A New Province for Law and Order: assessing one hundred years of industrial arbitration in Australia.

1. Introduction

The use of conciliation and arbitration to resolve industrial disputes in Australia stands as one of the great social experiments of the late nineteenth and twentieth centuries anywhere in the world. While the experiment with industrial arbitration was not new (Mitchell 1989), the manner in which it was established in the Australian context and subsequently evolved, is a unique and extraordinary story (Gahan 2005a). Now, a century on, this very timely volume, edited by Joe Isaac and Stuart Macintyre, provides a broad ranging institutional history of the development of the federal system of conciliation and arbitration and its profound impacts on Australian politics, economy and society.

Arbitration has played an important economic and policy role well beyond its industrial relations function. It represents one of the founding institutions of the Commonwealth and the broad elements of the historical compromise that has framed the Australian welfare state (Castles 1987 and 1988, Catley 1996, Lloyd 2002). At various times throughout Australia's history it has been used as a key instrument for managing wage fixation, implementing aspects of industry policy, and as a more general macro-economic policy instrument (Gahan 1998). It has also been subject to ongoing controversy and political conflict over its life time. This is reflected in the frequency with which the relevant legislation has been amended, the number of constitutional challenges to the ways in which the arbitration power of the Commonwealth (section 51 (xxxv)) has been interpreted and ongoing political opposition to the very existence of industrial tribunals.

Today, arbitration finds limited political support from business associations and conservative political parties (O'Brien 1994); while trade unions and the Australian Labor Party (ALP) have continued to provide support for the institution, at various times they too have sort to cut it down size (Dabscheck 1995). Notwithstanding this, conciliation and arbitration has remained a resilient institution, adapting and evolving to meet the economic and political challenges of the day (Gahan and Harcourt 1999). This flexibility and resilience makes it an extraordinary story, one of 'colour and movement' embodied in the personalities and events associated with it, as well as the legal and industrial doctrines which it has produced. After one hundred years of existence, however, one might be forgiven for thinking that the institution is now experiencing a long and slightly undignified decline. Today, the institution is set for yet another overhaul, but one which potentially removes the essential features of the system that marked the Australian experiment as distinctive (Gahan 2005b).

Given that it has remained so controversial after such a long period of existence, the centenary of arbitration marks an extremely appropriate time to assess its contribution to Australia's economic and industrial fortunes. For this reason alone, a compendium that seeks to review the last one hundred years marks a significant contribution to the even longer period of debate and scholarship on its role and impacts. Thankfully, the Australian Industrial Relations Commission itself has played a role in marking this historic occasion by assisting in the task of commissioning this volume, edited by eminent labour economist and one-time Deputy President Joe Isaac and historian Stuart Macintyre. Both Isaac and Macintyre have themselves made important contributions to scholarship on arbitration over a number of years.

Aptly titled The New Province for Law and Order, this volume brings together eight essays examining various aspects of the evolution of arbitration as an institution, and assesses its impact on Australian life in various ways, along with interesting biographical vignettes and useful appendices. The contributions traverse the origins of arbitration, the growth and development of the institution, the legal principles and constraints which have at various times shaped its course and influence, the economic and social effects of its decisions, and the ways in which unions and employers have grappled with its role.

As we have stated, we consider this to be an important contribution to the scholarship on industrial arbitration--we add flesh to this claim in the paragraphs that follow. We also recognize the challenge associated with attempts to consider all dimensions of an institution that has lasted a century. But in reading this contribution we also have a number of critical arguments to make about what the book achieves. Our central contention is that much of the analysis presented in this book does not provide a coherent sense of the political economy of arbitration: the 'big structures and large processes' through which it has embedded itself into the fabric of the Australian economy and social values. By 'political economy' we refer to the way in which arbitration related to the institutional, economic, social and political character and events that have marked the evolution of the Australia over the same one hundred years. In particular, we draw attention to a number of aspects of the arbitration story: first, the economic context in which the institution itself was created and reformed at various points in its history; second, the context in which arbitrators made key decisions; third, the way in which at various points arbitration has shaped the politics of the workplace; and fourth and finally, the politics of institutional decline, which have marked arbitration over the last two decades.

The central failure to account for the political economy of arbitration seems curious given the large volume of scholarship which has been devoted to various aspects of this question. Indeed, as we indicate at various points in our discussion, we were struck by a more general failure to incorporate adequately the contribution of what we see as key debates in the scholarship on various aspects of arbitration. For instance, the seminal contributions of people such as Anderson, Foenander, Perlman and MacCarthy remain largely absent from the analysis. Similarly, work which has considered the ways in which arbitration was used to establish a larger policy regime, interacting with tariff policy, industry policy, and social welfare arrangements is largely ignored. Yet for much of the last 50 years, these contributions have shaped the dominant views of arbitration. Nor is much said about the critics of arbitration, notably the work of Marxist writers such as Sharkey and Hutson, or neo-classical economists such as Niland, Blandy and Wooden.

This theme of the political economy of arbitration provides the core structure of the rest of this review essay. Section 2 begins with a review of what the contributors to this volume have to say about the introduction of arbitration in Australia and unique attributes of what others have termed the 'Australasian model' and how it was incorporated into a larger policy framework. Here we draw attention to the essential features of the Australian model of arbitration and the role arbitration played in a larger institutional framework established in the first two decades after 1900. Section 3 then reviews what this book contributes to our understanding of the evolution of arbitration in practice, focusing here on the question of how arbitrators make decisions. Section 4 then considers evolution of arbitration in practice, focusing on the more idealistic visions of what arbitration might achieve and the styles of arbitrator decision-making of successive Presidents. The economic and social impacts of arbitration are then reviewed in Section 5. The period of institutional decline which has marked the last two decades of arbitration and its likely future role is the subject of Section 6.

2. The Birth of the Australian Model of Arbitration

The first three Chapters examine from different perspectives the birth and evolution of arbitration as an institution. Tim Rowse looks at the politics of the introduction of arbitration and some of the subsequent political controversies that plagued its operation. In his view, arbitration has throughout its life struggled to find 'the ellusive middle ground' between the interest of unions and employers and within the political system that would allow for ongoing support and stability. Stuart Macintyre's chapter deals with the establishment of the federal system as an organization and its subsequent growth and change. He too charts many of the controversies and apparent death knells which the system has endured. Michael Kirby and Breen Creighton review the development of industrial jurisprudence, focusing on the way in which section 51(xxxv) and other heads of power within Commonwealth Constitution have been interpreted, focusing again on key cases that significantly altered the tribunal's capacity to respond to the industrial issues of the day. This too has been marked by controversy and conflict over how the 'sparse words' contained in the constitution should be interpreted. In their view, 'this area of constitutional law illustrates, more vividly than most, the impact upon constitutional exposition of the forces of history, economics, national values and survival, as well as the forces of changing legal doctrine and political and social needs' (p. 99).

