Encyclopaedia Britannica, 11th Edition, "Aram, Eugene" to "Arcueil" / Volume 2, Slice 4

by Various

In addition there are two boards composed of representatives of co-operators and trade-unionists for the settlement of disputes arising between co-operative societies and their employees.

The most typical form of machinery for the settlement of disputes by voluntary conciliation is a joint board consisting of equal numbers of representatives of employers and employed. The members of the board are usually Constitution and functions of voluntary conciliation boards. elected by the associations of employers and workmen, though in some cases (e.g. in the manufactured iron trade board) the workmen’s representatives are elected not by their trade union but by meetings of workmen employed at the various works. The chairman may be an independent person, or, more usually, a representative of the employers, the vice-chairman being a representative of the workmen. In the arbitration and conciliation boards in the boot and shoe trade, provision is made by which the chair may be occupied by representatives of the employers and workmen in alternate years. An independent chairman usually has a casting vote, which practically makes him an umpire in case of equal voting, but where there is no outside chairman there is often provision for reference of cases on which the board cannot agree to an umpire, who may either be a permanent officer of the board elected for a period of time (as in the case of several of the boards in the boot and shoe trade), or selected ad hoc by the board or appointed by some outside person or body. Thus the choice of the permanent chairman or umpire of the miners’ conciliation board, formed in pursuance of the settlement of the coal dispute of 1893 by Lord Rosebery, was left to the speaker of the House of Commons. The nomination of umpires under the Railway Agreement of 1907 was left to the speaker and the master of the rolls. Since the passing of the Conciliation Act, several conciliation boards have provided in their rules for the appointment of umpires by the Board of Trade.

Conciliation boards constituted as described above usually have rules providing that there shall always be equality of voting as between employer and workmen, in spite of the casual absence of individuals on one side or the other. In order to expedite business it is sometimes provided that all questions shall be first considered by a sub-committee, with power to settle them by agreement before coming before the full board. Boards of conciliation and arbitration conforming more or less to the above type exist in the coal, iron and steel, boot and shoe and other industries in the United Kingdom. A somewhat different form of organization has prevailed in the cotton-spinning trade (since the dispute of 1892-1893) and in the engineering trade (since the engineering dispute of 1897-1898). In these important industries there are no permanent boards for the settlement of general questions, but elaborate agreements are in force between the employers’ and workmen’s organizations which among other things prescribe the mode in which questions at issue shall be dealt with and if possible settled. In the first place, if the question cannot be settled between the employer and his workmen, it is dealt with by the local associations or committees or their officials, and failing a settlement in this manner, is referred to a joint meeting of the executive committees of the two associations. In neither agreement is there any provision for the ultimate decision of unsettled questions by arbitration. The agreement in the cotton trade is known as the “Brooklands Agreement,” and a large number of questions have been amicably settled under its provisions. In the building trade, it is very customary for the local “working rules,” agreed to mutually by employers and employed in particular districts, to contain “conciliation rules” providing for the reference of disputed questions to a joint committee with or without an ultimate reference to arbitration. Yet another form of voluntary board is the “district board,” consisting in most cases of representatives elected in equal numbers by the local chamber of commerce and trades council respectively. In the case, however, of the London Conciliation Board the workmen’s representatives are elected, twelve by specially summoned meetings of trade union delegates and two by co-optation. The functions of district boards are to deal with disputes in any trade which may occur within their districts, and of course they can only take action with the consent of both parties to the dispute, in this respect differing from the majority of “trade” boards, which, as a rule, are empowered by the agreement under which they are constituted to deal with questions on the application of either party. Another interesting type of board is that representing two or more groups of workmen and sometimes their employers, with the object of settling “demarcation” disputes between the groups of workmen (i.e. questions as to the limits of the work which each group may claim to perform). Examples of such boards are those representing shipwrights and joiners on the Clyde, Tyne and elsewhere. While the arrangements for voluntary conciliation and arbitration differ in this way in various industries, there is an equally wide variation in the character and range of questions which the boards are empowered to determine. For example, some boards in the coal trade (e.g. the conciliation boards in Northumberland and the so-called “Federated Districts”) deal solely with the general rate of wages. Others, e.g. the “joint committee” in Northumberland and Durham, confine their attention solely to local questions not affecting the counties as a whole. The Durham conciliation board deals with any general or county questions. This distinction between “general” and “local” questions corresponds nearly, though not entirely, to the distinction often drawn between questions of the terms of future employment and of the interpretation of existing agreements. Some conciliation boards are unlimited as regards the scope of the questions which they may consider. This was formerly the case with the boards in the boot and shoe trade, but under the “terms of settlement” of the dispute in 1895 drawn up at the Board of Trade, certain classes of questions (e.g. the employment of particular individuals, the adoption of piece-work or time-work, &c.) were wholly or partially withdrawn from their consideration, and any decision of a board contravening the “terms of settlement” is null and void. A special feature in the procedure for conciliation and arbitration in the boot and shoe trade, is the deposit by each party of £1000 with trustees, as a financial guarantee for the performance of agreements and awards. A certain class of conciliation boards, mostly in the Midland metal trades, were attached to “alliances” of employers and employed, having for their object the regulation of production and of prices (e.g. the Bedstead Trade Wages Board). None of these alliances, however, have survived.

