INTERNATIONAL LABOUR OFFICE STUDIES AND REPORTS Series A (Industrial Relations) No. 36 INDUSTRIAL RELATIONS IN GREAT BRITAIN By J. HENRY RICHARDSON, M.A., Ph.D. Montague Burton Professor of Industrial Relations in the University of Leeds GENEVA 1938 Published in the United Kingdom For the INTERNATIONAL LABOUR O F F I C E ( L E A G U E OF NATIONS) By P . S . KING & S O N , Ltd. Orchard House, 14 Great Smith Street, Westminster, London, S.W.i First printed iç33 Second Impression 1933 Second Edition IÇ38 FOREWORD PROFESSOR RICHARDSON'S report on industrial relations in Great Britain is a new edition of a study first published in 1933. I t forms part of a programme of research on industrial relations undertaken by the International Labour Office in accordance with a resolution adopted in 1928 by the International Labour Conference. This resolution, proposed by Mr. H. H. Champ, employers' delegate of Canada, and seconded b y the Canadian workers' delegate, Mr. R. J. Talion, ran as follows: " Whereas it is contended that a policy of active collaboration between employers and employed, such as exists in certain countries, has resulted both in an improvement in the level of real wages and working conditions, and also in greater and more economical production ; and " Whereas the economies resulting from such collaboration can also be made available for the benefit alike of the employers, employed and the community as a whole; " Therefore be it resolved : " That this Conference requests the Governing Body to consider the advisability of instructing the International Labour Office to follow with due attention the progress of the spirit of collaboration between employers and employed and to report on the subject from time to time." This resolution was the reflection in the international sphere of the growing attention which had been paid to the scientific study of industrial relations since the war. Much of the impetus to this study was derived from North America, and as a result of his visit to that country in the previous year the Office published in 1927 a Report b y Mr. Harold Butler, then Deputy-Director and now Director of the Office, on Industrial Relations in the United States. But, quite apart from American developments, the whole question of the technique of joint consultation and collaboration between employers and workers had been the subject of a great deal of study and discussion in other countries also. Conferences had been held in Australia, Finland, Great Britain, the Netherlands, New Zealand and Sweden, to mention only some of them, sometimes under Government auspices, sometimes on the initiative of employers' and workers' organisations. Another IV FOREWORD illustration of the same tendency was to be found in the creation of the Reichswirtschaftsrat in Germany, the Conseil national économique in France, and the procedure established for regular consultation between the representative employers' and trade union organisations in Great Britain. Indeed, the interest in the subject was so widespread that when the Governing Body discussed the Resolution of the Conference in October 1928 it authorised the Office to undertake a fairly comprehensive programme of study. In conformity with this programme the Office has issued four volumes x of studies on industrial relations in individual firms. The purpose of the Office in undertaking these studies has been to supply definite and reliable information on the practice of industrial relations in a certain number of undertakings, that is to say, on the methods adopted by these undertakings to organise satisfactory relations between the management and the staff. 1 INTERNATIONAL LABOUR O F F I C E : Studies on Industrial Relations, I. Studies and Reports, Series A (Industrial Relations), No. 33, Geneva, 1930. The undertakings dealt with in that volume were: The Siemens Works, the Lens Mining Company, the London Traffic Combine, the State Mines of the Saar Basin, and t h e Bat'a Boot and Shoe Factory. Studies on Industrial Relations, II. Studies and Reports, Series A (Industrial Relations), No. 35, Geneva, 1932. The undertakings dealt with in t h a t volume were: The Zeiss Works, the F.I.A.T. Establishments; the Philips Works, t h e Sandvik Steel Works. Studies on Industrial Relations, III. Studies and Reports, Series A (Industrial Relations), No. 38, Geneva, 1935. The undertakings dealt with in t h a t volume were : The Canadian National Railways, t h e Pequot Mills, Salem, Mass., U.S.A., a Paris Department Store (La Samaritaine), the Norwegian Nitrogen Company, t h e United Steel Works of Burbach, Eich and Dudelange, Luxemburg. Studies on Industrial Relations, IV. Studies and Reports, Series A (Industrial Relations), No. 33, Geneva, 1938. The undertakings dealt with in t h a t volume were : The " Globe Stores ", Zurich, Switzerland, the Geo Factory, Paris, the Mühlig Glassworks in Teplitz-Schönau, Czechoslovakia, the B a t a undertaking in Borovo, Yugoslavia. AUTHOR'S PREFACE TO THE FIRST EDITION THE object of this study is to give a descriptive account of industrial relations in Great Britain. The study begins with a general outline of the economic and social background. Reviews are then given of the development, structure and policy of the trade union movement and of employers' organisations. The very comprehensive joint machinery established voluntarily for negotiation and conciliation of disputes is examined, and an account is also given of the State systems of conciliation and arbitration and of minimum wage regulation. In addition to this survey of collective relations, the methods applied individually in progressive undertakings with a view to the establishment of good relations between the management and workers are described. Among the methods discussed are joint consultation in works councils, and various measures of industrial welfare and labour management which have been increasingly adopted during recent years. Throughout the study, attention is directed mainly to the present position, but trends of development are illustrated by comparisons with pre-war data. Part of the information given in the study is drawn from official publications and from the extensive non-official literature available on certain aspects of the subject. For other data and also for numerous suggestions the author is indebted to officials of the Ministry of Labour, the Industrial Court, and the Industrial Health Research Board, and to representatives of various employers' associations, trade unions, and other organisations, including the National Institute of Industrial Psychology, the Industrial CoPartnership Association, the Institute of Labour Management and the Industrial Welfare Society. Special thanks are due to Management Research Groups for many suggestions, facilities and contacts, and to a large number of individual firms which have accorded the fullest opportunities to study at first hand their methods of industrial relations. J. HENRY RICHARDSON. The University, Leeds. 7 November 1932. AUTHOR'S PREFACE TO T H E SECOND EDITION D U R I N G the five years since the first edition of this study was written, industrial relations in Great Britain have shown remarkable stability, combined with a high standard of industrial peace. This stability has been maintained in a period of great change in economic conditions; the first edition was written during the worst year of the world depression while the present edition was prepared in a year of prosperity which ranks amongst the best since the war. Voluntary machinery for collective negotiation has remained the chief method of regulating working conditions; it stood the test of the depression and has worked efficiently during the subsequent recovery. The State has continued its policy of intervening in industrial relations only as a last resort when other means have failed. There is growing recognition, however, that in certain industries, including some which are new or rapidly expanding, the organisations of workers and employers are too weak and unrepresentative to ensure the effective regulation of working conditions by voluntary agreements alone, and there is a distinct tendency for the State, though preferring voluntary agreements, to consider the introduction of statutory methods in such industries. Also, important legislation for the improvement of working conditions has been passed especially in fields not normally covered by collective agreements. Special mention may be made of the Factories Act, 1937, and the extension of unemployment insurance to agricultural workers. The stability of British industrial relations is the more noteworthy when it is contrasted with the almost revolutionary changes during the last five years in the United States, Germany and France. For each of these countries a study written five years ago would require to be completely reconstructed in order to indicate the present situation. In preparing this new edition for Great Britain few changes have been necessary in order to bring the first edition up to date, the general framework and large parts of the original study being maintained without modification. J. The University, Leeds. December 1937. HENRY RICHARDSON. CONTENTS Page FOREWORD AUTHOR'S PREFACE TO THE FIRST EDITION in v AUTHOR'S PREFACE TO THE SECOND EDITION vu I : Economic and Social Background i CHAPTER Area, Climate and Population Industry and Trade Employment and Unemployment Currency and Prices Wages and Hours of Work Social Insurance and Other Public Social Services Unemployment Insurance Health Insurance . Old-Age Pensions . Other Social Services Education The Co-operative Movement Summary CHAPTER I I : The Trade Union Movement Development Membership Finance Legal Position Structure Individual Unions Federations of Trade Unions Trades Councils The Trades Union Congress Policy CHAPTER I I I : Employers' Organisations Development Structure and Constitution Objects Contributions Management National Co-ordination National Confederation of Employers' Organisations . . Federation of British Industries Policy i 4 io 19 22 35 36 40 41 42 42 44 44 46 47 52 54 55 60 60 64 67 69 73 77 78 83 85 86 87 89 90 96 98 X CONTENTS Page IV: Methods of Negotiation between Trade Unions and Employers' Organisations ioo Development of Collective Relations ioi Industrial Disputes Involving Stoppages of Work 107 Machinery for Collective Bargaining no Coal Mining . .' in Railways 114 Road Transport 119 Shipping 122 Iron and Steel 124 Engineering 125 Cotton 127 Building • . . 129 Boot and Shoe 130 Joint Industrial Councils 132 State Regulation of Minimum Wages 141 Trade Boards 142 Minimum Wages in Agriculture 147 The Coal Mines (Minimum Wage) Act 149 State Conciliation and Arbitration 150 CHAPTER V: Works Councils 155 Development 156 Constitution 159 Functions 164 Summary and Results of Experience 166 CHAPTER VI: Industrial Welfare 171 CHAPTER I. Statutory Requirements Miners' Welfare Fund / / . Voluntary Welfare Arrangements for the General Well-being of Workers . . Recreation, Social Activities and Education Sport Social Activities Education Works Magazines Financial Schemes Labour Co-Partnership and Profit-sharing . . . . Pension Schemes Savings Schemes Sickness and Benevolent Schemes Unemployment Benefit Schemes The Industrial Welfare Society CHAPTER VII: Labour Management Vocational Selection and Training Health and Safety 173 175 177 180 183 184 186 186 189 189 190 194 198 200 204 207 209 212 216 CONTENTS xi Page Suggestion Schemes Research and Exchange of Experience Industrial Health Research Board National Institute of Industrial Psychology . . . . . . Institute of Labour Management Management Research Groups CHAPTER 220 222 223 226 228 230 VIII: Co-operation in National Economic Councils . . 