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servants" are forbidden, with minor exceptions (for which see appendix B), to belong to a trade-union affiliated with trade unions outside the civil service. The prohibition does not extend to industrial employees of the Government, or to municipal employees. The act of 1927 prohibits local or other public authorities from making union membership a condition of employment or a ground for discrimination. (5) Registered and unregistered unions and certification.
43. The act of 1871 prohibits the registration of trade-unions under the Companies Act; in other words, they cannot be incorporated. Voluntary registration of trade-unions was provided for under the
Trade-Union Act of 1871, and voluntary certification in lieu of registration by the Trade-Union Act of 1913.
44. The principal benefit of registration is that it enables a tradeunion to carry on its affairs through a board of trustees that has continuing existence; and the most considerable further benefit is a limited exemption from taxation of its benefit funds. The major obligation of a registered union is to file with the registrar an annual account of its general funds (as well as its political funds, for which every trade union must account, whether registered or not); and the most important further obligation is to file with the registrar a copy of its rules, which must state the name and objects of the union and the provisions for benefits, for fines and forfeitures, and for amending the rules; and which must include provision for appointment and removal of trustees and officers, for the investment of funds, for an annual audit, and for inspection of its books and names of members, by every person having an interest in its funds. The registrar functions only administratively, to see that the rules do in fact contain such provisions. Beyond this he has no power to require any particular form of organization, or to supervise the conduct of a trade-union.
45. An unregistered trade-union has neither these benefits nor obligations. Under the 1871 act it has legal status, but must sue or be sued by a more cumbersome procedure.
46. The benefit of certification in lieu of registration is that a certificate is convenient and conclusive legal evidence that the certified union is a trade-union and is therefore entitled to the immunities from suit granted by sections 1 and 2 of the 1871 act and by the Trade Union Act of 1906. Certification, like registration, is not required, and certified unions are not required to file copies of their rules or accounts, except their political accounts.
47. At the end of 1935 less than half the trade-unions were registered, but those contained about three-quarters of the total union membership in Great Britain.12 One national union, whose officials we met with, had registered and later withdrawn from registration; nonregistration involved the payment of 200 or 300 additional pounds a year of taxes on the income from the union's benefit fund, but it was content to pay this amount in return for what it regarded as the greater convenience of being unregistered. The fact of registration or nonregistration is a matter of no interest to employers; and unions, whether registered or unregistered, are authorized by the Government to assist in the administration of the unemployment insurance law, provided they maintain their own employment exchanges or branch offices to which unemployed men in the particular industry may be sent to get their payments, and provided that they also have their own unemployment benefit plans and pay out certain minimum amounts therefor.
(f) GOVERNMENTAL AGENCIES 48. The British Government has taken for many years an active part in the voluntary arbitration and conciliation of industrial disputes and in furthering the establishment and growth of joint industrial councils.
49. Arbitration.—The Minister of Labor, as we have noted, is sometimes called upon under the provisions of collective agreements to appoint impartial arbitrators or chairmen, and for this purpose the Ministry maintains a panel of qualified and experienced citizens who are willing, when called upon, to serve in such capacities. The existence of this panel, with its known composition, accounts in part for the confidence with which clauses of the sort described are incorporated, here and there, in agreements.
50. Conciliation.—The Ministry also, pursuant to the provisions of the Conciliation Act of 1896, maintains a staff of full-time trained conciliators, with divisional offices in Bristol, Birmingham, Leeds, Manchester, and Glasgow. Their duty is to keep intimately in touch with industrial conditions in the areas which they cover, to anticipate trouble and if possible forestall it, and to shorten it as best they can when it comes. They have no power, and their success depends on their skill in conciliation.
51. The Industrial Court.—By the Industrial Courts Act of 1919 a permanent industrial court was created to decide controversies submitted to it by the Minister of Labor with the consent of both parties, after (and only after) any existing joint machinery for settlement had failed. By statute the Minister of Labor appoints the members, representing industry, labor, and the public. As has been stated, we attended a session of the court and conferred with its members. They informed us that the court is now handling about two cases a week.13 Most of these are heard in London, but the court can and frequently does move to other centers.
