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Industrial Relations


INDUSTRIAL RELATIONS. This term is used to denote the relations of all those engaged in the production and distribution of goods and the rendering of services. It involves the methods by which the proceeds of these activities are divided between employers and workers or different classes of workers, and the settlement of the conditions under which work shall be carried on. The adjustment of the position of individuals in relation to those with whom they are associated in work is part of a wider adjustment in relation to the general community, and there is a close connection between political and industrial movements. In Great Britain the rapid development of the factory system during the Industrial Revolution and the concentration of the industrial population in towns, largely destroyed the personal bond between master and man who had worked together in the scattered and rural hand industry units. The rapidity of the change and the domination of employers caused an embitterment of relations which has greatly influenced the labour movement.

Joint stock enterprise, which developed after the Limited Liabil ity Act 1858, created a more complex situation than in the case of individual employers using their own capital, the employing section being divided into (a) investors of capital, (b) users of capital or management. The latter alone have relations with the wage-earners. The repeal of the Combination Laws 1824-25 gave workers the right to combine and to withhold labour by concerted action. Organization, hitherto confined to craftsmen, extended among other classes after a docks strike (1889) . From 191 o the growth of trade union organization was shown by national and other strikes, one object of which was to secure the recognition by employers of the right of the unions to make agreements for their members in the industries concerned. During the War com pulsory arbitration and State control of profits were instituted by the Munitions of War Acts. Results of the War were (1) increased trade union membership and political power ; (2) the improvement of the earnings of unskilled and semi-skilled workers owing to (a) uniform cost-of-living advances without changes in base rates, (b) increased organization, (c) employment on machine production; (3) increased employment of women. Varying eco nomic conditions in different industries since the War have further disturbed the pre-War wage position, when the rates of skilled and unskilled workers showed no great variation by industry. Such irregularity is a disturbing factor. Existing wages-rates were maintained for a short period after the War by the Wages (Tern porary Regulation) Act. Unrest caused the Government to call two national conferences of employers' and workers' organizations which led to extended Trade Board action and further legislation relating to unemployment. Arising from a dispute a royal com mission on coal mining was appointed and hours, which under an act of 1908 had been fixed at eight and one winding turn, were reduced to seven, being restored to eight by an act of 1926. In 1919 and 192o hours in industry generally were reduced to 48 or less, by agreement, without reduction of wages. Depression in industry from 1921 onwards caused considerable unrest owing to reductions in wages, and there was a substantial loss of trade union membership. Recurrent coal-mining disputes led, in 1925, to the appointment of a royal commission, the report of which was accepted by neither side.

A further stoppage in 1926 culminated in a general strike called by the trade union congress general council which, since the War, had steadily increased its authority as the central trade union co-ordinating body. This strike lasted ten days, the essential services being carried on by the Government. There has since been a movement for co-operation between employers and the unions in the solution of industrial difficulties, and few stoppages of work have occurred. Economic difficulties created by the War caused similar disturbances in other countries. While in Great Britain industrial conditions continue still to be settled by volun tary agreements between employers and workers, Governments have taken greater powers of intervention in other countries, e.g., in Russia, Italy, Spain and Germany.

Working conditions may be regulated by employers and workers themselves, by individual or collective bargaining. Whitley or joint industrial councils are a form of standing joint machinery for collective discussion within individual industries. There are also, as part of the voluntary arrangements within industry, con ciliation, arbitration or wages boards. The constant problem for the State is the harmonizing of the interests of employers and workers in industry with those of the community, and the con-. ditions under which industry may be carried on have been subject to intervention, in the interests of the workers as citizens, by legislation upon such matters as the establishment of minimum wages, the regulation of hours, insurance against unemployment and sickness, the protection of health and safety and the general welfare of workers while engaged in their work. (See TRADE BOARDS; HEALTH INSURANCE.) The adverse effect on the com munity of stoppages of work owing to differences between em ployers and workers has caused States to take action for the avoidance and settlement of disputes.

Collective Bargaining.

