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Wednesday, 16 June 1926


Senator PEARCE (WESTERN AUSTRALIA) (Minister of Home and Territories) - There has been a slight variation of that decision in connexion with a dispute relating to theatrical employees, but taken as a whole it still prevails. This has led to a singular state of affairs. In one instance there are no less than 4,000 respondents. The court cannot lay down a general rule applying to other than the actual parties cited. The practice has grown up of creating artificial disputes embracing more than one State, and the serving of a log is sufficient proof of the existence of a dispute. That is notoriously artificial. It is possible for the employers or the employees to approach the Commonwealth Arbitration Court and a State Arbitration Court, and to adopt the award that best suits them. The 44-hour week question is the result of a New South Wales act. and is a striking illustration of the confusion that is developing. Conflicting views are held as to where the Commonwealth court's jurisdiction and that of a State court begins and ends, and the surprising thing is that with all these drawbacks and hindrances our arbitration system has functioned at all, let alone that it has not been so successful as some would desire. A point that we have to bear in mind , and one that critics have lost sight of, is the fact that conciliation and arbitration as a part of the Federal system has come to stay. Those who are now expressing surprise at what is being done are surely overlooking past history. The necessityfor an alteration of the Constitution in the direction pro posed has long been foreseen. So far back as the 28th June, 1901,Mr. (now Mr. Justice) Higgins moved in the House ofRepresentatives the following motion : -

That in the opinion of this House it is expedient for the Parliament of the Commonwealth to acquire (if the State Parliaments see fit to grant it undersection 51. sub-section xxvii. of the Constitution Act) full power to make laws for Australia as to wages and hours and conditions of labour.

The late Sir Edmund Barton, who was then Prime Minister, suggested that the motion be amended by substituting the word " accept " for the word " acquire," which was agreed to, and the motion in its amended form was carried withouta single dissentient. That was in the first session of the first Commonwealth Parliament. At that very early stage in the life of the Commonwealth it was realized that the idea of a distinct line of demarcation between the Commonwealth and States authority in regard to the control of industry would have to be abandoned. Since the inception of federation these questions have been submitted to the people by way of referendum on three different occasions. It is true that in each case the people decided against an alteration of the Constitution, but with a lessening degree of opposition. The figures are very informative. In 1911 they were 483,000 for and 742,000 against, the- majority being 259,000 against the proposals. In 1913 the figures were 961,000 for and 987,000 against, . the adverse majority being 26,000. In 1919, when the last referendum was taken, the figures were 911,000 for and 92.4,000 against, or a narrow adverse majority of only 13,000. In a vote of that magnitude the majority was narrow indeed. The defeat of these proposals for an alteration of the Constitution was doubtless due to the fact that a number of other questions were submitted to the people at the same time, but it may also be attributed in a degree to the innate conservatism of the people, irrespective of their political views. It shows clearly that the referendum is one of the most conservative instruments of government. There is always a powerful negative vote available on any question submitted to a referendum. The only satisfactory solution of the problem is to equip the Commonwealth with greater power to bring about a system with re gard to both the regulation of wages and conditions of labour, and the settlement of disputes. By clause 2 of the bill it is proposed to delete the words, "extending beyond the limits of any one State " from paragraph xxxv. of section 51 of the Constitution. This will remove many of the objections to the present system of conciliation and arbitration. It will give the Commonwealth authority over intra-state as well as interstate disputes, and remove the necessity for artificially extending a dispute over two or more States in order to bring a matter within the jurisdiction of the Commonwealth Arbitration Court. Paragraph c of clause 2 of the bill deals with establishing authorities with such powers as the Parliament confers on them with respect to the regulation and determination of terms and conditions of industrial employment, and of rights and duties of employers and employees with respect' to industrial matters and things. That will give power to the Commonwealth Parliament, not to determine all questions relating to industrial employment, but to create the authority to determine them. The States retain concurrent powers. That is a matter to which I think public attention should be directed, because critics of the bill are arguing that it is proposed that the Commonwealth shall take exclusive power. We do not propose that. One prominent State Minister in Victoria has urged that this proposed amendment of the Constitution will mean the abolition of. the wages board system in Victoria. It does not mean anything of the kind.