Tim Rowse anchors his analysis of the difficult birth and evolution of arbitration on the proposition that the politics of arbitration made it difficult to establish some 'middle ground' between capital and labour, and political parties, as to how the institution should be constituted and for what essential purposes. At its core, arbitration embodied an attempt to institutionalise class conflict and make for a more orderly process of resolving disputes and determining the distribution of wealth. For capital it represented a means by which the emergent industrial conflicts and realities could be stabilized; but also a solution which required, to some degree, the usurpation of its innate property rights and a process by which organized labour could gain greater influence within economic social life and instutionalise a class basis to ordering political and social affairs. For unions, embracing arbitration represented a means to an end, but a retreat from independence and a conditional limit on their right to employ direct action. 'Under compulsory arbitration, trade unions have been both the instruments of employee self assertion and of their self-discipline' (p. 17).

Rowse begins with the debates at the constitutional conventions in the lead-up to Federation and the subsequent design of the arbitration Act itself. The granting of an arbitral power to a newly established federal government proved difficult and, by the final convention, won the day by only a slim majority of delegates. The subsequent introduction of the Commonwealth Conciliation and Arbitration Act of 1904 also proved difficult to achieve. The 'founding fathers' of the constitution, Rowse notes, 'differed over the particulars and urgency of the legislation' (p. 23). Barton promised that a federal arbitration Bill would be introduced in the first Parliament, but his own commitment to it was more pragmatic than one of conviction. The first federal Bill was introduced by Kingston as the Minister for Trade and Customs in July 1903, but foundered on disagreement between senior Ministers as to the appropriate coverage and was abandoned later that year. Deakin, who succeeded Barton in as Prime Minister in September 1904, and subsequently Watson, who led Australia's first labour government briefly, could not find a compromise Bill that could win adequate support. Although a little under four years after the establishment of the Commonwealth, it was under Reid, Australia's fourth Prime Minister that a version of the original Bill was finally passed in December 1904 (Plowman 1989, Macintyre 1989).

The Drift Towards Arbitration: 1870-1900

Perhaps of necessity, Rowse's chapter abbreviates much of the evolutionary impetus that emerged in the colonies prior to arbitration. While the Great Strikes of the 1890s are popularly (and rightly) attributed as providing a strong impetus for the Australian experiment with arbitration, their role has, to some degree, been exaggerated (Quinlan 1989).

The beginnings of Australia's experimentation with arbitration can perhaps be traced to some elements of pre-arbitral legislation, notably the Master and Servant Acts (Quinlan 1989) and the Trade Unions Acts (Gahan 2001). In both cases, while legislation was based on British labour law developments, the Australian legislation introduced innovative elements to their provisions or were received in quite different ways to their British parents, reflecting 'local Labour market conditions as well as distinct social, economic and political structures ... [which] provides a context in which it is possible to understand why local legislatures opted for arbitration, (Quinlan 1989, p.44). In the case of Master and Servant legislation, colonial statutes tended to be more interventionists in nature, relied on to a greater degree on compulsion, and reflected a greater dependence on statutory regulation at the expense of common law (Quinlan 1989). The colonial Trade Union Acts, while largely following the British Acts to the letter, were not utilized by unions in the same manner. They nonetheless paved the way for incorporation of unions within arbitral legislation through registration (Gahan 2001).

Interest in conciliation and arbitration in the Australian colonies during the late 1870s also grew in response to the growing incidence of strikes, particularly key areas of industry such as mining (Coghlan 19691[1918], p. 2098), as well as the more general growth in factory employment and the host of new problems which this brought with it. Most significant was the endemic problem of sweating in various trades, notably in the clothing trades, which received considerable public attention during the 1870s and 1880s, well before the strikes of the 1890s. Deakin, for instance, who was subsequently a strong supporter of arbitration at the constitutional conventions and as a senior member of the early federal parliaments, had been a member of the 1884 Royal Commission on Employes in Shops in Victoria, which had recommended arbitration as a means to combat the practice of sweating.

The more evolutionary drift towards arbitration is reflected in the stages through which the distinctive 'Australasian model' emerged. Mitchell and Stern (1989) have identified three phases in the development of the Australasian model of compulsory arbitration from this point: the first saw the introduction of experimental systems of conciliation and arbitration based principally upon voluntary rather than compulsory concepts. In the second phase, voluntary conciliation and arbitration was replaced by compulsory systems of two types--wages boards--and courts and boards of conciliation and arbitration. The third phase is characterised by the merger, in certain jurisdictions and in varying degrees, of the wages boards systems and the conciliation and arbitration systems (Mitchell and Stern 1989, p. 105).

The first Australian Act was introduced by the NSW Parliament in 1867, the same year as the Councils of Conciliation Act was passed by the English Parliament. The Arbitrations Facilitation Act 1867 provided for the appointment of an arbitrator by a judge of the Supreme Court where the parties had agreed to arbitration. The arbitrator's award would be binding. The award, however, could be referred back to an arbitrator where an application was made by one of the parties to set aside a determination. (1) There is no evidence that an arbitrator was ever appointed under the provisions of this Act; for all intents and purposes, it was unsuccessful in achieving its aims and was repealed by the Trades Disputes Conciliation and Arbitration Act 1892. (2)

Two further Bills were introduced into the NSW Parliament before 1890, but neither passed the legislature (Mitchell 1989). The first NSW Act of any substance was passed in 1892. Despite recommendations by the NSW Royal Commission on Strikes in favour of compulsory arbitration, the Trade Disputes Conciliation and Arbitration Act 1892 provided for voluntarily arbitration, and did not require the parties to be bound by the arbitrator's award. Markey (1988) suggests that this Act was certain to be ineffective from the start given its voluntary nature. The Act, he concluded, was 'negated almost immediately by the employer's refusal to submit the 1892 Broken Hill dispute to its machinery' (Markey 1988, 271). Indeed, Mitchell suggested that this Act, along with similar voluntary legislation passed in Victoria and South Australia soon after, 'failed to have any significant impact upon the settlement of industrial disputes' at all (Mitchell 1990, p. 57). While the Act was 'an amiable and nicely drafted measure', Pember Reeves quipped, 'conflicts went on intermittently, and it became so evident that the Act was a not inexpensive piece of waste paper, that Parliament ended by refusing to vote money for it' (Pember Reeves (1969[1902], p. 99) Subsequently, only a small number of relatively insignificant disputes were submitted to a Council of Conciliation established by the Act and most major disputes remained a test of industrial fortitude between unions and employers (Markey 1988, Walker 1970, Gollan 1960, Pember Reeves (1969[1902]).

