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New Zealand: IndustrialstrifePublished online: 15 Apr 2008.

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NEW ZEALANDINDUSTRIAL STRIFE

'"f-'HOUGH neither as numerous nor as grave as in some other countries,JL industrial disputes in New Zealand have been sufficiently numerous in

the opening months of 1947, and their consequences sufficiently serious, toarouse grave public concern, and to pose a major political problem throughthe strain thrown upon the existing machinery for reconciling the interestsof industrial groups. The Arbitration Court has found itself confrontedwith a problem of recognizing, or refusing to recognize, illegal "adjust-ments" of wage rates conceded by employers under the pressure of unions.

The Railways Industrial Tribunal, one of the statutory bodies created bythe Government to determine wages and conditions in special fields, refusedto concede most of the increases in pay applied for at a recent prolonged hear-ing, and was harshly criticized by the workers' organizations for takingaccount of the deteriorating financial position of the railway system. Themost disturbing topic during the period was the waterfront crisis, whichbrought under fire another statutory tribunal.

A number of minor disputes have been prevented by concessions, or settledby or referred to tribunals set up under war-time regulations. They areconstituted of an equal number of representatives of workers and employerswith a chairman normally selected by the Minister of Labour. The decisionsof such tribunals are legally binding on both parties; but, significantly, theMinister has commonly required from both an advance undertaking to acceptthe finding. In most cases the decision has in fact been made by the chair-man, usually a Magistrate or a Conciliation Commissioner, and in most casesrecently it has involved concessions to the workers.

A trivial question over hours to be worked in "wet" places, initiallyaffecting only two men, precipitated a sudden strike on the Waikato coalfield.It continued long enough to require the curtailment of Easter train travel,and, by limiting the use of steam plants, to make more drastic the restric-tions already in force on the use of hydro-electric power. A series of disputesover very high special rates of pay demanded by unions for salvage work bytheir members on the inter-colonial liner Wanganella, which ran aground onBarrett's Reef at the entrance' to Wellington Harbour on the night ofJanuary 19 and remained there for eighteen days, held up repair work on theship for some seven weeks after she had been moved into the floating dockby officers and officials. One tribunal has already settled the claims of thecrew. Another at the present time is considering the claims of other workers.The owners and underwriters undoubtedly feel that they have been ruthlesslyexploited and many of the public are inclined to agree with them.

Effects of Full Employment

THE special causes of this industrial unrest are to be found in the employ-ment situation, in the now-established tradition of the forty-hour week

and in the reaction to the elections of last year. The employment situation

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is a source of professed pride to the Government, yet also possibly a sourceof potential danger to the country. The Minister of Employment hasgiven the number of notified vacancies at the end of November as 10,800for males and 12,531 for females, while only 146 men and 9 women wereregistered as seeking, work. Vacancies have since increased in number andthose seeking work have diminished. Newspaper columns testify to theeffort to attract workers, especially female workers, by "the offer ofovertime at discretion, good conditions and amenities. ' Employers arein fact forced to bid against one another in terms of amenities, and thosewhose industry is most standardized and whose costs have been longestunder the critical scrutiny of the Price Tribunal are in the weakestposition.

In some employments overtime is desired to maintain earnings near theirwar-time level, in others depleted staffs are making "overtime a burden. Thegeneral application of the forty-hour week is producing a distinction betweenthose who can complete their work, including overtime, from Monday toFriday, and those who must at times work on Saturday and Sunday, eventhough they work no more than forty hours in the week. Hence recurrentdisputes over the payment of penal rates for Sunday work even where over-time is not involved.

The discipline and restraint on the part of trade unions which are necessaryfor stability under conditions of full employment are going to be difficult tomaintain in New Zealand. The narrow victory of the Labour party at the1946 elections has apparently increased the tension between moderates andless moderates in the parliamentary party and it may be precipitating astruggle for power within the ranks of the industrial movement.

The widening work of the young Institute of Industrial Administration,the calls made by progressive employers on the services of the IndustrialPsychology Division of the Department of Scientific and Industrial Research,the development of personnel work and industrial hygiene, are all signs thatemployers for the most part are keen to have better industrial relations.Similar evidence is found in their interest in profit-sharing and incentivepayment schemes, even though they may not allow sufficiently for the tradeunion point of view on such matters. Yet employers seem to be finding itincreasingly difficult to express their problems and grievances without inno-cently giving umbrage to trade unionists.

The attempt by the leaders of the Federation of Labour to initiate a group-ing of small unions into large bodies* may not only be a means to greaterinfluence but may also be planned to prepare for fuller participation ofworkers in industrial management, which would clearly require preparatorystudy by workers. Many Labour leaders and some Labour journals, how-ever, still use the terms of the class-struggle between workers and bossesin an unregulated economy, and the tone of their discussions seems to havesharpened over recent months. Clearly New Zealanders have reached thecondition of full employment or more without having first acquired the set ofideas appropriate to the situation. The result is that the Government is

* See THE ROUND TABLE, NO. 146, March 1947, p. 202.

