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U. S. DEPARTMENT OF LABOR

BUREAU OF LABOR STATISTICS
ROYAL MEEKER, Commissioner

/W H O L E 1 1 ^
\NUMBER I J j

BULLETIN OF THE UNITED STATES )
BUREAU OF LABO R STATISTICS )
C O N C IL IA T IO N

AND

A R B IT R A T IO N

S E R IE S :

No.

2

REPORT OF THE INDUSTRIAL COUNCIL OF
THE BRITISH BOARD OF TRADE ON ITS
INQUIRY INTO INDUSTRIAL AGREEMENTS




AUGUST 18, 1913

WASHINGTON
GOVERNMENT PRINTING OFFICE
1913




CONTENTS.
Page.

Report of the Industrial Council of the British. Board of Trade on its inquiry
into industrial agreements:
Conciliation and arbitration in Great Britain..............................................
5
Permanent court of arbitration.................................................................... 5, 6
Industrial Council.......................................................................................
6-8
Conciliation boards in 1912.........................................................................
8
Summary of report of Industrial Council.................................................... 8-11
Detailed report of Industrial Council.......................................................... 11-38
The fulfillment of agreements................................................... .......... 12-25
Conciliation boards, joint committees, etc..................................... 14-16
Organization.................................................................................. 16,17
Moral obligation.............................................................................17,18
Monetary penalties and prohibition of assistance to persons in
breach........................................................................................ 18-22
Monetary guarantees..................................................................... 22, 23
Monetary guarantees and penalties considered as in the nature
of compensation for damages.....................................................
23
Duration of agreements.................................................................. 23-25
Extension of agreements....................................................................... 25-30
Draft scheme................................................................................. 29, 30
Summary............................................................ .................................30, 31
Memoranda of members dissenting on one or more points....................32-38
Appendix I.—Conciliation Act, 1896.................................................................. 38, 39
Appendix n .—Court of arbitration..................................................................... 39-41




3




BULLETIN OF THE

U. S. BUREAU OF LABOR STATISTICS.
WASHINGTON.

WHOLE NO. 133.

AUGUST 18, 1913.

REPORT OF THE INDUSTRIAL COUNCIL OF THE BRITISH BOARD OF
TRADE ON ITS INQUIRY INTO INDUSTRIAL AGREEMENTS.
CONCILIATION AND ARBITRATION IN GREAT BRITAIN.
In Great Britain in recent years the development of the machinery
for the settlement of trade disputes by boards of conciliation and
arbitration and by joint committees has assumed great importance.
While a considerable number of these boards have been in operation
for long periods and many more are due entirely to the initiative
of the employers and employees independent of any official agency,
the Conciliation Act of 1896 has been especially influential in pro­
moting the growth of the present movement.
The Conciliation Act of 18961 was the outcome of an inquiry begun
in 1893 by the Board of Trade as to the legislation needed to meet
the new industrial and social conditions. Its most important feature
was the authorization of the Board of Trade as a standing agency of
mediation, ready to act at the request of either party or to offer its
services when the public welfare seemed to demand such action. The
Board of Trade was given no powers of compulsion whatever, but
the mere fact that a body of its weight and reputation had been told
off for such a service tended to dignify the idea of conciliation, while
the ease with which its services could be secured was a strong induce­
ment to call upon it in cases of disagreement.
PERMANENT COURT OF ARBITRATION.
In the period since the passage of the act two important additions
have been made to the machinery which the Board of Trade was
empowered to call into play when circumstances demanded. The
first was the provision in 1908 of the permanent court of arbitration.2
In providing for this the president of the Board of Trade expressly
1 For text of the conciliation act see Appendix I.
2 For constitution of court, rules, etc., see Appendix II.




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6

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

disclaimed any intention of curtailing or replacing any of the func­
tions already performed under the conciliation act; the proposed
court was to be an addition, not a substitution, and its creation was
ascribed to the fact that the scale of the operations carried on by the
Board of Trade “ deserves, and indeed requires, the creation of some
more formal and permanent machinery.” Another reason given was
the desire to test public sentiment in regard to arbitration; it seems
to have been felt that the general attitude toward conciliation was
already pretty well known. The system was put in operation in 1909.
INDUSTRIAL COUNCIL.
The second addition to the machinery provided by the Board of
Trade was made during 1911, largely as an outcome of the industrial
contests of the late summer, which threw an enormous amount of
delicate and difficult work upon the Board of Trade.
The new body, known as the Industrial Council, was made up of
representatives of employers and of workmen in equal numbers.1
The present membership of the Industrial Council is as follows:
EMPLOYERS* REPRESENTATIVES.

Mr. George Ainsworth, chairman of the Steel Ingot Makers’ Association.
Sir Hugh Bell, Bart., J. P., president of the Iron, Steel and Allied Trades Fed­
eration and chairman of the Cleveland Mine Owners’ Association.
Mr. G. H. Claughton, J. P., chairman of the London & North Western Rail­
way Co.
Mr. W . A. Clowes, president of the London Master Printers’ Association.
Mr. J. H. C. Crockett, president of the Incorporated Federated Associations of
Boot and Shoe Manufacturers of Great Britain and Ireland.
Mr. F. L. Davis, J. P., chairman of the South Wales Coal Conciliation Board.
Mr. T. L. Devitt, chairman of the Shipping Federation (Ltd.).
Sir T. Ratcliffe Ellis, secretary of the Lancashire and Cheshire Coal Owners’
Association and joint secretary of the Board of Conciliation of the Coal
Trade of the Federated Districts, etc.
Mr. F. W . Gibbins, chairman of the Welsh Plate and Sheet Manufacturers’
Association.
Sir Charles Macara, Bart., J. P., president of the Federation of Master Cotton
Spinners’ Associations.
Mr. Alexander Siemens, chairman of the executive board of the Engineering
Employers’ Federation.
Mr. Robert Thompson, J. P., M. P., past president of the Ulster Flax Spinners’
Association.
Mr. J. W. White, president of the National Building Trades Employers’ Fed­
eration.
WORKMEN'S REPRESENTATIVES.

Rt. Hon. Thomas Burt, M. P., general secretary of the Northumberland Miners’
Mutual Confident Association.
Mr. T. Ashton, J. P., secretary of the Miners’ Federation of Great Britain and
general secretary of the Lancashire and Cheshire Miners’ Federation.
Mr. C. W. Bowerman, M. P., secretary of the Parliamentary Committee of the
Trades Union Congress and president of the Printing and Kindred Trades
Federation of the United Kingdom.
Mr. F. Chandler, J. P., general secretary of the Amalgamated Society of Car­
penters and Joiners.
Mr. J. R. Clynes, J. P., M. P., organizing secretary of the National Union of
Gas Workers and General Laborers of Great Britain and Ireland.
1 Mr. W. Mullin, J. P., president of the United Textile Factory Workers’ Association
and general secretary of the Amalgamated Association of Card and Blowing Room Opera­
tives, who was one of the workmen’s representatives during the first year, resigned.




BEPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

7

Mr. H. Gosling, president of the National Transport Workers’ Federation and
general secretary of the Amalgamated Society of Watermen, Lightermen,
and Watchmen of River Thames.
Mr. Arthur Henderson, M. P., Friendly Society of Ironfounders.
Mr. John Hodge, M. P., general secretary of the British Steel Smelters, Mill,
Iron, and Tinplate Workers’ Amalgamated Association.
Mr. W . Mosses, general secretary of the Federation of Engineering and Ship­
building Trades and of the United Pattern Makers’ Association.
Mr. E. L. Poulton, general secretary of the National Union of Boot and Shoe
Operatives.
Mr. Alexander Wilkie, J. P., M. P., secretary of the shipyard standing commit­
tee under the national agreement, 1909, and general secretary of the Shipconstructive and Shipwrights’ Society.
Mr. J. E. Williams, general secretary of the Amalgamated Society of Railway
Servants.

Sir George Askwith, K. C. B., K. C., is chairman of the Industrial
Council, with the title of chief industrial commissioner.
The first meeting of the council was held October 26, 1911, at the
Board of Trade offices. The president of the board in his address
#of welcome said:
*
* * We believe that the powers and position of the Board
of Trade, its good offices, could be advantageously strengthened in
the direction of what may be called a national industrial body of
weight and repute, consisting of representatives of the two great
sides of the industry of the country; * * * a body that would
bring to bear on these problems a great range of advice, great
weight, and a greater likelihood, therefore, of useful and acceptable
action, especially— and I lay stress on this— before, rather than after,
stoppage of work. Such a body would also enable an appeal to be
made to it by one or other of the combatants without loss of dignity.
I would point out further that of late years, both on the side of
the employers and on the side of the workmen, considerable steps
have been taken toward what I may call federated effort-—combina­
tions of trade-unions on the one hand and of federations of employers’
associations on the other—and that, from the point of view of trade
disputes, trade and industrv are far more interdependent than they
used to be. While, therefore, a few years ago the creation of a
national conciliation council, representing all the great industries,
might have been thought to be premature, its existence is really now
essential, so that these matters can be considered as a whole. * * *
Fear has been expressed that the council may interfere with the
freedom of action of federations of employers or of the unions of the
men, but I wish to state clearly * * * that there will be no com­
pulsion on either side to submit their case to the council or to accept
its advice or its decisions. The council will not interfere with the
freedom of action of the employers or the employed.1
A t this first meeting of the council it was decided that regular meet­
ings should be held in February, June, and November of each year,
and special meetings might be called at any time by the chairman.
Meetings in general should be considered private, only official state­
ments of their action being issued, and the members should act in a
1 Board of Trade Labor Gazette, November, 1911, p. 403.




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BULLETIN OF THE BTJREAtF OP LABOR STATISTICS.

judicial capacity, not as advocates. The following classes of cases
might require to be dealt with:
(1) Cases which may be referred to the council, as an impartial
body, for their opinion upon the facts only of the case, to be con­
veyed to the parties privately.
(2) Cases which may be referred to the council in order that the
facts may be impartially ascertained and recommendations made to
each side, the acceptance of such recommendations not to be obliga­
tory nor made public.
(3) Cases similar to those last mentioned, but both sides agreeing
beforehand that the recommendations of the council be made public.
(4) Cases which may be referred to the council upon which a
decision may be given, the parties agreeing to accept the decision as
a final settlement.
(5) Cases which may be referred to the council, under special cir-«
cumstances, by the Board of Trade or the Government.
(6) Other matters, apart from particular disputes, which the Board
of Trade or the Government may decide to refer to the council, with a
view to obtaining a considered and representative opinion upon spe­
cific points.
CONCILIATION BOARDS IN 1912.
A t the end of 1912 the total number of voluntary conciliation
boards and standing joint committees was 297 (of which 282 were
boards dealing with particular trades and 15 district and general
boards), including both those registered under the conciliation act
and those not so registered. The rules of a number of these concilia­
tion boards, and also other agreements arranged between employers
and workpeople in various trades, contain a clause providing that
in the event of failure of the parties to effect a settlement of a dis­
pute, application shall be made to the Board of Trade for the ap­
pointment of an umpire, arbitrator, or conciliator. Such clauses now
exist in more than 100 cases. In addition a number of agreements
and awards provide that questions of interpretation, etc., of such
agreement or award shall, in case of disagreement between the
parties, be referred to the Board of Trade or to persons appointed
by the board.
REPORT OF THE INDUSTRIAL COUNCIL.
Because of the great number of cases arising out of these agree­
ments coming before the Board of Trade, and of the very great pub­
lic interest in the matters dealt with by these agreements, and espe­
cially because of the questions arising in connection with the strike
of the Thames transport workers in 1912, the president of the Board
of Trade in June, 1912, informed Sir George Askwith, as chairman



