Labour policy—false and true

Before the creation of the Ministry of Labour in 1916, a general surveillance of labour conditions was maintained by the Chief Industrial Commissioner’s Department of the Board of Trade. The Ministry of Labour was formed in 1916 and absorbed the Chief Industrial Commissioner’s Department, and took over also from the Board of Trade the administration of Unemployment Insurance, Trade Boards and Labour Exchanges.

Government Departments Concerned

The Statutes under which the Ministry of Labour acts are: Conciliation Act, 1896, and Industrial Courts Act, 1919, in relation to conciliation in, and settlement of, labour disputes; Labour Exchanges Act, 1909—establishment and administration of Employment Exchanges; Unemployment Insurance Acts—insurance against unemployment; Trade Boards Acts, 1909-1918—fixing of statutory minimum rates of wages. In addition, the Ministry has a number of temporary duties such as the training of men disabled in the war and of youths whose apprenticeship was interrupted by war service. Certain other branches of labour legislation are administered by other Government Departments as shown below: (1) The Factories and Workshops Acts and allied legislation dealing with the hours of employment of women and young persons, the health and safety of the workers, dangerous and unhealthy trades, etc., and the Shops Acts, regulating the hours of employment of shop assistants, by the Home Office; (2) Employment so far as dependent on the Education Acts, by the Board of Education; (3) The Mines Acts, regulating the hours and conditions of employment of persons employed underground in coal mines, by the Board of Trade (Mines Department); (4) The Health Insurance Acts, dealing with the insurance of workpeople against sickness, and the Workmen’s Compensation Acts, dealing with compensation in the event of accidents arising out of, and in the course of, a workman’s employment, by the Ministry of Health.

Conciliation and Arbitration

The general machinery for settlement of industrial disputes in this country by conciliation and arbitration is composed of (1) conciliation machinery within the industry, (2) State machinery. The former consists of voluntary machinery comprising (i) Joint Industrial Councils—these being bodies upon which organized employers and workpeople are equally represented, set up in a number of industries in accordance with the recommendations of a Committee appointed in 1916 and presided over by the Right Hon. J. H. Whitley, M.P., now the Speaker of the House of Commons; (ii) permanent voluntary conciliation boards—an older form of joint body equally representative of employers and workpeople, but differing from the Joint Industrial Councils in that the conciliation boards tend to confine their activities mainly to questions of wages and working conditions while the Councils take into consideration all matters appertaining to the industry; (iii) recognized procedure arranged by organizations of employers and workpeople, not having a formally constituted conciliation board, providing for the discussion of differences as and when they arise.

Whitley Councils

Up to the end of 1921 Joint Industrial Councils had been established in 73 industries and services; 15 are at present in suspense; 1 has been absorbed by another Council. In addition, there are 10 active Interim Industrial Reconstruction Committees in trades to which the Whitley Scheme cannot as yet be fully applied owing to lack of organization. The Joint Industrial Councils and Reconstruction Committees at present functioning cover about 3¾ million workpeople. The Whitley Scheme contemplates the establishment, under the National Joint Industrial Councils, of District Councils—equally representative of employers and employed—and Works’ Committees, comprising management and men in equal numbers, and many such bodies have been formed. The activities of Joint Industrial Councils have been directed largely to the settlement of wages claims and the adjustment of working hours, two problems forced into special prominence by the abnormal economic conditions of the past few years. But other questions of working conditions, e.g. overtime payments, payments for holidays, walking-time allowances, out-working and subsistence allowances, fines for late arrivals have also been discussed by the Councils. Some have considered the problem of unemployment and arrangements for contracting out of the National Unemployment Insurance Scheme; others have prosecuted statistical investigations and research into their particular industries; all of them have considered questions of welfare in conjunction with the Home Office; certain of them have considered some commercial matters which affect their industries. The Government agreed to regard a Joint Industrial Council as the Standing Consultative Committee for its industry, and in a number of instances matters such as the foregoing have been discussed on the initiative of the Government. A few Joint Industrial Councils do not deal with wages questions, viz., building, boot and shoe, paper making, printing, and metallic bedsteads, as machinery for the settlement of wages existed in these trades before the Councils were established and it was thought by the industries better to continue such machinery. Certain industries in which organization of employers and employed is well developed, such as iron and steel, coal, cotton, engineering, shipbuilding, have not favoured the formation of a Joint Industrial Council. In them conciliation boards or some well-recognized machinery is in existence for the settlement of disputes.

