MINISTRY OF RECONSTRUCTION. COMMITTEE ON RELATIONS BETWEEN EMPLOYERS AND EMPLOYED REPORT ON CONCILIATION AND ARBITRATION. (In substitution of [Cd. 9081.]) $>mente0 to tfarUameut by (ffommanti of jMajwtp, LONDON: PUBLISHED BY HIS MAJESTY’S STATIONERY OFFICE. To be purchased through any Bookseller or directly from H.M. STATIONERY OFFICE at the following addresses : Imperial House, Kingsway, London, W.C.2, and 28, Abingdon Street, London, S W l ; 37, Peter Street, Manchester; 1, St. Andrew’s Crescent, Cardiff; 23, Forth Street, Edinburgh; or from E. PONSONBY, Ltd., 116, Grafton Street, Dublin. [Cd. 9099.] 1918. Price Id. Net o ) MINISTRY OF RECONSTRUCTION. Committee on Relations between Employers and Employed. The Right Hon. J. H. WHITLEY, M.P., Chairman . Mr. F. S. Button. Sir George J. Carter, K.B.E. Professor S. J. Chapman, C.B.E. Sir Gilbert Claugiiton, Bart. Mr. J. R. Clynes, M.P. *Mr. F. N. Hepwortii. *Mr. W. Hill. Mr. J. A. Hobson. Miss Susan Lawrence. *Sir Maurice Levy, Bart., M.P. Mr. J. J. Mallon. Sir Thos. R. Ratcliffe-Ellis. Mr. Robert Smillie. Mr. Allan M. Smith. *Mr. D. R. H. Williams. Miss Mona Wilson. Mr. H. J. Wilson, C.B.E., Ministry of Labour, ) „ ,■ Mr. Arthur Greenwood, Ministry of Reconstruction, ) ecre a> ies * Additional members of the Committee, appointed in connection with the present Report. Ministry of Reconstruction, 2, Queen Anne’s Gate Buildings, London, S.W.l. u 5992 I4UIP REPORT ON CONCILIATION AND ARBITRATION. TO THE RT. HON. D. LLOYD GEORGE, M.P., PRIME MINISTER. Sir, We believe that the recommendations made in our earlier reports for the establishment of Industrial Councils will provide facilities for full and free discussion of matters affecting the several industries and so improve the relations between Employers and Employed. We have thought it necessary, however, to give some attention to the cases in which the parties may desire voluntarily to refer some difference that has arisen to Arbitration or Conciliation. But it must be understood that we do not intend to express any views on the extent to which disputes can be equitably or satisfactorily settled in this way. As regards arbitration, our sole concern in this Report is with the question of the machinery to be provided when it is the expressed wish of both parties, for any reason, to have recourse to it. 2. We are opposed to any system of Compulsory Arbitration ; there is no reason* to believe that such a system is generally desired by employers and employed and, in the absence of such general acceptance, it is obvious that its imposition would lead to unrest. The experience of Compulsory Arbitration during the war has shown that it is not a successful method of avoiding strikes, and in normal times it would undoubtedly prove even less successful. Disputes can only be avoided by agreement between employers and workers and by giving to the latter the greater measure of interest in the industry advocated in our former reports ; but agreement may naturally include the decision of both parties to refer any specified matter or matters to arbitration, whether this decision is reached before or after a dispute arises. 3. For the same reason we do not recommend any scheme relating to conciliation* which compulsorily prevents strikes or lock-outs pending inquiry. But it is obviously possible and desirable that in some instances arrangements should be voluntarity made in organised trades for holding an inquiry before recourse to extreme measures ; and we suggest that the Ministry of Labour should be authorised to hold a frdl inquiry when satisfied that it was desirable, without prejudice to the power of the disputing . parties to declare a strike or lock-out before or during the progress of the inquiry. 4. It is important that it should be clearly understood that we do not contemplate the imposition of an elaborate system of Conciliation and Arbitration upon industry, in place of the present well-recognised voluntary conciliation and arbitration machinery which exists in so many of the important trades of the country. On the contrary, we desire to emphasise the advisability of a continuance, as far as possible, of the present system whereby industries m$ke their own agreements and settle their differences themselves. o 5. The extent to which machinery for the conciliatory adjustment of disputes exists in the important trades of this country is one of the most marked features of its industrial organisation, and the valuable work that has been done by the numerous Conciliation and Arbitration Boards in the past has rendered it possible for the State to remain very much in the background. There seems no reason to suppose that after the war these Boards will not continue to work effectively, and it may be (especially in so far as they may become merged in or correlated with the Joint Industrial Councils, whose establishment the Committee have recommended) that they will achieve an even larger degree of success in securing the settlement of points that may arise between employers and employed, when regular joint meetings, . apart from any disputes, have been established, and their benefit experienced. 