BEPORT OK INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

9

of the Industrial Council, that the Government desired to refer to
the council certain matters which appeared to them to be difficulties
in the way of peaceful and friendly relations between employers and
workmen. The Government’s request upon the Industrial Council
placed before them for inquiry only two formal questions :
1. What is the best method of securing the due fulfillment of indus­
trial agreements?
2. How far, and in what manner, industrial agreements which are
made between representative bodies of employers and of workmen
should be enforced throughout a particular trade or district?
The Industrial Council, after holding 38 meetings and hearing the
evidence of 92 witnesses, representative of employers and workers in
practically all the principal industries of the country, has just issued
their report under date of July 24, 1913.
The Industrial Council, it should be borne in mind, is composed
of representatives of employers and of workmen, all with experience
with collective agreements and with methods of conciliation and
arbitration. Especially impressive, therefore, is the emphasis with
which they give their approval of the principle of the collective
agreement:
The desirability of maintaining the principle of collective bargain­
ing—which has become so important a constituent in the industrial
lire of this country— can not be called into question, and we regard it
as axiomatic that nothing should be done that would lead to the
abandonment of a method of adjusting the relationships between
employers and workpeople which has proved so mutually advanta­
geous throughout most of the' trades of the country. We think it
undesirable that any proposals should be put forward which might
lead to a tendency to refrain from entering into voluntary agree­
ments; indeed efforts should, in our opinion, be made rather to sup­
port the continuance of the collective bargain.
The council find from the evidence that collective agreements have
been as a rule well kept. The exceptions are mainly in trades which
are unorganized or in which organization is incomplete.
The council note the absence from many agreements of an “ inter­
pretation clause ” providing for cases of disagreement regarding in­
terpretation. Such a provision they regard as an essential part of
every industrial agreement; in the event of a dispute the points in
r
dispute should be referred to some independent authority chosen by
the parties or appointed by the Board of Trade, and pending a de­
cision there shall be no strike or lockout.
Various suggestions as to the best methods of securing the fulfill­
ment of industrial agreements were before the council.
The value of complete and effective organization on the part of
both employers and employees, they find, is very clearly demonstrated




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BULLETIN OF TH E BUREAU OP LABOR STATISTICS.

by the experience of the different trades of the country. Where
organization on both sides is imperfect the existence of any agree­
ments that may be arrived at is constantly imperiled, owing to the
inability of either side to take effective action.
The council, after examining in detail proposals for the enforce­
ment of money penalties on persons committing a breach of an
agreement and the prohibition, by law, of financial or other assistance
to persons in breach, reached the conclusion that the establishment
of a system of monetary penalties is not desirable, and that such
penalties as prohibition of assistance to persons in breach should not
be made legally obligatory. The council, however, state with em­
phasis their opinion that where a breach of an agreement has been
committed no assistance, financial or otherwise, should be given to the
persons in breach by any of the other members of the associations
connected with the agreement; that moral influence should in every
feasible way be brought to bear in favor of the strict carrying out
of agreements, and that, in cases where a breach is found to have
been committed, associations should accept the findings of the tribu­
nal and should exercise to the full the disciplinary powers of their
organization, assisted by the force of public opinion.
“ Compulsory ” arbitration the council do not view with favor, but
they consider it essential that conciliation boards or joint committees
should be provided with some authority to which final appeal may be
made for a recommendation as to settlement. Before there is a re­
version to the method of strike or lockout, it is important, they think,
that there should be a pronouncement upon the question at issue by
some independent body or by some impartial individual, and that
with this object in view the question in dispute should be thoroughly
debated by a body representative of those whose interests are con­
cerned, presided over by an independent person having the power of
recommending a decision should he fail to reconcile the two sides of
the board.
W ith regard to the question as to how far and in what manner
industrial agreements between representative bodies of employers
and employees should be enforced throughout a particular trade or
district, the council find that, especially in trades where there is a
considerable minority outside the employers’ association, and the
workmen’s organization is not sufficiently strong to secure the general
observance of the terms of agreements, there is a real danger that
effective voluntary agre&nents can not be maintained. The council
is of the opinion that means should be provided by which, at the re­
quest of both parties to an agreement, and after suitable inquiry, its
operation may be extended to include the minority and its terms
made applicable to them.




REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

11

In the scheme recommended by the council to provide such means
it is also required that an agreement in order to receive consideration
for extension must provide—
(a) That at least------ days’ notice shall be given by either party
of an intended change affecting conditions as to wages or hours; and
(h) That there shall be no stoppage of work or alteration of the
conditions of employment until the dispute has been investigated by
some agreed tribunal and a pronouncement made upon it.
The full report of the Irdustrial Council upon the questions re­
ferred to it by the Government is printed in the following pages:
DETAILED REPORT OF INDUSTRIAL COUNCIL.
S i r : W e have the honor to submit herewith our report upon the
inquiry which, in accordance with the request of His Majesty’s Gov­
ernment, we have made into certain matters connected with industrial
agreements.
2. The questions which were referred to us were the following:

(a) What is the best method oi securing the due fulfillment
of industrial agreements? and
(b) How far and in what manner industrial agreements
which are made between representative bodies of em­
ployers and of workmen should be enforced through­
out a particular trade or district?
3. In the course of our inquiry we have held 38 meetings, at 29 of
which we heard evidence from 92 witnesses, representing the em­
ployers and workpeople in the majority of the principal industries
of the country.
4. At the commencement of the proceedings invitations to nomi­
nate representatives to give evidence were addressed to a large num­
ber of the principal associations of employers and workpeople. The
majority or these bodies accepted the invitation.
5. Among the bodies representative of workpeople invited to sub­
mit evidence were the trades-union congress parliamentary commit­
tee, the parliamentary committee of the Scottish trades-union con­
gress, and the parliamentary committee of the Irish trades-union
congress. Representatives from the Scottish and Irish congresses
subsequently attended as witnesses and were examined. The follow­
ing letter^ dated 19th July, 1912, was addressed to the registrar of
the council by the secretary of the trades-union congress parliamen­
tary committee:
“ D e a r S i r : Your communication of the 25th ultimo was duly
considered by the parliamentary committee at their meeting held
yesterday, and I am instructed to reply that, inasmuch as four mem­
bers of the committee are serving upon the council, and two or three
have given evidence before the council as representatives of their
respective societies, the committee do not deem it necessary to appoint
witnesses to give further evidence.




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BULLETIN OF TH E BUREAU OF LABOR STATISTICS.

“After giving the subject under investigation by the council their
full and close consideration, the committee passed the following
resolution and directed me to forward a copy to you:
“ That this parliamentary committee hereby declares that any well-considered
plan to strengthen and bring into a more general observance trade agreements
duly ratified between the recognized leaders of employers and workmen will be
beneficial and reduce the number of irregular disputes.

“ Yours, faithfully,
“ (Signed)

C. W . B o w e r m a n ,
“ Secretary.”

In addition to the oral evidence which the council have had an
opportunity of hearing, a circular letter was addressed* at the com­
mencement of the inquiry to a large number (about 2,000 in all)
of the employers’ associations and trade-unions of the country, ad­
vising them of the inquiry which the council had undertaken, and
inviting them to forward, for the information of the council, a state­
ment containing any observations which they might desire to offer
regarding the matters to be dealt with under the terms of reference.
THE FULFILLMENT OF AGREEMENTS.

6. It may be of advantage at the outset to consider what might
be regarded as a working definition of an industrial agreement. (It
is understood that there is no legal definition of the term.)
An industrial agreement may be described as an arrangement ar­
rived at by employers and workpeople with a view to formulating
the general conditions of employment in a particular trade and dis­
trict. It is essentially different from (though to a large extent it
forms the basis of) the contract of service entered into between an
individual employer and an individual workman. It is, in most
cases, arrived at because the employers and workpeople think that a
collective agreement is a desirable method of formulating what they
have agreed shall be (for the time being, or for some period men­
tioned in the agreement) the principal terms governing the contracts
of service between individual employers and individual workmen.
As a matter of practice, agreements are usually made between asso­
ciations of employers and associations of workpeople, and the extent
to which these associations in the various cases cover the whole of the
trade concerned differs in almost every instance.
7. It is to be noted that industrial agreements, considered as con­
tracts between employers and employed, can not fairly be compared
with the ordinary commercial contracts made between individuals
or corporate bodies. In the case of ordinary commercial contracts
the persons who enter into the contracts are the principals directly
concerned, or at least persons acting under well-defined authority
from principals. Industrial agreements, on the other hand, are fre­
quently made— especially on behalf of the workpeople— by represent­
atives who, by reason of the numbers involved and the circum­
stances which surround trade movements, find it difficult to obtain
well-defined authority to enter into a settlement, or even to ascertain,
beforehand, the exact wishes of those whom they represent. This
fact it is necessary to keep clearly in mind in the consideration of
the questions now under review.



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

13

Notwithstanding these difficulties inherent in dealing with large
numbers of workpeople, we find from the evidence that agreements
in most cases are well kept. Although a number of instances of
alleged breaches of agreements have been referred to in the course
of the inquiry, the evidence of a considerable majority of the wit­
nesses is to tifie effect that agreements have, viewed generally, been
duly fulfilled by, both parties. The breaches that have been men­
tioned were, with a few exceptions, the result of the action of com­
paratively few men, or due to exceptional circumstances or to differ­
ences and misunderstandings in regard to points of interpretation,
and are not, as a rule, countenanced by the respective organizations.
It is recognized by both sides that they are under a strong moral
obligation to observe agreements which have been entered into by
them or by their representatives on their behalf. The principal
exceptions appear to be in trades which are unorganized, or in which
on one side or the other the organization is incomplete or is of recent
origin, but we find that where agreements are the outcome of prop­
erly organized machinery for dealing with disputes they are, with
very few exceptions, loyally observed by both sides. Where agree­
ments have been broken it is frequently found that they were made
at times when, owing to the abnormal conditions, great difficulty
must have been experienced in arriving at a fair adjustment.
8. Where one side or the other are alleged to have committed a
breach of an agreement, an examination of the facts of the case
sometimes shows that the signatories to the agreement, though acting
in good faith, signified their assent to the terms of the agreement,
but were unable, subsequently, to carry their constituents with them.
In fact, the agreement, regarded as a compact made by the constitu­
ents of those who signed it, was no agreement. It is perhaps unnec­
essary to detail all the causes in cases such as these, but it may be
mentioned that one of them is the fact that, in their desire to effect
a settlement of a dispute, particularly where a stoppage of work is
in progress or is imminent— the representatives of the parties some­
times agree to proposals which are shown by subsequent developments
to require amendment, and although both those who signed the agree­
ment and those for whom it has been signed, may be extremely de­
sirous of maintaining it, due observance of the agreement has been
found on occasion to be impracticable, particularly in cases where it
has been found impracticable to consult the constituent members.
There does not seem to be any satisfactory way in which an “ agree­
ment” under such circumstances could be enforced, and the case
would seem to be one for further adjustment by the parties.
9. There are cases of alleged nonfulfillment of agreements which
on examination, are found not to come within the category of
breaches of agreements, but are rather instances of a failure to agree
upon a question of interpretation. Those who have had experience
of the manner in which industrial agreements are sometimes made
will be aware of the fact that the form of words adopted is fre­
quently only an approximation to the real intentions of the parties,
the stress of the moment rendering it impracticable (and sometimes
even undesirable) to enter into a strict analysis of the possible literal
meanings of a form of words which has been suggested by one side
or the other, or has been evolved in the course of long sittings during




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BULLETIN OF THE BUREAU OF LABOR STATISTICS.

which considerable feeling may have been displayed. Hence it some­
times happens that when the agreement comes to be put into practice
different interpretations may be put upon some part of the docu­
ment. The obviously reasonable and advantageous course for the
parties to adopt in such circumstances is to submit the point of in­
terpretation to some person not concerned in the question at issue.
It appears to be the case that many industrial agreements contain
no clause providing for cases of disagreement regarding the in­
terpretation of the document, and we are of opinion that such a
clause— an “ interpretation clause ”— is an essential part of an in:
dustrial agreement and should form part of every such agreement.
We consider that a model clause of this character would be one which
provided that, in the event of a dispute arising as to the interpreta­
tion of an agreement, the point in dispute should be referred to an
independent chairman, or to arbitrators, or a court of arbitration,
agreed upon in each case by the parties. In the event of the parties
failing to ag;ree upon the person or persons to whom the matter is to
be referred, it should be referred to a chairman or a court of arbitra­
tion appointed in accordance with the provisions of the Conciliation
Act, 1896. W e are of opinion that such a chairman or court should
have a casting vote, or at least be able to recommend a solution
should the parties fail to agree.
CONCILIATION BOARDS, JOINT COMMITTEES, ETC.