Senator Sir Henry Barwell - It might if the Commonwealth chose to go so far.


Senator PEARCE - If the Commonwealth Parliament so legislated it might, but that is not contemplated. Obviously, the Commonwealth Parliament would not be so foolish as to legislate to abolish a system that was working satisfactorily. Whilst the States have concurrent powers, necessarily the Commonwealth authority where it conflicts with that of a State must be paramount. There are sound reasons why Parliament should have power to create the authorities provided for in the bill, and should not itself attempt to deal with industrial questions.


Senator Barnes - Any delegation of that power must necessarily be by act of Parliament, I presume?


Senator PEARCE - Two things could be clone. The Commonwealth could, by statute, vest a State tribunal or State authority with the power; or the Commonwealth could create an authority.


Senator Barnes - But will it be possible for the Government to withdraw that power from the authority to which it has been delegated ?


Senator PEARCE - The Commonwealth will set up an authority which will function on such terms and conditions as the Parliament may decide.


Senator Barnes - But can that power be withdrawn?


Senator PEARCE - Yes. Any power given to auy authority by act of Parliament may, by means of another act of Parliament, be withdrawn. I was proceeding to say that there are sound reasons for proposing that Parliament shall have this power to create authorities to decide industrial questions, but not the power to itself decide them. There is much confusion of thought on the part of critics of the proposal who argue that Parliament should not of itself exercise this industrial power. I am pointing out that it is not proposed to do this, but that, as in the case of the Conciliation and Arbitration Court, Parliament will exercise this power through properly constituted authorities.


Senator Elliott - The New South Wales Parliament does not always follow that practice.


Senator PEARCE - Criticism has been directed at this measure on the ground that it provides for a departure from the regular procedure, but I am pointing out, in reply, that what is now proposed is not a departure at all. As a matter of fact, we merely follow the practice established since the inauguration of federation. If full power to determine industrial questions were given to the Parliament itself, it would have to deal with many complicated problems in an atmosphere of political contention. It would be required, for example, to legislate with regard to hours of employment, the basic wage, and other vital industrial questions, the determination of which by the contending parties in the political arena would be most undesirable. Further, the Parliament wonld have to spend almost the whole of its time in dealing with industrial questions. Let me give honorable senators an analogy. Parliament itself does not deal with civil disputes. It establishes judicial and magisterial authorities to do so. That is the principle underlying this bill. Its purpose is to bring industrial questions within the region of law just as, for many centuries, in British communities civil disputes have been brought within the region of the law for settlement. Ho one would contend that disputants in civil cases should thrash out the relative merits of their claims before Parliament, and that Parliament itself should decide between them. Neither do we lay down fundamental principles affecting those disputes, except in the framing of legislation under which we establish, in respect of all citizens, certain rights. In the case of a dispute between one citizen and another,we have an established authority to which they may appeal, and which determines the rights of all citizens under the law.


Senator Sir Henry Barwell - But in this case the Government is going further.


Senator PEARCE - And so with the ordinary civil courts. What is the whole system of British common law but legislation by judges - by established authorities?


Senator DRAKE-BROCKMAN (WESTERN AUSTRALIA) -Brookman. - The whole system of British common law is in effect legislation by judges.


Senator PEARCE - Exactly. British common law establishes principles upon which there has been no legislation whatsoever. It imatters not from what angle we view this subject, the' principle is the same.


Senator Barnes - In the event of this measure being passed, would it be competent for Parliament to instruct the authority to whom it delegated this power to determine, for instance, that a working week should not exceed 44 hours?


Senator PEARCE - Certainly, in the terms and conditions under which the authority was constituted; but it would be extremely foolish to do so. The objective of all legislation of this sort should not be, and I contendis not, political, but social and economic. It is deemed inadvisable to deal in a political atmosphere with questions so vital to Australia. How could Parliament determine whether men in this country should adopt 48 hours. 44 hours, or 40 hours as a standard working week without the fullest possible investigation and examination of the whole of the economic and industrial results that would flow from such a determination? Does any one suggest that Parliament is competent to settle such questions as the basic wage, child endowment, &c, without a thorough investigation of their economic effect upon the community? The question of the hours of labour was once argued before Mr. Justice Higgins in the Arbitration Court for twenty days. The Court heard a tremendous amount of evidence from representatives of the workers and the employers, who had obviously spent many months in its preparation. The case was properly placed before that tribunal, but owing to a decision that such an issue could only be dealt with by three judges, the whole of the proceedings were abortive. That shows how ineffective the parliamentary machinery would be for the just settlement of such issues.


