Cornell ilr LIBRARY Martin P. Catherwood Library School of Industrial and Labor Relations MINISTRY OF RECONSTRUCTION. cora'ELL UNi, 924 099 173 209 T! COMMITTEE ON RELATIONS BETWEEN EMPLOYERS AND EMPLOYED. SECOND REPORT ON JOINT STANDING INDrSTRIAL COUNCILS. i&vt^tnte'b to Parliittnent 6y oroinntanli of i^t0 Ma)ttHv> LONDON: PUBLISHED BY HIS MAJESTY'S STATIONERY OFFICE. To be purchased through any Bookseller or directly from H.M. STATIONERY OFFICE at the foUowing addresses : Imperial House, Kingsway, London, W.C.2, and 28, Abingdon Street, London, S.W.I 37, Peter Street, Manchester; 1, St. Andrew's Crescent, Cardiff; 23, Forth Street, Edinburgh; or from E. PONSONBY, Ltd., 116, Grafton Street, Dublin. ICd. 9002J 1918. Price Id. Net. PREFATORY NOTE. This Report of the Committee on Relations between Employers and Employed is now receiving the joint consideration of the Minister of Labour and myself, in the light of the practical experience which hais bee a gained in establishing Joint Industrial CouDcils in accordance with the proposals of the First Report. A statement will shortly be published with regard to any modification of the recommendations of this Second Report which may be considered expedient from the administrative point of view. C. ADDISON. February 28th, 1918. MINISTRY OP RECONSTRUCTION. Committee on Relations between Employers and Employed. SECOND REPORT ON JOINT STANDING INDUSTRIAL COUNCILS. The Right Hon. J. H. WHITLEY, M.P., Chairman. Mr. F. S. Button. Sir George J. Carter, K.B.E. Professor S. J. Chapman, C.B.E. Sir Gilbert Claughton, Bart. Mr. J. R. Clynes, M.P. ■*Mr. F. N. Hepworth. •*Mr. W. Hill. Mr. J. A. Hobson. Miss Susan Lawrence. "'•■Sir Maurice Levy, Bart., M.P. Mr. J. J. Mallon. Sir Thos. R. Ratoliffe-Ellis. Mr. Robert Smillie. Mr. Allan M. Smith. *'Mr. D. R. H. Williams. Miss MoNA Wilson. Mr. H. J. Wilson, C.B.E. , Ministry of Labour, ") ^ . Mr. Arthur Greenwood, Ministry of Reconstruction, ) '^6<'^e*o'"*es. Additional members of the Committee, appointed in connection with the present Report. Ministry of Reconstruction, 2, Queen Anne's Gate Buildings, London, S.W.I. MINISTRY OF RECONSTRUCTION. Committee on Relations between Employers and Employed. SECOND REPORT ON JOINT STANDING INDUSTRIAL COUNCILS. To the Right Honourable D. Lloyd George, M.P., Prime Minister. Sir, • Following the proposals made in our first Report, we have now the honour to present further recommendations dealing with industries in which organi- sation on the part of employers and employed is less completely established than in the industries covered by the previous Report, and with industries in which such organisation is weak or non-existent. 2. Before commencing the examination of these industries the Committee came to the conclusion that it would materially assist their enquiries if they could have the direct advantage of the knowledge and experience of some representative emploj''ers who were connected with industries of the kind with which the Committee were about to deal ; and it was arranged, with your approval, that Sir Maurice Levy, Mr. F. N. Hepworth, Mr. W. Hill, and Mr. D. R. H. Williams should be appointed to act with the Committee while these industries were under consideration. This arrangement made it possible to release from attendance at the earlier meetings of the Committee Sir Gilbert Claughton, Sir T. Ratcliffe-EUis, Sir George J. Carter, and Mr. Allan Smith, whose time is greatly occupied in other public work and whose experience is more particularly related to the organised trades covered by our former Report. 3. It is difficult to classify industries according to the degree of organisation among employers and employed, but for convenience of consideration the industries of the country may be divided into three groups : — Group A. — Consisting of industries in which organisation on the part of employers and employed is sufficiently developed to render their respective associations representative of the great majority of those engaged in the industry. These are the industries which we had in mind in our first Interim Report. Group B. — Comprising those industries in which, either as regards employers and employed, or both, the degree of organisation, though considerable, is less marked than in Group A. Group G. — Consisting of industries in which organisation is so imperfect, either as regards employers or employed, or both, that no associations can be said adequately to represent those engaged in the industry. The present Report is concerned with Groups B. and C. 4. So far as Groups A. and C. are concerned, a number of industries can be definitely assigned to them. Group B., however, is necessarily more indeterminate. Some of the industries in this group approach closely to industries in Group A., while others verge upon Group C. Further, most industries, in whatever class they may fall, possess a " tail," consisting of badly organised areas, or sections of the industry. These facts we have borne in mind in formulating our further proposals. 