Individual bargaining and collective bargaining are terms used to describe the discussion that pre cedes the making of an agreement concerning working conditions. The former is the discussion between an employer and a single wage-earner and the latter is the discussion between an employer or group of employers and a group of workers with a view to a collective agreement as to working conditions covering all those represented in the discussion. Organization ensures stability to the agreements reached. Unless satisfactory conditions are settled, employers may refuse to give employment or may "lock out" employees and workers may withhold their services or "strike." Organization gives the workers the bargaining power which is lacking in an individual. It provides also a means of discussion of their desires and for the expert presentation of de mands by officials skilled in negotiation and freed from the fear of reprisal which is often present in the minds of employees. Fur ther, the workers in a particular establishment have the support of their fellows in other establishments and a union has resources for obtaining information outside the particular establishment or locality concerned. Collective agreements have effect beyond the membership of organizations both in establishments in which union members are employed and in others. In some cases, how ever, only union members may be employed, these being called "closed shops" as distinguished from "open shops" in which there is no such restriction. Action to compel non-members to become members of ten causes serious disputes. The agreed conditions are usually the "recognized" or "standard" conditions in any occupation in a district and under the "Fair Wages Resolution" of the House of Commons, Government contractors must observe these conditions.

There are often national agreements relating to procedure and general matters such as the length of the working hours, relation of piece-rates to time-rates, overtime and night-shift rates of pay ment, rules for the working of tools, general fluctuations of wages and sliding scales, holidays, apprentice questions, training and employment of workers. Detailed conditions as to wages are sometimes settled nationally but it is more usual for basic con ditions to be settled locally, the national organizations confining themselves to the settlement of general changes and to acting as the co-ordinating and appeal authority. Thus the conditions in industries which are carried on in many parts of the country, are adjusted both to local circumstances and to the required degree of uniformity. Wages-rates fixed by national bodies are often graded according to area. The existence of different types of unions with conflicting interests adds to the complexity of collec tive bargaining. The craft unions, for example, seek to obtain, as far as possible, similar conditions in each industry in which their members are employed. Where there are several unions having members in an industry there are sometimes federations of unions which act as a unit for negotiating purposes.

In some industries, e.g., iron and steel, collective agreements provide for sliding scales of wages based on the selling price of the product or, as in the tinplate industry, on the cost of the raw material, steel bars. In coal-mining, wages vary according to the proceeds of production, after costs have been deducted, de termined by accountants appointed by the two sides, the proceeds being divided between wages and management on an agreed basis. The Coal Mines (Minimum Wage) Act 1912 provides for the fixing of district minimum subsistence-wages (by the decision, if necessary, of the independent chairman) by district boards. Other industries have sliding scales by which wages are regulated accord ing to a cost-of-living index figure. The number of these is now greatly reduced and the principle of payment according to the estimated capacity of the industry has been re-adopted.

The enormous number of questions which constantly arise is shown by the complexity and length of collective agreements. The constant association, however, of representative persons of experi ence, responsibility and negotiating ability on both sides increases the chance of reaching amicable settlement of the most difficult new problems, and this, together with the adaptability and free dom from rigidity of the system, causes it to be recognized as the main means by which constructive progress towards a merging of the interests of all parties in industry can be made. A new development in this direction is the appointment of joint com mittees of both sides to examine all the costs and circumstances of an industry with a view to greater efficiency.

Collective bargaining demands for its efficient operation the possession by representatives of adequate authority to bind their members. While some trade union executives have considerable authority, it is usually necessary to take the opinion of the mem bers either by a ballot or through a delegate conference, before agreements are made. It is difficult on some occasions, when dis cussions have been long and intricate, to convey all the reasons for a particular policy to thousands of workers who have not had the advantage of being present at those discussions. At the same time, the effectiveness of a voluntary agreement depends upon its terms being in general accord with the views of those who are bound by it, and experience has shown that statutory and corn pulsory measures are practically unenforceable unless this con dition is satisfied. In practice the recommendations of leaders carry very great weight.

Collective agreements have a stabilizing effect as, when there is a settled procedure for dealing with questions which may arise, and when the basic conditions are clearly defined and the settle ment is for a definite period or subject to termination only after due notice, employers are enabled to enter into contracts with confidence. Where organization is not strong and unions are not able to compel unorganized employers to observe agreed con ditions, there is a demand for the statutory extension of agree ments, a policy which involves serious practical difficulties.

