Stanley Bruce's great industrial relation blunder

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The Howard government and its conservative backers are preparing with considerable fanfare for an assault on the trade unions through so-called reform of the industrial relations system after Howard gets control of the Senate on June 31.

This raises the issue of how the reactionary proposals of the Liberals can be defeated as the labour movement faces these attacks in a rather defensive situation.

People who think there will be a massive groundswell of immediate industrial rebellion against these proposals are deluding themselves. The labour movement at the moment is rather battered and dispirited.

The traditional socialist slogans of mobilization are still necessary and appropriate but it's extremely important to conduct a rapid educational program in the labour movement about the dangers of the conservative industrial proposals and about historical precedents.

A campaign for a militant industrial response has to be combined with exploring all the legal possibilities for defeating the Liberal offensive. Rhetoric about industrial mobilisation on its own won't get very far.

It's also necessary to construct the broadest united front including the bureaucracies in the labour movement whose interests are threatened to some extent and state Labor governments whose traditional prerogatives are threatened.

The Liberals have a tall order before them legally. They're talking about using aspects of corporations law to grab control of state industrial systems forcing most industrial matters into the federal sphere and then abolishing most of the functions of the state systems.

Legally that is a high-risk strategy. Even the current conservative-dominated High Court is likely to reject such proposals if they're strenuously opposed by the states.

A big danger in this situation is left talk by sections of the union bureaucracy and state Labor governments about handing over the state systems to the federal government on traditional Labor centralist grounds.

Such moves should be strenuously resisted. The striking thing about the Liberals' proposals is that they are an extraordinary rerun of the policies of the Bruce-Page conservative government in 1926 and 1928-29 which were defeated firstly in a referendum in 1926 and finally by the electoral defeat of the Bruce-Page government in 1929.

In some ways the social circumstances of the late 1920s were similar to now. The labour movement was in a relatively defensive situation and the economy was in a relative boom.

The political situation in the labour movement was quite similar too with Matt Charlton the federal parliamentary leader supporting the transfer of industrial powers to the federal sphere rather like Gough Whitlam did more recently.

The major difference is that in the late 1920s there was quite a bit of conflict on the conservative side about the proposals with the turbulent figure of Billy Hughes opposing Bruce every inch of the way. There doesn't seem to be the same scale of dissent on the conservative side in current conditions.

The most recent example of successful industrial resistance to conservative attack is the struggle of the Maritime Union a few years ago. That was a classic agitation combining industrial militancy community mobilisation and the intelligent exploitation of every legal mechanism which largely contributed to achieving the desired outcome: the preservation of the MUA.

In Jack Lang's useful memoir The Great Bust which was largely ghost-written by Norm Macauley there is a useful account of the Bruce-Page government's failed attempt to do what the Howard government is hoping to do. The two relevant chapters are available below to assist the beginnings of a discussion which will have to take place pretty fast if the next few months are to be used to prepare for mobilisation.

Imagine a referendum in which every political leader in the Commonwealth was rejected in his own sphere of influence. That was what happened in Australia on September 4th 1926. No one escaped the axe. It was a referendum to hand over industrial powers to the Commonwealth and to provide limited powers over trusts and combines. Prime Minister Bruce sponsored the proposal. He was not only defeated throughout Australia but in his own state of Victoria as well. The federal leader of the Labor opposition Matt Charlton supported Bruce. He also had his advice rejected throughout the Commonwealth and couldn't even carry his own electorate of Hunter.

As Premier of New South Wales I advocated a no vote. But this state voted yes. T.R. Bavin who was leader of the Nationalist opposition also advocated a no vote but his state electorate of Gordon gave an emphatic yes vote. Mick Bruxner Dave Drummond Frank Chaffey and other prominent members of the state opposition were against increased federal powers and met the same fate.

E.G. Theodore was premier of Queensland and also was on the no side only to have his state vote yes. Scullin Latham W.M. Hughes Frank Brennan and Dr Maloney were all on the losing side.

If anyone wants to study the referendum device to prove just how unpredictable public opinion can be and how difficult it is to carry a referendum this vote provides a classic study. I have opposed every referendum since the first conscription referendum. Although the Labor platform provided for unification I was always a federalist. I believed that the sovereign states had very real functions. The Commonwealth was always trying to filch them.

The state of New South Wales was always in the vanguard of social reform. We were many steps ahead of the other states. Many of the referenda were inspired by the hope of taking over control of our affairs in order to deprive the people of this state of hard-won gains. That was precisely why Bruce introduced his referendum proposals in June 1926.

My government had passed a 44-Hour Week Act which provided for a working day of eight hours and a 51/2 day week. Instead of leaving the question to the courts we had introduced it by legislation. The Tories were hostile. They said we were ruining the state. Industries would transfer to other states. We also introduced compulsory workers' compensation a new factories act the widows' pension and had motherhood endowment ready for Parliament. The Tories were in a panic.

Bruce had just swept the country in his law-and-order election and believed that he had a mandate to deal with the trade unions. The Crimes Act had been the first step only. He wanted to introduce compulsory ballots for trade unions. He also wanted power to bolster up the Crimes Act. There were still grave doubts as to whether it was constitutional.

In the 44-Hour Act we inserted a provision that it applied to all workers within the state whether they worked under federal or state awards. The employers through the Clyde Engineering Company Lever Bros and Metters took the case to the High Court. It is known in the law books as the Cowburn and Amalgamated Engineers' Union case. By four to two the High Court ruled that federal awards prevailed over all state awards as did federal laws over state where the Commonwealth has jurisdiction.

Chief Justice Sir Adrian Knox Sir Isaac Isaacs and Justices Rich and Starke upheld the federal power. Messrs Justices Higgins and Powers both well versed in industrial law had the opposite viewpoint.

