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Thursday, 22 May 1930

Debate resumed from 21st May (vide page 1945) on motion by Senator Daly -

That the bill be now read a second time.

Senator SirGEOEGE PEARCE (Western Australia) [3.41]. - After listening to the introductory speech of the Leader of the Senate (Senator Daly) on this bill and another similar measure to amend the Constitution I could not help wondering why the Government had submitted these proposals. Indulging in some musings, I endeavoured to put myself in the place of the Leader of the Government, metaphorically speaking, of course, to ascertain the underlying motive for the presentation of these amending constitution bills. Ministers and their supporters are in this position: During the election campaign last year they made a number of the wildest possible promises, never dreaming that they would be returned with a majority and called upon to honour them. Now that they are in power they find these promises hanging over their heads and at the same time they are faced with all the administrative difficulties incidental to a serious business and industrial depression which is responsible for a volume of unemployment unexampled in the history of Australia during the last 25 years. One of their election pledge's was that, if returned, they would amend the arbitration laws. They objected to the proposal of the Bruce-Page administration to vacate the field of arbitration and posing as the champions of federal arbitration, declared that, if they were returned, they would introduce legislation to free it from legal entanglements and make the court easier of access to all industrial organizations. But like many other promises which Ministers and their supporters made, they find this impossible of fulfilment. They realize possibly that they would not be doing very much even if they did rid arbitration of its legal entanglements, and hedged about as they are with all the difficulties and embarrassment arising out of their election engagements they say: "Let us have a referendum to divert the minds of the people from our election promises and give them something to talk about. They will then forget our pledges relating to the coal trouble, unemployment and arbitration. They will ignore all these things in the excitement and fight over a referendum. Hang the cost. Let us distract the attention of the people from the real issues confronting them."

I agree with Senator Lawson, who said when speaking to the motion for the second reading of the bill which seeks to confer upon the Parliament power to amend the Constitution, that this is the worst possible time for an appeal to the people. Their thoughts are at the moment directed to the removal of the business and industrial depression which has brought this country to its present position, and they are wondering how it will be possible to overcome the difficulties confronting them. This referendum will do nothing to relieve the situation. Even if this amendment is endorsed by the people it will be impossible to pass necessary legislation within twelve or eighteen months, and no one can honestly say that it will provide employment for one additional man in Australia; or in anyway help to lift the cloud of depression that has settled over the Commonwealth in the last year or two. Actually it will have as much effect upon the present situation of the Commonwealth as a mustard plaster would have upon a wooden leg. But since the Government has brought forward these proposals, the Senate must debate them.

This bill differs materially from the Constitution Alteration (Industry and Commerce) Bill submitted by the Bruce-Page Administration in 1926. I purpose placing on record in. Hansard the provisions of the 1926 referdum proposal so that there may be no misunderstanding or misrepresentation concerning it and the measure now before the Senate. The bill introduced in 1926 was passed by both Houses with the necessary statutory majority, but failed to receive the endorsement of the people. Its substantive provisions were -

Section 51 of the Constitution is altered -

(b)   by omitting from paragraph (xxxv.) the words " extending beyond the limits of any one State"; and

(c)   by inserting after paragraph (xxxix. ) the following paragraphs : - " (xl.) 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: (xli.) Investing State authorities with any powers which the Parliament, by virtue of paragraph (xxxv.) or paragraph (xl. ) of this section, has vested or has power to vest in any authority established by the Commonwealth : (xlii.) Trusts and combinations (whether composed of individuals or corporations or both) in restraint of trade, trade unions, and associations of employers or of employees for industrial purposes, including the formation, regulation, control and dissolution thereof.".

Had this proposal been adopted by the people, the Commonwealth Parliament would not have been authorized to legislate in regard to hours of labour, wages, or industrial matters, but it would have had power to establish an industrial authority to deal with all these things. This is the vital and essential difference between the proposals of 1926 and the bill we are now considering. This amendment, if adopted by the people, will turn Parliament into an industrial battlefield.


Senator Daly - Not necessarily.