10. A great number of examples were mentioned in the course of
the evidence of the various forms of machinery which exist in most
of the industries of this country for the consideration of trade dis­
putes by voluntary conciliation and arbitration boards or joint com­
mittees, and it was stated by a large proportion of witnesses that the
existing conciliation procedure was found to work satisfactorily and
to assist in the settlement of the great majority of the points of dif­
ference that arise from time to time between the parties.
A difference of opinion was manifested as to whether or not the
awards and decisions of conciliation boards should be made binding,
though a majority of the witnesses who expressed an opinion upon
this point were in favor of the suggestion.
Many witnesses considered that there should be attached to every
conciliation board some independent determining authority (e. g., a
chairman) with power to make a pronouncement upon questions in
dispute concerning which the board had been unable to agree.
Evidence was given that in many industries, when the established
conciliation procedure has failed to settle a dispute, recourse is had
(in accordance with the expressed rules, or ad hoc by agreement of
the parties) to the Board of Trade, or some other outside neutral
authority, to arbitrate in the matter.
11. The extent to which some form of conciliatory machinery
exists in connection with the various industries of this country is a
marked feature of the industrial life of the community, and the suc­
cess which has attended the operations of the various voluntary
boards of conciliation and arbitration points to the desirability of
the continued maintenance of this form of adjusting trade disputes.
The basis of these conciliation boards and joint committees is mu­
tual consent, and their value in the past has depended upon the loyal



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

15

acceptance on the part of the constituents on both sides of the de­
cisions arrived at in accordance with the procedure of the boards.
This acceptance is purely voluntary, depending solely upon the sense
of moral obligation. So far as has been shown by the evidence
which we have heard, loyal acceptance of the decisions of the concili­
ation boards has been the rule in all the trades concerned, and it
would appear inexpedient to attempt to substitute for these volun­
tary forms of machinery some alternative method based upon princi­
ples other than that of mutual consent.
12. The question arises, however, whether it is desirable or ex­
pedient to supplement in any way the existing voluntary agencies of
conciliation.
The object in view we understand to be to minimize the loss and
inconvenience caused to the persons concerned, and to the com­
munity as a whole, by strikes and lockouts. That there must be the
power to appeal ultimately to the arbitrament of the strike or lock­
out is apparently the general opinion of those whom we have had
an opportunity of examining, and we concur in this view. It is,
however, also the general opinion that the chances of effecting an
amicable settlement of industrial difficulties are increased if there
is an established and recognized form of procedure which must be
followed by the parties concerned before a cessation of work may
take place.
13. We were informed by witnesses from many of the organized
trades that under their respective systems of organization the stop­
page of work on questions of wages, hours, ana similar conditions
of employment is precluded by consent, pending some form of in­
quiry into the circumstances of the matters in dispute.
In some cases it was stated that where an unauthorized stoppage
has occurred the circumstances in connection with it are not taken
into consideration by the organization, or by the conciliation board,
until work has been resumed.
Much support has been given to the view that some procedure
should obtain in all trades to preclude a stoppage of work until
the matter in dispute has been made the subject of some form of
inquiry.
The majority of opinions on the point favored the principle that
a definite period should elapse after the notification of a grievance
before a stoppage of work. In most cases 30 days was suggested
as a suitable length of time.
Certain witnesses, while favoring the continuance of work in
cases of dispute till after an inquiry, were opposed to any definite
period being stated within which no stoppage of work might take
place.
The suggestion was made that when every stage of the established
inquiry procedure has been gone through in cases of dispute, a fur­
ther period of 30 days should intervene before any stoppage of work
may take place, the object of this further period being to afford the
parties another opportunity of considering the position.
Several witnesses favored the suggestion that incitement to strike
during the period of inquiry should be prohibited, and the opinion
was expressed that, employers should not make use of that period for
the organization of nonunion workers.
7053°—Bull. 133—13------2



16

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

14. Where there exists in any trade a recognized form of concili­
atory machinery for the adjustment of disputes agreed by both sides
to come within the conciliation scheme, we consider that it is unnec­
essary that there should be any intervention on the part of the com­
munity (acting through a Government department or otherwise)
until the existing procedure has been exhausted, but in order that the
interests of the community may be adequately safeguarded we couple
with this opinion the view that it is desirable that before a cessation
of work takes place there should be a period of time (after the existing
procedure has been exhausted) sufficient to admit of (a) the further
consideration of the position by the parties, and (&) the opportunity
of the introduction into the discussion of some authority represent­
ing the interests of the community.
15. We consider that it is an essential part of a concilation board
or joint committee that there should be attached to it some authority
to which, in the event of a deadlock, the parties may appeal for a
recommendation as to settlement. W e do not view with favor the
establishment of “ compulsory ” arbitration, but we do regard it of
great importance that the conciliation board or joint committee
should possess a means of arriving at finality. We think that before
there is a reversion to the method of strike or lockout, it is important
that there should be a pronouncement upon the question at issue by
some independent body, or by some impartial individual, and that
with this object in view the question in dispute should be thoroughly
debated by a body representative of those whose interests are con­
cerned, presided over (at some stage or other, but not necessarily
the first) by an independent person invested with the power of rec­
ommending a decision, should he fail to reconcile the two sides of
the board or the joint committee. The matters to which we have
alluded in this and the preceding paragraph are, in our opinion, of
such importance that in the recommendations which we have made
under the second part of our reference we have inserted provisions
which we think would assist in bringing about the desired end (vide
par. 58).
j
16. We are of opinion that, where there is (a) a difference in re­
gard to the interpretation of an agreement, or (b) a difference as to
whether there has been a breach of an agreement, there should be
no stoppage of work (by strike or lockout) pending the reference
of the difference to some impartial tribunal, and pending the issue
of a pronouncement by the tribunal. We have suggested (vide
par. 9) a method of determining a difference in regard to the inter­
pretation of an agreement, and we think that a similar procedure
might possibly be adopted in the case of a difference as to whether
there has been a breach of an agreement.
ORGANIZATION.

17. A very large proportion of the witnesses examined on the sub­
ject gave evidence as to the value of organization as a means of secur­
ing the due fulfillment of agreements, both by the signatories to the
agreement and by the trade as a whole.
The opinion was expressed by certain witnesses that complete or­
ganization is the best means of securing the fulfillment of agree­
ments, and that any form of compulsion should only be employed



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

17

when it has been found impossible satisfactorily to organize either
one or both sides of the industry.
In cases where definite opinion has been expressed a few witnesses
have stated that they consider complete organization preferable to
any legislative action in connection with agreements, and others
have suggested that thorough organization renders legislation and
monetary guarantees and penalties unnecessary.
The view was taken by certain witnesses that where there is excep­
tional difficulty in the way of organization, some form of legislative
compulsion ought to be employed to make the terms of voluntary
agreements general throughout the trade or district.
18. The value of efficient organization on the part of employers
and workpeople as a means of securing the due fulfillment of indus­
trial agreements is very clearly demonstrated by the experience of
the different trades of the country. Where, as in the steel trade, the
associations of employers and workmen include an overwhelming
proportion of the persons engaged in the trade on both sides, it is
round that breaches of agreements rarely occur, or, if they do occur,
generally occasion no difficulty since they are dealt with by the
prompt and efficient action of the employers’ association or the trade
union, as the case may be. In such an industry as the baking trade,
however, where organization on both sides is imperfect, it appears
at present to be the fact that (except in one or two localities where
the organization has been improved) the existence of any agreements
that may be arrived at by such part of the employers and workpeople
as are organized is constantly imperiled owing to the inability of
either side to take effective action in the event of a breach or the
agreement occurring.
Between the two extremes exampled by these two trades there are,
of course, a large number of intermediate states of organization, and
it is impracticable to divide into two distinct groups the trades in
which organization may be held to be so far perfect as to render any
outside assistance unnecessary, and those in which the organization
is so incomplete that the fulfillment of agreements can not be secured
unless a means is found whereby the existing efforts of the parties
may be strengthened.
MORAL OBLIGATION.

19. In the course of the evidence which we have heard different
opinions were expressed in regard to the efficacy of the “ moral obli­
gation ” as an aid to the due fulfillment of agreements.* Several wit­
nesses held the view that the moral obligation to fulfill agreements
was stronger than the fear of incurring a monetary fine for breach,
and it was suggested that the sense of moral obligation was a suffi­
cient guarantee of due fulfillment; it was also pointed out that the
existence of a system of monetary penalties might weaken the value
of the moral obligation in so far as it led to the belief that, the fine
having been paid, the offense was condoned and there was therefore
no longer the same need to observe the terms of the agreement, the
argument being that a sense of moral obligation is less easily dis­
posed of. In this way the value of the moral obligation— now a
very important factor in assisting in the fulfillment of agreements—



18

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

might be lessened. On the other hand, a considerable number of wit­
nesses favored the principle of monetary guarantees or penalties.
Some evidence was given to the effect that monetary guarantees or
penalties would not interfere with, but possibly might strengthen,
the moral obligation.
MONETARY PENALTIES AND PROHIBITION OF ASSISTANCE TO PERSONS
IN BREACH.

20. Among the proposals which have come before us for considera­
tion as possible methods of assisting the due fulfillment of agreements
are two which, though dissimilar in some respects, seem to us to
require, for the purposes of their proper examination and analysis,
the application of very much the same principles. These suggestions
are (a) the infliction and enforcement of monetary penalties upon
those committing a breach of an agreement, and (b) the prohibition
by law of financial or other assistance to persons m breach. A very
considerable amount of evidence was given in regard to these two
proposals, and we have given both subjects very full consideration.
21. The greater part of the evidence which was given in connection
with monetary penalties was in favor of the proposal that a penalty,
in the nature of a fine, should be imposed on persons committing a
breach of an agreement. A number of witnesses, however, expressed
opinions against the establishment of penalties.
The majority of the witnesses expressed the view that the penal­
ties should be recoverable from the association rather than from the
individual, the association to have the right of recovery from the indi­
vidual. It was also suggested that claims for penalties should in all
cases be made through the association to which the aggrieved party
belonged.
Some witnesses held the view that the penalty should not be a
monetary penalty, but should take the form of expulsion from the
trade-union in the case of the workman, or from the employers’ asso­
ciation in the case of the employer, such expulsion being considered—
especially in the case of the trade-unions— as sufficiently punitive in
effect. It was, however, pointed out that the expulsion of a man
from a trade-union might involve unduly severe punishment, inas­
much as the man might (on account of the members of the union
refusing to work with him) be altogether precluded from following
his trade.
A number pf witnesses referred to the difficulties that were likely
to be experienced in connection with the recovery of money penalties
from individual workmen, or from bodies of workmen (apart from
the trade-unions).
Various suggestions have been made as to the procedure by which
monetary penalties should be recoverable. Apart from their assess­
ment by a neutral and independent arbitrator, it has been suggested
that they should be recoverable through the county court. •
22. Among the matters to which attention is necessary in dealing
with the proposal to establish a system of monetary penalties is the
question whether the penalty should be claimable from the default­
ing individual direct or from his association, and, if the latter
whether the association should in turn be empowered to claim the
amount of the penalty from the individual member.