233 National Industrial Conference, 1919 Turner-Melchett Co-operation and its Sequel Economic Advisory Council CHAPTER I X : Conclusions 234 • 235 243 245 APPENDICES I. II. Short Bibliography Average Weekly Full-time Rates of Wages at July 1914 and 31 December 1936 III. Full-time Hours of Work in Various Industries, 1914 and 1936 IV. Membership of Trade Unions, 1913, 1920, 1930, 1935 and 1936 V. Industrial Disputes involving Stoppages of Work, 1893 to 1936 VI. Constitution and Functions of Works Councils VII. Industrial Co-Partnership and Profit-sharing Schemes in Various Undertakings VIII. Pension Schemes in Various Undertakings IX. Sickness Benefit Schemes in Various Undertakings . . . . X. The National Industrial Alliance INDEX 254 257 258 259 260 261 270 273 281 284 285 • CHAPTER I ECONOMIC AND SOCIAL BACKGROUND THE object of this chapter is to give a sketch of those features of economic, industrial and social conditions in Great Britain which are essential for the understanding of industrial relations in this country. Attention is directed chiefly to population, industry and trade, employment and unemployment, currency and prices, wages and hours of labour, social insurance and education. In dealing with these subjects reference is made to the effects upon industrial prosperity and labour conditions of monetary policy, including the suspension of the gold standard, to foreign trade and the successful demand by British industry for tariff protection, to the distribution of the national income, and to the course of prices. A note on the Co-operative Movement is included. Post-war conditions are mainly reviewed, but for purposes of comparison information is often given on the position immediately before the war.1 AREA, CLIMATE AND POPULATION The total area of Great Britain and Northern Ireland is less than 95,000 square miles, of which Scotland represents about 30,000 square miles, Wales 7,500, and Northern Ireland over 5,000. This small area has facilitated the formation of national organisations of employers and of workers. All the chief industrial centres except those in Scotland and Northern Ireland are within six or seven hours by rail from London, while from such cities as Leeds and Manchester there are very few important industrial areas which cannot be reached within three or four hours. Contacts between the representatives of organisations in the different cities are, therefore, readily maintained and a co-ordinated national policy is relatively easy to evolve. Also, local variations in 1 Most of the data given in this chapter are compiled from Board of Trade and Ministry of Labour publications, including the Statistical Abstracts and Abstracts of Labour Statistics. 2 INDUSTRIAL RELATIONS IN GREAT BRITAIN conditions are not great and, consequently, a basis is provided for considerable uniformity of working conditions whether under national legislation or national collective agreements. The worst industrial dispute in the history of the country, indeed, resulted largely from disagreement on the question of national versus district regulation of wages.1 The country is so small that there is little variation in climate. The latitude is between 50o and 6o° North, and the climate is temperate, insular, and free from extremes; the mean annual temperature is about 48 o Fahrenheit and the range is from about 39o in January to 58.5o in July. In consequence of the temperature and equable climate there is little interruption of outdoor work in winter, and seasonal fluctuations in the demand for labour are much smaller than in many other countries. Also shipping is not interrupted by ice-bound harbours. The small size of the country and the narrow range of its climate imply dependence upon other countries for the supply of a wide variety of products from other climatic zones. The population of Great Britain and Northern Ireland was 42,136,000 in 1911, 44,027,000 in 1921, and 47,098,000 in the middle of 1936.2 The numbers of persons gainfully occupied were about 45 to 46 per cent, of the totals. The following estimates show the geographical distribution of the population in 1936: England and Wales Scotland Northern Ireland 40,839,000 4,966,000 1,293,000 In common with many other countries, there has been a fall during recent years in birth rates and death rates compared with those before the war. The trends during the last twenty-five years in Great Britain and Northern Ireland were as follows: Rates per 1,000 population 1 Birth Death 1910-1912 24.5 14.3 I92I 22.6 12.5 1930 16.8 II.7 1935 152 I2.0 1 The post-war figures exclude the Irish Free State. The separate figures for England and Wales, Scotland and Northern Ireland show trends generally similar to those indicated above. The net result was that during these twenty-five years the growth of population was less in absolute numbers and much smaller as 1 2 This was t h e stoppage in the coal-mining industry in 1926. T h e 1936 figure is a provisional estimate. ECONOMIC AND SOCIAL BACKGROUND 3 a rate of growth than during any corresponding period in the previous hundred years. A further fall in the birth rate of about 1.5 per thousand would result in a stationary population, or a declining one if there were losses by emigration. The outward balance of British migrants to countries out of Europe and not within the Mediterranean area averaged about 90,000 per annum during the years 1924 to-1929. About 44 per cent. went to British North America, about 36 per cent, to other parts of the British Empire, and the remaining 20 per cent, to the United States of America.1 Emigration was considerably less between 1924 and 1929 than during the previous four years and during the years immediately preceding the war when, however, the rates were exceptionally high. In 1930 the net outward balance of British migrants fell to 25,955, while in each of the years 1931 to 1936 there was a net inward balance the annual average of which was about 29,000. The numbers of males and females in the population of Great Britain and Northern Ireland in the middle of 1936 were 22,613,000 and 24,485,000 respectively. These figures represent a higher proportion of females to males in 1930 than in 1911, largely as a result of the number of men killed during the war. Also, partly for this reason and partly owing to the relation between the movements of the birth and death rates the average age of the population was somewhat greater in post-war years than in 1911. The population is very homogeneous and this facilitates the organisation of trade unions and employers' associations. Except among a very small and rapidly diminishing minority of people in Wales and Scotland who speak only Welsh or Gaelic, the English language is universal. There are, of course, regional variations of dialect and type of population, but they present little or no obstacle to the formation of national associations of workers or of employers. Thus, the trade unions in Scotland, while retaining distinct characteristics and activities, are merged for most purposes in organisations which extend throughout the whole of Great Britain and Northern Ireland. The formation of organisations has not been complicated, as in some countries of Continental Europe, by questions of religion. 1 There was a very small net immigration into Great Britain from other foreign countries, the amount of which, however, increased appreciably during the period 1930 to 1935. 4 INDUSTRIAL RELATIONS IN GREAT BRITAIN INDUSTRY AND TRADE The lines of development of British industry and trade have been determined largely by the suitability of the country's geographical position for world commerce, the possession of valuable deposits of coal and iron conveniently situated near navigable water, and an early start in the industrial revolution, especially in the application of mechanical methods in the textile industries. Consequently coal mining, the iron and steel trades, engineering, shipbuilding, the shipping services and dock labour, together with the textile trades have been the characteristic industries of the country. Britain's great international trade and London's position as a world financial centre have resulted in the development of banking, insurance and other financial services which are widely used by the nationals of other countries and are a valuable source of revenue and employment to British people. Agriculture, which for many years was unable to resist the pressure of the manufacturing interests for free importation of food and raw materials, is relatively less important in Britain than in most other countries; pasture is much more extensive than arable land. Since 1930, however, measures of State intervention have been adopted with the object of protecting, conserving, and fostering the development of British agriculture. Large numbers of workpeople are, of course, employed in building, the food industries, clothing, furniture making, printing, internal transportation, and the distributive trades, and in public utility and local and national government services, but these are common to every country. The relative importance of some of the chief British industries and services is indicated by the figures tabulated below. They are the estimated numbers of workpeople insured against unemployment, whether employed or unemployed, in the different industrial groups at July 1937 in Great Britain and Northern Ireland.1 The groups are ranged according to size. Percentage figures are added showing the relation between the numbers in July 1937 and in July 1923 ; they indicate which industries have expanded and which have contracted during this period. In studying these changes it should be remembered that the total number of insured persons aged sixteen to sixty-four years rose by 22.7 per cent, between July 1923 and July 1937; therefore industries and services with 1 The total numbers of workpeople in these industries would be somewhat greater, owing to the employment of uninsured workpeople. ECONOMIC AND SOCIAL BACKGROUND 5 a lower percentage than 122.7 n a d experienced a relative decline. Agriculture and domestic service are not included in the table; nearly 1,000,000 persons are engaged in agriculture, and 1,400,000 workpeople in domestic service. 1 The railway service, in which the insurance system has only a partial application, employed nearly 600,000 persons in March 1937, but this figure is not comparable with those given in the table for other industries, as it includes persons in the higher clerical and administrative grades, and also omits unemployed railway workers. • Other important groups not given in the table are national and local government services, and commerce, banking, insurance and finance. ESTIMATED NUMBERS OF INSURED WORKPEOPLE AGED l 6 TO 64 IN CERTAIN INDUSTRIES IN GREAT BRITAIN AND NORTHERN IRELAND, JULY 1937, AND PERCENTAGES SHOWING RELATION TO THE NUMBERS IN JULY I923 ( = IOO) 1 Industry Distributive trades . . . Building . . . Coal mining. . General engineering . . . Hotels, restaurants, etc. . Cotton . . . . Motor vehicles. Public works contracting . Printing . . . Wool and worsted. . . Gas, water and electricity . . Tailoring . . . Road transport Tramway and omnibus service . . . . Iron and steel rolling, etc. . Shipbuilding . Insured workpeople in J u l y 1937 Percentage Number (July 1923 = 100) 2,061,390 167.4 1,035.290 868,360 I5I-9 72.O 613,910 95-6 444,110 408,580 174-8 73-o 185-5 35!>63o 294,110 284,550 239.8 223,260 86.1 218,480 215,170 207,170 1324 117.2 142.7 203,850 193-4 181,900 172,810 89.3 66.3 128.0 Industry Electric cables, wire and lamps . . . Bread, biscuits Laundries and dyeing . . . Docks, harbours, etc. . Furniture making . . . . Entertainments and sports . Boots and shoes . . . Shipping service . . . . Hosiery . . . Electrical engineering . . Drink . . . . Chemicals . . Textile bleaching, dyeing, Dressmaking and millinery Insured workpeople in J u l y 1937 Percentage Number (July 1923 = 100) 177,670 176,490 248.7 112.2 173,890 166.O 166,030 92.2 149,910 165.8 139,620 236.8 0 97.8 135." IO7.O 134,080 119,870 135-6 114,630 114,030 109,540 I9I-7 I16.4 I08.5 102,450 93-5 102,450 88.2 . 1 Ministry 0/ Labour Gazette, Nov. 1937. Some of the industries given include allied branches not specified in the table. 1 Agricultural workers were brought under a special unemployment insurance system by the Unemployment Insurance (Agriculture) Act, 1936, the number of insured persons in July 1937 being 723,000. 6 INDUSTRIAL RELATIONS IN GREAT BRITAIN The figures show high rates of increase since 1923 in public works contracting, tramway and omnibus service, entertainments and sports, the distributive trades, electrical engineering, electric cables, wire and lamps, hotels and restaurants, laundries, and motor vehicles. The industries which show marked decreases include shipbuilding x and ship-repairing, iron and steel rolling and allied trades, coal mining, and textiles. Among several of the basic industries the changes in recent years have been in part a correction of abnormal developments during the war, when iron and steel, engineering and shipbuilding were expanded beyond peace-time needs, while building and allied trades were greatly curtailed. Some of the trends of earlier years were, however, sharply changed by rearmament work in 1936 and 1937, particularly in iron and steel, and engineering. The changes between 1923 and 1937 are also illustrated by the following table: RELATIVE PROPORTIONS OF THE TOTAL INSURED POPULATION WHICH WERE INCLUDED IN CERTAIN LARGE GROUPS OF INDUSTRIES IN I 9 2 3 AND I 9 3 7 Percentages of total number insured at Industry Group 1 July 1923 July 1937 0.2 II.7 Commerce, banking, insurance and finance National and local government services . 7-3 17.8 1-5 4-7 2.0 3-7 0-3 71 471 9-7 21.7 1.6 6.7 2.0 3-8 All industries and services . . . 100.0 100.0 Transport and distributipn Gas, water and electricity supply . . . . 1 Not including agriculture. 2 Including hotel and boarding house services, professional services, laundries, dyeing and dry cleaning entertainments and sports. 