52. Many of the cases, referred jointly by national organizations of employers and workers, have involved the determination of national wage rates; other cases have involved a particular locality, or even a single plant. Unless otherwise agreed, the court's awards are not binding; but they are generally accepted. They are expressed in the form of decisions, with a full statement of the rival arguments but without an opinion. The absence of opinions has been occasioned by the desire of both sides in some industries to avoid the application of precedents to their disputes. The result has been to avoid, rather than to foster, the development of a body of industrial case-law.
53. Courts of inquiry. The act of 1919 also authorized the Minister of Labor, in any industrial dispute, to appoint a Court of Inquiry to make an investigation and report, the report to be laid before both Houses of Parliament. This authority has been exercised only in cases of major public interest. From 1920 through 1937, 20 courts were appointed.14 Under the law the appointment of a court does not operate to stop or postpone a dispute; the purpose is to expose the facts and to bring public opinion to bear on the merits.
54. Trade boards. These activities of the Ministry of Labor have been effectively reinforced by the Trade Board Acts, which authorize under certain conditions the creation of boards (composed of representatives of employers, employees, and the public) having power to fix minimum wages and to declare normal working hours (with overtime rates thereafter) in particular industries.
55. Following in part the second report of the Whitley Committee 1918, Parliament amended the Trade Board Act of 1909, which had limited the application of trade boards to "sweated” industries, to permit the Minister of Labor to set up a trade board in any trade in which, in his opinion, “no adequate machinery exists for the effective regulation of wages throughout the trade, and that accordingly, having regard to the rates of wages prevailing in the trade or any part of the trade, it is expedient that the acts should apply to that trade.” Thus, although there are no laws to compel union recognition, or to compel collective bargaining, and the Government consistently maintains the principle of noninterference with voluntary collective bargaining, yet in industries having no effective organization and excessively low wages the Government may, and does, set up trade boards to determine minimum standards by legislative and administrative processes.
56. It should be added, however, that the resort to such procedure is not favored by Government, by organized labor, or by employers' associations until every possibility of voluntary determination of wages and working conditions in the trade have been thoroughly explored. Even then the Ministry of Labor presses for a certain minimum of voluntary agreement within the trade as a prerequisite to the setting up of a trade board.
57. The Ministry of Labor continuously studies the desirability of setting up additional trade boards in particular trades. In considering these possibilities the Ministry at all times consults with employers and employers' associations, and with the unions, which have any membership in the trade. Because of the difficulty of exactly defining the limits of a particular trade or industry, it is customary for the Minister to prepare and circulate to all of the employers' and workers' organizations a tentative draft definition of the trade in which he proposes to set up a trade board; and to bring about informal conferences with the parties until an acceptable definition is reached. Thereupon the Minister publishes a notice of his intention to apply the acts, together with a draft of the special order. Not less than 40 days must be given for objections, and if the Minister thinks any of the objections are substantial, he must either amend or withdraw the order and direct a public inquiry. In case of amendment there must be republication with notice. When the special order is finally published it must be laid forth with before each House of Parliament, and if either House objects within the next 40 days of sittings, the Crown may annul the order. In no case has either House exercised this right.
58. A trade board, under the acts, must be made up of representatives in equal number of employers and workers in the trade, together with a number of impartial members not greater than one-half the total number of "representative” members. One of the impartial members presides, and the impartial members have the deciding vote if the representative members cannot agree. The Minister of Labor must appoint all the members. In practice, any employers' associations and unions existing in the trade are asked to nominate representatives for appointment, and, in addition, representatives of unorganized sections of the trade are often selected by the Minister.
59. Each trade board is required to fix for its own industry a "general minimum” time rate of wage. They commonly fix, also, general minimum piece rates and, if the occasion requires, “piecework basis time rates;" that is, rates fixed in hourly terms applicable to piece workers and caleulated to yield to the “ordinary” worker not less than the fixed minimum time rate; "guaranteed time rates, guaranteeing to piece workers a minimum payment according to the time they have worked, irrespective of their output; and “special minimum piece rates” for special cases where no general minimum piece rate has been fixed. The board may fix rates below the “general minimum" for juveniles, for adult learners, and for workers who, because of certified infirmity or physical injury, are not able to earn a standard wage. The general minimum may be different for different areas, and special rates above the general minimum may be fixed for different classes of workers. The boards are also empowered to “declare” the normal number of weekly or daily hours and to fix the overtime rates.