The voluntaristic approach to arbitration that characterised these first legislative initiatives in NSW was also evident in the Conciliation Act 1894 in South Australia, and the Councils of Conciliation Act 1891 in Victoria (Mitchell 1990). However, in 1890 and 1891, Charles Kingston introduced two Bills into the South Australian Parliament which contained the central features now associated with the Australasian model of compulsory arbitration: first, unilateral reference of industrial disputes to arbitration or to a wages board; second, binding awards backed by enforcement mechanisms; third, the registration and regulation of union organizations; and fourth, the prevention of strikes and lockouts in an industry where a tribunal or board had jurisdiction (Mitchell 1989). The first of these, the 1890 Industrial Unions Bill, was never enacted, while the second Bill, the 1891 Conciliation Bill, was modified to such an extent that, by the time it became the Conciliation Act 1894, most of its essential compulsory attributes were removed (Mitchell and Stern 1989, Portus 1958). By 1900, the arbitral model had been replaced with a wages board system largely based on the Victorian system. The elements contained in Kingston's failed 1891 Conciliation Bill were nevertheless influential, and can be can be found in the NSW Industrial Arbitration Act 1901, the Western Australian Industrial Conciliation and Arbitration Act 1900, and the Commonwealth Conciliation and Arbitration Act 1904.

The Establishment of the Tribunal System

Once created, the system took some time to establish a significant role. In its early years, the Court heard few cases and operated largely out of existing resources and personnel of the High Court and existing State industrial registries. Macintyre's account brings to life the process by which this was achieved. The first President of the Commonwealth Court of Conciliation and Arbitration as it was initially designated, Justice O'Connor, is characterized as an 'unwilling' president and was succeeded by Justice Higgins in September 1907.

The Court did not hear its first case until November 1906, and dealt with only a handful of disputes in the time before Higgin's presidency. Both O'Connor and Higgins were given limited statutory guidance as to how they should exercise their powers. The Act specified that the Court would operate 'without regard to technicality or legal forms', and the judges were left to 'inform their mind on any matter in such a manner as it thinks fit' (quoted by Macintyre, p. 58). Arbitration, as is well document, was closely linked to tariff protection. Under the Commonwealth Excise Tariff and Duty Act 1906, excise duties were imposed on specific agricultural implements on the proviso that such goods were produced 'under conditions as to the remuneration of labour which are declared by the President of the Commonwealth Court of Arbitration to be fair and reasonable' (quoted in Isaac 1949, p. 5).

For both O'Connor and Higgins, the challenge of making determinations under such experimental conditions was considerable. Faced with the dilemma of determining what constituted a 'fair and reasonable wage' in the Bagshaw case, Justice O'Connor quipped that this presented 'a difficult task. It is difficult no matter what the experience the Judge may have had in dealing with the affairs of business or his knowledge of the conditions of this country--in fact it is impossible for him to decide what is reasonable remuneration as well as the parties themselves.' (3) In the even more important Harvester case, Higgins similarly complained that: 'The first difficulty that faces me is as to the meaning of the Act. The words are few, and at first sight plain of meaning; but, in applying the words, one finds that the Legislature has not indicated what it means by 'fair and reasonable'.' (4)

In making this landmark decision, Higgins pronounced that: 'The provision for fair and reasonable remuneration is obviously for the benefit of employees; and it must be meant to secure to them something which they cannot get by the ordinary system of individual bargaining with employers.' (5) Rather than deriving a wage rate from some estimation of the value of the work being done, Higgins suggested a fair and reasonable wage would be that which met 'the normal needs of the average employee regarded as living in a civilized community. I have invited counsel and all concerned to suggest any other standard; and they have been unable to do so.' (6) This, he suggested, should relate to the needs of 'the humblest worker' living in a normal household 'of about five persons'. (7) Despite the subsequent battles Higgins and others after him waged with the government of the day, with unions who were willing to ignore his insistence that strikes should be subordinate to the rule of law, and with employers who insistently challenged the jurisdiction of the Court, Higgins set in stone core principles of Australian wage determination for much of the century (Hancock 1979a and b). Over the next quarter of a century, as the scope of the Court's authority expanded, the volume of work increased and key decisions flowed through to key sectors, the Court established itself 'as the landmark of Australian social democracy. It provided the basis for the system of wage determination based on the cost of living ... and it gave institutional force to the privileged position of the male bread winner' (p.63).

Arbitration in Context: the Politics of Domestic Protection

The extraordinary growth in the role and influence of arbitration, Kirby and Creighton note in their chapter tracing the law of conciliation and arbitration, appears to have been against the grain of the original intentions of those who proposed a federal arbitration power. 'It seems safe to assume,' Kirby and Crieghton conclude, 'that most of those who supported the inclusion of section 51(xxxv) in the Constitution, and probably all of those who opposed its inclusion, envisaged that the power to legislate in reliance upon this provision should be used, if at all, only in highly exceptional circumstances, such as the disputes of the 1890s' (p. 133). Yet, the 'logic' of the conciliation and arbitration and wages board systems appeared to take a more ambitious view of what it could achieve. Principally, this role was centred on giving meaning to the Webbs' concept of the 'common rule', which 'must have appeared inimical to this original view of 'federal balance" (p.106). The principle of common rule, they document, faltered on the constitutional interpretation of s51(xxxv) in the decisions in the Whybrow's litigation, in which the limits of federal awards and the capacity of the Court to make common rules were tested. This was certainly clear in Higgin's approach referred to earlier.

Whybrow's and other cases represent the cornerstones of the employers' counter-attack to the establishment of a federal arbitration court. Plowman (1989 and his essay in the volume under review) and Macarthy (1970) before him have documented the persistent opposition of employers' associations to the role of the Court during its first thirty years of its operation. Throughout the second half of the nineteenth century, employers struggled to come to terms with the emergent reality of industrial organization of workers. This, as is well traversed in countless publications, provides some of the backdrop for the great strikes of the 1890s and the subsequent turn to arbitration. For many employers and their associations, unions and arbitration represented incursions on their property rights and capacity to make commercial decisions (Plowman and Smith 1986).

Indeed, the possible threat that arbitration posed to managerial prerogative led to considerable resistance from employers to submitting industrial matters to the Court. For employers, the struggles of the 1890s were about freedom to wield labour market power, and to establish wages and employment practices on their own terms. Union interference in this process, even in the absence of public institutions to regulate industrial relations, had provided a rallying point for many employers. Macarthy (1970) argues that throughout this period:

   Employers held to a set pattern of preferences. The ideal, of
   course, was complete freedom from restriction on labour
   matters: an employers' utopia where labour collectivism had
   not been heard of, and the State was kept in its proper place--
   society's policeman and soldier (except, naturally, when some
   modification was necessary to further exploit employers' own
   interests). The next best was collective bargaining arrangements
   as practised in Britain and the United States. One step further
   back: if, exceptionally, the State had to intervene, institutional
   arrangements ought to be limited strictly to voluntary
   conciliation. Forced back one more step: if compulsion there
   must be, employers always favoured the wages board system
   (Macarthy 1970, p. 187).