At all events up to the year 1896, the development of arbitration and conciliation as methods of settling labour disputes in the United Kingdom was entirely independent of any legislation. Previously to the Conciliation Act of Legislation in the United Kingdom. 1896 several attempts had been made by parliament to promote arbitration and conciliation, but with little or no practical result, and the act of 1896 repealed all previous legislation on the subject, at the same time excluding the operation of the Arbitration Act of 1889 from the settlement of “any difference or dispute to which this act applies.” The laws repealed by the Conciliation Act need only a few words of mention. During the 18th century the fixing of wages by magistrates under the Elizabethan legislation gradually decayed, and acts of 1745 and 1757 gave summary jurisdiction to justices of the peace to determine disputes between masters and servants in certain circumstances, although no rate of wages had been fixed that year by the justices of the peace of the shire. These and other laws, relating specially to disputes in the cotton-weaving trade, were consolidated and amended by the Arbitration Act of 1824. This act seems chiefly to have been aimed at disputes relating to piece-work in the textile trades, though applicable to other disputes arising out of a wages contract. It expressly excluded, however, the fixing of a rate of wages or price of labour or workmanship at which the workmen should in future be paid unless with the mutual consent of both master and workmen. The act gave compulsory powers of settling the disputes to which it relates on application of either party to a court of arbitrators representing employers and workmen nominated by a magistrate. The award could be enforced by distress or imprisonment. The act was subsequently amended in detail, and by the “Councils of Conciliation” Act of 1867 power was given to the home secretary to license “equitable councils of conciliation and arbitration” equally representative of masters and workmen, who should thereupon have the powers conferred by the act of 1824. The act contains provisions for the appointment of conciliation committees, and other details which are of little interest seeing that the act was never put into operation. Another amendment of the act of 1824 was made by the Arbitration (Masters and Workmen) Act of 1872, which contemplated the conclusion of agreements between employers and employed, designating some board of arbitration by which disputes included within the scope of the former acts should be determined. A master or workman should be deemed to be bound by an agreement under the act, if he accepted a printed copy of the agreement and did not repudiate it within forty-eight hours. Like the previous legislation, however, the act of 1872 was inoperative. The evidence given before the Royal Commission on Labour (1891-1894) disclosed the existence of a considerable body of opinion in favour of some further action by the state for the prevention or settlement of labour disputes, and some impetus was given to the movement by the settlement through official mediation of several important disputes, e.g. the great coal-miners’ dispute of 1893 by a conference presided over by Lord Rosebery, the cab-drivers’ dispute of 1894 by the mediation of the home secretary (H.H. Asquith), and the boot and shoe trade dispute of 1895 by a Board of Trade conference under the chairmanship of Sir Courtenay Boyle. In these, and a few other less important cases, the intervention of the Board of Trade or other department took place without any special statutory sanction. The Conciliation Act passed in 1896 was framed with a view to giving express authorization to such action in the future.