Senator Sir GEORGE PEARCE - It will make this Parliament the arena in which questions of hours of work, wages, and other matters incidentalto an industrial dispute will be determined. It will make every federal election campaign an auction room in which the parties will bid against each other on all questions affecting the basic wage, hours of labour, and so on.


Senator Rae - There is nothing more important to the people than the industrial conditions under which they are working.


Senator Sir GEORGE PEARCE - I agree that it is a most important matter, but it is not one upon which a federal election should be fought. All such matters should be referred to arbitral tribunals and decided on their merits and on the ability of the country to do what it is asked to do. Of all bodies Parliament is the least qualified to deal satisfactorily with complex industrial problems. But there is another fundamental difference between the present proposals and those submitted by the Bruce-Page Administration in 1926. The preceding Government had in view the elimination of overlapping awards, which have been responsible for so much confusion and chaos in the industrial life of this country. Had its proposals been adopted it would have been possible to legislate effectively to prevent this overlapping ; but, as I have said, the people, by a substantial majority, withheld their endorsement. The Government accepted the verdict, and in 1929 brought forward legislative proposals to meet the evil of overlapping in another way. It introduced a bill, the purport of which was to vacate the field of arbitration, retaining control only over the maritime and waterside industries, which are truly federal in character. It proposed to allow State Governments to regulate all other branches of industry. If effect had been given to them again there would have been a complete over-coming of the overlapping and confusion that arise when two bodies are legislating and dealing with the same subject in the same arena. The late Government's proposal was not carried by Parliament, and the Government was unable to obtain the necessary majority in the country at the subsequent election to give effect to it.

In introducing this bill, Senator Daly, I am pleased to say, drew attention to the fact that the Australian Labour party and the Australian party were allied on this issue. Although we have always known that the two parties are allied, it is very satisfactory to get that declaration. We know now where the Australian party is. I am reminded of the description I read a little while ago of the pilot fish. It is said that sharks that infest our coast - I hope honorable senators opposite will not take exception to the simile - are accompanied by pilot fish. As the latter are not able to keep pace with the sharks they attach themselves to the bodies of the sharks, and when the latter secure a victim, the pilot fish are allowed to pick up the scraps. Apparently the Australian party is to play the part of pilot fish to the Australian Labour party, and for the support it gives will be allowed to pick up any of the scraps that fall from the table of the larger party.

A peculiarity of the present Government's proposal is that it allows for the continuance of the dual system. Senator Daly said that our powers under the Constitution are not wide enough to remove the present evil, and that the Government is submitting its present proposal for the alteration of the Constitution with a view to the removal of that evil. Are not the evils in our industrial system entirely due to the fact that we have two legislative bodies operating in the same field ?


Senator Daly - I admit it.


Senator Sir GEORGE PEARCE - The evil isthat industry suffers because of the over-lapping, confusion, and chaos that arise from the fact that the Commonwealth and the State Parliaments are legislating in the same field. The pre sent proposal for the alteration of the Constitution will not remove that evil; on the contrary, it will perpetuate it. Senator Daly said, "Both sides admit the confusion and chaos existing ", and he quoted the report of the Royal Commission on the Constitution to the effect that the Commonwealth Parliament cannot legislate to fix wages and hours. But is it desirable that the Commonwealth Parliament should have power to fix wages and hours?


Senator Rae - Yes.

Senator Sir GEORGEPEARCE.The honorable senator is welcome to his opinion, but in my judgment it is the last thing to be desired on behalf of this Parliament. A national parliament should be concerned with national matters. Under this proposal it will be not only possible, but almost certain, that every tin-pot industrial dispute throughout the Commonwealth will be dragged on to the floor of one or other of the chambers in this Parliament. Senator Daly said that the effect of carrying the Government's proposal would be to make the system of arbitration more effective to remove the evils that exist. My reply is that the Government's proposal will not have the effect of removing the dual system, and must tend to perpetuate the confusion and chaos that now exist. According to Senator Daly it will enable the Commonwealth to enter into the field now covered by the State.Will that not mean an extension or perpetuation of the existing evils? The proposal is not to remove the State from the arena, hut for the Commonwealth to further enter upon the arena. Senator Daly spoke of the service of a log by the parties as creating the dispute. If the Government's proposal is carried will not the parties still have the choice of serving the log for hearing before either a State or the Federal tribunal? That being so, the decision will rest with the union of employers or employees. It will have the privilege of serving the log and deciding the tribunal to determine it.