Further, economic conditions also worked in favour of employer resistance, particularly given the sluggish recovery that attenuated the aftermath of the 1890s depression: productivity growth was insignificant in the first two decades after 1900, the economy experienced large economic fluctuations due to the general dependence on commodity prices, and the problem of 'structural inertia', which resulted from slow growth in manufacturing, predominated (Forster 1989, pp. 206-211). Indeed, Forster has argued that these conditions provided little scope for the Commonwealth Court or government to pursue an active labour market policy aimed at increasing wages and restricting employers activities (Forster 1989, pp. 211-212).

The question left largely unexplored in the two chapters by Plowman and Creighton and Kirby is why, given a relatively adverse reception, was federal arbitration able to expand the scope of its coverage and establish itself as a permanent institution? These two chapters provide us with important parts of this story: first, the more expansive and sympathetic constitutional interpretation which removed many of the constraints on the federal system; and, second, the growing acceptance of arbitration by employers, particularly after the great depression, when arbitration was found to be a useful mechanism with which to thwart union claims and retard the growth of wages in the period of recovery, war and sustained growth thereafter.

What much of the two chapters leave in the background, but which is central to explaining the growth and expansion of arbitration--or the process by which it achieved an institutional embeddedness and permanency--is the story by which arbitration takes on its role beyond the settlement of industrial disputes and deliverance of industrial peace. Indeed it could be argued that these industrial functions became almost secondary to the function it has played in supporting a larger institutional framework and as a tool of macro-economic management.

This larger institutional framework has been associated with the 'White Australia policy'. Yet, the 'White Australia policy' is mentioned only twice in the entire volume--once by Creighton and Stewart and once by Gillian Whitehouse in her excellent chapter examining the effects of arbitration on equity and justice. We would argue that the question of arbitration's resilience over the course of the Twentieth Century--and also its gradual demise from the mid-to-late 1970s--can only be understood from the perspective of its role within the larger institutional framework that marked the Australian macro-economy and welfare state as distinctive.

Some of this institutional linkage was evident in the relationship between arbitration and the Excise Tariff and Duty Act of 1906--a relationship that endured through much of the twentieth century. However, as Francis Castles (1987, 1988) has comprehensively examined, arbitration was but one institution of a larger set of a relatively unique institutional regime designed to manage the economic constraints faced by a small economy dependent on world trade (see Gahan 2005b and 1998, and Lloyd 2002). This general institutional regime has often been labelled a policy of 'domestic defence', and formed the basis for continuing social consensus until the 1970s. (8) 'Domestic defence' has typically been contrasted with a policy regime of 'domestic compensation' employed by small European (particularly Scandinavian) countries who, given the similarly small size of domestic markets, are also dependent on world trade. (9)

3. The Evolution of Arbitration in Practice

Although arbitral and other legislation included provisions which were intended to guide arbitral decision makers, there was considerable scope for the development of a particular 'arbitrator style', or the enunciation of principles, never envisaged by legislation. For Higgins, the opportunities were to be boundless. In his own reflections on industrial arbitration, outlined in three articles in the Harvard Law Review between 1915 and 1920 (Higgins 1915, 1919 and 1920), Higgins was ready to recognize that the functions of the tribunal were 'definite and limited'. However, there was great scope to practice social engineering. Arbitration, he acclaimed,

   opened up for idealists a very wide horizon, with, perhaps,
   something of the glow of a sunset. Men accept the doom, the
   blessing of work; they do not dispute the necessity of the struggle
   with Nature for existence ... Give them relief form their
   materialistic anxiety; give then reasonable certainty that their
   essential material needs will be met by honest work, and you
   release infinite stores of human energy for higher efforts, for
   nobler ideals. (quoted in Perlman 1954 at pp. 31-32)

The lofty ideal of opening the wide horizon of arbitration to social reform was reflected in the principles on which Higgins based wage determination from the start of his tenure as President. For him, this required the strength and resolve to avoid influence from the industrial combatants, as well as political interference. As both Plowman and Rimmer note in their chapters, much of Higgin's presidency was marked by his attempt to impose the rule of law, unfettered by the exigencies of any particular case or external influence, a trait which we already noted had created political conflict for him.

But Higgins was not alone in the history of federal arbitration in facing this inevitable conflict over the appropriate role and approach of arbitrators. As a number of the chapters recount, various presidents faced industrial and political dissent from their approach and were pressured to move away from the principles which they sought to apply consistently across cases and time. In some cases, it involved arbitrators taking on the role of Higgin's 'idealist' and asking the parties to share in the glow of a new, utopian, industrial vision. In this respect Higgins own (utopist) vision of 'a new province for law and order' was outdone by Kelly, President between 1949 and 1956. (10) 'Kelly was an impolitic Chief Judge' (Macintyre, p.82). Like Higgins, he refused to accommodate powerful unions and sought to discourage them from resting their strength in the market for over-award payments. This approach won few friends among employers, unions or government. He faced a hostile relationship with his colleagues and found himself in disagreement over the appropriate role of the Court and over key decisions. A Catholic, Kelly found himself drawn into battles with communist trade union officials and, inspired by the agrarian vision associated with Catholic Action (see Ormonde 1972), wrote to unions and employers in an attempt to convince them to submit to the Court's authority (Dabscheck 1983). For Kelly, his idealism ended badly. His Court was not the apex of authority--as he soon discovered in the High Court's ruling in the Boilermaker's case that, in exercising both function of award maker and judge, the Court exceeded its constitutional authority. These two powers were duly separated in the form of a Commission to hear and resolve disputes, and a Court to exercise judicial functions. Kelly was appointed to the newly established Court, but died before taking up his new position.

Kelly's story is one of the most enigmatic and tragic of the federal tribunal's entire history. There are of course others that in various places, in different chapters, are discussed in some detail: Kirby's reign during a period of instability and difficulty; Moore's presidency during the period of indexation and decline; and Maddern's period in which the Commission's wings were clipped (Dabscheck 1995).

These all make for interesting reading. But where this book fails is in not providing an overall assessment of the behaviour of senior personnel and how decisions were generally made. Historically, this has been a key concern within the research on arbitration, starting with the assessment of the Higgins' Harvester judgment (particularly the work of Macarthy (1967, 1968a and b, 1969, 1970a and b), and including studies of key industries in which unions sought to defy the Court (most notably Perlman 1954), key arbitrators (Dabcheck's (1983) study of Kelly), and key motivations for arbitrators in decision-making (Romeyn 1980).

