Symposium: State Systems of Industrial Relations

Setting the pace: The NSW jurisdiction before 1981

Greg Patmore, University of Sydney

The federal government’s plan to abolish the state industrial relations systems overlooks how much state tribunals have improved the working lives of the citizens not only in their own states but in Australia generally. This is particularly true of the NSW system. This paper examines the historical and legal significance of the NSW industrial relations system before Mr. Justice Fisher became President of the NSW tribunal in 1981. Mr. Justice Fisher’s administration was to see a fundamental challenge to traditional model of industrial regulation in New South Wales through the Greiner Liberal Government’s push for enterprise bargaining. John Shields’ contribution to this symposium examines the important legacy of the Fisher years.

Compulsory arbitration in NSW began with the Industrial Arbitration Act of 1901.

The earliest predecessor of the Industrial Relations Commission of NSW, the NSW Court of Industrial Arbitration, held its first meeting on 16 May 1902. Its foundations lay in the failure of unilateral regulation by employers, collective bargaining, and state systems of voluntary arbitration to provide the basis for a satisfactory industrial relations system.

The most important example of early experimentation with industrial regulation in New South Wales was the Trades Dispute Conciliation and Arbitration Act, which became law in April 1892. It was a response to the 1890 Maritime Strike. The legislation required the agreement of both parties before a dispute proceeded to conciliation and arbitration. Employers took advantage of a declining labour market with the deepening 1890s Depression to ignore the legislation. Miners, printers, railway employees and maritime workers, unable to force their employers to conciliation and arbitration in their fight against wage cuts and deteriorating conditions, found the legislation ineffective. The legislative machinery only settled two of the 22 cases that came before it in two years. Disillusionment led the Labor Party and a majority of the Protectionist opposition in the Legislative Assembly to end funding for this ineffective arbitration system in December 1894 and fuelled calls for a compulsory system (Patmore 2003a, pp. 7–11).

Compulsory arbitration in New South Wales began with the Industrial Arbitration Act of 1901. The Act exemplified the Australasian model of the conciliation and arbitration of industrial disputes, which involves permanent state tribunals with the power to settle disputes and enforce their decisions. There are provisions for the registration of trade unions, which traditionally bring grievances to the tribunals of behalf of the workers for conciliation and then arbitration. Both unions and employers can unilaterally bring the other party before the tribunal. The tribunal’s decisions, mainly in the form of awards, set out the pay and conditions for workers in the relevant industry.

Not all awards are the product of arbitration, since the parties could create an award through consent or mutual agreement. The NSW system adopted at various times wages boards or conciliation committees to supplement the industrial tribunals. These boards or committees, consisting of an equal number of employer and employee representatives, and a chairperson, could create awards. Their decisions have been subject to appeal to the industrial tribunals. The powers of the wages boards or conciliation committees relative the main NSW industrial tribunals have been a focus of debate and legislative changes (Mills 1977, pp. 148–33; Patmore 1991, p. 104).

The NSW annual holidays legislation was the first in Australia.

The NSW industrial tribunals have also performed a wide range of other functions. Since 1912 the relevant Minister has been able to refer matters, not necessarily industrial, to the industrial tribunal for report. The Commission has undertaken inquiries into brick prices, chain stores, petrol station opening hours and rents. There have been major inquiries into impact of technological change in 1963 and apprenticeship in 1968. The Commission has also had the power to set maximum prices and investigate monopolies (Commonwealth Government 1985, p. 102; Dabscheck & Niland 1981, p. 285; Mills 1977, p. 397).

LEADING THE WAY—WAGES AND CONDITIONS

While there is great deal of interest in the federal arbitration system, the NSW system covers more workers in the state and has led the federal tribunal in several areas. Lengthy periods of Labor Party government in New South Wales provided a favourable environment for progressive industrial legislation. State legislation led the way in Australia in regard to shorter hours, annual leave, long service leave, equal pay for women, and job security. State governments can legislate on a wide range of industrial issues within their borders, while the Australian constitution restricts the powers of the federal government in legislating for industrial relations. The federal government can create a federal industrial tribunal, which could issue awards that covered wages and conditions, but not directly legislate on wages and conditions except in exceptional circumstances (Commonwealth Government 1985, p. 102). The current federal government is turning to the corporations rather than industrial relations provisions of the Australian Constitution to expand its powers over the states.

The NSW annual holidays legislation, which provided for two weeks annual leave, came into effect on 1 January 1945, was the first in Australia. It flowed onto the metal and printers federal awards by December 1945. These industries set the pace for other awards in the federal industrial jurisdiction The NSW legislation for three weeks annual leave took effect on 1 January 1959. As with two weeks annual legislation, this legislation had a flow-on effect to the Commonwealth Conciliation and Arbitration Commission, although not until 1963 (Mills & Sorrell 1975, pp. 148–9; Patmore 2003b, pp. 17–20).