REPORT OK INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

19

Where a breach of an agreement is committed by an employer, the
workmen concerned would appear to have a reasonable chance of
recovering the amount of the penalty, but where the breach is com­
mitted by an individual workman, or a body of workmen, acting
independently of their union, the employer’s chance of recovering
the penalties may be found to be so slight as to render the procedure
useless. As, presumably, the object ox the penalty clause would be
to secure the observance of the agreement, rather than the infliction
of fines, it would appear to be desirable that the area of responsi­
bility should be widened, and this suggests that the penalties should
be claimable from the associations rather than from individuals, and
that claims in respect of alleged breaches should be made only
through the respective associations. Where the breach is committed
by persons not members of an association a different procedure
would, of course, be necessary.
23. In order that the individual might not be free from direct per­
sonal responsibility^ it would be essential that, where a penalty had
been paid, the association should be empowered to recover the amount
from the defaulting members. It may be doubted, however, whether
this disciplinary course would, or could, in practice be followed in
the case of a trade-union where any considerable number of its mem­
bers were in breach, or where the want of organization gave oppor­
tunities to men who left the trade-union rather than pay the fine to
obtain employment as nonunionists.
24. It is to be noted that more than one witness emphasized the
desirability of strengthening the responsibility of trade-unions and,
in particular, of trade-union officials. The opinion was advanced
that if unions were liable to the infliction of fines or penalties for
breaches of agreements or strikes without due notice, the officials of
the unions would find themselves in possession of a new means of in­
sisting upon their members observing the agreements or of refraining
from ceasing work without proper notice. The unions might be
liable for breaches of agreements (1) when committed with the
knowledge and sanction of the union officials or executive, (2) when
committed by one or more individual members of the union without
the sanction of the union officials.
The amount of the penalty would vary according to the special
circumstances of the trade concerned ana the particular nature of
the case in point. The rate of the penalty would require to be higher
in the case of (1) than (2). In the case of (2) it was suggested that
the ability of the union officials to maintain discipline among their
members would be greatly strengthened by a provision giving them
power to claim from the #individual members the amount of the
penalty incurred by the union on their behalf, or to expel the offend­
ing members from the union, the whole of any sums due to such mem­
bers, or such part of those funds as may be necessary to cover the
amount of the penalty, being retained by the union.
25. A similar procedure to that indicated in the preceding para­
graph would be necessary in the case of associations of employers.
26. A proposal was put forward to the effect that where individual
workmen committed a breach of an agreement and would not pay
the penalty adjudged against them it should be possible for a lien to
be placed upon their wages (if and when they again became em­
ployed) until the amount was paid.



20

BULLETIN OF THE BUREAU OP LABOR STATISTICS.

This proposal is one which it would seem difficult in practice to
carry out, and we are disposed to agree with the view that in such
a case it should be left to the union to deal with the man in such
manner as they thought fit.
27. As regards the prohibition of assistance to persons in breach,
the suggestion that no support should be given by either employers
associations or trade-unions to their respective members acting in
breach of an agreement (e. g., that the union should give no strike
pay in case of breach and the association should also render no assist­
ance to a defaulting member) has, as a principle, received general
support from almost every witness who considered the matter in the
course of the evidence. It was also stated by- several witnesses that
this attitude toward members in breach is already adopted by many
employers’ associations and trade-unions and is a policy which is laid
down in the rules of the organizations.
Opinion was divided as to the desirability of introducing any form
of legislative compulsion to make such rules operative in every case.
A majorty of the witnesses who expressed a definite opinion on the
subject held the view that some kind of legislative compulsion is
desirable, but some witnesses were opposed to legislative interfer­
ence, and preferred that the matter should be regarded as part of
the internal discipline of the organizations concerned.
28. We think there can be little doubt that the fact that financial
or other assistance could not be given to persons acting in breach of
agreement would be an aid to discipline and would tend to assist
in the maintenance of agreements, and we are of opinion that where
it has been decided by an impartial tribunal (or by mutual consent
of the parties to an agreement) that a breach of an agreement has
been committed by any person who is a member of an association
represented by the signatories to the agreement, no assistance, finan­
cial or otherwise, should be given to that person by any of the other
members of the associations who were parties to the agreement. W e
have already suggested (vide pars. 9 and 16) a method by which
it might be decided whether or not a breach had, in fact, been com­
mitted.
29. The desirability of maintaining the principle of collective
bargaining—which has become so important a constituent in the in­
dustrial life of this country— can not be called into question, and
we regard it as axiomatic that nothing should be done that would
lead to the abandonment of a method of adjusting the relationships
between employers and workpeople which has proved so mutually
advantageous throughout most of the trades of the country. W e
think it undesirable that any proposals should be put forward which
might lead to a tendency to refrain from entering into voluntary
agreements; indeed efforts should, in our opinion, be made rather
to support the continuance of the collective bargain. Thus there is a
danger that the introduction into the terms of agreements of provi­
sions for the enforcement of money penalties or fines may in some in­
stances deter workpeople from entering into agreements which might
in other respects have been acceptable to them.
30. The feeling expressed in the dictum that “ those who break
their contracts ought to be made to pay for it ” is one which we fully
understand, but in our opinion the more important consideration



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

21

is whether the end in view (i. e-., the proper maintenance and ful­
fillment of industrial agreements by employers and workpeople) is
likely to be secured by attempting to punish, by means of monetary
penalties, persons who, for reasons which may be good or bad, are
found to have committed a breach of an agreement to which they,
through their associations, are parties. So far as we are aware, and
so far as has been shown by the evidence which we have had, in­
dustrial agreements are not lightly broken by either side, and the
circumstances which have, in certain cases, led to a breach of an
agreement are usually of a very special character.
We heard evidence at some iength regarding the strike in connec­
tion with the eight-hour agreement in the Northumberland coal
trade in 1910, and the strike in connection with the London taxicab
industry in 1913, both of which cases are illustrative of the special
difficulties which sometimes surround agreements affecting large
bodies of men. The former case has been cited as an instance where
an agreement containing provisions known to be objected to by a
large minority of the men concerned was nevertheless entered into
by the union executive under the force of circumstances, a large
number of men subsequently going on strike against it. In the case
of the taxicab award it was found that, owing to certain circum­
stances connected with the price of petrol, the operation of one of the
clauses would probably mean a reduction in the men’s earnings
amounting to over 6 shillings ($1.46) a week— a reduction which, it
was claimed, the men- could not afford.
31. An automatic monetary penalty operating in cases such as
these seems open to objection on grounds of equity, while the diffi­
culty of enforcing the penalty in such circumstances would probably
be found to be almost insuperable.
32. As we have already pointed out, industrial agreements can not
fairly be compared with the ordinary commercial contracts made
between individuals or corporate bodies, where the terms of the con­
tracts are decided upon by the principals directly concerned. In the
case of industrial agreements circumstances may arise subsequent to
the date of the agreement which might be held to justify a right of
relief from the whole or some part of the terms of the agreement.
A study of the circumstances leading up to the conclusion of an
agreement and of the circumstances subsequently existing will fre­
quently be found to indicate that some amount of elasticity is inevi­
table.
33. Having regard to the special nature of industrial organization
on the workpeople’s side, the ultimate result of the institution of a
system of legal money penalties for breaches of agreement or the
legal prohibition of assistance to members in breach might be that
the trade-union leaders would find themselves precluded from enter­
ing into agreements at all, or, if agreements were entered into, that
they would be compelled to insist upon the insertion of a clause
which enabled them to terminate the agreements upon exceedingly
short notice. An alternative to this might be defiance of the law,
when there would at once arise all the difficulties inherent in any
attempt to enforce the law against a large number of individual
workmen— with no ultimate source of pressure short of imprison­
ment.



22

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

34. The matters referred to in the foregoing paragraphs have been
discussed at length, and in the result they appear to us to involve a
question of important principle, viz, whether the maintenance of in­
dustrial agreements should be compelled or attempted to be com­
pelled by penalties in the law courts or should rest on intention,
moral obligation, mutual agreement, and generally on consent.
35. W e are aware that the perfected organization which has been
attained in many associations does not exist in all cases, but we are
not at present prepared to hold that in consequence of these cases a
new principle should be imported into industrial arrangements and
all other associations penalized and their work on voluntary lines
made difficult or impossible by reason of the action of a few. Our
view is that voluntary organization and collective bargaining can not
successfully proceed upon a basis of broken faith, and that breach
of faith should be discouraged by all voluntary action that can be
taken by associations on either side. In many associations rules for
the punishment of persons committing a breach already exist, and
we recommend that other associations should follow the lead which
has thus been taken and consider whether it is not advisable that
similar rules should be adopted in their organizations.
36. While we are convinced that it is to the interests of both
employers and workpeople that industrial agreements should be
duly fulfilled, we think that in the long run this object is more likely
to be secured by an increased regard for the moral obligation and
by reliance upon the principles of mutual consent, rather than by
the establishment of a system of monetary penalties or by the legal
prohibition of assistance to persons in breach.
MONETARY GUARANTEES.

37. A number of suggestions were received in favor of the prin­
ciple of monetary guarantees in connection with agreements, and
evidence was given as to the utility of the guarantee fund which
exists in the boot and shoe trade. A few witnesses, however, expressed
doubts as to the efficacy of monetary guarantees. It was pointed
out that the disciplinary value of a money payment for breach of
agreement might be of little effect if the payment were made out
of funds which had been set apart for the purpose, as in such a case
the payment would not affect the general funds of the organization,
and the penalty would not be brought home to the members. One
witness suggested that monetary guarantees implied a doubt as to
the good faith of the parties to the agreement. It was also stated
that in some cases the union funds could not bear the strain involved
in maintaining a heavy guarantee fund, and also that the individual
sum per man would be small; in the case of unions who are parties
to a number of agreements it was suggested that it would be difficult
for them to provide a monetary guarantee in each case.
38. W e have given consideration to the principle of monetary
deposits as a means of securing the due fulfillment of industrial
agreements. This principle is m operation in the boot and shoe
trade, and in one or two other instances, but it has not been
generally adopted in the various trades of the country. Consid­
erable diversity of opinion appears to exist in regard to the



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

23

efficacy of a monetary guarantee. I f the fund is intended to be one
out of which a penalty is payable equivalent "to the amount of dam­
age suffered, it is clear that, in order to provide for a case involving
a large number of persons, the sum of money which it would be
necessary to deposit would be such that many of the smaller organi­
zations would be unable to set aside so large a proportion of their
funds, or to obtain money for such a purpose. If, on the other
hand, the penalty to be paid is merely in the nature of a fine, it does
not appear that the adoption of the principle adds much to the re­
straining influence which is already exercised by the moral obliga­
tion to observe agreements.
39. In this connection it is to be noted that the system of mone­
tary guarantees does not afford a means by which pressure may be
brought to bear upon persons not members of the associations who
contribute to the rand.
40. W e are of opinion, therefore, that the general adoption of the
system of monetary guarantees, in the form of a deposit of money,
can not be regarded as constituting a practicable and efficient means
of insuring the fulfillment of agreements. At the same time where
monetary guarantees are voluntarily offered we see no objection to
their adoption.
MONETARY GUARANTEES AND PENALTIES CONSIDERED AS IN'* THE NATURE
OF COMPENSATION FOR DAMAGES.