Senator Lynch - Was that a High Court decision?


Senator PEARCE -No, it was a decision of the Government, which decision was confirmed by act of Parliament. To enable the presentation of such data, an amendment is proposed giving power to the Attorney-General to intervene in a case in which the question of hours is being considered. There are two contending parties - employers and employees - but there is a third party that has to be considered, and that is the general public.


Senator Barnes - Is it not the duty of the court to look after the interests of the general public?


Senator PEARCE - The court's duty is to hear the evidence presented to it, not to prepare or present evidence.


Senator McLachlan - Or to become partisan.


Senator PEARCE - Quite so. It is essential, therefore, that if the whole matter is to be considered, in its economic aspect - and every decision has an important effect upon the economic life of the community - not only the cases of the employers and employees, but the whole of the data as to the effect of any proposed alteration, should be put before the court, and the Attorney-General should have the power to intervene to present such data.


Senator Needham - In regard to> a question of hours?


Senator PEARCE - Hours or wages. That is provided for,. not in this bill, but in one shortly to be introduced. One weakness in the present position is that, after the fullest investigation and hearing, the court has no power to give full effect to its decisions ; in other words, the court can only give a judgment affecting the particular dispute before it. Yet that decision may have an important bearing upon a number of other industries that are affected by the particular industry in which the dispute has arisen. One has only to think of the shipping or coal industries to realize that. The proposed amendment of the Constitution will allow that power to be given to the court. In addition it is necessary, in order to insure industrial peace, that there should be complementary power regarding trusts and combines. If a great trust or combine is acting directly in restraint of trade, or an association of employers or employees is taking action that is detrimental to tie whole community, some authority must have legislative and administrative power to intervene. There is no objection to combinations that are functioning reasonably, but society must protect itself against combinations which obtain a stranglehold upon the community, and proceed to exploit it for their own benefit. There is need, also, for statutory power to deal with the trade unions and associations of employers. Trade unionism has gradually developed into one of the most powerful forces in the community; but, for some reason, possibly the opposition and dislike of many reactionary employers, it has never received complete legislative recognition. As I pointed out a short time ago, it is interesting te, look back over British history, and to compare the treatment meted out to those two great organizations - the trade unions and friendly societies. Both, sprang from the working classes, and might almost be said to have had a common origin. Every student of history knows that both those great organizations have- conferred important benefits on, not only the working classes, but society at large. Nevertheless we find that, in their early stages, each was declared to be an illegal association, and its meetings had to be held in secret. To that fact may be attributed the use of the password and the grip that obtains in many friendly societies, even to the pre, sent day; they are a relic of the days when these were forbidden- organizations and had to. meet in secret.. When society bacame more enlightened, and recognized that both were benefiting the community, pressure of public opinion compelled their recognition by law.. As time went on, that recognition, in the case of the friendly societies, became full and " complete, but, in the case of the trade unions, it was always limited. To the friendly societies, largely, I think, because of the class interests of the employing seetion of the community that then held control of the British Parliament, full recognition and protection were afforded; but the only recognition that waa given to the trade unions was the mere legal right to exist. It was admitted that the friendly societies were beneficent, institutions, and, therefore, it was decided, not only to recognize them by law, but also to protect their members. It was decided to see that they were established on a proper financial basis, that their funds were properly used, and that their rules were such as to secure justice to all their members. Thus the Friendly Societies Act of every British community takes power to the community, through its Parliament, to regulate and control the use of the funds of those bodies, requiring proper actuarial investigation of their accounts and a proper system of bookkeeping. In every British community to-day there is a Registrar of Friendly Societies, whose duty it is to keep, a close watch aud check on these organizations. As a member of one of those- societies, I have known a. registrar to call upon a certain society to increase the amount of the contributions from its members, because he found on investigation that its financial condition was actuarially unsound. He found that whereas it purported to give certain benefits to its members, the contributions were too small to enable those benefits to be conferred. In many ways the community, through its Parliament, vf has clothed these societies with protective powers that are essential to the interests of their members. Trade unions, however, have simply been made legal in the eyes of the law. Why should there be that differentiation? If we grant that trade unions are beneficent bodies, is there any reason why we should treat them differently from friendly societies in the matter of seeing that the funds contributed by their members are used for the purposes for which they are given ; that thora is a proper audit of their accounts, and that they are financially and actuarially sound.