Senator Rae - The federal law will override the State law.

Senator Sir GEORGEPEARCE.The federal law will operate only when the union desires it to operate. If it desires to go to a State court, it will have the right to do so. It is but a maintenance, of the fundamental' principle to which the present Government committed itself absolutely at the last election - that the unions should have the choice of the State or the Federal Court; and the Government and its supporters dare not say to the unions, "We shall confine you to the Federal Court". Senator Daly said " What the Government is endeavouring to bring about is uniformity". This bill will not provide means for doing so because, as I have already pointed out, the two parties will still have Federal and State courts open to them and can make their choice. Senator Daly quoted from the report of the Industrial Peace Conference held in Melbourne in 1928, as to the effect of one State competing with another in the matter of industrial and social legislation... But that is exactly what the Government is now proposing to do. It proposes that the Federal Parliament shall; h& an. even greater competitor than it has been in- the past. Its proposal -.is not to get rid of the competition between -State and State in this industrial field, not to have six competitors with partial additional competition from the Commonwealth, but to have seven competitors in the limited field of arbitration. It is also proposed that the Commonwealth Parliament should deal with all phases of industrial relations, not merely laws relating to industrial disputes, but also factory legislation, duplicating what is already so well done in all .the States, that it should invade the State arena by passing Workers Compensation legislation and such like, running the whole gamut of industrial legislation now on the statutebooks of the States. Senator Daly quoted Mr. Justice Higgins to the effect that there should not be a choice of two tribunals. I wonder that he should have done so, because this amendment, if carried, will make the choice of two tribunals a permanent feature of our Constitution. The proposal is not to have exclusive power in industrial matters, but to share a dual power between the Commonwealth and the States. There is nothing to prevent an alteration of the Constitution to give exclusive industrial power to the .Commonwealth, but the present proposal does not go that far. Senator Daly said that the Government's proposal "is the only way to co-ordinate the dual system." That blessed word " co-ordination !" What does it mean? And in any case, why the need for co-ordination? Why not let each State be the" judge of its own industrial conditions? Why teach our grandmothers to suck eggs? Adult franchise operates in the States and the people elect the popular houses in which industrial legislation is initiated. Are not the people of the States the best judges of the kind of arbitration they want? We are not, by this proposed alteration, depriving them of the power to legislate, but apparently we are to say to them : " We propose to co-ordinate your legislation with something we intend to do." My reply to the Government is, " Get yourselves out of the way or get the States out of the way, and there will be no need for co-ordination. Make up your minds to have one authority, Federal or State, and then there will be no need for coordination." All this talk about co-ordination is idle. As aimed at in this bill it is mere meddlesome interference. I go sofar as to say that it is vicious interference; That is the cause of the overlapping, confusion and chaos we have had ever since the Commonwealth has entered the field. This bill will not cure it. On the contrary, it will perpetuate it.

It is the wrong time to bring forward a proposal of this sort. I agree with Senator Lawson that this country cannot afford to spend £100,000 on a wrangle over a matter that will not effect a cure or take us one step forward, but on the contrary, will have a disturbing effect on the country. Why has it been brought forward? I have been able to obtain a report of the proceedings of the Australasian Council of Trade Unions, held in Melbourne on 22nd February last, and I propose to read some very pertinent extracts from the report of its arbitration committee, to show the objective of those who are behind the Government in this matter. The committee reported as follows -

1.   Your committee, having carefully perused and considered all the suggestions submitted to Congress for the better carrying into effect of the conciliation and arbitration principle adopted by the Labour movement, are of the opinion that, under the limited constitutional powers at present possessed by the Commonwealth Parliament, a complete realization of our ideals in this direction is impracticable and impossible, and therefore strongly urge that the Commonwealth Ministry immediately submit a measure; for the alteration of the Australian Constitution. 2.Recognizing, however, that some time must necessarily elapse before this recommendation can be given effect to, and also the highly unsatisfactory nature of the present act and its administration, your committee recommends that, pending the acquirement by the Commonwealth Parliament of full and untrammelled legislative power, and to give speedy relief from the many disabilities at present existing, the federal Labour Government be requested to introduce legislation early in the forthcoming session, on the lines submitted herewith, which we believe can be made consistently with the powers of the present Constitution.

