of the twenty-nine government bills’
(Gibbney 1975: 365). In this respect it had the capacity to emulate its Victorian
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counterpart where, in the view of Spence (1909: 199) ‘the rich minority were
able to resist the masses in every step taken in legislation. As employers they used
the boycott at every opportunity.’
It can be concluded that the Industrial Conciliation and Arbitration Act was not
initiated by Labor. Further, it can also be concluded that Labor had minimal
involvement in determining the scope and outcome of the Act. The Bill was
processed at a time when ‘labour or working class representation in Parliament
was meagre, if not negligible’ (Crowley 1954: 15).
New liberalism
Much of the social legislation in the decade before and after federation has
been attributed to ‘new’ liberalism. The records show that the initiation and
carriage of arbitration Bills was undertaken by persons with liberalist creeds.
These included Pember Reeves in New Zealand, Kingston in South
Australia; Wise in New South Wales; and Kingston, Deakin, Higgins, Isaacs,
O’Connor and others in the Commonwealth. Thus, Richardson (1987: 169)
writes, ‘Compulsion resulted from the conjunction of a particular stage of
union development, a heightened predisposition towards what might be called
‘liberal rationality’ or a belief in the possibility of resolving clashes of interest
by negotiation.’ He adds, ‘There is much to commend this general explanation
for the adoption of compulsory arbitration throughout Australasia. It is an
historical framework which Jim Holt’s Compulsory arbitration in New Zealand
endorses.’
The emergence of liberalism was at odds with the orthodoxy of the day that
held that the state should not interfere with economic and social matters (Simpson
1987: 145). Economic depression, the great strikes of the 1890s, and the reports
of the Royal Commissions on sweating were factors contributing to the growth
of liberalism. As Simpson notes:
Some members of the political class, i.e. those who constituted the parliamentary
recruiting ground, had by the 1880s become thoroughly perturbed by the social
consequences of economic downturn. Expressions of concern were not confined to
those who were later to be at the centre of what became the Liberal governments.
But one on those who did, Robert Stout, will serve as an exemplar of that concern.
Stout began as an orthodox Benthamite liberal. He though the state should not interfere under any circumstances in social economic matters. Between 1875 and 1890
his views underwent a profound change. . . . What changed the minds of Stout and
many middle-class people like him was the evidence before their eyes of the widespread distress caused by leaving things to take care of themselves. They honestly
believed that when they came to a new land they had left behind them such social
cankers as industrial class conflict, economic exploitation, and so forth. The revelations of the Sweating Commission which provided only the most dramatic evidence
that their presumption was wrong was profoundly shocking to many hitherto
complacent middle-class colonists (ibid: 145).
The notion that strikes and lockouts were intolerable, barbaric methods of
settling industrial disputes in a civilised society took hold in Australia and
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New Zealand (Holt 1986: 15). The ‘intellectual provenance’ of such views, writes
Macintyre,
lay abroad in the so-called ‘new liberalism’ that shifted the relationship between the
state and the citizen. Since the earlier liberalism that enshrined freedom from state
interference had failed manifestly to solve problems of poverty and inequality that
threatened to poison public life, the new generation of liberals asserted the need for
collectivist measures that would enhance the capacity of citizens (Macintyre 1987:
154).
If Liberalism is interpreted merely as a readiness to involve the state in economic
affairs, then the Western Australian parliament of the time met this description.
This is evident from the Attorney General’s speech when introducing the
Industrial Conciliation and Arbitration Bill: ‘The State after all is the parent,
and labour and capital are her children, and it is her duty . . . to preserve the
domestic peace’ (WAPD 1900: 461).
State interference in Western Australia, however, was not a manifestation of
a desire for social change but rather a matter of pragmatic necessity. The state
had been called upon to provide the infrastructure of commerce, industry and
social well-being, and in many cases had to engage in undertakings when private
enterprise had failed. The arbitration Act was initiated by Forrest. He has been
called many things—liberal is not one of them.8 Far from being a radical or
liberal, he was a shrewd pragmatic politician with not a little liking for the British
way of things. Segal notes that he ‘responded to the structural transformation
of the colony with social measures only, in the main, under duress and for
short-term political advantage’ (Segal 2002: 81). Segal quotes Vosper’s view that
Forrest led ‘only in the...sense that a wheelbarrow leads its driver or a mule a
plough . . . under harness, whip and spur’ (ibid). Deakin aptly summed up Forrest’s
conservatism in his book on federation: ‘Sir John Forrest was to the fore as leader
of the stalwart Conservatives in resisting with undaunted courage and inexhaustible persistency common-sense objections to every innovation’ (Deakin 1944:
88). The social gains achieved during the 1890s, in the view of Gibbney, resulted
not from Forrest’s liberalism, but rather his ‘intellectually pragmatic government’.
Forrest, he notes, ‘was always prepared to concede moderate demands which had
some show of political backing’ (Gibbney 1975: 346). Forrest’s pragmatism, in
which he sought public support while not alienating tradition interests, reduced
the effectiveness of much legislation. He ‘frequently diluted reformist legislation
to pacify his old colonial supporters and other vested interests, often to such
an extent that his measures proved to be ‘simulacra’ (phantoms) and of only
limited benefit to their proponents (Segal 2002: 82 quoting WAPD 1900: 81).
Is it contended that the Industrial Conciliation and Arbitration Act was such a
simulacrum.
The Western Australian parliament at this time was not devoid of ‘liberals’.
However, their influence was neither uniform nor decisive. Claydon notes that
in the absence of working class or union representation in parliament, unions
‘tended to support the election of sympathetic liberal politicians such as James
and Oldham’ (Claydon 1988: 45). As already noted, Oldham was elected in 1897.
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James was first elected in 1894 with TLC ‘endorsement’ and frequently attended
meetings of the TLCâ€