0. It is desirable, however, to consider the part that should be taken by the State in the event of those directly concerned in industry being unable to adjust their differences themselves. The interest of the community may require that there should be an unbiassed and independent examination of the facts and circumstances connected with any dispute between employers and employed. On this point the Committee have had under consideration the Canadian Industrial Disputes Investiga¬ tion Act, and the Report on the working of that Act made by Sir George Askwith [Cd. 6603]. They have also had under consideration the recommendations contained r m the Report of the Industrial Council [Cd. 6952 of 1913]. The Committee endorse the view that there should be means by which an independent inquiry may be made into the facts and circumstances of a dispute and an authoritative pronouncement made thereon, although this does not carry with it any compulsory power of delaying strikes or lockouts. u (33)5992(5928) Wt 11152—020 15,000 (5/18 A 2 4 7. Section 2 (1) (a) of the Conciliation Act, 1896, empowers the Ministry of Labour to cause an inquiry to be held into the facts and circumstances of disputes. Presumably the existing Act empowers the Ministry of Labour to publish reports made as a result of inquiries of this character, but, if not, the necessary power should be obtained, so that there may be immediate publication, for the information of those affected by the dispute and of the public generally, of an independent and authoritative account of the matters in difference. The question whether these powers should be exercised in respect of particular cases is one which must be left to the discretion of the Government Department concerned. 8. Arbitration being recognised as an appropriate method whereby the parties to industrial differences may voluntarily seek to have those differences adjusted, it is necessary to consider what form of arbitration tribunals are calculated to command the confidence of those who may appeal to them. Under the Conciliation Act the usual form of arbitration tribunal was the “ single arbitrator,” an independent person appointed by the Board of Trade sitting as sole judge except in cases where the points * in dispute necessitated the assistance of technical assessors. Courts of Arbitration (an employer’s representative, a workmen’s representative, and an independent chairman), were established in 1908, but comparatively few cases are referred to this form of tribunal. 9. Under the Munitions of War Act, in addition to single arbitrators and Courts of Arbitration, two other forms of tribunal were established—the Committee on Production and the Special Arbitration Tribunal for Women’s Wages. The Committee on Production consisted of three independent persons appointed by the Government, and the majority of the disputes referred to arbitration during the war other than those affecting the wages of women on munitions work have been settled by that tribunal. Its personnel has recently been changed and it is now constituted on lines similar to a Court of Arbitration, except that its members hold continuous office and are not appointed ad hoc. The Special Arbitration Tribunal for Women’s Wages consists of an independent Chairman and members chosen either for their official experience or their special knowledge of the interests of employers and workpeople respectively. 10. As arbitrations affecting the same trade or section of trades may recur, there are advantages to both employers and workpeople in knowing that the tribunal to which they submit any differences which they may have failed themselves to settle is one to which previous differences have been submitted, and which therefore has become to some extent familiar with the conditions of the trade. 11. For these reasons it would appear desirable that there should be a Standing- Arbitration Council on the lines of the present temporary Committee on Production to which differences of general principles and differences affecting whole industries or large sections of industries may be referred in cases where the parties have failed to come to an agreement through their ordinary procedure, and wish to refer the differences to arbitration. Such tribunal should include in its membership persons who have practical experience and knowledge of industry, and who are acquainted with the respective standpoints of employers and workpeople. 