5. So far as industries in Group B. are concerned, we are of opinion that the proposals of our First Report should, in their main lines, be applied to those which, on examination by the Ministry of Labour in consultation with the Associations con- cerned, are found to be relatively well_ organised. _ We suggest, however, that where in these industries a National Industrial Council is formed there should be appointed one or at most two official representatives to assistin the initiation of the Council, and continue after its establishment to act in an advisory capacity and serve as a link X (33)5296(1389-6?a) Wt 21796-37 15,000 3/18 j^ 2 with the Grovernment. We do not contemplate that a representative so appointed should be a member of the National Industrial Council, in the sense that he should have power, hj a vote, to influence the decisions of the Council, but that he should attend its meetings and assist in any way which may be found acceptable to it. By so doing he would acquire a continuous l^nowledge of the conditions of the industry of which the Grovernment could avail itself, and so avoid many mistakes that under present conditions are inevitable. * The question of the retention of the official representatives should be considered by the Councils in the light of experience gained Avhen an adequate time has elapsed. We anticipate that in many cases their continued assistance will be found of value even after an industry has attained a high degree of organisation, but in no case should they remain except at the express wish of the Councils concerned. 6. It may be that in some Group B. industries in which a National Industrial Council is formed certain areas are well suited to the esitablishmeat of District Councils, while in other areas the organisatioa of employers or employed, or both, is too weak to be deemed representative. There appears to be no good reason why in the former areas there should, not be District Industrial Councils, acting in conjunction with the National Industrial Councils, in accordance with the principles formulated in the Committee's earlier report on the well-organised trades. 7. An eramination of some of the industries coming within Group B. may show that there are some which, owing to the peculiarities of the trades and their geo- graphical distribution, cannot at present be lirought readily within the scope of the proposals for a National Industrial Council, though they may be quite well organised in two or more separate districts. In such a case we think there might well be formed one or more District Industrial Councils. We anticipate that in course of time the influence of the District Councils would be such that the industry would become suitable for the establishment of a National Industrial Council. 8. In the case of industries in Group B. (as in the industries covered by our first Report), we consider that the 'members of the National Councils and of the District Councils should be representatives of the Employers' Associations and Trade Unions concerned. In the formation of the Councils, regard should be paid to the various sections of the industry and the various classes of labour engaged, and the representatives should include representatives of women's organisations. In view of the extent to which women are employed in these industries, we think the Trade Unions, when selecting their representatives for the Councils, should include a number of women among those who are appointed to be members. 9. It does not appear to us necessary or desirable to suggest any fixed standard of organisation which should exist in any industry before a National Industrial Council should be established. The case of each industry will need to be considered separately, regard being paid to its particular circumstances and characteristics. In the discussion of this matter, we have considered whether it would be feasible to indicate a percentage of organisation which should be reached before a Council is formed, but, in view of the great diversity of circumstances in these industries and of the differing degrees to which the several sections of some of them are organised, we have come to the conclusion that it is more desirable to leave the matter to the decision of the Ministry of Labour and the organisations concerned. Whatever theoretical standard may be contemplated, we think its application should not be restrictive in either direction. 10. The level of organisation in industries in Group C. is such as to make the scheme we have proposed for National or District Industrial Councils inapplicable. To these industries the machinery of the Trade Boards Act might well be applied, pending the development of such degree of organisation as would render feasible the establishment of a National Council or District Councils. 11. The Trade Boards Act was originally intended to secure the establishment of a minimum standard of wages in certain unorganised industries, but we consider that the Trade Boards should be regarded also as a means of supplying a regular machinery for negotiation and decision on certain groups of questions dealt with in other circumstances by collective bargaiiaing between employers' organisations and trade unions. In order that the Trade Boards Act may be of greater utility in connection with unorganised and badly organised industries or sections of industries, we consider that certain modifications are needed to enlarge the functions of the Trade Boards. We suggest that they should be empowered to deal not only with minimum rates of ■wages but with hours of labour and questions cognate to wages and hours. We are of opinion also that the functions of the Trade Boards should be extended so as to enable them to initiate and conduct enquiries on all matters affecting the industry or the section of the industry concerned. 12. If these proposals were adopted, there would be set up, in a number of industries or sections of industries, Trade Boards (consisting of representatives of employers and employed, together with " appointed members ") who would, within the scope of their functions, establish minimum standard rates and conditions applicable to the industry or section of the industry which they represented, and consider systematically matters affecting the well-being of the industry. 