1 Notwithstanding the reduction, the tonnage of British merchant vessels launched in each of the years 1927 t o 1930 was more than half the world total of tonnage launched. From 1931 t o 1937, however, British tonnage launched was usually less t h a n half, and in some years less t h a n one-third of the world total. ECONOMIC AND SOCIAL BACKGROUND 7 The course of industrial production, which is intimately related to the trends of real wages and to the possibilities of improved material standards of living, is indicated below for recent years. The figures show the growth of production, which more or less kept pace with the growth in the number of workpeople employed during the years 1927 to 1929, the severe set-back during the depression, and the advance to record levels of production from 1935 to 1937.1 Year Iudex 1924 1927 1928 1929 1930 1931 IOOO 106.8 105.4 III.8 103.2 93.7 Year Index 1932 93.3 1933 98.3 I0 1934 9-9 1935 117.8 1936 129.2 1937 (ist half) . . 137.5 The nature of British foreign trade reflects the structure of industrial production. Imports consist mainly of food and raw materials, and exports are chiefly coal and manufactured products. The general lines of distribution of imports and exports are shown below for the year 1929, i.e. before the effects of the world depression had been felt, and for 1936, when foreign trade was slowly improving but was still much below the pre-depression level. Food, drink and tobacco . . Raw m a t e r i a l s 2 Manufactured a r t i c l e s 3 . . . -r- . . . i -. Total imports 1 . in million £'s 1929 1936 535 383 340 248 334 213 Exports of United Kingdom produce ¡/million £'s 1929 1936 55 36 79 51 575 341 * Exports of imported merchandise were as follows: in 1929, food, etc., £26,000,000; raw materials, £54,000,000; manufactured articles, £29,000,000; in 1936, food, etc., £11,680,000; raw materials, £32,960,000; manufactured articles, £r5,45o,ooo. 2 Ihcluding articles mainly unmanufactured. 3 Including articles mainly manufactured. Compared with the years immediately before the war there was a notable increase during the first post-war decade in the proportion of manufactured imports to total imports. An increasing proportion of exports of United Kingdom produce went to countries within the British Commonwealth. Also, exports decreased relatively to imports. These changes led to a growth of support 1 The figures are t h e Board of Trade index numbers of industrial production. The figures for 1934 to 1937 a r e calculated from indexes on a revised basis. 8 INDUSTRIAL RELATIONS IN GREAT BRITAIN for protection of the home market against imported manufactures, and for measures of Imperial preference. The system of protection and preference introduced in 1931 and 1932 had the effect of reducing the proportion of manufactured imports and of strengthening the tendency towards closer trade relations within the Commonwealth. British trade since the war has formed a smaller part of the value of world trade than in 1913. For several years the United States occupied the leading place, but in 1930 Britain resumed the premier position in total trade though not in exports. The figures below show the percentages which British trade formed of world trade in 1913, and in various recent years.1 BRITISH PERCENTAGES OF WORLD TRADE 1 1 Imports Exports Total 16.48 1593 17.04 17.46 18.22 1393 II.15 IO.32 II.08 IO.61 15-24 13.62 13.81 1434 14.50 Calculated from totals not including Italy and Spain in post-war years. Thus between 1929 and 1936 British imports represented a growing proportion and exports a fairly stable proportion of world trade. The value both of British imports and exports fell between 1924 and 1933, the fall in the value of imports being particularly great between 1930 and 1931 owing to the collapse in world prices of food and raw materials. The volume of imports, however, was 10 to 13 per cent, higher in 1930 and 1931 than in 1924. The volume of exports, which in 1929 had been about 8 per cent. greater than in 1924, fell heavily in 1930 and 1931. After 1933 a noteworthy increase began in the volume both of imports and of exports. These variations in value and quantity are shown by the following index numbers (1930 = 100) .2 1 League of Nations Monthly Bulletin of Statistics, and Review of World Trade, 1936. The figures do not make allowance for the exclusion of the Irish Free State in recent years. 2 Statistical A bstract for the United Kingdom. The indexes of average values are calculated on the basis of values in 1930. ECONOMIC AND SOCIAL BACKGROUND • 1924 1930 1931 1932 1933 1934 19352 . • • . • • Imports retained 1 9 Exports of United Kingdom produce Average values Volume Average values Volume 130-8 100.0 81.0 75-3 713 73-3 74.8 90.9 loo.O 102.8 120.9 100.0 89.4 83-3 81.9 82.2 81.8 116.0 100.0 76:5 76.8 78.7 84.4 91.2 903 91.7 96.9 97-8 1 Total imports less re-exports. 8 Provisional figures. There has been an appreciable decline since pre-war days in the importance of the export trade relatively to the whole national economy. Whereas in 1907 the number of workers manufacturing for export formed 44.5 per cent, of all manufacturing workers, the percentage has fallen appreciably below 40 per cent, since the war1. Among the reasons for this change have been high foreign tariffs, the development of industries abroad, reduced export of capital, and currency factors at home and abroad. The British tariffs introduced in 1932 are tending further to diminish the relative importance of external trade, and are causing changes in the relative importance of different industries. With regard to balance of trade, Britain has had for many years a large balance of visible imports over visible exports, but this has usually been much more than counterbalanced by invisible exports, and a surplus has been maintained for lending abroad. This surplus has recently been smaller than in the years immediately preceding the war. The effects of the world depression, indeed, resulted in 1931 and in several subsequent years in unfavourable balances of payments. It was in consequence of the heavy unfavourable balance in 1931 that the gold standard was suspended, new tariffs imposed and measures of economy adopted by the National Government with a view to increasing confidence in sterling. The tariffs and the preferences introduced at the Ottawa Conference in 1932 are designed to establish a more satisfactory relation between British imports and exports and to increase the relative importance of trade within the British Empire. The Committee on Industry and Trade Report, p . 308. io INDUSTRIAL RELATIONS IN GREAT BRITAIN balance of payments in each of the years 1913, 1924, 1928, 1932, and 1935 is shown below.1 1913 1924 1928 1932 «935 1 (In million £'s) Excess of imports of merchandise and bullion over exports Estimated excess of Government pay- 158 324 339 302 332 25 15 24 2 140 220 60 130 70 75 250 15 15 150 25 15 185 30 10 86 136 — 66 — 34 Estimated net income from : 94 210 Short interest and commissions . . Estimated total credit balance . . . 25 10 181 65 1 Provisional figures. 2 Including receipts and payments in respect of reparations and the principal of inter-Governmental loans. For 1913, Government receipts and payments were not separately estimated. EMPLOYMENT AND UNEMPLOYMENT No economic problem has received more attention during recent years, or exercised a more profound influence upon industrial relations, than that of the protracted unemployment from which British industry has suffered during most of the post-war years. The table below gives for July in each of the years 1923 to 1937 the estimated numbers of workpeople in Great Britain and Northern Ireland aged 16 years and over who were insured under the Unemployment Insurance Acts, and the numbers and percentages of those workpeople who were recorded as unemployed. The Acts in force during this period applied to most manual workers and also to nonmanual workers earning not more than £250 per annum; the principal exceptions were persons employed in agriculture and private domestic service, and these categories are not included in these statistics.2 The figures include persons wholly unemployed and persons temporarily stopped. 1 Figures compiled by the Board of Trade. Agricultural workers were brought within the field of unemployment insurance by the Unemployment Insurance (Agriculture) Act, 1936. ! ECONOMIC AND SOCIAL BACKGROUND NUMBER OF INSURED WORKPEOPLE AND THE n NUMBER AND PERCENTAGE UNEMPLOYED IN GREAT BRITAIN AND NORTHERN IRELAND IN J U L Y OF EACH YEAR I923 TO I937 ! Insured workpeople recorded as unemployed Year 1923 1924 1925 I926 1927 1928 1929 1930 I931 1932 1933 1934 1935 1936 1937 . . . . Number of insured workpeople 11,485,800 11,664,000 11,892,000 12,041,000 12,131,000 11,881,500 12,094,000 12,405,700 12,771,800 12,809,800 12,885,000 12,960,000 13,058,000 13.354.4 0 0 13,697,000 Number Percentage 1,327,000 1,138,000 1,329,000 I.737.000 1,114,000 II.6 9-8 II.2 I4.4 i.377>°°° 11.6 9-7 16.7 22.6 22.9 19.6 16.8 154 12.4 10.1 1,178,000 2,070,000 2,806,000 2,921,000 2,507,000 2,162,000 1,919,000 1,660,000 1,386,000 9.2 1 From Jan. 1928 all persons aged 65 and over ceased to be insured as they became pensionable under legislation passed in 1925. The figure of about 2% millions of unemployed among insured workpeople which was reached in the 1921 depression was exceeded during the world depression of 1930-1933. The high percentage in 1926 was due to the industrial conflicts of that year, especially the protracted stoppage in the coal-mining industry. Throughout the whole period the lowest percentages of unemployment were 8.7 and 8.8 in May and June 1927, representing over a million unemployed. The volume of unemployment in the relatively good years 1922 to 1925 and 1927 to 1929 was considerably greater than that which prevailed before the war ; pre-war figures of unemployment among trade unionists show an average percentage of 4.5 for the years i860 to 1914.1 The highest figures registered during the world depression were over 2,900,000 in the autumn of 1932 and the early months of 1933. They represented about 23.0 per cent, of the total numbers insured, which was very similar to the 1 I t is probable t h a t t h e r a t e of unemployment among non-trade unionists, including large numbers of unskilled and semi-skilled workers, was much higher t h a n t h a t among trade unionists. 12 INDUSTRIAL RELATIONS IN GREAT BRITAIN highest percentage reached in the 1921 depression, but was a more serious burden coming after ten years of severe unemployment.1 After the beginning of 1933 the numbers unemployed fell steadily, and by 1937 were about one-half of those at the worst period of the depression, the percentage of unemployment in July 1937 being 10.1. Although since 1921 few periods show appreciably lower percentages, the number unemployed in July 1937 was no fewer than 1,386,000. The figures of unemployment given above must be completed by certain supplementary data. Thus the numbers recorded as unemployed include a considerable proportion of workpeople who are only temporarily stopped from their jobs. On 21 July 1937, out of the total of 1,386,000 insured workpeople aged 16 to 64 years who were unemployed, 249,000 were temporarily stopped; it is also of interest to note that the total included 268,000 female workers. Another point which merits attention is that there was very little difference between the numbers of insured workpeople in employment during the years of exceptional depression 1931-1932 and the relatively prosperous year 1924. The averages for Great Britain were 9,421,000 in 1931 and 9,526,000 in 1924. Between these years, however, the number of insured workpeople had risen by about 14 per cent., and the demand for labour had not kept pace with the greater supply. In the first half of 1937 the numbers in employment were the highest on record. The estimated average numbers of insured workpeople, aged 16 to 64, in employment in Great Britain during the years 1924 and 1928 to 1937 were as follows : 1924 1928 1929 1930 1931 1932 9;52Ó,ooo 10,019,000 10,220,000 9,797,000 9,421,000 9,348,000 !933 1934 !935 1936 1937 (ist half) . 9,681,000 10,139,000 10,377,000 10,896,000 11,305,000 The results of investigations by sample conducted by the Ministry of Labour show that, before the world depression, more or less continuous unemployment was confined to a small section of the insured population. During the seven years ended 1930 the numbers were not more than about 100,000 men and 3,000 women, 1 The highest figure reached in the 1921 depression was 2,549,395 in May of t h a t year. This figure, which is for Great Britain only, represents an unemployment percentage of 23.0. ECONOMIC AND SOCIAL BACKGROUND and these represented the " standing army " of the unemployed. These numbers were, however, much increased as a consequence of the world depression, the older men being most seriously affected. A special analysis of unemployed men and women at 2 November 1936 showed that of the men roughly two-fifths were below the age of 35, one-fifth between 35 and 45, and two-fifths were over 45. Among women the proportions in the same age groups were roughly three-fifths, one-fifth and one-fifth. Over a quarter of a million or 20 per cent, of the men were over 55, the corresponding figures for women being approximately 20,000, or 9 per cent. These data indicate the handicap of age for men in obtaining employment. During the recovery years 1935 to 1937 there was a considerable change in favour of the younger men in the age distribution of unemployed men. The statistics also show that in recent years there has been considerably more long-term unemployment among men than among women. Such unemployment has been greatest in coal mining, public works contracting, the distributive trades, and local government service. These four industries were responsible for one-half of all long-term unemployment in 1936, the coalmining industry alone accounting for 25 per cent, of all men who, in that year, had been unemployed for twelve months or more.x The following table shows the numbers of unemployed applicants for unemployment benefit or assistance at 24 October 1932 and 26 October 1936, classified according to the length of each worker's latest period of continuous unemployment.2 DURATION OF CONTINUOUS UNEMPLOYMENT Men Women 24 October 1 1932 26 October 1936 24 October 1932 26 October 1936 Less t h a n 3 months . . 