The institutional structure of arbitration tribunals in Australia has been drawn largely from legal traditions. Historically, tribunals were convened as courts and proceedings were modelled on judicial procedures (Cupper 1976); that this was intended, Romeyn (1980) has argued, is evident from a reading of the Constitutional Convention debates of the 1890s, as well as debates surrounding the enactment of the federal legislation. However, the discretionary nature of arbitral decision making has given rise to debate over whether this judicial appearance actually reflects tribunal practice--although judicial form may dominate, the process may give rise to alternative modes of decision making.

Romeyn posits two alternative types of arbitral decision making processes, judicial and political. Judicial arbitration 'implies that there is some 'just' solution to an industrial dispute which the arbitrator will arrive at by applying guiding principles ... to the facts involved in a particular dispute of arbitration.' The arbitral process is 'in the provision of an 'impartial' and 'just' system.' From this perspective, arbitration courts or tribunals are involved in a process of developing 'guiding principles, ascertainable from the documented reasons of decisions, and applied with a high degree of consistency ... and uniformity' (Romeyn 1980, pp. 183-184). Niland (1976), for example assumes that the judicial model accurately describes Australian arbitration tribunals through the application of principles or doctrines, such as comparative wage justice:

   Under arbitration, ... the relativity factor has been
   institutionalised as a firmer wage fixation principle, with the
   result that 'orbits of coercive comparison' become wider than is
   usually the case with bargaining ... A centralised tribunal
   structure where members with a common organisational identity are
   called on to make wage determinations for a wide range of industries
   probably needs the principle of comparative wage justice for its own
   ease of operation (Niland 1976, p. 380).

This view of arbitral processes, however, 'assumes that conduct which in reality appears to be consistent with ... judicial ... arbitration is in reality consistent with that theory.' (Romeyn 1980, p. 184). In particular, it assumes that where decisions are made on the basis of established principles, compliance does not pose a problem. In other words, while arbitrators are ostensibly involved in a judicial process, factors other than the systematic application of principles are important motivations for the decision of the arbitrator. These factors include the need to take account of the distribution of power between disputants and other idiosyncratic contingencies in the dispute at hand, or the values about what is just, and the arbitrator's own understanding of how the industrial disputants should behave. This is the nature of arbitration as a political process.

In his study of arbitration in the pastoral, metals trades and stevedoring industries, Perlman (1954) likewise found that tribunals resorted to autonomous or accommodative arbitration when strong unions sought to defy the role of the Court. Where the tribunal's principles were opposed by unions, 'the Court either has been forced to abandon or has voluntarily given up the traditional administrative role ... In its place it has ... bas[ed] its decisions mainly on an estimate of the strength and vehemence of the litigants own presentations' (Perlman 1954, pp. 179-180). Similarly, Dabscheck (1983) has made a distinction between arbitrators behaving 'as if motivated by the instinct to survive, ... which means that the Full Bench wishes to continue to be involved in the rule making process' (p. 209), and activist arbitrators, who enunciated principles of judicial decision making, and continually sought 'to clarify and (re)define the principles that should be employed in responding to the responsibilities and problems associated with industrial relations regulation' (Dabscheck 1983, p. 153).

While both Perlman and Dabscheck contend that the type of arbitration that will predominate will largely be a function of the preferences of the parties themselves, Bennett (1994) has more recently argued that the maintenance of a judicial appearance has served a concrete purpose in the legitimation of arbitration. She suggests that, within the political mould, but under the guise of judicial wisdom, the federal tribunal has attempted to impose a disciplinarian type of arbitration on the behaviour of the parties. The imperative for a disciplinarian model of arbitral decision making and enforcement has been the result of a range of factors. Most particularly, Bennett has argued that economic management, the dominance of legal ideology and the role of courts have driven the decisions made by arbitrators. This form of arbitration, which Bennett has called 'contextualized arbitration', can be seen as a variant of political or activist arbitration.

4. The Impacts of Arbitration: the Economy, Industrial Relations and the Workplace

While the majority of the chapters in this volume deal with aspects of arbitration in practice and the relationship between arbitration, unions, employers and governments, the three chapters which add most significantly to the research on federal arbitration are those dealing with its impacts on economic and social outcomes, justice and equity and strikes.

Hancock and Richardson take the view of sympathetic economists in examining the economic effects of arbitration on wages and other economic outcomes. They begin with a description of time series data tracking wages and prices. Not surprisingly they find that over the course of the last century nominal and real wages have grown by a considerable multiple; nominal wages have growth significantly higher than prices; and that for females the course of the century has seen an evolutionary improvement in their wages relative to men, punctuated by significant improvements associated with the equal pay decisions of 1969 and 1972.

The Hancock and Richardson analysis provides a backdrop for the waxing and waning of competing wage principles of 'needs' and' capacity to pay'. Tied into this discussion is the inevitable links between wage determination based on principles of needs and welfare state provisions. Much of this debate centred on early discussions around child endowment (see the final Chapter of Anderson's 1929 classic Fixation of Wages in Australia), but extended over the subsequent decades to other transfers aimed at alleviating poverty. This debate, as Hancock and Richardson document, remains a central debate in wage fixation, principally around the current system of 'safety net adjustments'. Aspects of capacity to pay, like needs, have remained persistent issues for the Commission in wage determination. For many of its current and (past) critics, the argument remains that arbitration sets an artificially high price for labour, particularly for the low skilled and those at the bottom of the labour market, effectively pricing them out of the market.

The evidence for this effect continues to be subject to debate both within and outside the Commission. At some points in time, that wages growth did in fact outstrip productivity growth and was associated with deleterious effects on employment, is evident, notably during the period of the wages explosion of 1970s and the inevitable 'real wage overhang.' But whether this was due solely to the Commission's decisions is doubtful given the growing proportion of all wage movements that occurred outside of Commission decisions and which resulted from direct bargaining between unions and employers. At other times, the Commission has proved useful in slowing wages growth. We have already mentioned the growing employer willingness to accept arbitration after the Great Depression, which was in part associated with their use of it to slow wages growth. More recently, the Commission has usefully checked the wages outbreak following the breakdown and abandonment of wage indexation in 1981, although this occurred under the auspices of the Prices and Incomes Accord. Nonetheless, the abiding conclusion drawn from Hancock and Richardson's discussion is that the impact of the Commission's wage decisions on labour market was at best mixed and varied over time.