Senator Findley - -Whoare the best judges of that?


Senator PEARCE - The community.


Senator Findley - The members of the organizations themselves are the best judges.


Senator PEARCE - It was not the members of the friendly societies that passed the laws to which I have referred, but the genera] community through its legislature, in order that they should be conducted on proper lines. Coming to the test as to whether this would be in any way detrimental to the trade unions, I ask honorable senators if there is any friendly society to-day that would advocate the repeal of the laws that regulate those societies. Of course not. It is generally recognized that they are calculated to safeguard the interests of the members.


Senator McHugh - Would this proposal apply to the Employers' Federation as well?


Senator PEARCE - To both employers and employees.


Senator McHugh - Would there be an audit of the books of the Employers' Federation showing the source from which it obtained its political funds ?


Senator PEARCE - The same set of laws will apply both to employers and employees. The amendment in paragraph a of clause 2 of the bill proposes to repeal the existing power contained in paragraph xx. of section 51 of the Constitution - " Foreign corporations and trading or financial, corporations formed within the limits of the Commonwealth." Originally this provision was believed to confer full power to make a company law for the whole of Australia, but the High Court judges have held otherwise. The readings of the judges are long and complicated. Honorable senators will find them in the judgment of the High Court in the case of Huddart Parker and Company Proprietary Limited v. Moorehead (C.L.E., vol. VIII., p. 3307.) Briefly, the interpretation of the decision is that the ordinary provisions of company law, as contained in the companies acts of the various States, were beyond the powers of enactment of the Commonwealth Parliament.


Senator Thompson - There might be a different decision to-day.


Senator PEARCE - There might be; but, as things are, unless the Constitution is altered, there can be no uniform company law for Australia. A uniform company law is much needed, not only to facilitate trade and commerce generally, but also to protect the public. A uniform Bankruptcy Act has been passed for Australia; the idea of a uniform company law had to be abandoned in view of the interpretation of the provisions relating to companies in the Constitution. The proposed alteration was one of the subjects of a previous referendum bill, but the voting on the question was complicated by other issues. The wording of the paragraphs is clear, and it will be seen that the exceptions are of such a character as to exclude any unnecessary encroachments on State governmental and municipal functions and corporations formed for religious, charitable, scientific, or artistic purposes. I feel sure that the Senate will consider this bill quite impartially, undeterred by the loose statements that are being made outside Parliament to the effect that it is a step in the direction of unification, that it is a nullification of the power of the States. We must take things as we find them. Any one who studies industrial conditions in Australia cannot but be intensely dissatisfied with them. There is need for great improvement. I am one of those who have always believed in arbitration. Arbitration brings industrial disputes within the region of the law; they are dealt with as civil disputes are dealt with. The fact that there is reserved to the individual to-day power to have recourse to the civil courts to settle a dispute with another individual does not deter some people from endeavouring to trench on the civil rights of others. There are- some people who, not being prepared to accept the judgment of the court, try to take the law into their own hands. Because, notwithstanding the arbitration system, there are still strikes and lockouts, some people condemn the arbitration system; but they have no more right to condemn that system because some people will not conform to arbitration laws than they have to condemn the system by which civil disputes are settled, merely because a few people will try to take the law into their own hands.


Senator Sir Henry Barwell - Awards cannot be enforced against organized labour.


Senator PEARCE - Oh, yes they can! I do not subscribe to the view held by the honorable senator. I admit that under our limited powers to-day we cannot do so. Those powers are too circumscribed.


Senator Sir Henry Barwell - This bill will not help.