These facts show the results which have attended the efforts of the Ministry of Labour, acting in tactful co-operation with the employers and employed in various industries, to set up Joint Industrial Councils.

Industry’s Own Conciliation Machinery

A unique feature of industrial evolution in the United Kingdom has been the establishment of permanent voluntary Conciliation Boards in very many industries, by agreement between employers and workpeople, unsupported by legal enactment, and depending solely for their success on the goodwill of the parties. Such Boards have existed for many years past. The Board established in the Nottingham glove and hosiery industry in 1860 is probably the first example of permanent machinery in any industry for the systematic treatment of labour disputes. There is a large number of Conciliation Boards in existence. The value of Conciliation Boards (as of Joint Industrial Councils) depends on their ability to prevent stoppages of work rather than on power to settle strikes or lock-outs which may have already taken place. In most cases, the rules of Conciliation Boards provide that no stoppage of work shall be permitted pending consideration of the difference by the Conciliation Board—in some cases, the rules state that, if a stoppage of work has occurred, the Board will refuse to discuss the matter until work has been resumed. The membership of a Board consists usually of equal numbers of representatives of the employers’ associations and of the Trade Unions, parties to the agreement establishing the Board. Accordingly, it not infrequently happens that the two sides of the Board are equally divided on the question brought before them, and the efficacy of a Board as an instrument for composing differences depends largely upon the steps normally adopted for resolving such a dead-lock. The rules of some Conciliation Boards contain a clause providing that, in the event of failure of the parties to effect a settlement of a dispute, application shall be made to the Ministry of Labour for the appointment of an umpire, arbitrator or conciliator. The changed conditions during the war, and the special war-time provisions which were necessary for dealing with disputes, had a remarkable effect upon the forms of conciliation machinery in this country, with the result that, in several important industries (e.g. building), the machinery is under revision.

An illustration of the working of Conciliation Boards is afforded by those in the iron and steel industries, which, although now under reconsideration in some districts, have been in existence for many years. In them the remuneration of the majority of the workpeople is regulated by sliding scales under which wages rise and fall in accordance with prescribed advances or reductions in the selling price of the manufactured article, this price being ascertained by accountants at specified intervals. Although the general adjustment of wages is the main object, other useful functions are exercised in these trades by the Boards. Amendments of the sliding scale, alterations in method of working, fixed rates for special classes of work, variation of prices according to difficulties in manufacture, and other similar questions have come under the consideration of the Boards. The Conciliation Boards in the manufactured iron and steel trades show a great similarity in constitution and procedure. They are composed, not of representatives of employers’ and workpeople’s associations, but of one representative of the workpeople and one of the employers from each of the works affiliated to the Board. Their methods of procedure are alike in affording opportunities for the parties to a dispute to arrive at a settlement by themselves, the services of the Board not being sought until other means have failed. Their rules stipulate that individual causes of complaint must first be discussed between the aggrieved workmen and the employer or his representative. In all cases, except that of the South Wales Iron and Steel Wages Board, the rules provide that, failing a settlement, the question shall then be discussed between the workman, accompanied by his Board representative, and the employer or his representative. In the case of some of the Boards, questions which have passed this stage without a settlement are referred to a Standing Committee, and it is only on the failure of this Committee to effect a settlement, that matters are brought before the Board itself.