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NEW ZEALAND 305

confronted with a troublesome problem, most aspects of which are revealedin the history of the waterfront dispute.

It might be pointed out in passing that, even when due allowance is madefor shortages and dislocation due to war, the difficulties which the Govern-ment faces are in part the result of its own policy. Ministers have been reluc-tant to accept fully the self-discipline involved in proper co-ordination ofplans and slow to recognize that when many objectives are pursued toointensively they become inconsistent with one another by competing toostrongly for limited resources of men and materials. The Government talksmuch of planning and co-ordination but is not willing to accept the fullimplications of its own preaching.

The Waterfront Crisis

THIS very important episode represented a new phase of a very interestingexperiment. Under the Waterfront Commission a system of co-opera-

tive contracting was introduced, shipowners being charged a contract ratefor each port based on an average rate of work for each type of cargo, pluscharges for delays or overtime and certain levies to cover administration costs.The men are employed at award rates and a profit-and-loss account is pre-pared for each ship. "Profit" due to the men working at above ordinaryefficiency is distributed at three-monthly intervals among the unionistswho participated in the work, non-unionists being excluded from the dis-tribution. Non-unionists are, of course, engaged only when union workers arenot available. The records of the Commission show that efficiency increasedin some types of work, principally export loading, and decreased in others,principally unloading.

The men benefited in the first five years of the scheme by the distributionof £660,000 "profits" among some 7,000 unionists, and the current gainfrom this source might be about £40 per man per annum in main ports.Shipowners are keenly conscious that by various concessions the costs ofhandling cargo have in fact increased, and they have been critical of uniondemands. Unionists, on the other hand, do not seem to have risen above theold spirit of internecine warfare characteristic of pre-Commission days.

Unionists are expected to report at 8 a.m. each morning and to hold them-selves available for engagement for two hours thereafter. Once gangs areformed they can be required to work overtime from 6 p.m. to 9 p.m.Monday to Friday. Until the present crisis they have been required to attendfor possible engagement on Saturday morning, though they have contendedthat the necessary engagements could be made on Fridays. Hours workedby any man vary appreciably from week to week, but not so much frommonth to month. They include a large proportion of overtime at penalrates, and average earnings have been high in main ports and lower in smallports where work is more irregular. They have lately been less in either thanduring the latter part of the war period.

The decision of the Commission guaranteeing work or payment to theamount of £25 per four-weekly period for A-class watersiders* was in fact

* See THE ROUND TABLE, NO. 146, March 1947, p. 203.

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a decision by the Chairman and represented a compromise between the viewsof representatives on the Commission of the shipowners and the workers.It would be of some benefit to workers in small ports, of much less benefitto unionists in main ports, and was estimated to involve an increased overallcost of about £40,000 per annum. A return for the concession was requiredin that the Commission asked for "reasonable" relaxations of customsrestricting the mobility of workers and a modification of the "spelling"system under which, in effect, half of each gang works while the other halfrests. Established after long struggle these practices were of dubious socialvalue, except for special types of work, even when work was highly casualand too many men were offering, and were clearly inappropriate to a systemof Commission control in which union representatives participated, withlabour decasualized, with man-power short and with an urgent need to speedthe loading and unloading of shipping.

The union decision to work only forty hours per week, soon made effec-tive in most ports, created such inconveniences that the Government, theFederation of Labour and its recently formed affiliate, the Transport Federa-tion, were in succession drawn into the struggle. The Prime Minister wasfirm but conciliatory. While the Commission existed the Government mustsupport it. Unless normal working were resumed, Commission control withits benefits must be terminated. Following an ultimatum issued by him onDecember 30, the powers of the Commission were suspended on January 7,and the Minister of Labour assumed responsibility. In effect this wouldmean little until contracts already entered into should run out. Throughoutthe Prime Minister and other Ministers urged that the Commission couldreconsider its decision and the matter was open for negotiation. But normalworking must first be resumed.

The officials and National Council of the Federation of Labour were boundas to policy by a resolution of the 1946 Conference of the Federation whichrequired all affiliates to exhaust every avenue of negotiation before resortingto stoppage of work. Were normal working resumed they offered to conductthe case for the watersiders, or to support their case. Conferences betweenthe two executive bodies were followed by acrimonious discussions as towhat had been agreed. The Transport Federation was apparently disposed tosupport the claims of the watersiders but not their methods. The languageof officials of the Waterside Workers Union and its branches was truculent,and indicated an intention of forcing an issue of increased wages and improve-ments in conditions upon both the Federation of Labour and the Government.They sought support among affiliates of the Federation and secured some.

Finally an Extraordinary Conference of the Federation of Labour, thesecond in its history, was called for January 21 to deal with what Federationofficials termed "the most important issue in the history of the Federationand of the whole trade-union movement". After two-and-a-half days' sharpdiscussion, and as a result of hard fighting by the Prime Minister and otherMinisters, the Conference supported by a considerable majority the policy ofthe Government and of its own officials.