3 b u t less t h a n 6 m o n t h s . 6 b u t less t h a n 12 months 12 months or more. . . 1,123,400 261,543 303.422 419,109 616,195 109,447 112,004 299,123 212,638 35.592 24,728 27.253 145.645 19,662 13,636 18,874 2,107,474 1,136,769 300,211 197,817 Total 1 1 Duration Ministry of Labour Report for the Year 1936. Ministry of Labour Gazette, January 1937. The number of unemployed applicants for benefit or assistance represents about seven-eighths of the number of insured workpeople unemployed. 2 14 INDUSTRIAL RELATIONS IN GREAT BRITAIN Short-term unemployment reached its highest level in 1932, whilst the peak of long-term unemployment among men was reached about a year later. Between 1932 and the end of 1936, unemployment of less than six months was reduced by nearly one-half, while the numbers unemployed for six months but less than twelve months was reduced by two-thirds. Long-term unemployment of twelve months or more declined considerably between 1933 and 1935, and the rate of reduction was accelerated during 1936, due mainly to revival in that year of basic industries such as iron and steel manufacturing, shipbuilding and shiprepairing. The number of men and women who had been continuously unemployed for twelve months or more at the end of 1936 was, however, still about 314,000. Long-term unemployment has been consistently serious in the North of England, Scotland, Wales and Northern Ireland. In most parts of the country unemployment among juveniles has been slight except in periods of depression; they experience little long-term unemployment, while in periods of good trade there is a shortage of juvenile workers in many parts of the country. Additional information on unemployment is given in the reports of the Unemployment Assistance Board, which was set up under legislation passed in 1934 to provide assistance to unemployed workpeople who had exhausted their right to benefits under the unemployment insurance scheme. The main body of the long-term unemployed and a large proportion of the unemployed in the higher age groups are dealt with by the Board. Thus, in 1936, 45 per cent, of the Board's applicants for unemployment assistance between the ages of 18 and 64 were 45 years of age and over, as compared with 27 per cent, of such claimants to unemployment insurance benefits.1 In commenting upon the large volume of unemployment among older people, the Board referred in its 1936 Report to the difficulties that will be caused during the coming years by the trends of population increasing the proportions of older sections in the community, and indicated that industry will have to accustom itself to the fact that it will not be able in the future to find a continuous supply of juvenile labour equal to the present volume, and that it must be prepared to engage and to retain older men. The Board also noted that there are still numbers of young applicants for assistance " who have been unemployed 1 Report of the Unemployment Assistant Board for the Year 1936 (Cmd. 5526). ECONOMIC AND SOCIAL BACKGROUND 15 for considerable periods, and are losing the appreciation of the difference that would be made in their lives if they could secure employment." The large volume of post-war unemployment has been distributed very' unevenly between different industries and districts. In general, the industries which have experienced the greatest unemployment have been those exposed to foreign competition whether at home or abroad, while the " sheltered " industries have been relatively prosperous. This difference in prosperity has resulted in the development of disparity, which is reviewed in a later section, between the wages of workers in sheltered and unsheltered industries. From 1922 onwards the demands for wage reductions and other adjustments of working conditions have been relatively frequent in the unsheltered industries. These have often resulted in conflicts, and the losses from industrial disputes during the period have been much higher in the unsheltered than in the sheltered industries. It is noteworthy, however, that, despite the adverse economic conditions and the inevitable strain on both employers and workers, several important unsheltered industries have maintained a clean record of industrial peace throughout the period.1 The following table shows the wide differences in the extent of employment in some of the chief industries. Figures are given for July 1932, when the world depression was at its worst, and for July 1937, after recovery had greatly reduced unemployment. The highest percentages in 1937 were in dock and harbour services, shipbuilding, shipping, and coal mining. The greatest improvements since 1932 are shown by the iron and steel, engineering, and textile industries, coalmining, and railway transportation. Cyclical improvement in trade, including better markets overseas, and the rearmament programme were mainly responsible for these improvements. Public utility services, commerce, printing, laundries, food and distributive trades show low percentages. Among industries not included in the table in which unemployment has been below the average in recent years are chemicals, electrical engineering, dressmaking, grain milling, drink and tobacco, and the manufacture of scientific, photographic, and musical instruments, toys, games and sports requisites. 1 Excluding the general strike in 1926, which was outside the ordinary course of industrial relations. i6 NDUSTRIAL RELATIONS IN GREAT BRITAIN PERCENTAGES OF INSURED WORKPEOPLE RECORDED AS UNEMPLOYED IN CERTAIN INDUSTRIES IN GREAT BRITAIN AND NORTHERN IRELAND, JULY I 9 3 2 AND JULY I 9 3 7 l Percentage unemployed Percentage unemployed Industry Coal mining . . . . Iron and steel rolling General engineering Motor vehicles Shipbuilding . . Cotton Wool and worsted Tailoring . . . . Boot and shoe . . Bread and biscuit Furniture making Printing . . . . Building . . . . Gas, water and electricity supply . . . . July July 1932 1937 41-3 48.9 16.8 11.0 30.1 22.1 4-9 4.8 63.8 33° 22.4 10.4 10.4 12.1 II-3 27.2 16.2 22.6 10.8 21.8 10.0 6.9 8.Ö 5-6 27.6 11.2 10.9 7-5 July, Railway service . . Tramway and omnibus Other road transport. Shipping Docks and harbours . Distributive trades . Commerce, banking, insurance . . . . National government. Local government Hotels Laundries All industries 2 July 1932 1937 15-8 5-3 5-2 21-5 32.8 2.4 10.5 19.8 29.0 33-7 11.6 7.6 5-5 3-3 11.9 17-5 14.6 8.2 IO-5 154 10.4 4-9 22.8 1 The percentages are for a date in the latter part of each month. Some of the industrial groups include allied branches not specified in the table. 2 Including many other industries in addition to those given in the table. Statistics of unemployment in agriculture have become available since the introduction of unemployment insurance for agricultural workers under legislation passed in 1936. In July 1937 in Great Britain and Northern Ireland the estimated number of agricultural workers aged 14 to 64 years covered by the insurance system was 723,000, of whom 654,000, or more than 90 per cent., were males.1 The numbers and percentages unemployed at 26 July 1937 were: Percentage Males Females 15.555 1,626 2.8 4.9 Total 17,181 2.9 1 The figures include farming, forestry, market gardening, horticulture and other gardening (except private gardening). ECONOMIC AND SOCIAL BACKGROUND These figures show that unemployment in agriculture is much smaller than in industry. Unemployment in agriculture is higher during the winter months than in summer; the percentage at 14 December 1936 was 4.8, but even this winter figure was less than one-half the industrial percentage. Regional variations in unemployment are indicated by the following table, which gives the average percentage rates of unemployment among insured persons in different areas during the years 1929, 1932, 1935 1936 and at 21 June 1937. AVERAGE PERCENTAGE RATES OF UNEMPLOYMENT INSURED PERSONS IN DIFFERENT DIVISIONS AMONG OF GREAT BRITAIN AND NORTHERN IRELAND IN THE YEARS 1929, I932, 1935, I 9 3 6 , AND AT 21 JULY I 9 3 7 Average percentage of unemployment Division 1929 5-6 5-6 1932 1935 8-5 1936 7.2 7-3 9-4 5-8 7.2 II-5 131 16.3 19.9 22.2 10.1 North Eastern North Western Scotland . . . 9-3 137 133 12.1 135 143 17.1 20.1 28.5 25.8 27.7 Northern Ireland 193 14.8 36-5 27.2 21.3 31.2 24.8 9.2 16.8 17.1 18.7 29.4 22.7 Great Britain and Northern Ireland . 10.4 22.1 15-5 13.2 South Eastern South Western 8.1 8.1 11.6 n.2 20.7 19.7 21 July 1937 5-2 6.5 The figures show much lower percentages in London and the South of England generally than in the North of England, Wales, Scotland and Northern Ireland. In 1937 the Midlands enjoyed a level of prosperity not far below that of the South. Wales and in recent years Northern Ireland are the areas which have experienced the most severe depression. The percentages of unemployment in the most depressed areas in different years have been more than two or even three times those in the South of England. The districts with high levels of unemployment are those where the most depressed industries, particularly shipbuilding and coal mining 18 INDUSTRIAL RELATIONS IN GREAT BRITAIN are localised and where the demand for labour by other industries is relatively small.1 The relatively greater prosperity of the southern areas has caused a drift of workers to the South. This was greatest during the years 1923 to 1929 but was retarded by the general depression of 1930-1933, which resulted in a considerable fall in the demand for labour in the southern areas. The movement was resumed when unemployment in the South and Midlands fell to low levels in 1935 to 1937. An Industrial Transference Scheme instituted by the Government has facilitated the movement from the distressed areas of considerable numbers of juveniles and of young adult men without dependants. Instructional centres have also been established to ensure, as far as possible, the suitability of transferred workers. On the other hand, the distressed areas have recognised that their difficulties were in large measure due to dependence upon one or two main industries, e.g. shipbuilding in Northern Ireland and coal mining in parts of Wales. The public authorities and business men in several of these areas, therefore, considered means of increasing diversity in the demand for labour, industrial development boards have been set up, and plans have been formulated with a view to attracting new industries. With the support of the Government acting through Commissioners for the Special Areas, trading estates have been established with favourable conditions for new undertakings, and other measures have been introduced for the reconstruction of areas suffering from severe unemployment.2 Some employers have apparently been unwilling to establish factories in the distressed areas because of fear of undue trade union restrictions in these districts, where the workers have long been strongly organised. This difficulty does not appear to have been encountered by employers who have set up factories in these areas during recent years. Some of the effects of the long and severe unemployment upon industrial relations have already been indicated. The fall in prosperity of many of the basic industries which had long enjoyed relatively high standards of living provoked severe conflicts, especially in the early post-war years. The results of the stoppage 1 There was a total of 239,026 insured workpeople unemployed in t h e specially depressed areas of the country a t 15 March 1937. 