For many years the boot and shoe industry has been covered by a series of Local Conciliation Boards existing in all the centres of the industry—questions affecting the industry as a whole being dealt with at National Joint Conferences presided over by an independent Chairman appointed by the Ministry of Labour. Each Local Board appoints a Committee of Inquiry consisting of two manufacturers and two workmen; in case of disagreement, each side of the Board elects an Arbitrator to whom is remitted for arbitration any dispute referred to the Board and which the Board is unable to settle. Should the two Arbitrators not agree the questions are referred to an Umpire appointed by themselves or by the Ministry of Labour. The rules of the Local Conciliation Boards provide that the procedure to be followed in cases of dispute between an employer and his workmen shall be as follows: (a) the workmen shall first bring the matter before the employer or foreman; (b) should they not be able to agree the representatives of the Employers’ Association and the representatives of the Workmen’s Union shall endeavour to settle the matter in dispute; (c) if these representatives are unable to arrange terms the Secretary of the Board shall forthwith advise the Committee of Inquiry of the dispute; (d) in the event of the Committee of Inquiry being unable to settle the dispute it shall be referred to the Board, and, failing a decision, then to the Umpire or Arbitrators, who shall be asked to give their decision within seven days from the date of hearing. This conciliation scheme is the most important of the few to adopt the system of financial penalties.

In addition to the Conciliation Boards, there is a variety of arrangements which, although not coming within the definition of a Conciliation Board, provide definite procedure for the consideration and settlement of differences. Two examples may be given: the highly organized cotton industry has not adopted conciliation board procedure, but the “Brooklands” Agreement, signed in 1893, at the termination of the great contest, provided for many years machinery for settlement of disputes in the spinning branch of the industry. This Agreement has now been superseded by new provisions for avoidance of disputes. As regards other sections of the industry, the principal agreement is that existing between the North and North-East Lancashire Cotton Spinners and Manufacturers’ Association and the Northern Counties’ Textile Trades Federation. Under this agreement, the procedure is similar to that adopted in the case of the Brooklands Agreement and provides for a meeting of representatives of employers and operatives in the branch of trade affected; if no settlement is arrived at, the dispute is to be brought before a joint meeting of the members of the Employers’ Association and the Amalgamated Association of Trade Unions formed in the section concerned; if this meeting fails to effect a settlement, then the matter is to come before a joint meeting of representatives of the Manufacturers’ Association and the Northern Counties’ Federation. Until all these steps have been taken and have failed, no strike or lock-out notices are to be given. An important feature is a provision that, in cases of stoppages of work, meetings of the representatives of the signatories shall be held at intervals of four weeks in Manchester until the dispute has been settled.

Similarly, Conciliation Boards have not been adopted in the engineering trades. The principal agency for conciliation in these trades is that afforded by the “Terms of Settlement” signed in 1898 on the termination of the great dispute which had commenced in the previous year. This agreement, revised in 1907, provides, inter alia, for the discussion of grievances in the first instance by employers and workpeople or their representatives. Should a settlement not be effected by this method, a local conference of employers’ and workpeople’s associations may then be called to consider the matter, and if the question still remains unsettled, it can be referred to a central conference between the Executive Board of the Employers’ Federation and the Executives of the Trade Unions signatory to the agreement. No stoppage of work is permissible until this procedure has been fully carried out. An agreement dated May 20, 1919, amplified the previous agreements by the recognition of shop stewards and the institution of Works’ Committees.

This voluntary machinery (i.e. permanent voluntary conciliation boards and recognized procedure for discussion) covers a number of the principal trades of the country, such as building, coal mining, iron and steel, engineering, shipbuilding, cotton, boots and shoes. Before the war, there were some other industries of considerable importance in which Conciliation Boards or other permanent machinery did not exist, presumably owing to lack of organization of the parties, e.g. dockers, carters, seamen, agricultural workers. This has to some extent been remedied during and since the war.

