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

by Various

Another objection on the part of some employers and workmen to unrestricted arbitration is its alleged tendency to multiply disputes by providing an easy way of solving them without recourse to strikes or lock-outs, and so diminishing the sense of responsibility in the party advancing the claims. It is also sometimes contended that arbitrators, not being governed in their decisions by a definite code of principles, may tend to “split the difference,” so as to satisfy both sides even when the demands on one side or the other are wholly unwarranted. This, it is said, encourages the formulation of demands purposely put high in order to admit of being cut down by an arbitrator. One of the chief practical difficulties in the way of the successful working of permanent boards of conciliation, consisting of equal numbers of employers and employed, with an umpire in case of deadlock, is the difficulty of inducing business men whose time is fully occupied to devote the necessary time to the work of the boards, especially when either side has it in its power to compel recourse to the umpire, and so render the work of the conciliation board fruitless. In spite of all these difficulties the practice of arranging differences by conciliation and arbitration is undoubtedly spreading, and it is to be remembered that even in cases in which theoretically a basis for arbitration can scarcely be said to exist, recourse to that method may often serve a useful purpose in putting an end to a deadlock of which both parties are tired, though neither cares to own itself beaten.

New Zealand.—The New Zealand Industrial Conciliation and Arbitration Act 1894 is important as the first practical attempt of any importance to enforce compulsory arbitration in trade disputes. The original act was amended by several subsequent measures, and the law has been more than once consolidated. The law provides for the incorporation of associations of employers or workmen under the title of industrial unions, and for the creation in each district of a joint conciliation board, elected by these industrial unions, with an impartial chairman elected by the board, to which a dispute may be referred by any party, a strike or lock-out being thenceforth illegal. If the recommendation of the conciliation board is not accepted by either party, the matter goes to a court of arbitration consisting of two persons representing employers and workmen respectively, and a judge of the supreme court. Up to 1901 disputes were ordinarily required to go first to a board of conciliation except by agreement of the parties, but now either party may carry a dispute direct to the arbitration court. The amendment was adopted because it was found in practice that the great majority of cases went ultimately to the arbitration court, and conciliation board proceedings were often mere waste of time. The award of the court is enforceable by legal process, financial penalties up to £500 being recoverable from defaulting associations or individuals. If the property of an association is insufficient to pay the penalty, its members are individually liable up to £10 each. It is the duty of factory inspectors to see that awards are obeyed. The law provides for the extension of awards to related trades, to employers entering the industry hereafter, and in some cases to a whole industry.

The above is only an outline of the principal provisions of this law, under which questions of wages, hours and the relations of employers and workmen generally in New Zealand (q.v.) industries became practically the subject of state regulation. The act must more properly be judged as a measure for the state regulation of industry, but as a method of putting an end to labour disputes its success has only been partial.

Australia.—The laws which are practically operative in Australia with respect to arbitration and conciliation are all based with modifications on the New Zealand system. The first compulsory arbitration act passed in Australia was the New South Wales Act of 1901. The principal points of difference between this and the New Zealand act are that the conciliation procedure is entirely omitted, the New South Wales measure being purely an arbitration act. The arbitration court has greater power over unorganized trades than in New Zealand, and the scope of its awards is greatly enlarged by its power to declare any condition of labour to be common rule of an industry, and thus binding on all existing and future employers and work-people in that industry. In Western Australia laws were passed in 1900 and 1902 which practically adopted the New Zealand legislation with certain modifications in detail.

In 1904 the commonwealth of Australia passed a compulsory arbitration law based mainly on those in force in New Zealand and New South Wales, and applicable to disputes affecting more than one Australian state. The arbitration court is empowered to require any dispute within its cognizance to be referred to it by the state authority proposing to deal with it. There are other Australian laws which, though unrepealed (e.g. the South Australian Act of 1894), are a dead-letter. Generally speaking, the Australasian laws on arbitration and conciliation are more stringent and far-reaching than any others in the world.

Canada.—In 1900 a conciliation act was passed by the Dominion parliament resembling the United Kingdom act in most of its features, and in 1903 the Canadian Railway Labour Disputes Act made special provision for the reference of railway disputes to a conciliation board and (failing settlement) to a court of arbitration.

This act was consolidated with the Conciliation Act 1900 during 1906 in an act respecting conciliation and labour, and in March 1907 the Industrial Disputes Investigation Act became law by which machinery is set up for the constitution of a board, on the application of either side to a dispute in mines and industries connected with public utilities, whenever a strike involving more than ten employees is threatened. The provisions of the act may be extended to other industries and railway companies, and their employees may take action under either the Conciliation and Labour Act or the Industrial Disputes Investigation Act. Under the Investigation Act it is unlawful for any employer to cause a lock-out, or for an employee to go on strike on account of any dispute prior to or during a reference of such dispute to a board constituted under the act, or prior to or during a reference under the provisions concerning railway disputes under the Conciliation and Labour Act. There is nothing, however, in the act to prevent a strike or lock-out taking place after the dispute has been investigated.

France.—The French Conciliation and Arbitration Law of December 1892 provides that either party to a labour dispute may apply to the juge de paix of the canton, who informs the other party of the application. If they concur within three days, a joint committee of conciliation is formed of not more than five representatives of each party, which meets in the presence of the juge de paix, who, however, has no vote. If no agreement results the parties are invited to appoint arbitrators. If such arbitrators are appointed and cannot agree on an umpire, the president of the civil tribunal appoints an umpire. In the case of an actual strike, in the absence of an application from either party it is the duty of the juge de paix to invite the parties to proceed to conciliation or arbitration. The results of the action of the juge de paix and of the conciliation committee are placarded by the mayors of the communes affected. The law leaves the parties entirely free to accept or reject the services of the juge de paix.

During the ten years 1897-1906 the act was put in force in 1809 cases—viz. 916 on application of workmen; 49 of employers; 40 of both sides; and 804 without application. Altogether 616 disputes were settled—549 by conciliation and 67 by arbitration.

Germany.—In several continental European countries, courts or boards are established by law to settle cases arising out of existing labour contracts; e.g. the French “Conseils de Prud’hommes,” the Italian “Probi-Viri,” and the German “Gewerbegerichten,”—and some of the questions which come before these bodies are such as might be dealt with in England by voluntary boards or joint committees. The majority, however, are disputes between individuals as to wages due, &c., which would be determined in the United Kingdom by a court of summary jurisdiction. It is noteworthy, however, that the German industrial courts (Gewerbegerichten) are empowered under certain conditions to offer their services to mediate between the parties to an ordinary labour dispute. The main law is that of 1890 which was amended in 1901. In the case of a strike or lock-out the court must intervene on application of both parties, and may do so of its own initiative or on the invitation of one side. The conciliation board for this purpose consists under the amending law of 1901 of the president of the court and four or more representatives named by the parties in equal numbers but not concerned in the dispute. Failing appointment by the parties the president appoints them. Failing a settlement at a conference between the parties in the presence of the president and assessors of the court, the court arrives at a decision on the merits of the dispute which is communicated to the parties, who are allowed a certain time within which to notify their acceptance or rejection. The court has no power to compel the observance of its decision, but in certain cases it may fine a witness for non-attendance. In the first five years after the passage of the amending law of 1901 (viz. 1902-1906) there were 1139 applications for the intervention of the industrial courts: 492 agreements were brought about and 107 decisions were pronounced by the courts, of which 64 were accepted by both parties.