2 Powers were granted by the Special Areas Reconstruction (Agreement) Act, 1936. In 1937 a Royal Commission was set up to consider the Geographical Distribution of the Industrial Population in its economic, social and strategic aspects. ECONOMIC AND SOCIAL BACKGROUND 19 in 1926 in the coal-mining industry, however, confirmed the opinion that, whatever might be the value of strikes in more prosperous times they would inevitably involve loss, distress and often defeat so long as unemployment remained serious. This contributed to the result that the severity of industrial disputes during the world depression was much less than in the years shortly after the war. The post-war depressions also resulted in a heavy decline in trade union membership, in a fall, the extent of which is not known, in the membership of employers' organisations, and in an increase in the number of firms in which wages and hours have been fixed in agreement with their own workpeople, independently of collective agreements. The movement of workers to seek employment in the South in expanding industries which had no trade union tradition increased the difficulties of organisation. The more prosperous years from 1934 to 1937, however, saw trade union membership recover, but industrial relations remained peaceful. CURRENCY AND PRICES Great Britain has not suffered from the catastrophic changes in monetary values experienced by several Central European countries in 1922 and 1923, or from the less violent but still considerable post-war inflation in Italy and France. Nevertheless, British currency changes have exercised an appreciable influence upon industrial relations and working conditions. Inflation continued with one or two minor interruptions throughout the war years and until May 1920, when wholesale prices according to the Board of Trade index were 225 per cent, above the pre-war level, or, in other words, sterling had depreciated to less than one-third of its pre-war value. A considerable part of the rise in wholesale prices, and also in the cost of living, had taken place during the twelve months preceding May 1920, and the consequent upward adjustment of money wages had been marked by serious industrial conflicts in several industries. From May 1920 inflation gave place to rapid deflation and in less than two years sterling doubled in value, wholesale prices falling to only 60 per cent, above the pre-war level. This was accompanied by a rapid decline in the cost of living and by downward adjustments of money wages which again were marked by severe conflicts. It was during the rapid upward movement of 20 INDUSTRIAL RELATIONS IN GREAT BRITAIN prices to May 1920 and the subsequent collapse that the slidingscale system of adjusting money wages to changes in the cost of living was of specially great value in a number of industries. From the spring of 1922 until the end of 1924 prices were remarkably stable; wholesale prices were slightly higher at the end of the period than at the beginning, and the cost of living was at the same level in December 1924 as in May 1922. Then a new deflation took place when Britain returned to the gold standard in 1925 ; the index of wholesale prices fell from 171 in January 1925 to 152 in December of the same year (1913 = 100), and a further decline took place during 1926. The return to the gold standard, however, increased British gold costs for wages, interest and other charges by about 10 per cent, and consequently placed British industry at a disadvantage in its competition with foreign producers both in the home market and abroad. Owing to the inelasticity of these charges, including not only wages but also especially rents, rates of interest, taxes and other overhead expenses, the disadvantage continued to be felt throughout the next six years, and accentuated the depression of British industry. The view is now widely held that the return to the gold standard in 1925 at the pre-war parity was an unfortunate mistake, although at the time it was impossible to have foreseen the subsequent trend of world prices which aggravated British difficulties. There was little variation in British prices during the years 1927, 1928, and the first nine months of 1929. Then the world depression set in. British wholesale prices, moving with world gold prices, plunged down by about 30 per cent, from 136 in September 1929 to 99 in September 1931 (1913 = 100). Unemployment more than doubled, exports fell enormously, the balance of foreign trade became adverse and, finally, the drain of gold abroad became so great that in September 1931 the gold standard was suspended. The immediate effect of suspension was a considerable depreciation of sterling in terms of foreign gold currencies, the decline soon reaching more than 30 per cent. But British prices were now released from the " tyranny " of gold, and, although foreign exchange rates of sterling might fluctuate, the internal price level could be effectively controlled. The Government declared its intention of preventing currency inflation, and price changes were small. Wholesale prices, however, rose by 6 per cent, during the last quarter of 1931, largely in anticipa- ECONOMIC AND SOCIAL BACKGROUND tion of the increased costs of imports in terms of depreciated sterling; also the fall in the cost of living was arrested. The relatively small rise in wholesale prices was due largely to the fact that a number of other countries had suspended the gold standard, and goods required by Great Britain could be purchased from them at about the old parities of exchange. In the spring of 1932 the downward movement of wholesale prices and cost of living was resumed, but by the middle of the year it was again interrupted, and for three years both wholesale and retail prices remained remarkably stable. The years 1936 and 1937 experienced considerable increases owing to the high level of business activity. The depreciation of sterling in terms of gold currencies imposed restrictions upon imports and gave a stimulus to exportation. Restrictions to imports also resulted from the tariffs introduced in 1931 and 1932, but the tendency for increase in the export trade was largely counteracted, so long as the depression continued, by the new obstacles to trade erected by a number of other countries. Also the purchasing power of other countries was diminished by the restriction upon imports into Britain. The suspension of thè gold standard and the consequent reversal of the trend of prices saved Great Britain from the necessity of making widespread reductions in money wages, some of which might have been effected only after severe industrial conflicts. One further effect of British post-war currency policy upon the prosperity of industry may be mentioned. The policy of deflation resulting in the return to the gold standard at the pre-war parity in 1925 maintained or increased the burden of public and industrial indebtedness. This placed British producers at a relative disadvantage in their competition with producers in countries where the gold standard was restored by a process of devaluation following currency depreciation ; in these countries the real burden of internal public debts and industrial capital charges was greatly reduced, if not altogether eliminated. The general course of British prices during the years 1920 to 1937 is shown in the table below. The figures are yearly averages calculated from the monthly index numbers of wholesale prices published by the Board of Trade, and of the cost of living published by the Ministry of Labour. 22 INDUSTRIAL RELATIONS IN GREAT BRITAIN YEARLY AVERAGE INDEX NUMBERS OF WHOLESALE PRICES AND COST OF LIVING IN GREAT BRITAIN, I 9 2 O TO I 9 3 7 (PRE-WAR = Year 1920 1923 1924 1925 1926 1927 1928 IOO) Whole- Cost-ofsale price living index index 307 197 159 159 166 159 148 142 140 249 226 183 174 175 176 172 167 y 2 166 Whole- Cost-ofsale price living index index Year 1929 1930 I93I 1932 1933 1934 1935 1936 1937 • 1 136 119 104 1011/ 2 IOI 104 106 113 128 164 158 147 % 144 140 141 143 147 151H 1 First half. W A G E S AND H O U R S OF W O R K Wages In considering the course of wages during recent years changes in rates of wages will be related to changes in the cost of living in order to determine the trend of " real " wages, i.e. the purchasing power of the money wages. The Ministry of Labour has estimated that in the first half of 1937 weekly full-time rates of money wages were less than one per cent, above the level in 1924; the cost of living was about 13.3 per cent, below the 1924 level, and consequently weekly full-time rates of " real " wages were 16 per cent. above those in 1924. This increase is not, however, representative for post-war years, having been due to the fall in the cost of living between 1930 and 1933. During the eight years from the beginning of 1922 to the beginning of 1930, the level of real rates of wages averaged only about 2.6 per cent, above the 1924 level. The changes from 1920 to 1937 are shown by the index numbers of weekly full-time rates of money wages and real wages tabulated below.1 As real wage rates in 1924 were at practically the same level as in 1914, the real wage index numbers on the basis of 1924 ( = 100) also show approximately the levels of real wages in post-war years compared with that in 1914. The figures take no account of changes in average earnings resulting from short time or overtime, from changes in the proportions of workers paid at time and piece rates, or from changes in the proportions of workers in different 1 Compiled from figures published in the Abstract of Labour Statistics, 191Q-33 (Cmd. 4625), and in the Ministry of Labour Gazette. See also E. C. RAMSBOTTOM'S paper on " The Course of Wage Rates in the United Kingdom, 1921-1934", published in the Journal of the Royal Statistical Society, Part IV, 1935. ECONOMIC AND SOCIAL BACKGROUND 23 industries and occupations. If, for example, allowance were made for short time and overtime the indexes in the years of depression, 1921 and 1930 to 1933, would be lower and those in the years of prosperity, 1927 to 1929 and 1935 to 1937, would be higher than those given in the table. Index numbers Index numbers (1924 = 100) (1924 = 100) Year Year 1920 1921 1922 1923 1924 1925 1926 1927 1928 . . . Money wage rates Real wage rates 148.7 *43-7 I07-3 98.5 IO45 in.3 102.5 99.0 IOO.O 100.0 IOI.7 IOI.3 100.5 99.0 ioilo 103.0 105.0 104.7 1929 . . . 1930 I93I 1932 1933 1934 1935 1936 19371 Money wage rates Real wage rates 98.8 98.4 96.5 94-7 94.0 94-4 95-5 98.2 100.7 1055 109.5 II4-5 II5-5 117.8 117.0 117.0 117.0 116.2 1 First half. The changes in wage rates since 1914 show wide diversity among different industries and classes of workpeople. Thus for some classes of workers the weekly rates of money wages in recent years were only 20 per cent, above those in 1914, whereas for other classes of workers they were more than 100 per cent, above the pre-war rates. The chief relative changes since 1914 have been between skilled and unskilled workpeople, between men and women, and between the sheltered industries and those exposed to foreign competition. 1 The position of unskilled workers has shown a greater relative improvement than that of skilled workers. This divergence has been due mainly to the granting of similar money increases to both skilled and unskilled workers in many industries to meet the rising cost of living u p to 1920, but mention may also be made of the effects of improved organisation among unskilled workers, better general education, increase in the demand for workers to tend semi-automatic machinery, the operation of the Trade Boards fixing minimum rates of wages in certain, industries, and the influence upon wage-bargaining of the flat rate of benefits for both unskilled and skilled workers under the Unemployment Insurance Acts. For some of the same reasons there has been a tendency for 1 In Appendix I I statistics are given of wage rates in some of the chief occupations a t July 1914 and December 1936. 