12. There are, however, certain administrative difficulties connected with the utilisation of tribunals of three or more persons, particularly where the parties desire that their case should be heard locally, and where the matter is one of relatively small importance, and it is desirable that suitable persons should be available to act as single arbitrators, where the parties agree to submit their case to a single arbitrator. Persons possessing experience of industrial conditions and acquainted with industrial and workshop life, including representatives of labour, would seem the most likely to command the respect and confidence of the parties. It will be obvious that the efficiency of an arbitrator, provided that he possesses the right personal qualifications, increases with practice and the study of the conditions with which he has to deal. 13. The question whether, and if so, by what means, awards of single arbitrators should be co-ordinated with the more general awards of the Standing Arbitration Council is one of considerable difficulty, as there are important reasons why the several awards should not conflict. The experience which has been gained of the various forms of arbitration tribunals suggests that there are great advantages to all parties in facilitating co¬ ordination of decisions. Conflicting decisions given by different tribunals are bound to cause dissatisfaction to one or other party. With the object of avoiding such conflict as much as possible it is of paramount importance that the Department charged with the appointment of arbitrators should be in a position to ensure that the several arbitrators should have opportunities of interchanging views and experiences. The means to ensure reasonable co-ordination should be provided through the secretariat of the Standing Arbitration Council. The awards and decisions of that Council would be circulated among the single arbitrators who would thus be kept in touch with the more general and comprehensive cases. 14. In order that there might be the requisite differentiation between questions of general importance or principle and questions of comparatively less importance, the Department responsible for referring cases to arbitration should pass all cases to the secretariat of the Standing Arbitration Council. This secretariat should include a highly trained staff with experience of industry and knowledge of arbitration work so that proper differentiation would be made between the various cases and, subject to the concurrence of the parties, the several cases referred to the form of tribunal most competent to deal with them to the satisfaction of those concerned. 15. The question whether awards and agreements should be made enforceable by means of monetary or other penalties was examined exhaustively by the Industrial Council in an inquiry commenced in 1912, and the Committee concur generally in the views expressed in the Report made by the Council in 1913 [Cd. 6952] to the effect that, while it is to the interests of both employers and workpeople and the community generally that industrial agreements should be duly fulfilled, in the long run this object is more likely to be secured by an increased regard for moral obligation, respect for an instructed public opinion, and reliance on the principles of mutual consent, rather than by the establishment of a system of monetary penalties. 16. Our conclusions, therefore, are that:— (а) whilst we are opposed to any system of Compulsory Arbitration, we are in favour of an extension of voluntary machinery for the adjustment of disputes. Where the parties are unable to adjust their differences, we think that there should be means b;y which an independent inquiry may be made into the facts and circumstances of a dispute, and an authoritative pronounce¬ ment made thereon, though we do not think that there should be any compulsory power of delaying strikes and lockouts. (б) we further recommend that there should be established a Standing- Arbitration Council for cases where the parties wish to refer any dispute to arbitration, though it is desirable that suitable single arbitrators should be available, where the parties so desire. H. J. Wilson, A. Greenwood, | Secretaries. We have the honour to be, Sir, Your obedient Servants,* J. H. WHITLEY, Chairman. F. S. BUTTON. GEO. J. CARTER. S. J. CHAPMAN. G. H. CLAUGHTON. J. R. CLYNES. F. N. HEPWORTH. WILFRID HILL. J. A. HOBSON. A. SUSAN LAWRENCE. MAURICE LEVY. J. J. MALLON. THOS. R. RATCLIFFE-ELLIS. D. R. H. WILLIAMS. MONA WILSON. 31st January 1918. Mr Smillie was unable to attend any of the meetings at which this Report was considered and therefore does not sign it. Mr. Allan M. Smith has not signed the Report, but makes the following state- ment : ‘ W ithout expressing any opinion on the views contained in the Arbitration Report of the Committee, I have refrained from signing the Report, because I consider that the subject dealt with is one which, unprejudiced by any pronouncement of the Committee, should be left to the free discussion and consideration of the employers and workpeople in each branch of industry.” Printed under the authority of His Majesty’s Stationery Office By Eyke and Spottiswoode, Ltd., East Harding Street, E.C.4, Printers to the King’s most Excellent Majesty.