A closely related debate concerns the effects of arbitration on the wages structure. The more 'rational' moments of the Commission's operation had been to pronounce wage outcomes, determine wage relativities and seek to have increases flow directly and orderly to other industries and occupations where appropriate. This was embodied in the doctrine of Comparative Wage Justice. Comparative Wage Justice consisted of two related elements: the first seeking uniformity in wages for specific occupational groups, based on a notion of work value, irrespective of the industry in which workers in that occupation might be located; and second, the notion of stable relativities, again based on a relative concept of work value (or margin for skill) between occupational groups. The evidence on the effects of arbitration on wages structure is at best ambiguous, although it points to a conclusion that it has had a most marked impact on wages of the weak.

Missing from this discussion is the now familiar linkage to international debates on the effects of minimum wages on unemployment and poverty (see Gahan and Barbara 2000). To be fair, this is a different, although related debate. But since the introduction of safety net wage increases, the minimum wage effect has become a central issue in evidence before the Commission and its deliberations. The institutional complexity of the Australian wage fixing through awards make it difficult to apply a US-style analysis to the question; yet no alternative approach has been devised by the hundreds of labour economists now employed in industry and universities. This seems puzzling to us, and given its criticality to current debates concerning whether arbitration fails the economy, an essential piece of work yet to be done.

Inequality and Justice

By far the most important contribution in this volume is Whitehouse's excellent essay on the effects of arbitration on the wages of indigenous and women workers. Her focus in this essay reflects the now significant amount of research examining both these groups of workers, although as she notes, the analysis pertaining to the 'story of women concentrates primarily on white women and their situation relative to white men; while the impact of the system on Indigenous Australians is largely the story of its impact on a particular group of Aboriginal men (stockmen)' (p. 210).

The essence of Whitehouse's analysis is the contradictory and conditional relationship between notions of equity and justice and the outcomes for women and Indigenous workers. As we have noted above, Higgins stamped his mark on the principles of wage determination through the notion of needs, rather that the principle of value to the employer. At the same time, however, Higgins also placed limits on the extension of these principles to all categories of workers. Indigenous workers, Whitehouse notes, 'found themselves on the other side of the protective barrier' to white men. 'Alongside the immigration restrictions directed at Asian and Pacific Islander labour ... legislative means of excluding Aborigines from particular forms of employment were adopted at both State and federal levels.' The historical tendency for the arbitral system to marginalize Indigenous workers has been reinforced by labour market discrimination and segmentation in the patterns of employment. To this end, the capacity of the an industrial tribunal, implementing notions of justice and equity equally across Indigenous and non-Indigenous workers is at best varied given the tendency for Indigenous workers employed in the private sector to be employed in non-award organizations and non-union employment.

In the case of women workers there has been significantly more research looking at both the history of how arbitration has determined wages and the impact of contemporary wage fixation on the wages of women. Whitehouse's chapter provides vivid accounts of key decisions in which the dominant concept of the family wage was applied in specific cases dealing with women workers, and the subsequent changes in wage determination, such as Women's Employment Board and the Equal Pay cases, which have been associated with significant narrowing in the male-female wage differential and, more recently, the growth in inequality associated with decentralization in wage bargaining--phenomenon evident in other industrialized countries. Whitehouse's analysis is also sensitive to the role of other forces in shaping inequality, particularly the gender-based occupation and industrial segmentation which has exerted such a strong influence.

Unions, Strikes and Arbitration

The final two chapters in the book deal with the relationship between unions, strikes and arbitration. Rimmer's chapter examines the relationship between unions and arbitration in light of two competing hypotheses: the first, drawn from the work of Scherer (1983), posits that arbitration was effectively captured by union principles; and second, the dependency theory, advanced initially by Marxist critics of arbitration, popularized and sustained by Howard (1977), which posits that unions have become dependent on arbitration for their existence. At an aggregate level both have some support. But the same might also be said of the US system of collective bargaining established as part of Roosevelt's 'New Deal' or indeed the institutional arrangements in other industrialized economies. Aspects of these debates are not unique to the Australian context.

Nonetheless, as Rimmer notes, both hypotheses are at best overdrawn given the difficult relationship between unions and the Commission. At the individual union level, neither hold water in that all unions at some point have had cause to curse the Commission. Some unions have almost seamlessly moved between more traditional methods recognisable to unionists elsewhere, while some have been successful outside the Commission. Dabscheck (1980), in an unusually poetic moment, liken unions to bumble bees 'moving from flower to flower,' in that they have used in a more pragmatic way the various options available to them, including arbitration. In a series of historical case studies Gahan (1996) concludes that neither Scherer nor Howard explains the relationship between unions and arbitration. Instead, he posits that unions are to varying degrees dependent on arbitration, reflecting varying access to alternative sources of power and influence.

Harley's chapter deals specifically with managing industrial conflict, which inevitably brings the focus of analysis to strikes. This chapter is essentially an update of the thorough treatment of strikes given by Waters (1981). It begins with a useful overview of the evolving pattern of strike activity since the beginnings of reliable statistics (around 1910). The fate of unions during this period corresponds closely with the rise and fall in the number of working days lost and disputes. What is also clear form the data is the strong influence of arbitration on the pattern of strikes that makes the Australian case distinctive: namely, strikes of short duration used as a queuing mechanism to gain access to arbitration. The larger question of whether arbitration causes industrial conflict provides Harley with the motivation to examine historically the relationship between arbitration and strikes at key junctures. From this analysis he concludes that there is no conclusive evidence that arbitration has been a major cause of strikes, despite the fact that Australian has a high level of strike activity compared with other countries. He goes on to claim that 'despite the arguments made by some critics, it encourages cooperation' (p. 350). This conclusion runs at odds with the debates on collective bargaining and arbitration which mark the industrial relations literature during the 1970s and 1980s. Surprisingly, these debates are largely ignored in this and other chapters.

5. The Future of Arbitration

At the beginning of this essay, we noted that the last decade has been associated with a decline in the role of the arbitration and, in the current political climate, the federal arbitration system is under significant attack. It now appears to be likely to lose some of the essential features of the Australasian model of compulsory arbitration. Dabscheck (1995), for instance, has tracked the political machinations of this process by which the 'wings' of the commission have been 'clipped'. More recent work by Watson et al (2004) tackles the real underlying factors which have been associated with this decline beyond the rejection of arbitration by employer groups and conservative political parties. They document the large scale shifts in the composition and dynamics of the labour market in which the traditional worker covered by arbitration has been in decline. Surprisingly, this volume does not engaged with this analysis. To be fair, some aspects are dealt with in each of the chapters, but again there is no overall sense of this process.