24 INDUSTRIAL RELATIONS IN GREAT BRITAIN the wages of women to rise in somewhat greater proportion than those of men. During the post-war years, however, unskilled workers have lost a part of their relative gain during the war, whereas women workers have at least maintained the relative improvements of the war years. In industries exposed to foreign competition skilled workers in recent years have been paid on the average at rates only about three-quarters of those in the sheltered industries, and, in some industries, have been worse off than before the war. Among unskilled workers the divergence has been smaller, those in sheltered industries having wage rates about io per cent, above those in unsheltered industries. With certain exceptions unskilled workers generally, and skilled workers in sheltered industries, have been in a better position than before the war. There is a tendency towards a gradual narrowing of the divergence between the sheltered and unsheltered industries. The data tabulated above were time rates of workers in full employment, and should be considered in relation to statistics of full-time earnings and of actual earnings, but there are no continuous series of such data. The London and Cambridge Economic Service, however, publishes a general index, which combines the effects of changes in rates of wages and changes in methods of work and in categories of workers affecting earnings. The index shows appreciably greater increases in money wages and real wages than those indicated by the statistics of wage rates given above. This is due mainly to the allowance which it makes for the growing productivity of piece-workers equipped with improved machinery and organisation, for increases in the proportion of workers in the higher paid grades, and for increase in the proportion of piece workers. These statistics show the following levels of full-time money earnings and full-time real earnings (i.e. the purchasing power of the money earnings) in July 1914, and the second quarters of 1928, 1936 and 1937: Year Index of full-time money earnings Index of full-time real earnings I914 1928 1936 1937 IOO 195 190 x 95 IOO "9 131 128 These figures make no allowance for short time, overtime, unemployment, sickness, or reductions of earnings from certain other causes. Also they are general averages which cover wide diversities, ECONOMIC AND SOCIAL BACKGROUND 25 similar to those already indicated, between the various industries and occupations. Detailed statistics of the weekly earnings of more than 5 % million workpeople in most of the chief industries were collected by the Ministry of Labour in a special enquiry relating to the week ended 12 October 1935. These statistics are summarised in the table below. Owing to under-representation, in the returns received, of the building industry and certain other industries in which men are largely employed and to the relative over-weighting of the textile and certain other industries in which women and girls form a high proportion of the total number of operatives, the average of 48s. lid. shown for all workers is considered to be appreciably below actual average earnings of all workpeople AVERAGE EARNINGS IN VARIOUS INDUSTRIES ENDED 1 2 OCTOBER IN THE WEEK I935 Average earnings in the week ended 12 October 1935 Industry group of workpeople covered All workpeople covered s. d. Mining and quarrying (other t h a n coal mining) 65,981 Treatment of non-metalliferous mine and quarry products . . 50,925 Brick, pottery, glass, chemical, etc. . . . 318.356 Metal, engineering, shipbuilding, etc 1,478,212 Textiles 923,674 Leather 41.551 Clothing 471,100 Food, drink and tobacco 363,119 191,979 Woodworking . •. . . Paper, printing, station292,649 ery, etc Building, contracting, etc 387,985 Other manufacturing in138,065 dustries Transport and storage 231,622 (other t h a n railways) 450,835 Public utility services . Government industrial 101,676 establishments . . . All above industries 5.507,729 50 6 Youths Men Women Girls (21 years and boys (18 years (under (under and and 21 years) 18 years) over) over) s. d. 5. d. s. d. s. d. 53 4 26 6 29 7 17 I I 56 8 60 8 28 3 29 I 17 48 2 63 0 24 5 29 5 15 4 53 36 44 35 44 2 67 55 7 31 1 30 3 29 6 32 8 32 1 33 10 17 3 17 2 15 4 15 o 17 o 15 7 33 5 15 6 6 0 10 51 2 61 9 64 6 63 8 65 1 22 3 23 1 22 9 22 5 24 11 21 11 55 5 83 8 2 2 11 4 9 11 3 56 11 61 2 21 9 30 2 16 43 11 64 11 25 1 30 1 16 3 65 6 55 6 69 1 57 10 25 25 3 8 32 28 4 2 16 7 66 2 69 9 2 9 11 38 10 19 3 48 11 64 6 23 31 16 4 0 3 15 5 26 INDUSTRIAL RELATIONS IN GREAT BRITAIN employed in the industries covered. It is estimated that if these defects were corrected, the average would be approximately 49s. 6d. The inclusion of coal mining and railway service would raise the figure to about 50s. a week.1 Owing to the general rise in the average level of rates of wages and to the general improvement in employment between October 1935 and the autumn of 1937, average earnings in many of the industries were appreciably higher in the last quarter of 1937 than two years earlier. Comprehensive statistics of average earnings of workpeople (adults and juveniles) in the coal-mining industry are available and these are summarised below to show the position in recent years of a severely depressed industry.2 The period when the lowest standard of real shift earnings was experienced was in 1928 and 1929 when the cost of living was still high and the industry was suffering from a large surplus of labour. There was little variation in money shift earnings during the world depression, and purchasing power increased as a result of the fall in the cost of living, but there was so great an increase in unemployment that, although not shown by the statistics below, the standards of living in the mining communities were seriously reduced. After 1934, earnings and employment both improved, and in 1936 and 1937 average real shift earnings, which for a number of years had fallen below those in 1914, rose slightly above the pre-war level. AVERAGE SHIFT EARNINGS OF COAL MINERS, I 9 1 4 , AND I 9 2 7 TO 1 9 3 7 Year 1914 ( J u n e ) 1928-29 1930-31 1932-33 1937 (first half) Money earnings per shift 6 10 9 9 9 9 9 10 10 5-75 0.75 3°° 300 1-75 1-75 3°° 0.25 7.00 Index numbers of shift earnings Money | Real IOO 155 142 142 141 141 142 !55 163 IOO 93 86 93 99 IOO IOO 105 107 1 The figures do not cover agricultural workers, domestic servants and workers employed in the catering, entertainment and certain other industries. 2 The money earnings do not include the value of allowances in kind which averaged about 4%á. per shift in recent years. The average number of shifts per week in the years 1935 to 1937 ranged from about 4 % to slightly more than 5. ECONOMIC AND SOCIAL BACKGROUND 27 For workers employed in railway service statistics of average full-time weekly earnings are published by the Ministry of Transport. The most recent detailed information, which is for the week ended 7 March 1936, is tabulated below. The figures are compiled from information supplied by the four main line railway companies. TOTAL NUMBERS AND AVERAGE FULL-TIME EARNINGS WORKERS DURING 1ST W E E K OF MARCH OF RAILWAY I936 Earnings Total numbers 3 Category Conciliation grades1 . . . Shop and artisan staff Other classes 2 . All . . . . Men (20 years and over Youths and boys 326,036 6 4 s . 5/, per cent, of the present rates; it is also suggested that benefits might be reduced by 33 % per cent ; (3) the total number of benefits which any individual could draw should bear a direct ratio to the number of contributions he had paid, and there should be a definite limit to the number of benefits any individual could draw in a year; (4) a Board of Trustees should be appointed to safeguard the solvency of the fund ; (5) outside the scope of the unemployment insurance system relief of unemployment, the cost of which should be borne mainly by the Exchequer, should only be given after adequate enquiry and assessment of need; relief should not be given to any applicant who refused to accept work which he was reasonably capable of performing, even though it was outside his normal occupation. Fairly full summaries have been given of the Confederation's statements and recommendations, both because of the importance of the organisation and of the light they throw upon its policy. Many of the recommendations were, however, made during the economic depression, and do not necessarily represent the Confederation's policy in more prosperous periods. Also, some of them were given partial application by the National Government which came into office in the autumn of 1931. Mention has already been made of a scheme of co-operation between the Confederation, the Federation of British Industries and the General Council of the Trades Union Congress. This had its origin in a series of meetings, generally known as the TurnerMelchett Conference, between a number of leading industrialists and representatives of the General Council of the Trades Union Congress. An account of the scheme is given in Chapter VIII. 96 INDUSTRIAL RELATIONS IN GREAT BRITAIN Federation of British Industries. Unlike the National Confederation of Employers' Organisations, the Federation of British Industries publishes information about its constitution, membership, policy and activities. 1 It is essentially an organisation of British manufacturers set up to promote and safeguard their interests both at home and abroad. As has been indicated earlier, it deals chiefly with the problems of production and trade, and, although it claims that nothing-concerning the welfare of British industry falls outside its scope, it does not take any direct part in matters affecting wages and conditions of labour. The Federation is a war-time development, being established in the autumn of 1916.2 Individual firms and associations of manufacturers may be members. Its membership has grown from some 500 individual firms and 78 trade associations in October 1917, a year after its formation, to 2,685 firms and 178 associations in November 1937. Almost all important manufacturers' associations i n ' t h e country are affiliated. Exact information is not available as to the number of workpeople employed by firms covered by the Federation, b u t it is approximately 5,000,000. Contributions of member firms and associations to the Federation are based on the numbers of persons they employ. Constitutionally the chief bodies for general control, determination of policy and administration of the Federation are the annual general meeting of members, the annually elected Grand Council and the Executive Committee. The Grand Council is a large body of several hundred members, twenty-five of whom are district representatives, but the great majority represent industrial groups and sub-groups ; the representation of each industry is proportional to its importance in the membership of the Federation, coal mining, engineering, iron, steel and allied trades, and textiles having the largest representation. Associations are represented on the basis of one member for every 20,000 employees or part thereof covered, and individual firms on the basis of one member for every 40,000 employees or part thereof covered by their industrial sub-group. In the Executive Committee, which has more than a hundred members, the representation of districts and 1 The chief sources of information are the Federation's Register of British Manufacturers, its Bulletin—British Industries—and its Annual Reports. 2 It took over the activities of the Employers' Parliamentary Association, an organisation formed shortly before the war mainly to express the views of employers on legislative proposals. EMPLOYERS' ORGANISATIONS 97 industries is on somewhat similar lines to that in the Grand Council, but district representation is relatively greater than in the Grand Council and industrial representation is generally one member for every 100,000 employees covered by each industrial group or sub-group. In addition to these central bodies and its permanent staff in London, the Federation has organisations with a resident secretary in the various districts; these have committees and annual general meetings. The Federation also has paid commissioners and correspondents in many foreign countries for the purpose of keeping contact with trade conditions abroad. The Federation undertakes two distinct types of activities: it renders special services to its member firms and associations and represents manufacturers co-operatively in relation to Governments and other interests at home and abroad. The special services include the furnishing of information and advice about such questions as rates and taxes at home and abroad, currency, foreign and Dominion customs duties, transport charges, insurance rates, patents and trade marks, oversea trade openings and advertising abroad. It also compiles information on economic conditions and on wages and conditions of employment at home and abroad. In representing the collective views of British manufacturers the Federation takes action when Bills affecting industry are introduced into Parliament, gives evidence before public Committees and Commissions of Enquiry and endeavours to secure the support of public opinion for its policy. For example, early in 1931 it published a statement of its policy for the rehabilitation of British industry. It proposed thé establishment of a carefully adjusted system of tariffs which would combine the protection of British industrial interests at home with the widest possible extension of inter-Empire preference; it also called attention to the heavy burden of social services and other forms of public expenditure and recommended a drastic reduction in the burden of taxation and other charges borne by British industry. The tariffs, Imperial preferences and measures of economy adopted by the National Government in 1931 and 1932 were along the lines of the Federation's proposals. Since the formation of the National Confederation of Employers' Organisations, the Federation has generally refrained from expressing any views upon conditions of labour, but, as already stated, it is participating on economic, commercial and financial matters in a scheme of consultation with the Trades Union Congress. 