Collective agreements usually provide for a settled procedure for dealing with disputes in order to obviate stoppages of work. A common form of procedure is for the matter to be discussed first within the establishment. Failing settlement it may then be discussed between the local employers' association and representa tives of the union, and then by the national executives, work con tinuing in the meantime. In the shipbuilding industry in Great Britain provision is made for the appointment of an independent chairman, without the power to give a decision, when there is an irreconcilable difference of opinion on matters other than general wages fluctuations. The fact that a stoppage of work may be the result of failure to settle provides an incentive to agree ment. When action is taken in breach of an agreement, the or ganization whose members are at fault is expected to restore the status quo ante pending discussion of the matter in dispute. Stoppages without the sanction of an organization are called "unofficial." Conciliation, Arbitration and Wages Boards.—Concilia tion boards are a form of standing or ad hoc joint machinery in or ganized industries for the purpose of enabling agreement to be reached on matters which ordinary negotiations have failed to settle. They generally consist of an equal number of representa tives of employers' associations and of trade unions who are parties to the agreement establishing the board. The rules of some of the boards provide that, in the event of failure to secure agreement, an umpire, arbitrator or conciliator shall be appointed. Some boards limit themselves to wages questions, but conditions settled by general collective agreements are not within the power of boards to alter. The rules of boards usually require that there shall be no stoppage of work pending the consideration of the difference referred to them.

In the iron and steel trade differences not settled in a works are referred to a neutral committee chosen from employers and workers from other works. If this fails there is reference to a board of arbitration consisting of representatives of the two sides with a neutral chairman. In addition there are several standing district wages boards, composed of representatives of the two sides, with, in some cases, a neutral president who may give a binding decision.

In the coal-mining industry there are district conciliation boards composed of equal numbers of both sides. In some districts, if there is no settlement, the matter is referred to an independent chairman. Disputes under the Minimum Wage Act 1912 are re ferred to statutory joint district minimum wage boards having an independent chairman, who has the power to give a decision.

In the boot and shoe manufacturing industry under the agree ment of 1895 there are local boards of conciliation and arbitration. In case of failure to reach agreement an independent chairman is appointed with power to give a decision. There is also a national standing committee of three of each side to deal with all ques tions arising out of the national agreements. In national negotia tions there is a standing independent chairman who acts only as a conciliator.

In the bleaching, dyeing and finishing industry there are stand ing reference boards, constituted of four representatives of each side to which any dispute on other than a general question must be referred. If the board fails to settle, each side appoints an arbitrator who appoint an umpire. The decisions of the tribunal are final.

The railway services have a form of wages board on which the users of railways are represented. In default of agreement by negotiation, questions are referred to a central wages board con stituted of eight representatives of each side. Appeal may be made to a national wages board which is constituted of six repre sentatives of the companies, two representatives from each union and four representatives of users of railways (nominated by the trade union congress, co-operative union, federation of British industries and associated British chambers of commerce, re spectively) and an independent chairman. The board must report within 28 days from the date of reference of a matter to it, and it is agreed that there shall be no stoppage of work within that period. This agreement, which is terminable by 12 months' notice on either side, received statutory effect in Part IV. of the Rail ways Act 1921, but there are no penalties for its non-observance.

The electricity supply, tramways and wool textile joint in dustrial councils, not desiring arbitration, have adopted interest ing ad hoc procedure of a combined court of inquiry and con ciliation board character, and have referred important matters to boards consisting, in the first two cases, of representatives of the parties, employers' and workers' representatives from other in dustries and an independent chairman for investigation and rec ommendations. In the third case the parties themselves were not represented on the tribunal. The councils were free to accept or reject the recommendations but, in fact, they were accepted.

This procedure associated the parties in friendly circumstances in a thorough investigation of facts. Trade boards and agricultural wages committees in Great Britain, wages boards in Victoria and Tasmania, labour disputes committees in New Zealand and the minimum wage boards for home workers in Germany, France, Austria, Czechoslovakia and Norway are of a compulsory char acter, but they have the characteristic feature of being constituted mainly of representatives of the industries concerned.

Whitley or Joint Industrial Councils.