The conclusions of the editors in their introductory chapter and many of the authors of individual chapters seemed to be somewhat sanguine about the future. Many note that the history of arbitration has been one of flexibility and adaptation. Hancock and Richardson castigate those who focus on the historical link between arbitration and protectionism as necessitating an inevitable decline in the institution: 'the assertion that the demise of protection removed an essential underpinning of arbitration elevates historical event into historical necessity. The linked contention that freedom of trade necessitates market determination of wages and conditions is a massive non sequitur' (p.186).

While this is undoubtedly the case, there is a larger argument--a larger debate within economics, public policy and other disciplines about the role and ongoing effectiveness of traditional forms of regulation in economies more generally and specifically related to aspects of labour market regulation. As a number of researchers have noted, the realities of the labour market have changed irrevocably (Watson et al 2004, Gahan and Stricker 2005). Arbitration appears to be ill suited to deal with the diversity in employment statuses which have grown up under its reign. The 'labour problem' is less now a problem of securing industrial peace, and more a problem of securing efficient and fair labour markets (Deakin and Wilkinson 2005).

This is not the place to catalogue the shifting structure and dynamics of Australia's labour markets. Overall, the picture that can be drawn from the evidence is that these changes have created a highly fragmented labour market in which individuals are more likely to experience transitions between labour market states (unemployment and unemployment) and a diverse range of employment statuses and workplace contexts (Gahan and Stricker 2005). These new realities may require very different labour market institutions governing wages and labour market policy. The truth is, arbitration has faced an uphill battle for almost thirty years; it probably cannot meet the labour market challenges of today.

References

Anderson, G. (1929), The Fixation of Wages in Australia, Macmillan, Melbourne.

Bennett, L. (1994), Making Labour Law in Australia: Industrial Relations, Politics and Law, Law Book Company, North Ryde.

Bray, M. and Rimmer, M. (1989), 'Voluntarism or Compulsion? Public Inquiries Into Industrial Relations in NSW and Great Britain, 1890-4', in Macintyre and Mitchell. (1989), pp. 50-73.

Castles, F. (1987), 'The Politics of Economic Vulnerability: A Comparison of Australia and Sweden,' Acta Sociologica, vol. 30, pp. 271-280.

Castles, F. (1988), Australian Public Policy and Economic Vulnerability, Sydney: Allen and Unwin.

Catley, R. (1996), Globalising Australian Capitalism, Cambridge University Press, Melbourne.

Coghlan, T.A. (1969[1918]), Labour and Industry in Australia, volumes 1-4, Macmillan, Melbourne.

Cupper, L. (1976), 'Legalism in the Australian Conciliation and Arbitration Commission: The Gradual Transition', Journal of Industrial Relations, vol. 18, pp. 337-364.

Dabscheck, B. (1980), 'The Australian System of Industrial Relations: An Analytical Model', Journal of Industrial Relation: vol. 22, pp. 196-218.

Dabscheck, B. (1983), Arbitrator at Work, Sir William Raymond Kelly and the Regulation of Australian Industrial Relations, George Allen and Unwin, Sydney.

Dabscheck, B. (1995), The Struggle for Australian Industrial Relations, Oxford University Press, Melbourne.

Deakin, S. and Wilkinson, F. (2005), The Law of the Labour Market, Oxford University Press, Oxford.

Esping-Andersen, G. (1990), The Three Worlds of Welfare Capitalism, Princeton, NJ: Princeton University Press.

Esping-Andersen, G. (1999), Social Foundations of Postindustrial Economies, Oxford University Press.

Forster, C. (1989), 'The Economy, Wages and the Establishment of Arbitration', in Macintyre and Mitchell (1989), pp. 203-224.

Gahan P. (1998a), 'From Corporatism to Liberal Individualism: The Changing Character of Industrial Relations in Australia and New Zealand,' Otemon Bulletin for Australian Studies, vol. 24, pp. 195-226.

Gahan P. (1998b), 'European Unemployment: The Role of Labor Market Regulation?' Comparative Labor Law and Policy, vol. 19, pp. 455-472.

Gahan, P. (2000), 'Dead Letters? An Examination of Union Registrations Under Colonial Trade Union Acts, 1876-1900,' Australian Journal of Labour Law, vol. 13, pp. 50-83.

Gahan, P. (2005a), 'Conciliation and Arbitration,' in Galligan, B., (ed.), Oxford Companion to Australian Politics, in print.

Gahan, P. (2005b), 'Australia's Economic Performance in Context: The Role of Institutions and Institutional Change,' Otemon Bulletin of Australian Studies, vol. 31, in print.

Gahan, P. and Barbara, J. (2000), 'Taxation, Social Welfare and the Role of Labour Market Regulation: Complements or Substitutes?,' Economic and Labour Relations Review, vol. 11, pp. 8-45.

Gahan, P. and Harcourt, T. (1999), 'Australian Labour Market Institutions, 'Deregulation' and the Open Economy', Economic and Labour Relations Review, vol. 10, pp. 508-532.

Gahan, P. and Stricker, P. (2005), 'The Challenge of Reconciling Working Time Demands and Life Transitions: A Policy Proposal', Transitions and Risk: New Directions in Social Policy conference, University of Melbourne, February 23-25, proceedings.

Gahan, P. (1996), 'Did Arbitration Make for Dependent Unionism? Evidence From Historical Case Studies,' Journal of Industrial Relations, vol. 38. pp. 643-693.

Gollan, R. (1960), Radical and Working Class Politics: A Study of Eastern Australia 1850-1910, Melbourne University Press.

Hancock, K. J. (1979a), 'The First Half-Century of Australian Wage Policy--Part I', Journal of Industrial Relations, vol. 21, pp. 1-20.

Hancock, K. J. (1979b), 'The First Half -Century of Australian Wage Policy--Part II', Journal of Industrial Relations, vol. 21, pp. 129-160.

Higgins, H. B. (1915), 'A New Province for Law and Order. Industrial Peace Through Minimum Wage and Arbitration, (Part I)' Harvard Law Review, vol. 29, pp. 13-39.

Higgins, H. B. (1919), 'A New Province for Law and Order. Industrial Peace Through Minimum Wage and Arbitration (Part II)' Harvard Law Review, vol. 32, pp. 189-212.

Higgins, H. B. (1920), 'A New Province for Law and Order. Industrial Peace Through Minimum Wage and Arbitration (Part III)' Harvard Law Review, vol. 34, pp. 105-136

Howard, W.A. (1977), 'Australian Trade Unions in the Context of Union Theory,' Journal of Industrial Relations, vol. 19, pp. 255-273.

Isaac, J.E. (1949), Economic Analysis of Wage Regulation in Australia: 1920-1947', Unpublished PhD Thesis, University of London.

Lloyd, C. (2002), 'Regime Change in Australian Capitalism: Towards a Historical Political Economy of Regulation,' Australian Economic History Review, vol. 42, pp. 238-266.