7 98 INDUSTRIAL RELATIONS IN GREAT BRITAIN POLICY Many indications of the policy of British employers' associations have been given in reviewing the activities of the National Confederation of Employers' Organisations. It is, therefore, necessary here only to summarise the chief features: (i) Opposition is shown to extensions of State regulation in industrial relations, and curtailment of many existing regulations is demanded. The view is generally held that " third-party intervention " should be avoided, that private enterprise and capitalist control should be maintained and that conditions determined by legislation are not sufficiently adaptable to changes in economic conditions. Preference is shown for the greater elasticity of collective agreements compared with the rigidity of legislation. Among the consequences of this attitude has been resistance to proposals for the nationalisation or public control of various industries, e.g. the mines and railways. It offers one of the main explanations of the opposition shown to ratification of the Washington Hours Convention.(2) Organised employers accord recognition to trade unions for purposes of collective negotiation. Trade union recognition is, of course, implied in the preference expressed by organised employers for collective bargaining rather than for legislation, but employers usually maintain the principle of the " open shop ", that is, the right of an employer to give employment to any worker whether a trade unionist or not. (3) During most of the period from 1921 to 1933 a policy of wage reduction was pursued. The view was held that wage rates were too high, especially in the sheltered industries and services, including national and local government services. The standard of living which had grown up was believed to be too high in relation to the national income and, therefore, required to be reduced. References were frequently made to the lower levels of wages in many competing countries. In the period of growing prosperity, increasing employment, and rising prices from 1935 to 1937, a policy of agreeing to wage increases was adopted in many industries, following negotiations with the trade unions. (4) On the question of the length of the working week, the reduced hours fixed by agreements in 1919 and 1920 have not EMPLOYERS' ORGANISATIONS 99 been generally attacked by organised employers. In one or two industries successful demands for longer hours were made some years ago. Also, some unorganised employers, and certain organised employers, introduced longer hours in their undertakings by individual action, especially during the depression. More recently some industries have agreed to reduced hours, but general opposition has been shown to proposals for a forty-hour week. (5) Recently, the employers' organisations in several industries have agreed to schemes providing for annual paid holidays. The latest important extension of this system was in the engineering industry by collective agreement in 1937. (6) Measures of economy in national and local administration and expenditure are advocated as a means of reducing the burden of rates and taxes borne by industry. In this connection demands are made for diminution of expenditure upon various public social services, and reduction of employers' contributions to social insurance funds. (7) The principle of rationalisation of industry is supported, but in practice in various industries the individualistic attitude of many employers greatly hinders the successful adoption of amalgamation schemes and other methods of reorganisation. (8) Opposition is shown to various trade union restrictions, and also to participation by workers in the functions of management. (9) In the economic field, a successful demand was made during the depression for tariff protection against foreign competition and for measures of preference within the British Commonwealth of Nations. CHAPTER IV METHODS OF NEGOTIATION BETWEEN TRADE UNIONS AND EMPLOYERS' ORGANISATIONS conditions throughout the greater part of British industry are determined and adjusted by collective agreements between trade unions and employers' organisations or are much influenced by the provisions of these agreements. It is the main purpose of this chapter to review the chief types of machinery for collective negotiation in the various industries; methods for the joint consideration of general questions affecting many industries are reserved for review in Chapter VIII. In the present chapter a short account is given of the development of collective relatiors. This is followed by data on the number and magnitude of stoppages of work due to industrial disputes in recent years; although some part of these losses might have been avoided by improved machinery and more complete information, they have been maini), due to economic conditions and to psychological factors on one or both sides such that even perfectly adapted machinery would probably have failed to prevent many of the conflicts. The joint machinery set up voluntarily in some of the chief industries by employers' and workers' organisations for negotiation and the adjustment of differences is then « described. Special attention is directed to the Joint Industrial Councils established in a number of industries mainly during the years 1918 to 1921, as these Councils are the result of a conscious endeavour to evolve a complete and fairly uniform system of collective relations in all industries where employers and workers are strongly organised. A review is given of the trade boards system established by law to fix minimum wages in industries where organisation is weak, and of wage boards set up on similar lines for the regulation of agricultural wages; both these systems closely resemble collective bargaining, and the various boards consist largely of representatives of employers' organisations and trade unions. The system for fixing minimum wages in the coalmining industry in accordance with legislative provisions is also WORKING METHODS OF NEGOTIATION ioi described. Finally a review is given of the State system of voluntary conciliation and arbitration. DEVELOPMENT OF COLLECTIVE RELATIONS The present position of industrial relations, with mutual recognition and widespread regulation of working conditions by collective agreements, is the result of a century of struggle and evolution. Throughout a considerable part of the nineteenth century the employers resisted demands by the trade unions for recognition and collective bargaining, regarding these as interference with their liberty. Although the unions were no longer criminal conspiracies after 1824, employers generally refused to discuss conditions of labour with the trade unions leaders and for many years collective agreements were rare. Where, however, an employer was willing to discuss wages and other conditions with his own workpeople, the trade unionists among them, though not often formally recognised as such, were able to exercise an influence upon' the terms of employment. With the growth of strong craft unions in various trades from about the middle of the nineteenth century, recognition, first by individual employers and then by employers' organisations, became increasingly frequent. Especially during the last three decades of the century there was a rapid extension of collective bargaining, and well-organised industries frequently set up joint machinery for the. settlement of differences. Thus the Royal Commission on Labour, appointed in 1891 to consider industrial relations and conditions of labour, referred to the rapid extension of voluntary conciliation boards and recommended that a Government department might undertake to promote the universal adoption of appropriate joint machinery. Further progress was made during the early years of the present century, and by 1914 well-developed methods for negotiation and the settlement of disputes had been established in many of the chief industries, including coal mining, iron and steel, engineering, cotton, and boot and shoe. Also in several branches of industry where wages were unduly low, trade boards had been set up under the Act of 1909 and a system of joint relations was developed which somewhat resembled collective bargaining. On the other hand, in some industries, including various branches of transportation, the conflict over trade union recognition was still raging and no effective joint 102 INDUSTRIAL RELATIONS IN GREAT BRITAIN machinery was in operation. Thus, the railway companies refused to negotiate upon conditions of labour with officials of the railway workers' unions, although they would meet representatives of their own workpeople for this purpose. Pre-war joint machinery was usually brought into operation only when new collective agreements were under consideration or when a dispute had arisen. Exceptionally, however, in one or two industries, notably iron and steel, meetings were held at regular intervals for the adjustment of wage rates in accordance with sliding-scale agreements.1 A systematic procedure for dealing with disputes was often formally agreed upon between the two sides. Thus provision was frequently made that a difference in any works or locality would be considered by a local joint board, the constitution of which was defined. If the board should fail to effect a settlement the dispute would be referred to a district board, or even to a national board or conference. If these bodies were unable to reach agreement, provision was sometimes made for the matter to be submitted to arbitration, whether by using the facilities offered by the Government under the Conciliation Act of 1896 or otherwise. Until the agreed procedure had been followed no stoppage of work was to take place. Usually pre-war negotiations and agreements determining wages and other conditions of work were local and regional rather than national. Industrial conditions during the war and especially the growth of organisation on both sides between 1915 and 1920 led to many changes in the relations between organisations of employers and of workers, and to progress in the development of machinery for negotiation. Among these changes were the almost universal recognition of the trade unions, a great increase in nation-wide negotiations and agreements, and an extension of organised collective bargaining to many branches of industry in which, before the war, methods of regulating conditions of labour had been extremely chaotic. These features chiefly distinguish present relations from those in 1914. The extension of recognition was a consequence partly of the rapid growth of trade unions in industries where the workers had been relatively late in building up strong organisations. It was due in part to the necessity during the war for frequent 1 In the iron and steel industry sliding scales based on the selling price of certain typical products were adopted. METHODS OF NEGOTIATION 103 consultations about production and conditions of work between the Government and representatives of employers and of workers. The importance of recognition was also emphasised by the Whitley Committee in 1917, the National Industrial Conference in 1919, and the Turner-Melchett Conference in 1928 and 1929.x The major cause of increase in joint machinery for negotiation and settlement of disputes was growth of organisation on both sides. It is only rational that when two strong bodies grow up in any industry they should endeavour to establish systematic methods for dealing with disputes. In many industries such methods were agreed upon spontaneously by the two parties. In other industries some features of the system of Joint Industrial Councils recommended in 1917 by the Whitley Committee and approved by the Government were adopted. The Committee's plan for joint machinery, applicable with modifications to any industry, and the action of the Government in bringing this plan before employers' and workers' organisations, undoubtedly facilitated agreement during the early post-war years upon machinery for joint negotiation in many of the newly organised industries. The Joint Industrial Councils which were formed served to fill up many gaps in the structure of collective relations; they are usually nation-wide in scope and cover industries and services employing about three million workers. In addition to proposing a given type of machinery, the Whitley Committee recommended that the machinery should be used for regular frequent discussions over a wide field of mutual interests of the two sides and not merely for the settlement of disputes about wages and other working conditions. As will be indicated in the section dealing with Joint Industrial Councils, this last recommendation has been adequately applied only in few industries, and in practice there is usually little except their origin to distinguish most of the Councils from other systems of joint negotiation. In railway transportation, machinery voluntarily agreed upon was embodied in an Act of Parliament—the Railways Act, 1921, but in 1935 changes were made in the machinery by agreement without any legislative recognition. The Coal Mines Act, 1930, also makes provision for negotiating machinery, although the nature of the machinery was not approved by organised employers in the 1 Later in the present chapter an outline is given of the recommendations of t h e Whitley Committee; the National