41. The assessment of monetary penalties and claims on guarantee
funds as compensation for damages due to breach of agreement was
favored by several witnesses, but other witnesses opposed the sug­
gestion. Among the reasons for not favoring the principle were the
preference for tne moral obligation, the consideration that any com­
pensation (from union funds) that could be provided would be in­
adequate, that a penalty should, only be a preventive to the con­
tinuance of any action in breach of agreement, and that there would
be difficulty in recovering damages. On the other hand, it was sug­
gested that a small penalty, in the nature of a fine, would not act as
a sufficient preventive of breach, and also that the actual losses of
either party due to breach should be made good, as far as possible,
by the party acting in breach.
DURATION OF AGREEMENTS.

42. The instances which were cited in the course of the evidence
as to the duration of agreements indicate that in practice agreements
are usually made for a fixed period— varying from one to five
years— after which either party desiring alteration or withdrawal
is required to give a term of notice, such term varying from 14
days up to as much as 6 months. Some arrangement of this nature
was favored by the majority of expressed opinions on the point.
Certain witnesses held the view that it is desirable that agreements
should be made to last only a short period of time, in order that the
opportunities for variation in the terms of the agreement might not
be too infrequent.




24

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

It has been suggested as desirable that sectional agreements in a
particular trade or allied group of trades should run concurrently,
and that all the agreements should terminate and come up for con­
sideration at the same time, it being anticipated that a succession of
sectional disputes (involving a danger of breach of agreements by
sympathetic strikes in other directions) might thus be avoided.
43. The question of the period for which agreements should oper­
ate is one to which our attention has been directed, and it is one of
no little importance. The existing practice appears to be different
in different trades. In the tin-plate trade of South Wales, for
instance, the agreement which covers that trade comes up for dis­
cussion annually, and this practice of giving opportunity for revi­
sion after the expiration of a year is one which is stated to have given
satisfaction to both employers and workpeople. In certain branches
of the building trades (e. g., the carpenters and joiners) an agree­
ment once entered into continues in force till one side or the other
gives six months’ notice to terminate it. In other cases (e. g., the
shipbuilding trade agreement of March, 1909) it was provided that
the agreement should continue in force for a fixed period— three
years— and be subject thereafter to six months’ notice from either
side.
There may in some instances be difficulty in inducing employers or
workpeople to bind themselves to observe particular terms of employ­
ment for a long period, but it appears to us to be to the advantage
of the trade generally that agreements should continue in force for
some fixed period.
44. For the purposes of the consideration of this part of the sub­
ject, agreements may be divided into two categories, viz, (a) those
which have been arrived at for the purpose of establishing machin­
ery for dealing with questions which may arise between the parties,
and (&) those which are made as a result of the operation of the
machinery established under (a). It will be obvious that the dura­
tion of agreements in these two classes will vary, and that, in gen­
eral, agreements included under (a) would be of longer duration
than those included under (b). In both cases the period for which
the agreement is to last must vary according to the circumstances of
particular trades, but we think that in ordinary cases such period
should not exceed three years.
As regards (a), we consider that agreements providing for the
establishment of machinery should contain a provision to the effect
that the machinery shall remain in operation for an agreed period,
to be mentioned in the document, and that it shall continue in force
thereafter until such time as either party shall have given not less
than three months’ notice in writing to the other side to terminate it
or to amend any of its provisions.
With regard to (b) , agreements on questions coming within the
scope of the recognized machinery, we consider that they should be
subject to revision on such written notice as may be agreed between
the parties.
In making the suggestion that the period for which agreements
are made should not, in general, exceed three years, we have no wish
to interfere in any way with the existing practice in trades where
longer periods may have been customary and are necessary for the



Otf INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

25

proper conduct of the trade, nor with the practice under existing
conciliation boards.
EXTENSION OP AGREEMENTS.

45.
The evidence of a considerable number of witnesses was to the
effect that the terms of agreements arrived at between employers’
associations and trade-unions are often observed, particularly as re­
gards rates of wages, by individual firms who are not members of
the employers’ association, and are not, therefore, parties to an agree­
ment. This was usually accounted for by the fact that the work­
people in the industries concerned were well organized, and that the
trade-unions were strong enough to bring pressure to bear on the
“ outside ” employer. In trades in Avhich the workpeople are less
well organized, the observance of agreements by the nonassociated
employers is less usual. It has in some cases been stated that it was
not the policy of employers’ associations to take steps to induce non­
associated employers to observe agreements, but to rely upon the
unions to do so. Instances were given where the trade-unions re­
sorted to a strike to compel nonassociated firms to observe the terms
of an agreement, and evidence was given as to strikes and as to the
existence of difficulties in carrying out agreements owing to the pres­
ence of nonassociated employers.
A very large majority of the witnesses who expressed themselves
definitely on the subject were in favor of the principle of the exten­
sion of agreements to the whole trade of a district, where such
agreements have been arrived at voluntarily by associations repre­
sentative of the trade in the district.
There were, however, certain witnesses who opposed the suggestion.
Evidence was given regarding the difficulty which would arise
in practice in defining the area to which any particular agreement
should be applied.
The view was expressed that the extension should be made only
after the agreement had been considered (on the application of the
parties) by a coiiipetent independent authority, and had been found
to be a proper agreement.
It was held in a number of cases, though not in all, that it should
be a condition precedent to the holding of an inquiry for the pur­
pose of extending an agreement, that the parties to the agreement
which it was proposed to extend should represent a majority of the
trade in the district concerned.
The suggestion was made that in the event of an authority being
established with power to decide as to the extension of agreements,
such authority should also be empowered to hear appeals for exemp­
tion from the action of the extended agreements, and to grant such
exemption if the special circumstances of the applicants were con­
sidered to warrant it.
The majority of opinions expressed on the point were in favor
of the terms of the agreement being declared to be enforceable at
law upon the persons to whom it had been made applicable by the
operation of the principle of extension; though, on the other hand,
a number of witnesses (while desiring to see the terms of agree­
ments observed by nonassociated persons) expressed opinions un­



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BULLETIN OP THE BUREAU OF LABOR STATISTICS.

favorable to the adoption of legislation for such purpose. In the
case of the witnesses from the iron and steel trades it was held that
the organization in those trades is sufficiently complete to secure
the observance of the terms of agreements by persons outside the
contracting associations, and for this reason, apart from any others,
legislative action was not favored. Other witnesses who expressed
the view that legislative action was undesirable based the objection
apparently upon the desire to avoid legislative interference with
their trade.
46. It appears clear that in trades in which the organization is
imperfect the effective maintenance of agreements is jeopardized
by the existence of a section (perhaps only a minority) which is not
party to, and therefore not in any sense bound by, whatever agree­
ment may be arrived at by the rest of the trade. Where the organi­
zation on the workpeople’s side has reached a high degree of perfec­
tion, the presence of a minority of employers outside the employers’
association does not seriously affect the efficacy of an agreement,
since the trade-union is generally able by the threat of withdrawing
its members, to secure that the nonassociated firms observe the terms
of the agreement, but even in such cases a section of a trade, how­
ever small, outside the general conditions of employment where
other things are equal, is a menace to the agreement.
47. In cases where, however, there is a considerable minority out­
side the employers’ association, and the workpeople’s organization is
not sufficiently strong to deal with such minority, there is a real
danger that effective voluntary agreements can not be maintained
even as regards the majority. Where the agreement provides for a
particular rate of wages (and the industry is one in which the wages
bill is a prominent factor in the cost of production) the members of
the employers’ association who are parties to the agreement, and who
comply with its terms, are at a distinct disadvantage as compared
with those nonassociated firms who, while not being bound to pay
the rate of wages fixed by the agreement, are competitors with them.
The influence of such a noncomplying and competitive minority is
likely to endanger the continuance of the agreement, and we are of
opinion that means should be provided whereby, at the request of
the parties to an agreement and after suitable inquiry, its operation
should be extended to include the minority and its terms made
applicable to them.
48. The form of machinery that might suitably be established to
deal with proposals for the extension of agreements is a subject to
which we have given full consideration. It is essential that the body
charged with the responsibilty of arriving at decisions which might
very seriously affect certain parts of particular trades should com­
mand the confidence of both employers and employed. It must, of
course, in each instance, be completely independent of both the em­
ployers and the workpeople engaged in the trade concerned.
49. After considering various proposals regarding this matter
(including one to the effect that the Industrial Council should be
the authority appointed to hold the necessary inquiries and decide
upon the various applications for extension of agreements that might
be made), we have arrived at the conclusion that the proper body
to appoint the authority is the Board of Trade. It will be evident
that the circumstances of each application may vary and that some



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

27

discretion will be requisite in constituting the authority in the various
cases. Should it be considered that the services of a body similar to
the Industrial Council are necessary to deal with a particular case
that had arisen, the council would readily be available for the
purpose.
50. It has not been proposed that the Board of Trade should en­
tertain any application for the extension of an agreement unless
such application is received from both the parties to the agreement.
There is thus no element of compulsion upon either party.
51. Attention has been drawn to the fact that m the establish­
ment of a scheme for dealing with proposals for extension of agree­
ments it would be necessary to provide for exceptions to be made
in regard to individual firms or workpeople whose conditions of
trade or employment were such as to differentiate them from the
remainder of the trade to such an extent as to make the application
of the agreement to them an inequitable proceeding.
52. It would therefore be desirable that public notice should be
given of the fact that an application for the extension of an agree­
ment had been made, and that at the inquiry that is made by the
authority appointed by the Board of Trade full opportunity should
be afforded to those whose interests might be affected to appear
before the authority and explain the circumstances which they con­
sidered warranted the authority in exempting them from the general
operation of the agreement. In the publication of its decision re­
garding the extension of the agreement the authority would include
a statement of any exemptions which it might deem necessary to
make.
53. W e have already stated (par. 44) that we think the fixed
period for which agreements are made should not, except in special
circumstances, exceed three years. In regard to proposals for the
extension of agreements already arrived at it would seem desirable
that the period for which the extension should operate should, ordi­
narily, be the same as the period of operation of the agreement itself.
But there may be circumstances in which it might be found that a
different period should be fixed, and accordingly we are of opinion
that the authority which is appointed to consider the proposal to
extend the agreement should be empowered to determine the period
of operation, after taking into consideration all the circumstances of
the case.
54. It was suggested to us that where a rate of wages is a rate
“ commonly recognized” in the district (as e. g., certain rates of
wages in tbe building trades), the authority should be empowered
to determine that such a rate should be extended to the whole trade
or district, even though the parties to the agreement (in the case
in point, the members of the employers’ association and , the tradeunion) did not constitute an actual majority of the trade. In such
cases it would seem to be the duty of the authority to consider each
instance upon its merits and to ascertain inter alia how far the rate
was, in practice, “ commonly recognized5 by others than the actual
5
parties to the agreement.
55. It will be of interest, in considering the principle of the exten­
sion of agreements to persons not members or the contracting asso­
ciations, to note the terms of the fair-wages clause which is inserted