Macarthy, P.G. (1967), 'Labour and the Living Wage,' Australian Journal of Politics and History, vol. 13, pp. 67-72.

Macarthy, P.G. (1968a), 'Wage Determination in New South Wales--1890-1921,' Journal of Industrial Relations, vol. 19, pp. 189-205.

Macarthy, P.G. (1968b), 'Victorian Wages Boards: Their Origins and the Doctrine of the Living Wage,' Journal of Industrial Relations, vol. 19, pp. 116-134.

Macarthy, P.G. (1969), 'Justice Higgins and the Harvester Judgment', Australian Economic History Review, vol. 9, pp. 17-38.

Macarthy, P.G. (1970a), 'Employers, the Tariff, and Legal Wage Determination in Australia, 1890-1910', Journal of Industrial Relations, vol. 12, June, pp. 182-193.

Macarthy, P.G. (1970b), 'Wages in Australia, 1891 to 1914,' Australian Economic History Review, vol. 10, pp. 56-76.

Macintyre, S. and Mitchell, R. (1989), 'Introduction,' in Macintyre and Mitchell, (1989), pp. 1-24.

Macintyre, S. (1989), 'Neither Capital nor Labour: the Politics of the Establishment of Arbitration', in Macintyre and Mitchell (1989), pp. 178-202.

Macintyre, S. and Mitchell, R. (eds.) (1989) Foundations of Arbitration, Oxford University Press, Melbourne

Markey, R. (1988), The Making of the Labor Party in NSW, 1880-1900, University of New South Wales Press.

Mitchell, R. (1989), 'State Systems of Conciliation and Arbitration: The Legal Origins of the Australasian Model,' in Macintyre and Mitchell (1989), pp. 74-103.

Mitchell, R. (1990), 'Solving the Great Social Problem of the Age: A Comparison of the Development of State Systems of Conciliation and Arbitration in Australia and Canada', in Kealy, S. and Patmore, G. (eds.) (1990), Canadian and Australian Labour History: Towards a Comparative Perspective, Australia--Canadian Studies, Nathan, pp. 47-80.

Mitchell, R. and Stern, E. (1989), 'The Compulsory Arbitration Model of Industrial Dispute Settlement: An Outline of Legal Developments', in Macintyre and Mitchell (1989), pp. 104-134.

Niland, J. (1976), 'The Case for More Collective Bargaining', Journal of Industrial Relations, vol. 18, pp. 365-390.

O'Brien, J. (1994), 'McKinsey, Hilmer and the BCA: The New Management of Labour Market Reform', The Journal of Industrial Relations, vol. 36, pp 468-490.

Ormonde, P. (1972), The Movement, Thomas Nelson, Melbourne.

Palmer, N. (1931), Henry Bournes Higgins: A Memoir, George G. Harrap and Coy., London, pp. 148-1499.

Pember Reeves, W (1969[1902]), State Experiments in Australia and New Zealand, Macmillan, Melbourne, 2 volumes.

Perlman, M. (1954), Judges in Industry, Melbourne University Press.

Plowman, D. H. (1986), 'Employers and Compulsory Arbitration: The Higgins Era 1907-1920', Journal of Industrial Relations, vol. 28, pp. 588-609.

Plowman, D. H. (1989), 'Forced March: Employers and Arbitration', in Macintyre and Mitchell (1989), pp. 135-155.

Plowman, D. H. and Smith, G. (1986), 'Moulding Federal Arbitration: The Employers and the High Court, 1903-1935', Australian Journal of Management, vol. 11, pp. 203-229.

Portus, J. H. (1958), The Development of Australian Trade Union Law, Melbourne University Press.

RCS (1891), Royal Commission on Strikes, Report and Conciliation Appendix, Government Printer Sydney, pp. 39-40.

Rickard, J. (1984), H. B. Higgins: The Rebel as Judge, Allen and Unwin, Sydney.

Romeyn, J. (1980), 'Towards a Motivational Theory of Arbitration in Australia', Journal of Industrial Relations, vol. 22, pp. 181-195.

Sheldon, P. (1993), 'System and Strategy: The Changing Shape of Unionism Among NSW Construction Labourers, 1910-19', Labour History, No. 65, pp. 115-135.

Walker, R. B. (1970), 'Australia's Second Arbitration Act', Labour History, No. 19, November, pp. 17-25.

Watson, I., Buchanan, J., Campbell, I. and Briggs, C. (2003), Fragmented Futures: New Challenges in Working Life, The Federation Press.

Wootton, J. H. (1970), 'The Role of the Tribunals', Journal of Industrial Relations, vol. 12, pp. 130-144.

Peter Gahan * and Bruce Hearn-Mackinnon *

Endnotes

(1) An Act to Make Arbitrations More Effective (Arbitrations Facilitation Act) 1867. See Minutes of the Proceedings of the Legislative Council of NSW (1867-68), 15(1), pp. 35, 47 and 146. Also see The Sydney Morning Herald, October 12, December 24, 1866, and September 4, November 30, December 7 and 10, 1867; and Royal Commission on Strikes, Conciliation Appendix (hereafter, RCS Conciliation Appendix), Government Printer Sydney, pp. 39-40.

(2) In a study of these early Acts, Mitchell (1989) has been unable to find any reference to the 1867 Act other than in the Royal Commission on Strikes of 1891 (see the Conciliation Appendix). See Mitchell (1989: pp. 100-101, footnote 28).

(3) Re Bagshaw (1906) 1 CAR 122-131 at 126.

(4) Harvester Judgement. MacKay, H.V. ex parte (1907) 2 CAR 1-32 at 2.

(5) Ibid., at 2.

(6) Ibid., at 3.

(7) Ibid., at 6.

(8) The essential elements of the regime of domestic defence include: high levels of tariff protection and subsidies to domestic firms, limitations on immigration, compulsory arbitration, social welfare policy (unemployment benefits, pensions, income maintenance and so forth). See Castles (1987, 1988).

(9) Rather than protecting the domestic economy from international fluctuations, a policy of domestic compensation leaves the domestic economy exposed to international markets and external shocks. This strategy involves compensating groups within the economy adversely affected by external shocks. In relation to industrial relations and labour market policy, this involves the maintenance of high wages, and protecting jobs in declining or low productivity industries. Instead, active labour market policy is employed to facilitate structural change in the domestic economy and re-allocate labour from low productivity to high productivity industries (see Katzenstein 1985, Esping-Andersen 1990 and 1999).

(10) For a detailed account of Kelly's presidency, see Dabscheck (1983).

* Faculty of Business and Law, Deakin University, 221 Burwood Highway, Burwood VIC 3125, Australia