13. Where an industry in Group C. becomes sufficiently organised to admit of the institution of National and District Councils, we consider that these bodies should be set up on the lines already indicated. Where it appears to a Trade Board that an Industrial Council should be appointed in the industry concerned, they should have power (a) to make application to the Minister of Labour asking him to approach the organisations of employers and employed, and (6) to suggest a scheme by which the representation of the workers' and employers' sides of the Trade Board could be secured. • 14. Whether in industries in Group C. the establishment of Works Committees is to be recommended is a question which calls for very careful examination, and we have made the general question of Works Committees the subject of a separate Report. 15. We have already pointed out that most of the industries in Groups A. and B. have sections or areas in which the degree of organisation among the employers and employed falls much below what is normal in the rest of the industry ; and it appears to us desirable that the general body of employers and employed in any industry should have some means whereby they may bring the whole of the trade up to the standard of minimum conditions which have been agreed upon by a substantial majority of the industry. We therefore recommend that, on the application of a National Industrial Council sufiBciently representative of an industry, the Minister of Labour should be empowered, if satisfied that the case is a suitable one, to make an Order either instituting for a section of the industry a Trade Board on which the National Industrial Council should be represented, or constituting the Industrial Council a Trade Board tinder the provisions of the Trade Boards Act. These proposals are not intended to limit, but to be in addition to, the powers at present held by the Ministry of Labour with regard to the establishment of Trade Boards in trades and industries where they are considered by the Ministry to be necessary. 16. We have already indicated (paragraph 9) that the circumstances and characteristics of each of the several industries will need to be considered before it can be decided definitely how far any of our proposals caa be applied in particular instances, and we have refrained from attempting to suggest any exact degree of organisation which would be requisite before a particular proposal could be applied. We think, however, that the suggestion we have made in the preceding paragraph to confer upon a National Industrial Council the powers of a Trade Board should be adopted only in those cases in which the Minister of Labour is satisfied that the Council represents a substantial majority of the industry concerned. 17. We are of opinion that most of the chief industries of the country could be brought under one or other of the schemes contained in this and the preceding Report. There would then be broadly two classes of industries in the country — industries with Industrial Councils and industries with Trade Boards. 18. In the former group the National Industrial Councils would be constituted either in the manner we have indicated in our first Report, carrying with them District Councils and Works Committees, or on the lines suggested in the present Report, i.e., each Council coming within the scope of this Report having associated with it one, or two, official representatives to act in an advisory capacity and as a link with the Government, in addition to the representatives of the employers and employed. 19. It should be noted that in the case of industries in which there is a National Industrial Council, Trade Boards might, in some instances, be associated with the Council in order to determine wages and hours, &c. in certain sections or areas. It is possible that in some allied trades, really forming part of the same industry, both sets of proposals might, in the first instance, be in operation side by side, one trade having A 3 6 its Industrial Council and the other its Trade Board. Where these circumstances obtain, we anticipate that the Trade Board would be a stepping stone to the full Industrial Council status. 20. It may be useful to present a brief outline of the proposals which we have so far put forward : — (a) In the more highly organised industries (Group A.) we propose a triple organisation of national, district, and workshop bodies, as outlined in our first Report. (b) In industries where there are representative associations of employers and employed, which, however, do not possess the authority of those in Group A. industries, we propose that the triple organisation should be modified by attaching to each National Industrial Council one or at most two representatives of the Ministry of Labour to act in an advisory capacity. (c) In industries in both Groups A. and B., we propose that unorganised areas or branches of an industry should be provided, on the application of the National Industrial Council and with the approval of the. Ministry of Labour, with Trade Boards for such areas or branches, the Trade Boards being linked with the Industrial Council. {d) In industries having no adequate organisation of employers or employed, we recommend that Trade Boards should be continued or established, and that these should, with the approval of the Ministry of Labour, be enabled to formulate a scheme for an Industrial Council, which might include in an advisory capacity the " appointed members '" of the Trade Board. 