State Conciliation Machinery

Supplementary to the Whitley Councils, voluntary conciliation boards and similar procedure, which are responsible for the settlement of the bulk of the differences that arise, there exists the State machinery—on the one hand, the Industrial Court; on the other hand, the Trade Boards for poorly organized trades. The Industrial Courts Act, 1919 (which for practical purposes embodies the Conciliation Act, 1896), defines the Government’s powers of intervention in industrial disputes, such intervention being necessary in cases where the joint machinery is not adequate or where the joint machinery has failed to effect a settlement. The Act sets up a permanent Court of Arbitration,[11] to which recourse can be had by parties to industrial disputes if both parties to the dispute consent. Although permanent provision for voluntary arbitration is thus made by the establishment of the Industrial Court, it has been the policy of the Ministry of Labour, if not always the practice of the Cabinet, that trade disputes should be settled as far as possible by negotiation between Employers’ Associations and Trade Unions. When this fails or a Joint Industrial Council, or a Conciliation Board cannot arrive at an agreement, the Industrial Court is an independent authoritative tribunal to which such differences can be referred.

Should the parties so desire, a dispute can be referred by the Minister of Labour under the Act either to a single arbitrator appointed by him or to a special Board of Arbitration composed of members selected by the parties from panels of persons appointed by him to act on these Boards. Reference to the Industrial Court is, however, the normal procedure. A dispute may be referred for settlement under the Industrial Courts Act only after the exhaustion of all available means for conciliation already existing in the trade. Under the Industrial Courts Act, the Minister has power to establish a Court of Inquiry to investigate the causes and circumstances of any industrial dispute, whether the dispute exists or is merely apprehended; moreover, to this course the consent of the parties is not required. These Courts have no power to settle the dispute by arbitration, but are restricted to making a report which serves to put before the public an impartial account of the merits of the case, with possibly a recommendation as to the best course to be pursued to effect a settlement.

The policy of the Ministry of Labour is to place the prime responsibility for the harmonious working of industry upon the employers and employed in each industry, and only to intervene when negotiations between the employers and the Trade Unions have broken down, and then merely for the purpose of bringing them together again and trying to promote a solution of the difficulty acceptable to both sides. Since the armistice, the industrial situation has been peculiarly difficult, and in certain disputes, there has been a political as well as an industrial element which would have made a settlement almost impossible whatever machinery existed, but on the whole it may be claimed that the existing policy of the Ministry of Labour has been fully justified by the results.

Statutory Minimum Wages

Voluntary conciliation machinery can function successfully only in those trades where both employers and workpeople are sufficiently well-organized to enable a collective agreement to be made effective. There must always remain a large section of industry which is poorly organized and for which other means are required for the proper regulation of conditions. State action has accordingly been found necessary to enable the less well-organized trades to fix minimum wages and to enforce proper observance of them; this has been done by means of Trade Boards. The Trade Boards Act of 1909 was passed with the avowed object of eradicating the evils of “sweating”; four trades only were included under the Act, but power was given to the responsible Department (then the Board of Trade) to bring additional trades under the Act from time to time by Provisional Order. In 1918, an amending Act was passed substituting procedure by Special Order for procedure by Provisional Order and modifying the description of the trades which could be brought under the Acts. The Minister of Labour is empowered to extend the Trade Boards Acts to trades to which the Acts do not already apply, if he considers there is no effective machinery in them for the regulation of wages, and that, in view of the rates of wages prevailing in them, a Trade Board is desirable. For this purpose an investigation into the conditions in the industry is first made and, if there be a prima facie case for the application of the Acts, the Minister gives notice of his intention to make a Special Order under the Acts. A period of at least forty days must be allowed, in which, if objections are received, the Minister must order a public inquiry to be held by some person not in Government employment, unless he decides to amend or withdraw the order, or unless the objections are merely frivolous. On receiving the report of the inquiry, the Minister then decides whether he should make an Order with a view to establishing the proposed Trade Board or not.

A Trade Board consists of an equal number of representatives of employers and of workpeople in the trade, to whom are added a neutral chairman and two or four persons unconnected with the trade, who are known as “appointed members.” Where there is any organization among the workpeople or employers, the Trade Unions and employers’ associations are asked to nominate representatives. Where there is no effective organization, the only practicable method is for the Minister to nominate members selected to represent the various types of work done in the trade and the various districts where it is carried on. The number of members varies according to the needs of the trade. Where women are largely employed in the trade, at least one of the “appointed members” must be a woman.