28

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

in Government contracts in pursuance of the “ fair-wages resolu­
tions ” of the House of Commons. The clause is as follows:
“ The contractor shall in the execution of this contract observe and
fulfill the obligations upon contractors specified in the resolution
passed by the House of Commons on the 10th March, 1909, namely:
6The contractor shall * * * 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 recog­
nized wages and hours, those which in practice prevail amongst good
employers) in the trade in the district where the work is carried out.
Where there are no such wages and hours recognized or prevailing
in the district, those recognized or prevailing in the nearest district
in which the general industrial circumstances are similar shall be
adopted. Further, the conditions of employment generally accepted
in the district in the trade concerned shall be taken into account in
considering how far the terms of the fair-wages clause are being
observed. The contractor shall be prohibited from transferring or
assigning, directly or indirectly, to any person or persons whatever,
any portion of his contract without the written permission of the
department. Subletting, other than that which may be customary
in the trade concerned, shall be prohibited. The contractor shall be
responsible for the observance of the fair-wages clauses by the sub­
contractor.’ ”
The principles involved in this clause substantiate the proposition
that conditions of employment which have been agreed upon or are
recognized by the employers and workpeople in the trade generally—
and which may therefore be regarded as reasonable conditions—
might equitably be observed by the remainder of the persons engaged
in the trade. There is no proposal, in connection with the clause,
that particular rates of wages or other conditions of employment
should be imposed upon the trade by the legislature or by any other
outside body, but that, if those in the trade, employers and work­
people, have agreed that certain conditions are fair and reasonable,
these conditions should be applicable to others who may be engaged
under similar conditions in the trade and district concerned.
56. It is of interest to note that in the agreement between the Welsh
Plate & Sheet Manufacturers’ Association and the several tradeunions having members employed in the tin-plate trade of South
Wales there is a clause which provides as follows:
“ That the rates paid, and the conditions, must not be more favor­
able than the foregoing (i. e., those laid down in the agreement) to
works outside the employers’ association.”
In accordance with this clause it is the duty of the unions to see
that the nonassociated employers observe the terms of the agree­
ment, and it appears from the evidence given on behalf of the em­
ployers’ association that the clause is largely instrumental in secur­
ing the continued maintenance of the agreement. The result of the
operation of the clause is that, while the agreement purports to cover
only about 80 per cent of the trade, its terms are, in fact, observed
by the whole of the trade.
57. In the foregoing paragraphs mention has been made of certain
proposals for the adoption of a scheme whereby there should be
established machinery for the purpose of dealing with requests for
the extension of voluntary agreements. We have given these pro­



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

29

posals our careful consideration and are of opinion that their main
principles should be adopted. We have accordingly drawn up the
details of a draft scheme on these lines, and submit it, as follows:
“

draft s c h e m e .

“ 58. Where an industrial agreement has been arrived at between
representatives of one or more employers’ associations and representa­
tives of one or more trade-unions in a particular trade or district it
shall be competent for the parties to the agreement to apply (at any
time during the currency of the agreement) to the Board of Trade
to cause an inquiry to be held, by such authority as the Board of
Trade may direct, to determine whether or not the agreement shall
be extended and its terms made obligatory upon persons not members
of the associations represented by the signatories to the agreement.
“ Upon receipt of an application for the extension of an agreement
the Board of Trade shall arrange for an inquiry to be held and shall
take steps to advertise the facts that an application is under consid­
eration and that an inquiry is to be held. The name or names of the
person or persons constituting the authority shall be made public.
“ The inquiry shall be held at such times and places as shall give
reasonable opportunity for those affected to attend should they so
desire.
“ The terms of any agreement in respect of which an application
for extension has been received shall be duly advertised by the Board
of Trade a reasonable time before the inquiry is commenced.
“ I f the authority appointed by the Board of Trade are satisfied,
after holding the inquiry, that the associations represented by the
signatories to the agreement constitute a substantial body of the em­
ployers and workmen in the trade or district and that the agreement
is a proper agreement and one that might suitably be extended, the
authority may declare that the terms of the agreement, with such
modifications thereof as may be agreed upon by the parties at the in­
quiry, shall be extended to cover the whole of the trade or district*
Where an agreement has been so declared to be extended, it shall be
an implied term of any contract of service in the particular trade or
district that the terms of the agreement shall be an essential part of
such contract.
“ It shall be a condition precedent to such determination by the au­
thority that the agreement provides—
“ (a) That at least---------- days’ notice shall be given by either
party of an intended change affecting conditions as to wages or hours,
and
“ (&) That there shall be no stoppage of work or alteration of the
conditions of employment until the dispute has been investigated by
some agreed tribunal, and a pronouncement made upon it.
“ In determining whether or not an agreement shall be extended,
the authority shall take into consideration representations that may
be made to them by persons claiming that they should be exempted
from the operation of the agreement, either generally or as regards
any part or parts of the agreement, and if the authority are satisfied
that a claim for exemption has been established an intimation of
such exemption shall be included in the determination respecting the
agreement.



30

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

“ The authority shall forward its determination to the Board of
Trade, and the Board of Trade shall cause it to be duly published,
and copies of the determination shall be given to such persons as are
known to be interested or affected or to any who may apply for
copies.
“ The period during which an agreement which has been extended
shall operate shall be such period as the authority may think fit.”
59. We do not think it desirable to attempt to give a rigid defini­
tion to the term “ substantial body,” as used in the foregoing “ draft
scheme.” W e think that the authority should, when considering
the application for the extension of an agreement, take into account
all the circumstances of the case, and that, after an examination of
the evidence available, they should determine whether or not, in the
particular instance under consideration, the parties to the original
agreement constitute a body that is sufficient to make an extension
of the agreement to the whole of the trade or district fair and rea­
sonable.
60. In considering the application we think that the authority
should also take account of the suggestion we have made in para­
graph 28, viz, that financial or other assistance should not be given
to persons acting in breach of agreement, and whether or not the
agreement, or the rules of the associations that are parties to it,
stipulate that no such assistance should be given.
SUMMARY.

61. It will be seen from our report that among the various sug­
gestions that we have had under consideration with respect to the
first part of our reference, i. e., as to the best method of securing the
due fulfillment of industrial agreements, are the following—
(1) Organization (i. e., complete and effective organization on the
part of both employers and workpeople).
(2) Moral obligation.
(3) Monetary penalties and prohibition of assistance to persons
in breach.
(4) Monetary guarantees.
The whole organization of collective bargaining, of which we have
expressed our approval, is based upon the principle of consent. W e
have found that such collective agreements have been as a rule kept,
and we are loth either to interfere with the internal organization of
the associations on both sides by putting upon them the legal neces­
sity of exercising compulsion upon their members, or to introduce a
new principle which might have far-reaching and unexpected effects
upon the natural growth of such associations or upon the spirit with
which as a rule they have been carried on. We have therefore, as will
be seen, come to the conclusion that the establishment of a system of
monetary penalties is not desirable, and that such penalties as prohi­
bition of assistance to persons in breach should not be made legally
obligatory. W e have stated, however, and we wish to give our opin­
ion the maximum degree of emphasis, that where a breach of an
agreement has been committed no assistance, financial or otherwise,
should be given to the persons in breach by any of the other members
of the associations connected with the agreement. The language of
our report is intended to express as strongly as possible our adher­



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

31

ence to the view that moral influence should in every feasible way be
brought to bear in favor of the strict carrying out of agreements,
and that, in cases where, by any of the methods to which we have
alluded, a breach is found to have been committed, associations should
accept the findings of the tribunal and should exercise to the full the
disciplinary powers of their organization, assisted, as would no doubt
be the case, by the force of public opinion.
G2. As regards the second portion of our reference (as to how far
and in what manner industrial agreements which are made between
representative bodies of employers and of workmen should be en­
forced throughout a particular trade or district), we have come to
the conclusion that, subject to an inquiry made by an authority ap­
pointed by the Board of Trade, an agreement entered into between
associations of employers and of workmen representing a substan­
tial body of those in the trade or district should, on the applica­
tion of the parties to the agreement, be made applicable to the whole
of the trade or district concerned, provided that the agreement ful­
fills the requirements laid down in the draft scheme in paragraph
58 and contains conditions to secure—
“ (a) That at least ---------- days’ notice shall be given by either
party of an intended change aftecting conditions as to wages or
hours, and
“ (&) That there shall be no stoppage of work or alteration of the
conditions of employment until the dispute has been investigated
by some agreed tribunal^ and a pronouncement made upon it.”
W e have the honor to be, sir,
Your obedient servants,
G e o r g e A s k w i t h , Chairman.
F. W . G ib b in s .
* G eo. A in s w o r t h .
T hom as A shton.
* H ugh B ell.
C. W . B o w e r m a n .
T hom as B urt.
F r a n c is C h a n d l e r .
G . H . C laughton.
* W . A. C l o w e s .
J. R. C l y n e s .
J a m e s H. C. C r o c k e t t .
* F r e d . L. D a v i s .
* T h o s . L . D e v it t .

H a r r y G o sl in g .
A r t h u r H e n d e r so n .
J o h n H odge.

C. W .

M acara.

W m . M osses.
E . L . P oulton.
f T h o s . R . R a t c l if f e - E l l is .
* R obert T h o m p s o n .
J o h n W . W h it e .
A l e x . W il k ie .
J. E . W il l ia m s .
H . J . W i l s o n , Registrar.

24th July, 1913.]
The following memorandum is attached to the signatures of Sir
Gilbert Claughton, Mr. J. H. C. Crockett, Mr. F. W . Gibbins, Sir
Charles Macara, Sir Thos. R. Ratcliffe-Ellis, and Mr. J. W . White.
W e have signed the report, but desire to add that in our opinion
an inquiry into the effects of the Trade Disputes Act, 1906, and the
provision of protection would be desirable. (Both subjects are much
misunderstood^ and may be germane to the fulfillment of industrial
agreements.)
* Signed subject to memorandum (1) attached,
f Signed subject to memorandum (2) attached.

7053°— Bull. 133— 13------ 3




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BULLETIN OF THE BUREAU OF LABOR STATISTICS.
MEMORANDUM (1 ).

(1) While agreeing in the main with the foregoing report, we do
not concur in those portions which, giving the go-by to the very
strong opinions expressed against compulsion, seek to impose agree­
ments made between certain persons on others not parties to them.
We are, therefore, unable to sign the report without reservations.
(2) Supplementary to what is said in the report, paragraphs 6
and 7, we desire to state what we conceive to be the real nature of
the so-called “ agreement ” and the necessary limitations to its bind­
ing force. The arrangement made between an employer, or a group
of employers, and persons purporting to represent the trade-union
organization of the men employed must be deemed to be a bargain
made between each employer and the men in his employment,
whether members of the trade-union or not. It is binding only to a
very modified extent, for it leaves employer and workman alike free
to terminate the relation between them under the ordinary notice.
This is a right which neither party is willing to surrender. The ar­
rangement goes no further than to set out the conditions of wages,
hours, and other matters, on which those responsible for it consider
employment ought to be offered and taken. It is clear that if such
conditions are fair to A they must be fair to B, whether A and B be
unionist or nonunionist. For this, among other reasons, we hold com­
pulsion to be inadmissible as a means of obtaining the adherence of
the parties to the arrangement. We are, moreover, of opinion that no
statutory compulsion could, in fact, be enforced, nor would any
penalties, whether monetary or other, be of avail. It is difficult, if
not impossible, to give effect to the civil remedies which the parties
already possess in the only circumstances (that of a general strike or
lockout) when they might be of some use. How much less possible
would it be to put into operation penal clauses at such a crisis?
(3) In the great organized industries it is admitted that arrange­
ments are carried out in a fairly satisfactory manner, and that it is
only under circumstances of unusual tension that failure occurs. It
is averred that this failure is as frequent on the side of the employer
as of the workman. We offer no opinion on the accuracy of this
statement. In any case, consent, which is admitted to be the best
ground on which to build, is found to afford a fairly sure foundation.
It is proposed, under certain circumstances, to abandon this. We do
not agree to this for the reasons we have given.
(4) But we think there are other grounds for dissent. The com­
pulsion which, under paragraph 47, et seq., it is sought to impose,
might lead to intolerable tyranny. Small manufacturers carrying
on various industries might find themselves hampered in a way
calculated to prevent that progress which it is the interest of the
community at large to promote. The modern tendency is to limit
the number of these industries in a manner to be regretted, for they
form avenues of advancement which it is important to keep open.
We can not be parties to advising a course which would, in our
opinion, have the effect suggested.
(5) A further consideration to which, in our opinion, great weight
attaches, relates to the position of the general public. It is not diffi­
cult to conceive circumstances in which the interests of a majority
of the employers and their workmen might be at variance with those