This act is of a purely voluntary character. Its most important provisions are those of section 2, empowering the Board of Trade in cases “where a difference exists or is apprehended between any employer, or any class of employers, and workmen, or between different classes of workmen,” to take certain steps to promote a settlement of the difference. They may of their own initiative hold an inquiry or endeavour to arrange a meeting between the parties under a chairman mutually agreed on or appointed from the outside, and on the application of either party they may appoint a conciliator or a board of conciliation who shall communicate with the parties and endeavour to bring about a settlement and report their proceedings to the Board of Trade. On the application of both parties the Board of Trade may appoint an arbitrator. In all cases the Board of Trade has discretion as to the action to be taken, and there is no provision either for compelling the parties to accept their mediation or to abide by any agreement effected through their intervention. There are other provisions in the act providing for the registration of voluntary conciliation boards, and for the promotion by the Board of Trade of the formation of such boards in districts and trades in which they are deficient. During the first eleven years after the passage of the act the number of cases arising under section 2 (providing for action by the Board of Trade for the settlement of actual or apprehended disputes) averaged twenty-one per annum, and the number of settlements effected fifteen. In the remaining cases the Board of Trade either refused to entertain the application or failed to effect a settlement, or the disputes were settled between the parties during the negotiations. About three-quarters of the settlements were effected by arbitration and one-quarter by conciliation. A number of voluntary conciliation boards formed or reorganized since the passing of the act provide in their rules for an appeal to the Board of Trade to appoint an umpire in case of a deadlock. At least thirty-six trade boards are known to have already adopted this course. The figures given above show that the Conciliation Act of 1896 has not, like previous legislation, been a dead letter, though the number of actual disputes settled is small compared with the total number annually recorded.

Arbitration and conciliation in labour disputes as practised in the United Kingdom are entirely voluntary, both as regards the initiation and conduct of the negotiations and the carrying out of the agreement resulting therefrom, Proposals for compulsion. In all these respects arbitration, though terminating in what is called a binding award, is on precisely the same legal footing as conciliation, which results in a mutual agreement. Various proposals have been made (and in some cases carried into effect in certain countries) for introducing an element of compulsion into this class of proceeding. There are three stages at which compulsion may conceivably be introduced, (1) The parties may be compelled by law to submit their dispute to some tribunal or board of conciliation; (2) the board of conciliation or arbitration may have power to compel the attendance of witnesses and the production of documents; (3) the parties may be compelled to observe the award of the board of arbitration. The most far-reaching schemes of compulsory arbitration in force in any country are those in force in New Zealand and certain states in Australia. Bills have been introduced into the British House of Commons for clothing voluntary boards of conciliation and arbitration, under certain conditions, with powers to require attendance of witnesses and production of documents, without, however, compelling the parties to submit their disputes to these boards or to abide by their decisions. In the United Kingdom, however, more attention has recently been given to the question of strengthening the sanction for the carrying out of awards and agreements than of compelling the parties to enter into such arrangements. An interesting step towards the solution of the difficulty of enforcement in certain cases is perhaps afforded by the provisions of the terms of settlement of the dispute in the boot and shoe trade drawn up at the Board of Trade in 1895. Under this agreement £1000 was deposited by each party with trustees, who were directed by the trust-deed to pay over to either party, out of the money deposited by the other, any sum which might be awarded as damages by the umpire named in the deed, for the breach of the agreement or of any award made by an arbitration board in consonance with it. Very few claims for damages have been sustained under this agreement. Nevertheless it cannot be doubted that the pecuniary liability of the parties has given stability to the work of the local arbitration boards, and the satisfaction of both sides with the arrangement is shown by the fact that the trust-deed which lapsed in 1900 has been several times renewed by common agreement for successive periods of two years, and is now in force for an indefinite period subject to six months’ notice from either side. Theoretically a trust-deed of this kind can only offer a guarantee up to the point at which the original deposit on one side or the other is exhausted, as it is impossible to compel either party to renew the deposit. A proposal was made by the duke of Devonshire and certain of his colleagues on the Royal Commission on Labour for empowering associations of employers and employed to acquire, if they desired it, sufficient legal personality and corporate character to enable them to sue each other or their own members for breach of agreement. This would give the association aggrieved by a breach of award the power of suing the defaulting organization to recover damages out of their corporate funds, while each association could exact penalties from its members for such a breach. For this reason the suggestion has met with a good deal of support by many interested in arbitration and conciliation, but has been steadily opposed by representatives of the trade unions.

The question is not free from difficulties. The object of the change would be to convert what are at present only morally binding understandings into legally enforceable contracts. But apart from the possibility that some of such contracts would be held by the courts to be void as being “in restraint of trade,” the tendency might be to give a strict legal interpretation to working agreements which might deprive them of some of their effectiveness for the settlement of the conditions of future contracts between employers and workmen, while possibly deterring associations from entering into such agreements for fear of litigation. Individuals, moreover, could avoid liability by leaving their associations. In practice the cases of repudiation or breach of an award or agreement are not common. In countries like New Zealand, where the parties are compelled to submit their differences to arbitration, some of the above objections do not apply.