A Trade Board must fix a minimum rate or rates of wages for time-work. Where no other rate has been fixed, piece-workers must be paid at rates sufficient to yield to an ordinary worker at least as much money as the minimum time-rate. It also has power to fix general minimum piece-rates, a guaranteed time-rate for piece-workers, a piece-work basis time-rate on which piece-work prices must be based, overtime rates, and for this purpose the Board has power to declare what is the normal number of working hours per week in the trade. A Board can, if it thinks fit, fix minimum rates of wages for all classes of workers throughout its trade, or, if it chooses, fix only a general minimum time-rate, and leave other rates to be settled between the employers and workpeople themselves. When a rate has been fixed, every employer in the trade must exhibit the Trade Board’s notice, giving full particulars of the rate, in his factory, or in the place where work is given out. Any employer who pays wages at less than the minimum rate is liable to a fine of £20 for each offence and to a further fine of £5 for each day after his conviction on which he fails to pay the legal rate. Any worker who thinks he is not receiving the rate due to him may complain to the Minister of Labour or to the Trade Board.

The number of Trade Boards at present in existence is 44. Of these 5 are for England and Wales, 5 for Scotland, and 34 for Great Britain. By May 10, 1922, 30 Boards had been set up in Ireland. These Boards covered in all approximately 3 million workpeople. The Trade Boards are independent bodies, though they are financed and staffed by the Ministry of Labour and though their rates are subject, as described above, to confirmation by the Minister. The Minister of Labour has announced his intention to introduce legislation dealing with the recommendations of a Committee appointed in September 1921, under the chairmanship of Lord Cave, to inquire into the working and effect of the Trade Boards Acts (Parliamentary Paper, 1922, Cmd. 1645). A statement of the Government’s new policy appears at p. 286 of the Labour Gazette for July 1922.

Employment Exchanges

The Ministry of Labour is responsible for the administration of the Employment Exchanges established under the Labour Exchanges Act, 1909, which now number over 400 in Great Britain. The work of the Exchanges falls under two main heads, viz., that of bringing together employers requiring workpeople, and workpeople desiring employment, and that of administering the National Unemployment Insurance Scheme. As illustrating the amount of work performed by the Exchanges during the seven years 1914 to 1920 inclusive, the average number of yearly placings was 1,360,000. The organization of the Exchanges provides a ready means of bringing a demand for labour from any part of the United Kingdom into touch immediately with a supply in any other part. Railway warrants are issued by the Exchanges in necessitous cases subject to a signed undertaking being given, either by the workman or his prospective employer, to repay the amount involved.

Women are dealt with in a separate department of each Exchange, which, in all but the very smallest Exchanges, is in charge of a woman officer and is staffed by women. The administration of unemployment insurance has greatly increased the work of the Exchanges in connection with women. Under the old Insurance Acts about 500,000 women were insured against unemployment, but this number has been increased to 2,750,000 under the Unemployment Insurance Act of 1920. Since the war, in addition to dealing with industrial and commercial occupations, the Exchanges deal with private resident domestic service as a permanent part of their work, and also with applicants who are desirous of obtaining employment over-seas. They co-operate with the Central Committee on Women’s Training and Employment in selecting women for training courses. In all these matters, and in interviewing and advising unemployed women, valuable assistance is rendered by the Women’s Sub-Committees of the Local Employment Committees. Boys and girls under the age of eighteen are dealt with in a special department of each Exchange, except in the case of the smallest Exchanges. In about 250 areas, Juvenile Employment Committees have been set up in connection with Juvenile Departments of Exchanges. These Committees have been appointed under the Labour Exchanges Act, 1909, the Education (Choice of Employment) Act, 1910, or the Education (Scotland) Act, 1908.