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

33

of the general community. I f the other employers and workmen
were compelled by law to accept the decisions of such a majority
and to regulate their practice accordingly, it might have the result
that prices would be artificially forced up, in the interest of a par­
ticular trade, to the great detriment of the consumer. The burden
of this advance would fall on people who would be unable to pro­
tect themselves against the legalized tyranny inflicted on them by a
strongly organized combination of employers and workmen, repre­
senting, it might be, but a small majority of the producers of some
important article of consumption.
(6) We recognize fully the advantages of thorough organization
to both employer and workman, but we do not disguise from our­
selves that it has also serious drawbacks, which we have endeavored
as far as possible to set out in the foregoing remarks. They are
greatly reduced when the organization is based on consent, and we
do not see our way to recommend any departure from this method.
(7) We had desired to add to the report some comments upon the
effects of the Trades Disputes Act, 1906, which it is claimed militates
seriously against the fulfillment of industrial agreements. It has
been stated that, as the law now stands, certain sections of the com­
munity are relieved from effects of conduct which, if pursued by
other persons, would entail serious consequences. I f this be so, the
immunity in respect of the commission of wrongful acts is, we believe,
without precedent. The question of the provision of adequate and
effective protection to men who wish to work is part of the same
subject. As, however, the evidence taken upon these matters has
not been very extensive and as they have not been specifically re­
ferred to the council in the terms of reference, we do not comment
further upon them, but we consider that an inquiry into these ques­
tions would be valuable and we think it should be undertaken with­
out delay.
Subject to these reservations we sign the report.
G eo . A in s w o r t h .
F red L. D a v is .
H u g h B ell.
T h o s . L. D e v it t .
W . A. C l o w e s .
R obert T h o m p s o n .
MEMORANDUM (2 ).

I am in entire agreement with the statements made in paragraphs
14 and 15 of the report, but I am of opinion that to secure the object
aimed at something more than an expression of opinion on the part
of the council is necessary. I think that it should be provided by
statute that it should be an implied term of every collective industrial
agreement that before there is a reversion to the method of strike or
lockout there should be an inquiry and a pronouncement upon the
question at issue by some impartial tribunal, and that where that
statutory term of the agreement is not observed it should constitute a
contravention of the agreement.
I am in entire agreement with the statements made in paragraphs 97
and 28 of the report, but again I consider that something more than
an expression of opinion on the part of the council is necessary. I
think it should be declared to be illegal to make any payment, or to
give any financial assistance in support of any person who (having
been a member.of an association represented by the signatories to the



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BULLETIN OF THE BUREAU OF LABOR STATISTICS.

agreement) has been declared by the tribunal referred to in para­
graph 9 of the report, or by the consent of the parties to the agree­
ment, to have contravened any of its terms. There may be cases
where either employers’ associations or workmen’s associations may
possess under their respective organizations the means of securing
compliance with the opinion so strongly expressed in paragraph 28
of the report, and be able to enforce it. I f so, the statutory provision
would not be necessary in such a case. A method by which such
association might be excepted from the statutory obligation during
such time as the agreements are observed would be that power should
be given to the Board of Trade to issue a certificate that the statu­
tory provision should not apply in any cases where, after inquiry,
the chief industrial commissioner is satisfied that the rules of the
association and its disciplinary power of enforcing those rules are
such as to secure the due fulfillment of all the terms, statutory and
otherwise, of any agreement entered into. Such certificate should be
revocable, but might be reissued.
It has been contended by some of my colleagues on the Industrial
Council that the suggested legislative prohibition of assistance
might, under certain circumstances, be harshly applied. To avoid
that, it might be provided in the act that proceedings against persons
alleged to have made such illegal payments should not be instituted
except on a certificate of the tribunal referred to in paragraph 9 of
the report that it was a proper case for a prosecution. I f that cer­
tificate were given, neither the Trade Disputes Act nor any other
act should be a bar to such proceedings.
Holding the opinion expressed in paragraph 18 of the report that
“ the value of efficient organization on the part of employers and
workpeople as a means of securing the due fulfillment of industrial
agreements is very clearly demonstrated by the experience of the dif­
ferent trades of the country,” I favor the proposals for the extension
of agreements as proposed in paragraphs 45 et seq. of the report;
but in my opinion the draft scheme set out in paragraph 58 should
be amended by having a third condition added to the two conditions
precedent to such determination by the authority, namely—
(c)
That it should be illegal for any financial assistance to be
given by either the employers’ association or the workmen’s asso­
ciation in support of any person who, having been a member of an
association represented by the signatories to an agreement, has been
declared by an impartial tribunal or by mutual consent of the parties
to the agreement to have contravened the terms of the agreement.
Except as I have set out above. I agree with the report.
T h o s . R . R a t c l if f e - E l l is .
(3) MEMORANDUM BY MR. ALEX. SIEMENS.

While agreeing with the report so far as it summarizes the evi­
dence submitted to the council I am unable to adopt the conclusions
drawn from that evidence or the recommendations as made.
I therefore consider it desirable to state fully the impression I
have gained from an examination of the evidence and from the dis­
cussions at the various meetings of the council.
When considering the subject I have done so in the light of over
17 years’ actual experience in negotiating and administering indus­



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

35

trial agreements in conjunction with several of the most important
trade-unions in the Kingdom.
The original position in industrial matters was that there should
be a free market in which the employers were at liberty to purchase
and the workmen at liberty to sell labor without restrictions. In
such circumstances both employers and workpeople were at liberty to
come to terms mutually satisfactory to the individuals concerned.
Owing, however, to developments which have taken place from year
to year the original position has been altered, and the rights of
parties in this respect are restricted.
The most important restriction is due to the system of collective
bargaining. Collective bargaining restricts the individual workman
and the individual employer, while, on the other hand, trade-unions
restrict the rights of employers and the employers’ associations the
rights of trade-unions.
The development of the position has resulted in a state of affairs
whereby to a large extent individual employers and workpeople
have surrendered their freedom of action to organizations in which
the interests of the individual are merged with those of the body to
which he belongs.
It is important, however, to remember that although this change
has taken place the individual rights of the employer and of the
workmen still remain, restricted though they may be.
Having these considerations in view, an industrial agreement, as
distinguished from an agreement of service between an individual
employer and an individual workman, may be defined as an agree­
ment in which collective bargaining either acknowledges the natural
rights and privileges of employers and workmen or embodies the re­
strictions under which such rights and privileges may be exercised.
Such agreements may cover two sets of questions, viz, questions of
principle and questions of fact. Questions of principle arise out of
the rights and privileges of the employers and workpeople, either
maintained by the party concerned or acknowledged in an agreement.
Questions of fact, on the other hand, are questions which are deter­
minable by circumstances which may be readily ascertained and
which vary from day to day. A notable question of fact is the ques­
tion of general alterations of wages.
The manner of dealing with questions of principle and with ques­
tions of fact necessarily differs. On questions of fact it may be de­
sirable to have a final settlement by negotiation which would preclude
a stoppage of work. This could be achieved by invoking the inter­
vention of an outside impartial authority who would have a deter­
mining voice in the event of the parties failing to agree. In ques­
tions of principle it is difficult for an outside authority to be of as­
sistance. The solution of such questions does not depend on the
ascertainment of facts.
There is one important consideration which seems to have been
overlooked, if not altogether at least in great measure. Industrial
agreements are made either in settlement of disputes or by ordinary
process of collective bargaining, the parties to the agreement not
being in dispute but being desirous of arriving at a formal agree­
ment embodying their ideas on certain points or certain informally
recognized conditions of labor.



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BULLETIN OF THE BUREAU OF LABOR STATISTICS.

The latter class of agreement has not been much referred to in the
evidence given before the council. It appears, however, to be neces­
sary to keep this class of agreement prominently in view, especially
when considering the difficulties which are alleged to have arisen
owing to the leaders of the unions having taken upon themselves the
responsibility of entering into agreements without having a mandate
previously obtained, or without taking the precaution to get the
agreements approved prior to their being put into operation.
It may be taken as generally accepted that, in adjusting agree­
ments of the nature referred to above in the second place, there is
either a mandate previously obtained or the agreement is provision­
ally arrived at, and is subject to the approval of the constituents on
both sides.
It is necessary, as well as desirable, that agreements which have to
be worked to by the individual members of any body should be ap­
proved by the members of that body according to their rules. There
is no doubt that in comparatively few cases all the members of an
Employers’ association or of a trade-union would be willing to accept
the terms of an agreement submitted to them, but it is usual for the
rules of such bodies to provide that acceptance, by a certain propor­
tion is binding upon all.
In the case of agreements which are made in settlement of a dis­
pute it is desirable that those who negotiate ought to have instruc­
tions previously given, or ought to confine themselves to a provisional
agreement which they would undertake to recomm,end for acceptance
by their constituents.
I regret being unable to indorse the view which has been expressed
that questions arising regarding the interpretation of the clauses of
an industrial agreement should be referred to an outside body. Ex­
perience has demonstrated that where a difference of opinion exists
as to any clause in an industrial agreement the difference may be
due not to the fact that parties were at variance as to what was in­
tended by the phraseology of the clause, but may be due to the
phraseology itself, which conceivably does not convey the intention
of the parties. That being so, the only reasonable course is to get
the parties to the agreement together and give them an opportunity
of so phrasing the clause in question as to convey their intention. It
is undesirable to endeavor to hold the parties strictly to the phrase­
ology adopted. Industrial agreements are not framed like com­
mercial agreements, in which the phraseology determines the posi­
tion. The clauses are intended to be simply an embodiment, in lan­
guage which can be understood by the parties, of their intention
when the agreement was made.
The recommendations which I would submit are as follows:
Question (a).
1. Agreements entered into by representatives of the parties shall,
prior to being put into operation, be ratified by the constituent bodies
wherever the rules or practice of the contracting parties demand
such a course.
2. All agreements shall contain provisions which afford ample and
ready opportunity for discussion of any questions which may arise.



REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

37

3. I strongly recommend that all agreements shall contain an effec­
tive provision that no financial or other assistance shall be given to
persons acting in breach of the agreement.
4. On wages questions no stoppage of work shall take place, and
the provisions for discussion referred to above shall include, as the
ultimate stage, reference to an independent authority with power to
finally dispose of the matter.
5. (a) On questions of principle, an independent authority shall
be admitted only by consent of the parties concerned.
(b)
Pending the exhaustion of the provisions for discussion, no
stoppage of work shall take place, and in the event of failure to ar­
rive at a settlement, at least 30 days’ notice shall be given of a stop­
page of work.
6. I further recommend that no period shall be fixed for the dura­
tion of agreements except in the case of agreements affecting wages
questions, in which a minimum period shall be fixed of 12 months
clear.
Question (&).
I recommend that it shall be competent for the parties to an agree­
ment to apply jointly (at any time during the currency of the
agreement) to the Board of Trade to cause an inquiry to be held,
by such authority as the Board of Trade may direct, to determine
whether or not the agreement shall be extended to, and its terms made
obligatory upon, persons not members of the associations represented
by the signatories to the agreement.
Upon the receipt of an application for the extension of an agree­
ment, the Board of Trade shall arrange for an inquiry to be held
and shall take steps to advertise the facts that an application is
under consideration and that an inquiry is to be held.
The inquiry shall be held at such times and places as shall give
reasonable opportunity for those affected to attend should they so
desire.
The terms of any agreement in respect of which an application
for extension has been received shall be duly advertised by the Board
of Trade a reasonable time before the inquiry is commenced.
I f the authority appointed by the Board of Trade are satisfied
after holding the inquiry that the associations represented by the
signatories to the agreement constitute a substantial majority of the
particular trade in the district in question, and that the agreement
embodies the recommendations made in reply to question (a), and is
one that might suitably be extended, the authority may declare that
the terms of the agreement, with such modifications thereof as may
be agreed upon by the parties at the inquiry, shall be extended to
cover the whole of the trade in the district. Where an agreement
has been so declared to be extended it shall be an implied term of any
contract of service in the particular trade or district that the terms
of the agreement shall form the basis and be an essential part of such
contract.
The authority shall forward its determination to the Board of
Trade, and the Board of Trade shall cause it to be duly published,
and copies of the determination shall be given to such persons as are
known to be interested or affected or to any who may apply for
copies.