3.   The Prime Minister, Mr. Scullin, in his election speech promised that, if elected, the Labour party would propose amendments of the Commonwealth Conciliation and Arbitration Act. We quote the text of his promise -

The Arbitration Act to be revised to provide for a system of sound businesslike arbitration, free from the entangling legalisms of the law court - a system framed on the lines of the Industrial Peace Act, to be handled by men of industrial experience, to ensure equitable, expeditious, and less costly methods of dealing with industrial matters.

4.   Your committee has carefully considered the present system with the object of recommending such alterations as would most effectively assist the Government to perform its promise.

A.   S. Drakeford.

W.   H. Seale.

A.   S. evernden. (Signed) H. Carter.

A.   E. Turkey.

H.   C. Gibson.

E.   C. Magrath.

I quote that report because I wish to put on record not only what was recommended, but also the names of those who were responsible for it.

The next point is as to how the Labour party will exercise the power which the Commonwealth Parliament will have if this bill is adopted by Parliament and accepted by the people. Again, I turn to the report of the congress of the Australasian Council of Trades Unions. Having prompted the introduction of the amendment of the Constitution, it has also prompted the Government as to what it should do if it obtains the necessary power. I quote from the report of the proceedings of the congress as follows -

16.   Prescribed Conditions.- In view of comparatively recent decisions of the High Court we understand that the arbitral power may be given conditionally that, if exercised, it must be exercised in conformity with the provisions made by Parliament. We recommend that the following conditions, among others, should be laid down by the act: -

(a)   No award to prescribe hours exceeding a weekly maximum of 44 hours.

(b)   No award to prescribe a basic wage which (subject to improvement on principles later to be considered) will not maintain at least the basic wage standard obtaining at 1928

That means to say that no fall in the cost of living is to bring down the basic wage. The report goes on - (This list is not intended to be exclusive of other conditions).

17.   Preference of employment. -

This recently found an echo in some of the administrative acts of the Government. It reads -

We suggest that the act itself should direct an employer to give absolute preference to members of that registered organization which is covered by the award. The position of nonregistered unions we propose to safeguard by making it a defence (a) that there is no award and (b) that the persons employed are members of a body recognized by the appropriate Trades and Labour Council as a bonafide trade union.

18.   Strikes and Lookouts, and Penalties. -We propose to abolish the penalties upon strikes and lockouts, retaining for the court the power to intervene in any dispute with a view to its settlement by conciliation and arbitration.

19.   We propose also to repeal all clauses which make awards enforcible by prosecution.

This is rather an interesting resolution. I suppose that it is to cut both ways, and that if an employer pays a man less than the award rate, he shall not be subject to prosecution. That clearly is the meaning of the resolution as it reads, but I venture to suggest that it was not so intended. These people had their eyes so glued on their own side of the case that they never looked at the other side -

20.   Awards should be enforcible by civil proceedings and we suggest that sums should be fixed by law, or by the award, as damages for breaches which should be recovered in full by the organization as the representative of the party affected.

That seems rather contradictory; it seems as if they woke up to the fact that whilst they wanted to let the union out they must not let the employer escape. The next resolution is a very interesting one -

21.   Industrial Magistrates. -

I recollect having heard that when Mr. Lang was able to carry one of his arbitration bills-


Senator Dunn - He is a good man.