These are standing bodies which meet regularly for the purpose of discussing not only matters upon which there are differences but also all questions affecting their industry. A committee of employers' and workers' representatives, with the Right Hon. J. H. Whitley, M.P., as chair man, was appointed in 1916 to consider the means of securing a permanent improvement in industrial relations, and to recommend means for securing that those relations should be systematically reviewed by those concerned. The committee stated their opinion that an essential condition of securing a permanent improvement in the relations between employers and employed is that there should be adequate organization on the part of both, that a per manent improvement must be founded upon something other than a cash basis, and that workpeople should have a greater oppor tunity of participating in the discussion about, and adjusting of, those parts of industry by which they were most affected. They proposed, therefore, a tripartite organization of standing joint bodies, a national joint council for the whole industry, district joint councils to provide the means of discussion in the districts, and works committees. The constitution of district councils and works committees was to be defined by the national councils, and, throughout, the membership was to be determined by organiza tions. In the circumstances created by the War, in which cen tralization of the settlement of conditions became the rule, and the preoccupation of the leaders of organizations with national matters caused them to become somewhat detached from the rank and file in the shops, a shop stewards' movement commenced which threatened to disintegrate the whole system of collective bargaining. The committee's plan was intended to maintain a constant and live connection between the individual members in the individual establishments, and the machinery by which their conditions were settled, and to provide means by which both the interests of individuals and those of the whole industry would receive full consideration. This report gave a new impetus to the creation of constitutional machinery, and, assisted by the Ministry of Labour, joint industrial councils were established in many important industries and services including municipal and Government services. In addition, in industries in which organ ization was not sufficiently strong for the requirements of a Whitley council, interim industrial reconstruction committees were established. On the railways, station, depot and sectional councils were established to deal with the local application of national agreements, suggestions as to operating and working, and co-operation in obtaining increased business and efficiency. These received statutory recognition in the Railways Act 1921.

The councils are constituted of employers' and workers' repre sentatives alone, except in the case of the pottery council on which there are three independent members in an advisory capacity. The number on each side is not always equal but each side votes as an entity. Usually, unless there is agreement, no action is taken on the proposal under consideration.

The chairman is appointed from among the members and is often, alternately, an employers' and workers' representative or there may be joint chairmen acting in turn. Each council has a written constitution and practically all councils have appointed executive or general purposes committees, the number of council members often being large. Special committees may be appointed such as, in the case of the pottery council, which was the first to be established, the research, inventions and designs committee, wages and conditions committee, organization committee, statis tical and enquiries committee, apprenticeship committee. An important rule is that meetings shall be held regularly, usually not less than once a quarter.

Another important advantage of the Whitley council procedure is that all the organizations in an industry meet on one body and there is provided an opportunity of reconciling conflicting inter ests, and of emphasizing the community of interest of all con cerned. There is no settled practice as regards supervisory workers who are generally not represented. In the electricity supply industry, however, there is a separate joint body for the technical and supervisory staff. The national maritime board has panels for (1) masters, (2) navigating officers, (3) engineers, (4) sailors and firemen, (5) catering department. These sit separately to negotiate conditions, the board meeting as a whole when general questions arise. There are district panels which may be divided into sections. Craft unions receive ad hoc repre sentation when questions affecting their members are under dis cussion.

In consequence of the difficult economic conditions since the establishment of Whitley councils, the main subject of con sideration, contrary to the intentions of the Whitley committee, has been wages and working conditions, and this subject has been responsible for their breakdown in many cases before they had been in existence long enough to stand the strain. A contributory cause has been insufficient organization on both sides for the effective operation of council decisions. Further, councils some times attempted too much regulation by national decisions without adequate regard to local circumstances. Of the councils which survive (about 5o) many have found it necessary to delegate considerable freedom to district councils and to confine their action to co-ordination and to the settlement of differences.

Important work has been done by certain councils in research and in the collection of information and statistics. Other im portant matters considered have been unemployment, education, training and apprenticeship, safety, health, welfare and com mercial problems. The docks joint council has carried out important work for the decasualization of dock labour.

It is usual to require differences to be considered by councils before a stoppage of work occurs. Certain councils, e.g., pottery, boot and shoe, printing, do not exercise the function of wage settlement, this being left to agreements between the various or ganizations, but they act as the conciliating authority in the case of differences involving the possibility of a stoppage of work.

In other countries, there is no general application of the Whitley scheme except in Belgium where organization has grown since the War, and where there are national joint commissions with district and shop councils in many industries.

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