After studying the judgment the Bruce-Page Cabinet decided they could stymie the 44-hour week right away if they could obtain full power over industrial matters for the Commonwealth. Only New South Wales and Queensland had the 44-hour week.

They appointed a Commonwealth Arbitration Court of three judges – Chief Justice Lukin and Justices Dethridge and Beeby. They were given appointments for life at £2500 a year. The next move was to get the question of hours and wages transferred to their court.

Bruce and his Attorney-General J.G. Latham decided that the time was opportune for a referendum to increase Commonwealth powers. One of their problems was that a Nationalist Party conference in 1923 had voted in favor of limiting Commonwealth powers and transferring them back to the states. But that didn't worry Bruce. He had just obtained a fresh mandate. Most of the states had returned Labor governments. In a speech to a select gathering at the Hotel Australia presided over by Sir Owen Cox Bruce shortly after he had become Prime Minister had suggested what was really needed in this country was a "dictatorship of six of the best brains of the land".

Bruce knew that the Federal Labor Party had always favored unification. Fisher had put a referendum to the people in 1911 and 1913 which had suggested alterations to the constitution giving the federal government absolute power over all industrial problems trusts and monopolies and other items in the Labor platform. They had been rejected on both occasions with New South Wales leading the opposition. Hughes tried again in 1919 with proposals covering trade and commerce as well as arbitration together with power to nationalise monopolies. Again the Australian people had turned their thumbs down and nowhere more emphatically than in this state.

Bruce's trump card was to invite Charlton and the federal Labor Party to confer with him on proposals which they could jointly submit to the people. The Federal Caucus referred the suggestion to the state branches of the ALP. Three states were in favor of collaboration while three were against. Again New South Wales opposed the suggestion. Charlton then decided that he would go ahead.

Bruce's chief proposition was that the constitution should be altered in such a way as to hand over all power dealing with the regulation of the terms and conditions of employment and the rights and duties of employers and employees in all industrial matters to authorities to be established by the Commonwealth. That meant giving absolute power to the Commonwealth Arbitration Court.

There was a second clause intended as a sop to the Federal Labor Party to grant control over trusts and combinations operating "in restraint of trade". Charlton and his party didn't realise that the clause could be used against trade unions as well as against powerful trusts. Then as a separate question there was a proposal to give the Commonwealth power "to protect the interests of the public in case of actual or probable interruption of an essential service".

The federal caucus after many comings and goings between the two parties finally agreed to support Bruce in an appeal to the people. In Sydney I immediately denounced it as an attempt to deprive the people of the 44-hour week. I pointed out that the states would jettison all rights to enact factory laws. Conciliation and arbitration courts would no longer be state affairs. Workers' compensation early closing motherhood endowment would be solely federal matters. The Commonwealth could kill the state laws. "The whole social and industrial life of the Australian people will be at the mercy of three legal gentlemen who will be superior to all laws federal or dtate. Mr Bruce's proposals are fraught with tremendous danger to the peace order and good government of the Commonwealth " I told the Labor Party. The ALP executive backed my stand.

In Melbourne Bruce and Charlton collaborated to the limit. The only criticism came from within the government parties. A West Australian member of the Country Party Mr Gregory called it an unholy alliance. WA Watt a former treasurer and deputy prime minister said that it would split all parties. He had grave doubts. He described the rival groups as two well-bred dogs watching the bone held in the Prime Minister's hand. He was suspicious of giving judges too much power. "Even if they were angels from Heaven I should hesitate to repose in these three judges of the Arbitration Court the enormous powers contained in this measure " said Watt.

Hughes was also against giving the power to the judges. He said it should remain with Parliament. That was the original proposal of 1911. But it didn't satisfy Bruce. He wanted Lukin Dethridge and Beeby to have the power and not Parliament. However Hughes finally agreed that half a loaf was better than none and agreed to support the Bill. Mr Rodgers a former Nationalist minister of trade and customs from Victoria openly attacked the Bill. He said he preferred to leave industrial matters to the wages boards as they had then in Victoria. He said the Labor Party could appoint its own judges to bring in a 30-hour week and £10 a week wage.

The Bill to refer the proposal to a referendum was carried by 56 votes to two – the dissenters being Messrs Gregory and Rodgers. Watt and Hughes supported the Bill. A number of Labor members including Frank Anstey Percy Coleman and Billy Mahony didn't vote.

The fight then moved into the electorates. A council of federal unions was formed in Melbourne to urge a yes vote. The committee had unlimited money to spend and millions of pamphlets were distributed with arguments by Matt Charlton and Scullin in favor of the Bruce proposals.

The counter came when Albert Willis called an All-Australian Congress of Trades Unions in Sydney and invited Charlton to attend. It was the first meeting of the ACTU.

Charlton put up a passionate defence of his stand. He was told that he had been guilty of an act of treachery against the working class. The miners were particularly bitter and they controlled his selection. Charlton said that the proposal was the same as Labor supported in 1911 and said that Bruce had seen the light. "For God's sake don't let your opinions bring disruption to the Labor movement " he pleaded. He said every member of the Labor Party was free to vote as he liked.

By 144 votes to 10 Charlton was rejected by the congress. It was a humiliating defeat. In Melbourne Maurice Blackburn was one of the few to come out in opposition. On the other side of the political fence there was growing confusion. The Nationalists in this state wanted it. They wanted to kill the 44-hour week. The manufacturers retailers and wholesale houses all backed Bruce with cash.

But Thomas R. Bavin state leader of the Nationalist Party was against it. "You will never get industrial peace through a Court." He pointed out that they would be giving the power to the next federal Labor government. He had the foresight to see what such powers could lead to in the future.

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