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BULLETIN OF THE BUREAU OF LABOR STATISTICS.

I have given careful consideration as to whether or not in ex­
tending an agreement it should be extended as a whole, or whether
it would be desirable to exempt any part or parts of the agreement,
but in view of the fact that agreements in general are of the nature
of a compromise, I am of opinion that no clause should be omitted
and that the agreement should be extended as a whole to the trade
in the district as a whole.
I desire to add that, in my opinion, an inquiry into the effects of
the Trade Disputes Act, 1906, and the provision of adequate and
effective protection to men who wish to work would be desirable.
(Both subjects are much misunderstood, and may be germane to the
fulfillment of industrial agreements.)
A

lex.

S ie m e n s .

APPENDIX I.—CONCILIATION ACT, 1896.
AN ACT TO MAKE BETTER PROVISION FOR THE PREVENTION AND
SETTLEMENT OF TRADE DISPUTES. [7TH AUGUST, 1896.]
1. (1) Any board established either before or after the passing of this act,
which is constituted for the purpose of settling disputes between employers and
workmen by conciliation or arbitration, or any association or body authorized
by an agreement in writing made between employers and workmen to deal with
such disputes (in this act referred to as a conciliation board), may apply to the
Board of Trade for registration under this act.
(2) The application must be accompanied by copies of the constitution, by­
laws, and regulations of the conciliation board, with such other information as
the Board of Trade may reasonably require.
(3) The Board of Trade shall keep a register of conciliation boards, and enter
therein with respect to each registered board its name and principal office, and
such other particulars as the Board of Trade may think expedient, and any
registered conciliation board shall be entitled to have its name removed from
the register on sending to the Board of Trade a written application to that
effect.
(4) Every registered conciliation board shall furnish such returns, reports of
its proceedings, and other documents as the Board of Trade may reasonably
require.
(5) The Board of Trade may, on being satisfied that a registered conciliation
board has ceased to exist or to act, remove its name from the register.
(6) Subject to any agreement to the contrary, proceedings for conciliation
before a registered conciliation board shall be conducted in accordance with the
regulations of the board in that behalf.
2. (1) Where a difference exists or is apprehended between an employer,
or any class of employers, and workmen, or between different classes of work­
men, the Board of Trade may, if they think fit, exercise all or any of the follow­
ing powers, namely:
(а) Inquire into the causes and circumstances of the difference;
(б) Take such steps as to the board may seem expedient for the purpose of
enabling the parties to the difference to meet together, by themselves or their
representatives, under the presidency of a chairman mutually agreed upon or
nominated by the Board of Trade 01* by some other person or body, with a view
to the amicable settlement of the difference;
(c) On the application of employers or workmen interested, and after taking
into consideration the existence and adequacy of means available for concilia­
tion in the district or trade and the circumstances of the case, appoint a person
or persons to act as conciliator or as a board of conciliation;
{d) On the application of both parties to the difference, appoint an arbitrator.
(2) If any person is so appointed to act as conciliator, he shall inquire into
the causes and circumstances of the difference by communication with the
parties, and otherwise shall endeavor to bring about a settlement of the differ­
ence, and shall report his proceedings to the Board of Trade.
(3) If a settlement of the difference is effected either by conciliation or by
arbitration, a memorandum of the terms thereof shall be drawn up and signed




REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

39

by the parties or their representatives, and a copy thereof shall be delivered to
and kept by the Board of Trade.
S. The Arbitration Act, 1889, shall not apply to the settlement by arbitration
of any difference or dispute to which this act applies, but any such arbitration
proceedings shall be conducted in accordance with such of the provisions of the
said act, or such of the regulations of any conciliation board, or under such
other rules or regulations as may be mutually agreed upon by the parties to the
difference or dispute.
4. If it appears to the Board of Trade that in any district or trade adequate
means do not exist for having disputes submitted to a conciliation board for the
district or trade, they may appoint any person or persons to inquire into the
conditions of the district or trade, and to confer with the employers and em­
ployed, and, if the Board of Trade think fit, with any local authority or body,
as to the expediency of establishing a conciliation board for the district or trade.
5. The Board of Trade shall from time to time present to Parliament a report
of their proceedings under this act.
6 The expenses incurred by the Board of Trade in the execution of this act
shall be defrayed out 6f moneys provided by Parliament
7. The Masters and Workmen Arbitration Act, 3824, and the Councils of Con­
ciliation Act, 1867, and the Arbitration (masters and workmen) Act, 1872, are
hereby repealed.
8. This act may be cited as the Conciliation Act, 1896.

.

APPENDIX II.—COURT OF ARBITRATION.
The following is the text of a memorandum communicated by the president of
the Board of Trade to chambers of commerce and employers’ and workmen’s
associations in September, 1908, with reference to the formation of a court of
arbitration as an auxiliary to the conciliation act. It is self-explanatory.
M EM OBANDUM .

1. Under the Conciliation Act of 1896 the Board of Trade has power to appoint
a conciliator in trade disputes, and an arbitrator at the request of both parties.
These slender means of intervention have been employed in cases where oppor­
tunity has offered, and the work of the department in this sphere has consid­
erably increased of recent years. In 3905 the Board of Trade intervened in 14
disputes and settled them all; in 1903 they intervened in 20 cases and settled
16; in 1907 they intervened in 39 cases and settled 32; while during the first
eight months of the present year no fewer than 47 cases of intervention have
occurred, of which 35 have been already settled, while some of the remainder
are still being dealt with.
2. It is not proposed to curtail or replace any of the existing functions or
practices under the conciliation act, nor in any respect to depart from its
voluntary and permissive character. The good offices of the department will
still be available to all in industrial circles for the settlement of disputes when­
ever opportunity offers. Single arbitrators and conciliators will still be ap­
pointed whenever desired. Special interventions will still be undertaken in
special cases, and no element of compulsion will enter into any of these pro­
ceedings. But the time has now arrived when the scale of these operations
deserves, and indeed requires, the creation of some more formal and permanent
machinery; and, with a view to consolidating, expanding, and popularizing
the working of the conciliation act, I propose to set up a standing court of
arbitration.
3. The court, which will sit whenever required, will be composed of three
(or five) members, according to the wishes of the parties, with fees and ex­
penses to members of the court and to the chairmen during sittings. The court
will be nominated by the Board of Trade from three panels. The first panel—
of chairmen— will comprise persons of eminence and impartiality. The second
will be formed of persons who, while preserving an impartial mind in regard
to the particular dispute, are nevertheless drawn from the “ employer class.”
The third panel will be formed of persons similarly drawn from the class of
workmen and trade-unionists. It is hoped that this composition will remove
from the court the reproach which workmen have sometimes brought against




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BULLETIN OF THE BUREAU OF LABOR STATISTICS.

individual conciliators and arbitrators, that, however fair they mean to be,
they do not intimately understand the position of the manual laborer. It is
believed that by the appointment of two arbitrators selected from the em­
ployers’ panel and two from the workmen’s panel in difficult cases, thus consti­
tuting a court of five instead of three persons, the decisions of the court would
be rendered more authoritative, especially to the workmen, who, according to
the information of the Board of Trade, are more ready to submit to the judg­
ment of two of their representatives than of one. As the personnel of the court
would be constantly varied, there would be no danger of the court itself
becoming unpopular with either class in consequence of any particular decision;
there would be no difficulty in choosing members quite unconnected with the
case in dispute, and no inconvenient labor would be imposed upon anyone
who consented to serve on the panels. Lastly, in order that the peculiar condi­
tions of any trade may be fully explained to the court, technical assessors
may be appointed by the Board of Trade, at the request of the court of the
parties, to assist in the deliberations, but without any right to vote.
4. The state of public opinion upon the general question of arbitration in
trade disputes may be very conveniently tested by suchra voluntary arrange­
ment. Careful inquiry through various channels open to the Board of Trade
justifies the expectation that the plan would not be unwelcome in industrial
circles. The court will only be called into being if and in proportion as it is
actually wanted. No fresh legislation is necessary.
5. Steps will now be taken to form the respective panels.
September 1, 1908.
When both parties to an industrial dispute desire to have their differences
settled by arbitration it is open to them jointly to apply to the Board of Trade
under the conciliation act either (1) for the appointment of a single arbitrator,
or (2) for the appointment of a court of arbitration in accordance with the
scheme devised in 1908, by the president of the Board of Trade.
The following regulations have been drawn up by the Board of Trade in
connection with the appointment of courts of arbitration:
REGU LATIO N S.

1. The application should state (a) the subject matter of the dispute; (&)
whether the parties wish the court to consist of (1) a chairman and two arbi­
trators, or (2) a chairman and four arbitrators; (c) whether the parties desire
the Board of Trade (i) to appoint a chairman and arbitrators, all of whose
names have been jointly selected by the parties from the respective panels,
or (ii) to appoint a chairman whose name has been jointly selected by the par­
ties from the chairmen’s panel, and to select and appoint the arbitrators from
the respective panels, or (iii) to select and appoint the chairman from the
chairmen’s panel, and to appoint arbitrators jointly selected by the parties from
the respective panels, or (iv) to select and appoint all the members of the court
from the respective panels; (4) whether the parties wish the court to appoint,
or apply to the Board of Trade to appoint, a technical assessor or assessors.
2. A court of arbitration shall, if either party or both parties shall have so
requested, or may on their own initiative, if they consider that the assistance
of a technical assessor or assessors is expedient, appoint or apply to the Board
of Trade to appoint a technical assessor or assessors accordingly.
3. Technical assessors shall not be members of the court. They will be ap­
pointed solely for the purpose of giving the court information on technical
matters when required by them. They will only be entitled to be present at
such stages of the proceedings as the court may direct. Every assessor before
taking up his duties shall pledge himself in writing to keep secret all matters
with which he shall in the course of the performance of such duties become
acquainted.
4. All procedure in connection with the hearing of a case shall be settled by
the chairman after consultation with other members of the court, including the
mode of appearance thereat.
For the convenience of the court, each application should be accompanied by
a statement showing (a) whom the parties desire to represent them at the
hearing and (&) the approximate number of witnesses each side desires to call.




REPORT ON INDUSTRIAL AGREEMENTS IN GREAT BRITAIN.

41

5. The award of a majority of the members of the court shall be the award
of the court. When no majority can be obtained in favor of an award, owing
to the arbitrators being equally divided, then the matter shall be decided by
the chairman, acting with the full powers of an umpire.
6. After an award is made it shall be signed by the chairman on behalf of
the court, and he shall then cause a copy to be sent to the representatives of
both parties to the dispute. The original award, together with any shorthand
notes and all relevant papers, shall be forwarded to the Board of Trade.
7. Shorthand notes (and transcripts of such notes) of any part of the pro­
ceedings shall only be paid for by the Board of Trade if the chairman of the
court certifies that the notes were necessary for the purpose of the court. The
Board of Trade will also pay any expenses connected with the drawing of the
award and for the hire of a room for the hearing of the case when necessary,
They will also pay the expenses of the members of the court.





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