The NSW Labor Government also enacted the first Australian legislation for paid long service leave in 1951. The NSW tribunals applied the principle in a small number of awards before the legislation. To support the legislation the Government drew upon the three major established arguments for long service leave: reducing labour turnover, rewarding loyalty, and worker health. Again, the NSW long service leave legislation had important flow-on effects for other Australian jurisdictions. Victoria followed New South Wales, introducing long service leave in November 1953 and long service leave legislation later spread to other states. After NSW legislation in 1963 allowed three months long service leave on full pay for fifteen years service, the first arbitrated long service leave awards appeared in the federal jurisdiction in the metal trades and graphic arts in 1964. Prior to this the federal tribunals had been reluctant to award long service leave except with the consent of employers (Metal Trades Industry Association of Australia 1977, pp. 1, 31; Mills & Sorrell 1975, p. 153).

NSW led the way on legislating equal pay for women.

One major benefit of the annual leave and long service leave initiatives in New South Wales was the development of recreational facilities for workers and their families. Trade union leaders expressed concerns that longer annual leave was jeopardised by shortages of low-priced holiday accommodation. In August 1948 Labor Premier James McGirr opened the first union-sponsored holiday camp. It was operated by the NSW Branch of the Australian Railways Union at Sussex Inlet on the South Coast of New South Wales. The camp consisted of seven fully furnished family cabins, a store, six small fishing launches, and, later, a tennis court. Soon the camp was averaging one thousand visitors a year with a fair proportion being railway workers from the western New South Wales who could not have otherwise afforded a seaside holiday.

The move towards greater leave also recognised the benefits for the Australian tourist industry. During the debates to extend annual leave to three weeks in 1957, J. J. Maloney, the then Minister for Labour and Industry, argued that the tourist industry would raise its standards as a result of greater demand and attract overseas tourists (Dodkin 2001, pp. 30–2; Hearn 1990, pp. 88–9; Patmore 2003a, pp. 18–19).

New South Wales also led the way on legislating equal pay for women. In 1951 the International Labor Organisation adopted Convention No. 100 that recommended ‘equal remuneration for men and women workers for work of equal value … with a view to providing a classification of jobs without regard to sex’. The federal Menzies Liberal Government supported the Convention but did not ratify it, claiming it was a matter for adjudication by the Commonwealth Arbitration Court. Despite this, the convention gave an impetus to those trade unionists and feminists demanding equal pay. Agitation by the NSW Teachers’ Federation led the Cahill Labor Government in 1958 to amend the NSW Industrial Arbitration Act to provide for ‘Equal Pay under Certain Circumstances’. Where a woman could prove that her work was ‘of a like nature and equal value’ to that of a man in the same occupation, she would receive equal margins immediately and an equal basic wage phased in over three years. South Australia in 1967 and Western Australia in 1968 adopted similar legislation. Tasmania only applied it to public servants in 1966. The Commonwealth Commission decided in June 1969 to accept a limited principle of equal pay for equal work similar to that provided by state legislation (Patmore 1991, p. 177; Patmore 2003a, p. 33).

The NSW state tribunal also led the federal tribunal on other issues. Before World War I the NSW Arbitration Court developed the idea of the ‘living wage’. The conservative Liberal Reform government appointed Charles Heydon to the Court from the District Court in 1905. Although not a radical, Catholic social doctrine and protectionism strongly influenced him, and he was concerned with the plight of low-paid workers. Heydon was the first Australian arbitrator to adopt a living wage to prevent ‘sweating’ in the Sawmillers’ case of 1905. This wage supposedly allowed workers to lead a ‘human life’ with some degree of comfort, marry, and raise a family. Heydon determined his living wage two years before Henry Bournes Higgins formulated his basic wage in the famous ‘Harvester’ judgment in the Commonwealth Arbitration Court. Both Heydon and Higgins assumed that women did not support families and excluded them. Heydon envisaged a family of four rather than Higgin’s five. (Patmore 2003a, p. 14).

The NSW tribunals dealt with questions of individual rights such union activism and fair promotion.

While there were innovations in regard to wages and conditions in the NSW jurisdiction, not all innovation was necessarily progressive. The labour shortages of the post-war economic boom helped unions gain wage increases outside the industrial arbitration system through industrial action, shop committees, and over-award bargaining. The Commission developed a doctrine known as ‘collective responsibility’ to curb this militancy. If, due to the industrial misconduct of some employees, work was not available to members of the same union employed at the same workplace, employers were not required to pay for the time so lost to the non-striking unionists even if they were willing and ready to work. Thus, union members were to bear a ‘collective responsibility’ for the industrial conduct of their fellow unionists. The principle was first espoused in 1944 and terminated by the Industrial Commission in 1972. Some labour lawyers challenged the notion of ‘collective responsibility’. They criticised the Commission for going beyond its authority and creating a ‘law’ that neither the Industrial Arbitration Act nor the common law sanctioned (Mills 1977, p. 397; Sorrell 1970, p. 263).