60. The process of fixing rates has been described as one of bargaining, with the course of the negotiations influenced by the fact that any deadlock may be settled by the votes of the independent members. Proposals and counterproposals are negotiated between the two sides with the independent members acting as conciliators in an endeavor to reach agreed wage scales; but if an agreement cannot thus be reached, the votes of the independent members decide. Rates of wages proposed by a board must be communicated to employers and workers, and 2 months allowed for objections; after which the board may proceed to fix the rates or make new proposals. The rates do not become effective until they have been confirmed by the Minister of Labor, who may refer a rate back to the board but cannot fix one. Rates confirmed by the Minister of Labor may be enforced by either civil or criminal proceedings. They are en forced by the Minister of Labor through a body of inspectors.
61. In addition to thus establishing minimum rates, declaring normal hours and fixing overtime rates, the trade boards are obliged to consider matters referred to them by the Government departments, and the Government departments are required to give immediate consideration to matters referred to them by the boards. Thus, a trade board is the authoritative mouthpiece of the trade. 62. Eight trade boards were set up under the 1909 act.
There are now, under the 1918 act, over 40 trade boards in operation. In the year 1938 the Trade Board Acts were applied to the baking trade, and an application of the principle was made, by special legislation, to road transport. In this legislation the boards are expressly em:
powered to set up machinery for the settlement of local disputes and grievances, and to promote the voluntary organization of employers and workers.
63. Application of the acts to the distributive trades has been under active discussion for some time by the employers' associations and the workers' associations in the industry and by the Ministry of Labor; and more recently for the rubber manufacturing trade. We have already spoken of the temporary legalization of wage scales for cotton weaving agreed to by representative organizations of employers and workers. 64. The statutory fixing of maximum hours (aside from the
power of the trade boards to declare the normal hours of work per day or week after which overtime rates apply) is limited to the fixing of hours of underground labor in the coal mines, the hours of service of certain railway and road transport workers, and the hours of work of women and young persons in factory employment.
65. The Fair Wages Clause.-On March 10, 1909, a resolution passed the House of Commons that Government contracts should require the contractor to “pay rates of wages and observe hours of labor not less favorable than those commonly recognized by employers and trade societies (or, in the absence of such recognized wages and hours, those which in practice prevail among employers) in the trade in the district where the work is carried on.” Responsibility for the inclusion of such fair-wages clauses in Government contracts rests with the several contracting departments, but an interdepartmental coordinating committee, the Fair Wages Advisory Committee, has been set up. The Local Government Act, 1933, requires (sec. 266) that all contracts entered into by a local authority shall be made in accordance with the standing orders of the authority; and there is an extensive inclusion in such standing orders of the Fair Wages Clause in the same or similar terms. By the Road Traffic Act, 1930, and the Road and Rail Traffic Act, 1933, the Fair Wages Clause was made applicable to the road transport industry, and under the new transport legislation the clause, with modifications, is still applicable to private carriers who carry their own goods, not for hire.
III. EVOLUTION OF EXISTING METHODS OF SETTLING
66. At the beginning of this report we referred to the long and gradual development of union organizations and employers' associations, and of the methods of collective bargaining between them. These methods have been evolved experimentally, and have been tested and from time to time modified, in the light of experience. Both sides have learned in the process, and their background of experience is an integral part of the present arrangements.
67. By the latter part of the nineteenth century labor unions were well established in a number of industries in Great Britain. The growth of trade-union membership from that period to the present time is shown completely in appendix C. The trend is from 1,576,000 at the end of 1892; 2,022,000 in 1900; 4,145,000 in 1914; 8,347,000 in 1920; 5,506,000 in 1925; 4,389,000 in 1933, and 5,308,000 in 1936. No similar figures are available for the growth of employers' associa