Senator PEARCE - It will; it will help tremendously. Under the powers to be conferred by this bill it will be possible to enforce awards. It is said that employers cannot be compelled to keep their factories open, nor can men be made to go to work. Neither can the ordinary civilian who will not obey the law be made to obey it; but you can send him to jail, or fine him.


Senator Sir Henry Barwell - We cannot send a thousand men to gaol.


Senator PEARCE - A man who is released from jail may immediately again break the law, the breach of which caused him to be imprisoned; but there is power to punish those who break the law. If we had full industrial powers, it would be possible to punish either the employer or employee who broke the industrial laws."


Senator Lynch - A man cannot be compelled to run his business at a loss.


Senator PEARCE - No. But those who break the law, can be punished, whether they be employers or employees. I suggest that one way to deal with such cases is by requiring a bond to be entered into for the observance of the law. Then, if the law were not complied with, the bond could be estreated. No one can say that, because our industrial laws have not in the past achieved what we have desired, it is not possible for them to do so in the future.


Senator Kingsmill - Does the Minister suggest a collective or an individual bond?


Senator PEARCE - In the case of large aggregations of employers or employees it could be a collective bond.


Senator Elliott - Does the Government contemplate compelling a man to carry on a business that does not pay.


Senator PEARCE - How could we? In such circumstances a man would simply file his schedule in the insolvency court. I believe now, as I have always believed, that an overwhelming majority of both employers and employees desire industrial peace. I have never seen a time - even during periods of industrial turmoil - when there was not a majority on either side who desired to do the fair thing. Unfortunately, there are always a number of extremists on both sides.


Senator H Hays - How is it proposed to get over that difficulty?


Senator PEARCE - If the Constitution is amended as we desire, we shall have the power to pass laws to regulate the formation of associations of employers and unions of employees. We can ensure to the majority the opportunity to express their will in relation to these disputes. In most cases that opportunity is not given to-day.


Senator Barnes - Has the Minister in mind the taking of a ballot to determine whether a strike should take place?


Senator PEARCE - Yes. I speak for myself individually.


Senator Barnes - In the case of the Australian Workers' Union it would take six months to conduct a ballot. How would you manage it in that case ?


Senator PEARCE - There are means of accomplishing it. The Australian Workers' Union, like other organizations, can conduct a ballot when it desires to do so. It is not past human ingenuity to do what the Australian Workers' Union can do when it suits that organization. I believe that the present officers of the Australian Workers' Union desire industrial peace. The Australian Workers' Union has a distinguished record in respect of obedience to arbitration awards. I take this opportunity of saying that publicly, despite what some people say to the contrary.


Senator Barnes - It was the fault of the court that we had to fight at all.


Senator PEARCE - Parliament cannot change human nature; but if the people will give us a Constitution under which we can make efficient industrial laws - and it is competent for us to do that - I am content to leave the rest to the common sense and good will of the great majority of the people of Australia.

I believe that both employers and employees have sufficient common sense to realize that the continued interruptions which have occurred in the industrial field are of no benefit to any one. All that both sides need is justice. They have no right to ask for more than that. Throughout the British Empire it is recognized that our judicial tribunals are fair and just. Both sides to disputes have many times paid their tribute to the justice of our courts. If honorable senators want an illustration of the benefit of having a judiciary appointed, preferably for life, as compared with elective tribunals, whether parliamentary or otherwise - they will find it in the United States of America. In respect of its interpretations of the American Constitution, and its judicial decisions generally, the High Court of the United States of America is the equal in prestige and standing of any other court in the world, but there are courts in America the judges of which are elected by the people, and they are the subject of contempt even in the States in which they are elected. They are, in some cases, venal, they are capable of being swayed by public opinion or passion, and in many instances they are notoriously corrupt. This illustration alone is, in my judgment, a strong argument why the deter mination of those industrial matters which lie at the base of our national fabric should be left to a judicial tribunal that is not swayed by passing gusts of public opinion, but comes to its decisions on the merits of the evidence before it. I hope the Senate will approach the consideration of this bill in that spirit, and that the measure will be passed by the Senate and accepted by the people, so that this Parliament may be clothed with the power that will enable it to deal with these very important questions.

Debate (on motion by Senator Needham) adjourned.







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