21. It will be observed that the policy we recommend is based upon organisation on the part of both employers and employed. Where this is adequate, as in Group A. industries, there is no need of external assistance. In Group B. industries, we think that the organisations concerned would be glad to have the services of an official representative who would act as adviser and as a link with the Government. In unorganised sections of both groups of industries we believe that a larger measure of Government assistance will be both desirable and acceptable, and we have therefore suggested the adoption of the machinery of the Trade Boards Act in this connection. In Group C. industries we think that organisation will be encouraged by the use of the powers under the Trade Boards Act, and where National Industrial Councils are set up we recommend that the " appointed members " of the Trade Board should act on the Councils in an advisory capacity. Briefly, our proposals are that the extent of State assistance should vary inversely with the degree of organisation in industries. 22. We do not, however, regard Government assistance as an alternative to the organisation of employers and employed. On the contrary, we regard it as a means of furthering the growth and development of such organisation. 23. We think it advisable in this connection to repeat the following paragraph from our forjner Report : — " It may be desirable to state here our considered opinion that an essential condition of securing a permanent improvement in the relations between employers and employed is that there should be adequate organisation on the part of both employers and workpeople. The proposals outlined for joint co-operation throughout the several industries depend for their ultimate success upon there being such organisation on both sides ; and such organisation is necessary also to provide means whereby the arrangements and agreements made for the industry may be efi^ectively carried out." 2d. In considering the scope of the matters referred to us we have formed the opinion that the expression "employers and workmen" in our reference covers State and Municipal authorities and persons employed by them. Accordingly we recommend that such authorities and their workpeople should take into consideration the proposals made in this and in our first Report, with a view to determining how far such proposals can suitably be adopted in their case. We understaud that the Ministry of Labour has up to the present circulated our first Report only to employers' and workpeople's associations in the ordinary private industries. We think, however, that both it and the present Report should also be brought to the notice of State Departments and Municipal Authorities employing labour. 25. The proposals we have set forth above do not require legislation except on three points, namely, to provide — (1) That the Trade Boards shall have povs^er, in addition to determining minimum rates of wages, to deal with hours of labour and questions cognate to wages and hours. (2) That the Trade Boards shall have power to initiate enquiries, and make proposals to the Government Departments concerned, on matters affecting the industrial conditions of the trade, as well as on questions of general interest to the industries concerned respectively. (3) That when an Industrial Council sufficiently representative of an industry makes application, the Minister of Labour shall have power, if satisfied that the case is a suitable one, to make an Order instituting for a section of the industry a Trade Board on which the Industrial Council shall be represented, or constituting the Council a Trade Beard under the Trade Boards Act. 26. The proposals which we have made must necessarily be adapted to meet the varying needs and circumstances of different industries, and it is not anticipateei that there will be uniformity in practice. Our recommendations are intended merely to set forth the main lines of development which we believe to be essential to ensure better relations between employers and employed. Their application to the several industries we can safely leave to those intimately concerned, with the conviction that the flexibility and adaptability of industrial organisation which have been so large a factor in enabling industry to stand the enormous strain of the war will not fail the country when peace returns. 27. Other problems affecting the relations between employers and employed are engaging our attention, but we believe that, whatever further steps may be necessary to accomplish the object we have in view, the lines of development suggested in the present Report and the one which preceded it are fundamental. We believe that in each industry there is a sufficiently large body of opinion willing to adopt the proposals we have made as a means of establishing a new relation in industry. We have the honour to be. Sir, Your obedient Servants,* J. H. WHITLEY, Ghahman. F. S. BUTTON. S. J. CHAPMAN. G. H. CLAUGHTON. J. R. CLYNES. F. N. HEPWORTH. WILFRID HILL. J. A. HOBSON. A. SUSAN LAWRENCE. MAURICE LEVY. J. J. MALLON. THOS. R. RATCLIFFE-ELLIS. ALLAN M. SMITH. D. R. H. WILLIAMS. MONA W^LSON. s \ H. J A. Greenwood EENWOOD,}^^"^^*"^^^^- 18th October 1917. * Sir 6. J. Carter and Mr. Smillie were uuable to attend any of the meetings at which this Report was considered and they therefore do not sign it. Printed under the authority of His Majesty's Stationery Office By Eyre and Spottiswoode, Ltd., East Harding Street, E.G. 4, Printers to the King's most Excellent Majesty. The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924099173209