Senator Sir GEORGE PEARCE - I shall quote one of his good actions. I believe that he almost cleared the trades hall of union secretaries by appointing them chairmen of conciliation boards, and paying them good salaries, so giving him the opportunity to promote other officials who were looking for positions. These vacancies having been filled, further opportunities for employment are to be given by the appointment of industrial magistrates -

We recommend that in the capitals and other large centres there should be appointed Industrial Magistrates to hear claims for wages and damages. These should have exclusive jurisdiction, subject to appeal to the President only. The Magistrate should have the right to refer to the President for his decision on difficult points of interpretation. Tn small centres State Magistrates should be given the same jurisdiction on the same terms.

Honorable senators who strongly advocate the payment of certain bounties should consider the next resolution -

26.   Bounty and Preference.- We recommend that it shall be a condition of payment of any bounty on production or export that the payee proves to the Commissioner that in respect of all his employees he gives preference to unionists and complies with the award.

I hope that the farmers of Australia will read that. It indicates that, in connexion with the compulsory wheat pool and the guarantee, which is a form of bounty, farmers must give preference to unionists as well as paying award rates -

27.   Contracts.- We recommend that no person shall receive a Commonwealth Government contract unless -

(a)   he proves to the Commissioner that in respect of all his employees he is giving preference and complying with the award.

(b)   he gives a bond to the Commissioner that he himself and his subcontractors will, in respect of all employees, give preference and comply with the award.

28.   We recommend that it shall be a condition of an increase in customs protection or a reduction of excise duty that the employers to be benefited shall give bonds to the Commissioner binding them, in respect of all employees, to give preference and comply with the award.

I hope that the manufacturer, those for whom the Government claims to be doing so much at present, will take notice of the next resolution - 29.Basis of Interstate Trading. - We recommend that the following should be done under the Trade and Commerce Powers (section 51):-

(a)   no person should be employed in overseas or interstate trade and commerce except at award conditions.

(b)   no person shall export from one State to another, goods, which, owing to the industrial conditions under which they are produced, unfairly compete with the product of the State into which they arc sent.

30.   We suggest that compliance with the award and preference provisions shall be a defence, and that the Commissioner's certificate shall be prima facie evidence that there is or is not such compliance.

33.   The definition of industrial matters to be amended in accordance with the suggestion made by the High Court in the clothing trades case, the following being suggested: -

(a)   In the definition of "industrial matters," section 4, line 13, after " employees," insert - " and any claim or demand by any organization or by the members thereof that persons employed' in the industry concerned, whether members or not members of such organization, shall be entitled to the same pay, wages, reward, hours, privileges and rights."

The Government seems to have slipped a little bit there in regard to public servants. I trust that the attention of the Australasian Council of Trade Unions will be drawn to the fact that the Government has departed from that principle in respect of the regulation that it has just repealed -

(b)   The foregoing sub-section to be deemed to have commenced upon the date of the commencement of the Commonwealth Conciliation and Arbitration Act, 1920.

Not only are these things to be done, but they are to be retrospective to 1920. I take it that every employer who has not done these things will, under the beneficent reign of the present Government, when it obtains the full constitutional power that it seeks, be dealt with as these people would desire -

34.   Union officials to have, under reasonable restrictions, right of entry of places of employment for the purpose of inspection.

That is signed by the seven gentlemen who signed the other resolution that I have read. The significant point about the whole thing is that a report appeared in the press purporting to be a record of the congress, but these resolutions were not published. That may indicate that they wanted the Government to consider the resolutions before they were given publicity. Having obtained a copy I thought it desirable to give the resolutions publicity in this debate, so that the public would know what the Government is aiming at. If the public is lured into voting for this amendment of the Constitution, it cannot grumble when these things are given effect to by the Government, at the direction of their masters.

It is also instructive to consider what will be the administration of the law when the Government has power to make any law that it likes in respect to arbitration. The party that the Government, represents is, to say the least of it, suspect in its administration of arbitration awards, because of the attitude that it adopted when in opposition. In some cases it openly aided and abetted rebellion against the law, while in other cases it condoned infringements by its silence. I have here an extract from the Sydney Morning Herald of the 10th December last, which reads -







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