INDIVIDUAL RIGHTS

The NSW tribunals did not only deal with broad issues such as the living wage, but also with questions of individual rights such union activism and fair promotion. In May 1919 a meeting of bank officers in Sydney formed the United Bank Officers Association of NSW. The banks opposed the union’s formation and their opposition culminated in the dismissal of a union activist Henry Rawson by the Bank of NSW. The bank tried to transfer Rawson to Dubbo on the grounds that his latest staff reports were unfavourable. Rawson believed that he was being victimised because of his union activism and refused the transfer. The Bank of NSW then dismissed him in September 1919.

The bank officers’ union gained industrial registration in July 1920 and instituted a case for Rawson’s reinstatement. Judge Thomas Rolin of the NSW Industrial Court ordered Rawson’s reinstatement on 17 May 1921, noting that Rawson’s union activity was the real cause of his dismissal. He ruled that reinstatement could be ordered where the employer refused reinstatement. The Bank of New South Wales then appealed to the NSW Supreme Court challenging the power of the Industrial Court to order reinstatement. The Supreme Court dismissed the bank’s appeal and upheld Rolin’s judgment on 9 September 1921 (Patmore 2003a, p. 20). The case was widely reported in New South Wales and other states, where Rolin’s judgment ‘removed much of the fear that accompanied union membership’ (Hill 1982, p. 31).

The proposed federal reforms ignore the lessons from the past.

The tribunals also acted to ensure the fair treatment of workers by employers. A significant early case was the case of Reginald Winsor. Winsor was an out-door salesman in the advertising section of the NSW Railway Commissioners. He was classified as a third-class clerk. His employers transferred him on 22 March 1927 to a position at the Railway Institute in Sydney, a position previously occupied by a fourth-class clerk. Meanwhile, two other third-class clerks in the advertising section, and junior to Winsor, were promoted to second-class on 1 January 1928. Management promoted one of these clerks further to a first class clerk on 1 January 1929. Winsor, meanwhile, remained in third class.

The Commission noted on 5 July 1929 that the ‘injustice and oppression’ in Winsor’s case justified intervention and issued an award backdating Winsor’s promotion to second class on 1 January 1928 and promotion to first class on 1 January 1929 with seniority over the other two clerks. While the Commission ruled that it would only intervene in promotion issues under exceptional circumstances, it would exercise its powers to compel employers to change their decision if a strong case were made (Patmore 2003a, p. 24).

CONCLUSION

The NSW system of industrial relations was founded on the failure of a number of unsuccessful attempts to establish an orderly and equitable system of labour relations including unilateral regulation and voluntary state arbitration. Prior to 1981 the NSW industrial relations system was a source of significant innovation in industrial rights. This continued after 1981, as John Shields shows, with issues such as redundancy and pay equity. State Labor governments legislated for a range of benefits including shorter hours, annual leave, equal pay, and shorter hours. The tribunals were responsible for developing the living wage and protecting industrial rights.

The proposed federal reforms ignore the lessons from the past and rob Australian workers of a vital force that has shaped and can continue to shape their working lives. They also threaten the long established rights of workers covered by the NSW industrial jurisdiction to unionism and a ‘fair go’ in the workplace.

REFERENCES

Commonwealth Government 1985, Report of the Committee of Review into Australian Industrial Relations Law and Systems, Volume Two: Report, Australian Government Publishing Service, Canberra.

Dabscheck, B. & Niland, J. 1981, Industrial Relations in Australia, George Allen & Unwin, Sydney.

Dodkin, M. 2001, Brothers. Eight Leaders of the Labor Council of New South Wales, UNSW Press, Sydney.

Hearn, M. 1990, Working Lives. A History of the Australian Railways Union (NSW Branch), Hale and Iremonger, Sydney.

Metal Trades Industry Association of Australia 1977, Long Service Leave in Australia, no place of publication.

Mills, C. P. 1977, Industrial Laws. New South Wales, 4th ed., Butterworths, Sydney.

Mills, C. P. & Sorrell, G. H. 1975, Federal Industrial Law, 5th ed., Butterworths, Sydney.

Patmore, G. 1991, Australian Labour History, Longman Cheshire, Melbourne.

Patmore, G. 2003a, ‘Industrial conciliation and arbitration in New South Wales before 1998’, in Laying the Foundations of Industrial Justice, ed. G. Patmore, Federation Press, Sydney, pp. 5–66.

Patmore, G. 2003b, ‘Legislating for benefits—NSW 1941–1958’, Australian Bulletin of Labour, vol. 29 no. 1, pp. 14–30.

Sorrell, G. H. 1970, ‘Decisions affecting industrial relations’, Journal of Industrial Relations, vol. 12, no. 2, pp. 263–267.

Greg Patmore is editor of Labour History and Director of the Business and Labour History Group at the University of Sydney. He edited a book on the presidents of the NSW industrial tribunal (Federation Press, 2003). Current research interests include consumer co-operatives, non-union forms of worker representation and a history of Citigroup in Australia.