The following statistics are based on the reports of the Labour department of the Board of Trade. The number of boards of conciliation and arbitration known to be in existence in the United Kingdom is nearly 200, but a good many of Statistics of existing agencies. these do little or no active work. Only about one-third of these boards deal with actual cases in any one year, the active boards being mainly connected with mining, iron and steel, engineering and shipbuilding, boot and shoe and building trades. During the ten years 1897-1906 the total number of cases considered by these boards averaged about 1500 annually, of which they have settled about half, the remainder having been withdrawn, referred back or otherwise settled. About three-quarters of the cases settled were determined by the boards themselves and only one-quarter by umpires. The great majority of the cases settled were purely local questions. Thus more than half the total were dealt with by the “joint committees” in the Northumberland and Durham coal trades, which confine their action to local questions, such as fixing the “hewing prices” for new seams. The great majority of the cases settled did not actually involve stoppage of work, the most useful work of these permanent boards being the prevention rather than the settlement of strikes and lockouts. A certain number of disputes are settled every year by the mediation or arbitration of disinterested individuals, e.g. the local mayor or county court judge.

The extent to which the methods of arbitration and conciliation can be expected to afford a substitute for strikes and lockouts is one on which opinions differ very widely. The difficulties arising from the impossibility of enforcing Future scope and limits. agreements or awards by legal process have already been discussed. Apart from these, however, it is evident that both methods imply that the parties, especially the work-people, are organized at least to the extent of being capable of negotiating through agents. In some industries (e.g. agriculture or domestic service) this preliminary condition is not satisfied; in others the men’s leaders possess little more than consultative powers, and employers may hesitate to deal either directly or through a third party with individuals or committees who have so little authority over those whom they claim to represent. And even where the trade organizations are strong, some employers refuse in any way to recognize the representative character of the men’s officials. The question of the “recognition” of trade unions by employers is a frequent cause of disputes (see [Strikes and Lock-outs].) It may be observed, however, that it often occurs that in cases in which both employers and employed are organized into associations which are accustomed to deal with each other, one or both parties entertain a strong objection to the intervention of any outside mediator, or to the submission of differences to an arbitrator. Thus the engineering employers in 1897 were opposed to any outside intervention, though ready to negotiate with the delegates chosen by the men. On the other hand, the cotton operatives have more than once opposed the proposal of the employers to refer the rate of wages to arbitration, and throughout the great miners’ dispute of 1893 the opposition to arbitration came from the men. Naturally, the party whose organization is the stronger is usually the less inclined to admit outside intervention. But there have also been cases in which employers, who refused to deal directly with trade union officials, have been willing to negotiate with a mediator who was well known to be in communication with these officials, e.g. in the case of the Railway Settlement of 1907.

Apart, however, from the disinclination of one or both parties to allow of any outside intervention, we have to consider how far the nature of the questions in dispute may in any particular case put limits to the applicability of conciliation or arbitration as a method of settlement. Since conciliation is only a general term for the action of a third party in overcoming the obstacles to the conclusion of an agreement by the parties themselves, there is no class of questions which admit of settlement by direct negotiation which may not equally be settled by this method, provided of course that there is an adequate supply of sufficiently skilful mediators. As regards arbitration the case is somewhat different, seeing that in this case the parties agree to be bound by the award of a third party. For the success of arbitration, therefore, it is important that the general principles which should govern the settlement of the particular question at issue should be admitted by both sides. Thus in the manufactured iron trade in the north of England, it has throughout been understood that wages should depend on the prices realized, and the only question which an arbitrator has usually had to decide has been how far the state of prices at the time warranted a particular change of wage. On the other hand, there are many questions on which disputes arise (e.g. the employment of non-union labour, the restriction of piece-work, &c.) on which there is frequently no common agreement as to principles, and an arbitrator may be at a loss to know what considerations he is to take into account in determining his award. Generally speaking, employers are averse from submitting to a third party questions involving discipline and the management of their business, while in some trades workmen have shown themselves opposed to allowing an arbitrator to reduce wages beyond a certain point which they wish to regard as a guaranteed “minimum.”