Meantime conferences of representatives of the waterside workers, Federa-

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tion officials, Cabinet Ministers and Labour Members of Parliament resultedin the resumption of work after January 17 and the restoration of thepowers of the Commission. On meeting, however, the members of theCommission could not find a basis for agreement and the Chairman offeredhis resignation. As a "temporary" arrangement the Commission was reconsti-tuted with the former General Manager as sole Commissioner. Compromiseterms were hammered out with_ the union, the protesting shipownersbeing completely ignored. The men won a guarantee of work or paymentto the amount of £5 per week, two hours' pay for attendance withoutengagement, concessions as to engagements for Saturday work and as toholiday pay and an assurance that the provision of amenities on the wharveswould be speeded up. As a consequence the levy on all cargo was raised to8d. per hour, and shipowners doubt whether this will cover the costs involved.

The crisis had merely been the outstanding episode in a period of apparentincipient irresponsibility and anarchy in industrial unionism. The PrimeMinister, acting consistently, had won his main point by concessions whichmade it a Pyrrhic victory. Federation officials had retained their leadership.The watersiders, yielding on the prior resumption of work, won less thanthey asked, but the "spelling" system went apparently unchallenged. Theirdemand for increased wage-rates appeared to be partly met by an announce-ment by the Minister of Labour that the Government had decided to issuea regulation permitting an application to the Arbitration Court for a generalwage order.

Stabilization'"T^HIS announcement may have been due to current discussions of stabiliza-JL tion by the Federation of Labour, which apparently'envisaged a general

increase in all wages. Arbitration Court orders granting increases of thistype were granted before the introduction of stabilization in December 1942.Since 1945 the Court has been able to grant increases only to correct dispari-ties and anomalies, and has been guided by a general order setting standardrates for skilled, semi-skilled and unskilled workers which it issued at thattime. Meantime the index-number of money wage-rates has increased some-what and new anomalies have developed. Adjustments made in the salariesof public servants, teachers and others have not gone unnoticed by unionists,even though they represented long-delayed remedies.

A meeting of the executive and national council of the Federation wasaddressed at length by four Cabinet Ministers, and after discussion a state-ment was prepared by a committee and released. It affirmed the continuednecessity for stabilization controls in view of the accumulation of purchas-ing power greatly in excess of the value of goods available from currentproduction. It criticized the practice, followed at times by the Price Tri-bunal, of meeting rising costs of a manufacturer producing both essentialand non-essential lines by permitting a widened profit margin on the latterto offset a narrowed margin on the former. This practice has also beensharply criticized by the Manufacturers' Federation.

The statement condemned "cost-plus" methods of price-fixing, suggestedthat prices be "based on the costs of the averagely efficient firms in each

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industry", with closer examination of the financial position in each case, andsuggested greater precautions and tighter controls in regard to the subsidieswhich have been so extensively used to hold stable the war-time index ofprices. It suggested a strengthening of the Tribunal, with a change in per-sonnel, increased publicity respecting applications for price increases, andopportunities for the Federation to present submissions on any applicationshould they desire so to do.

The statement contended that increased production of essential lines isnecessary and "can be facilitated by the adoption of the new method of price-fixing, by giving the workers a financial incentive to produce more, and bygiving trade unions an opportunity of carrying on production". Notaltogether consistently with this, the statement indicated that a case wouldbe prepared for a general increase in wages, and later various spokesmenindicated that an increase of £1 per week was to be asked for. Clearly thiswould give a strained meaning to "inducement to produce more". Yet someunions and leaders said "nothing less will do". The National Secretary of theWaterside Workers' Union stated: "The function of the Court has beenclearly defined. It is not so much to determine wages and conditions as topreserve industrial peace. If it wants to do that, the way is obvious."

A New Dairy Industry Plan

THE concession by the Government of penal overtime rates for all week-end work in dairy factories naturally led the organizations representing

farmers to urge upon the Government their claims to recognition in theweekly wage allowance which really serves as the basis for guaranteed prices.One result of these representations is to be seen in some aspects of the agree-ment reached between the Government and the dairy industry, details ofwhich were announced by the Prime Minister on April 17. Under the pro-posed plan a New Zealand Dairy Industry Commission of seven membersis to be set up to undertake the buying, handling and selling of dairy producefor the export market and to regulate local market costs and distribution.

The Commission will receive power to determine the guaranteed price ason the basis laid down in the present Act, with the proviso that in deter-mining the price it will have regard to the general economic stability of NewZealand, and, if the Dairy Industry Account is in debit or likely to be indebit for the season, then it will first consult with the Minister of Marketingbefore fixing the price. The price so fixed is to be guaranteed by the Govern-ment. The Commission is also to be empowered to reconsider the pricepayable to farmers for the season ending June 30, 1947, after taking into fullconsideration the extension of the forty-hour-week policy. This plan willto some extent remove the affairs of the industry from Government control.Nevertheless the Commission will be required to "comply with the generaltrade policy of the Government and with any general or special directionsissued by the Minister in terms of Government policy".

New Zealand,

April 1947.

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