During the war, the Exchanges were very largely used by the Government for the purpose of organizing the supply of labour for munitions and essential services. The various measures included schemes for (1) registration and enrolment so that skilled and other essential workers could be removed from one part of the country to another, (2) the temporary release of serving soldiers for munitions and essential work, (3) the supply of substitutes to enable more workers to be recruited in the army from essential industries and services, and (4) the recruitment of women workers for munition work.

The Juvenile Employment Committees consist of representatives of educational and industrial interests in the districts, together with other persons especially concerned in promoting the welfare of boys and girls. In the year 1917, the Minister of Labour decided to associate with each Employment Exchange a Local Employment Committee (at first known as a Local Advisory Committee) to secure for the Exchange the full benefit of local knowledge and to bring it into close touch with employers and workpeople in the district. Local Employment Committees are composed of equal numbers of representatives of employers and workpeople, together with a certain number of additional members (not exceeding a third of the total membership) who are not necessarily connected with industry—among the additional members representation of ex-service men is provided for. The Chairman is nominated by the Minister and the Committee themselves appoint a Vice-Chairman. It is one of the most important duties of these Committees to keep a close watch over the state of employment in their area. Where the local unemployment is severe, it is open to them to urge upon local authorities and private employers the need for widening the field of employment where necessary, and also to advise the Minister with regard to any difficulties which might be removed by departmental action. At the present time the Committees assist in the selection of men from the Exchange registers for employment under schemes devised to relieve abnormal unemployment. See pp. 187 and 191.

The Work of the Ministry of Labour

The Committee on National Expenditure[12] (see Parliamentary Paper, 1922, Cmd. 1581) proposed to abolish the Industrial Relations Department of the Ministry of Labour. They observe that “with the knowledge that, in the end, there will be Government intervention, neither side will have the same incentive to make the final proposals which might lead to a settlement of the dispute.” This appears to me an exceedingly hazardous proposal. Anyone with experience of industrial disputes knows that occasions occur when reason disappears, tempers rise and responsibility vanishes, and neither side will meet the other. It is essential in such circumstances for a Government Department to act the go-between if the community is not to suffer. At some time intervention is imperative, and it is a question whether it should be that of the Ministry of Labour working on a consistent policy or of the Cabinet in Downing Street which, lacking the industrial experience of the Ministry, is apt to settle a dispute on any policy, but this question I discuss later at length. The Committee on National Expenditure found that, so long as unemployment insurance is on the present basis, Labour Exchanges are required as agencies for checking payments of unemployment insurance benefits, but not as Labour Exchanges; they recommended that if unemployment insurance by industry could be secured that the Labour Exchanges should be abolished. It is quite clear that that cannot be done, nor does the Committee recommend it to be done while the present National Unemployment Insurance Scheme continues. If insurance by industry is found to be practicable, it may be necessary, from motives of economy, to abolish the Exchanges. Apart from that justification it would be, I think, greatly to the national detriment to do so. While an employer cannot take all his labour through the Exchanges, employers generally learned during the war to appreciate their value. Trade Unions started by being suspicious of the Exchanges, largely because the local delegate of an organized Trade Union regarded it as an important piece of patronage to supply labour of his trade to employers in his district, and he considered the exercise of that patronage as no unimportant factor affecting his re-election. Although in certain districts, no doubt, Exchanges can be abolished, in the main industrial centres their continuance is essential particularly for trades which are ill-organized.

I can say from my own practical experience during the war that the munitions industries could not have been conducted without the expert services rendered by the Labour Exchanges. As Chairman of the Clyde Dilution Commission and of the Tyne Dilution Commission, as Commissioner for Dilution on the Mersey and in Barrow-in-Furness, as Director of Shipyard Labour, I worked in the closest touch with them. Their officers were invariably men known to, and respected by, local employers and Trade Unions, and possessed a complete grasp of district labour conditions. The work they did in the early days of the war, both in connection with the Ministry of Munitions and the Admiralty, in settling labour differences, is as notable as it is unknown. They formed the nucleus on which the local labour staffs of the Ministry of Munitions and the Admiralty were ultimately built up.