Industrial Conference and the Turner-Melchett Conference are described in Chapter VIII. I04 INDUSTRIAL RELATIONS IN GREAT BRITAIN industry. Under this Act a National Industrial Board was set up, which includes other members in addition to those representing the employers and workers in the industry. An important extension of joint machinery in branches of industry with weak organisations was effected under the Trade Boards Act, 1918, which supplements an Act of 1909. During the three years following the passing of this Act, boards were set up in industries now employing about a million workers. In agriculture, representative boards have been set up throughout England and Wales under the Agricultural Wages (Regulation) Act, 1924. The general policy of the Government, however, has been to interfere as little as possible, leaving the regulation of conditions of work to voluntary bodies. During some years in the world depression, owing partly to losses in trade union membership, a greater disposition was shown to consider the strengthening of the authority of organisations by legislation. " Nevertheless, there is a strong feeling that the greatest efforts should be made to avoid this by increasing voluntary organisations."1 Apart from the above-mentioned Acts, together with legislation limiting the hours of work of underground miners, and factory and social legislation, there is little restriction upon freedom in collective bargaining. Even the inclusion in the Coal Mines Act, 1931, of a provision that the rates of wages agreed upon by the organisations of miners and mine owners in the various districts should remain in force for a specified period could scarcely be claimed as a serious restriction; it did, however, introduce the novel principle of giving statutory force to rates fixed by collective bargaining. This system remained in operation only for a short period and was terminated in 1932,2 but the principle was applied in the cotton manufacturing industry by legislation passed in 1934. The only other actions by Parliament on wages have been the passing of a Resolution by the House of Commons on the payment of fair wages by public contractors, the extension of this obligation to persons engaged in carrying passengers or goods for hire or reward by road motor 1 Ministry of Labour, Report for the Year 1934. Apart from these exceptions, t h e rates of wages and other conditions of labour determined by collective bargaining are entirely voluntary, unless embodied in individual contracts of service, but are usually well observed in the industries with strong organisations. Proposals have sometimes been made t h a t the method of giving legal force and making applicable throughout an industry agreements reached by sufficiently representative parties in the industry should be more extensively used. 2 METHODS OF NEGOTIATION 105 vehicles, and the enactment of legislation setting u p joint bodies to fix legally binding rates of wages in certain branches of private industry. 1 The 'Government's policy for many years has been to encourage the establishment and use of voluntary machinery in the different industries and, in the event of a breakdown, to offer assistance b y voluntary conciliation and arbitration, chiefly under the Conciliation Act, 1896, and the Industrial Courts Act, 1919. " I t has been the deliberate policy of the Ministry of Labour to take every opportunity of stimulating the establishment of joint voluntary machinery or of strengthening that already in existence." 2 In recent years special attention has been given by the Government, in consultation with representatives of the employers and workers, to the problem of securing effective machinery for regulating working conditions in the road transport industry and the distributive trades, in many sections of which organisation of employers and workers is weak and collective relations inadequate. Especially in road transportation the Government has shown that failure to develop effective voluntary arrangements may involve the institution of statutory methods and the fixing of working conditions binding upon the industry. In many of the chief industries voluntary methods have been comprehensive and have ensured reasonable co-ordination of conditions. The great extension during the war and in post-war years of national machinery for collective bargaining was due partly to the consolidation of local into national organisations in many industries. It was the result also of the fact that wages and other conditions in different localities have been increasingly influenced b y factors which are nation-wide in their operation. When, for example, the cost of living was rising during the war and up to the year 1920, demands were made all over the country for increases in money wages and it was found more expeditious and effective to deal with them nationally than to conduct a large number of isolated local negotiations. The same was true during periods of falling prices after 1920. In many industries wages were adjusted b y cost-of-living sliding scales based on the Ministry of Labour's index; in others, which did not adopt an automatic scale, cost-of1 This was done by the Trade Boards Acts, 1909 and 1918, the Coal Mines (Minimum Wage) Act, 1912, and the Agricultural Wages (Regulation) Act, 1924. 2 Ministry of Labour, Report for the Year 1934. io6 INDUSTRIAL RELATIONS IN GREAT BRITAIN living bonuses uniform throughout the country were added to basic wage rates as the result of ad hoc negotiations.1 The establishment of national systems of negotiation did not, of course, involve identical wage rates and other conditions throughout the country, and although in some industries uniform conditions were fixed, in others allowance was made in national agreements for the requirements of different localities. Nevertheless, in a few industries the employers have offered strenuous resistance to national negotiations, especially on wages. The outstanding example is the opposition of the Mining Association to the regulation of wages by national agreements. Wage rates which differed according to district were fixed in the coal-mining industry by national agreements during the years 1921 to 1926, but during the 1926 conflict the return to district agreements was a vital demand of the coal owners, which they succeeded in enforcing. The miners have, however, continued to press for national agreements, and the issue between district and national agreements is responsible for some of trie manoeuvres of the miners and of the coal owners. Despite the heavy losses suffered in certain periods by British industry from stoppages due to breakdown of the machinery of negotiation, the systems which have been developed during the last sixty years have made remarkable contributions towards industrial peace. They have given opportunity for the ventilation of grievances at an early stage, fuller consultation, a freer expression of points of view and, above all, a clearer grasp of facts by both parties, and by these means have contributed to the reduction of disputes.2 Sometimes trials of strength occur in industries well equipped with machinery for negotiation and adequately supplied with economic facts. But strikes and lock-outs are not lightly entered upon, especially by great national organisations, being regarded as a last resort when peaceful methods have failed to harmonise conflicting principles. Even in the coal-mining industry, which has an unenviable record of serious disputes, the Royal 1 During the years 1923-1934, when fluctuations in the cost of living were relatively smaller than in the previous decade, there was a tendency for the cost-of-living sliding scales to be used less extensively, and for wage changes to be based upon many other economic factors in addition to variations in the cost of living. In recent years the number of workpeople whose wages have varied in accordance with a cost-of-living sliding scale has fallen to little more t h a n a million, or less than one-half the number about twelve or fourteen years ago. 2 Survey of Industrial Relations, p . 48. METHODS OF NEGOTIATION 107 Commission (1925) stated that " if stoppages are numerous, it is satisfactory to remember that the difficulties that are settled without stoppages, through the conciliation machinery established by the industry itself, are probably a hundred times as numerous ".1 Writing after the chaotic conditions of 1926 the Turner-Melchett Conference, to which reference is made in Chapter VIII, stated that in its opinion the existing machinery for the avoidance of strikes and lock-outs " has, on the whole, been successful in dealing with the great majority of disputes. On the other hand, this does not blind us to the fact that during the last few years the existing machinery has failed to deal with certain disputes of a serious magnitude ". Since then a decade has elapsed during which the processes of settling disputes without stoppages of work have been exceptionally successful. This has been due not so much to improvements in machinery as to increased recognition of the many common interests of both parties, more responsible leadership, mutual understanding, and, in some industries, a more comprehensive review of data upon the economic situation. Before proceeding to describe some of the chief types of machinery for collective bargaining established in various industries, data are given showing the number and importance of industrial disputes during recent years. INDUSTRIAL DISPUTES INVOLVING STOPPAGES OF WORK Strikes and lock-outs are spectacular and rightly attract wide public attention, but the direct losses involved are probably less than the lowering of production due to discontent and friction while the worker is at work. The strikes and lock-outs are, however, an index of this discontent. In Great Britain and Northern Ireland the average number of workpeople involved in stoppages during the forty-four years from 1893 to 1936 for which figures are available was about 558,000, or less than 4 per cent, of all workers. In this period the number of working days lost, i.e. the number of workers involved multiplied by the duration of stoppage, was formidable, the average being about 13,622,000 per annum. Expressed in relation to the annual total number of working days of all workers the figure seems much less serious: it represents only about one day for all workers in the country, and, apart from the discon1 Report, p. 113. io8 INDUSTRIAL RELATIONS IN GREAT BRITAIN tent of which it is an index, would only be the equivalent of an additional public holiday. The time lost from strikes and lockouts is very much less than that resulting from sickness and unemployment.1 The average number of workers involved and of working days lost was much greater during the early post-war years than before the war. During the eight years before the war (1907-1914) the yearly average number of workpeople involved was about 597,000, and the average number of working days lost was 12,030,000. In the eight years from 1919 to 1926 the figures were 1,383,000 and about 44,566,000 respectively; that is, the average number of workers involved had more than doubled and the average annual number of working days lost had almost quadrupled. There was, it is true, a considerably larger number of workpeople in employment in the years shortly after the war than in those immediately preceding the war, but the losses from disputes had increased in much greater proportion. A considerable part of the increase was due to the exceptional year 1926 when the protracted stoppage in the coal-mining industry and the General Strike took place; even excluding this year, however, the early post-war losses were double those before the war. By contrast, the decade following the General Strike and coal stoppage was more peaceful, if measured by the number of working days lost, than any other years in the period from 1893 for which statistics are available. Losses from stoppages are chiefly due to a small number of important disputes (about 2 per cent, of all disputes) involving large numbers of workers. The coal-mining industry alone has been responsible since the war for over 30 per cent, of the workers involved and for about 70 per cent, of the total working days lost by all British industries; during the first post-war decade the average annual loss in working days from disputes involving stoppages in this industry was about 22,000,000, or more than three weeks per miner per annum, but subsequently more peaceful conditions have prevailed. Other industries in which serious losses were incurred, though very much smaller than in coal mining, include the building, metal, engineering, shipbuilding and textile industries, and transport; several of these industries have enjoyed years of industrial peace, with the disturbance of an occasional big dispute. 1 Statistics of industrial disputes involving stoppages of work during the years 1893 to 1936 are given in Appendix V. METHODS OF NEGOTIATION 109 The chief cause of disputes has been wage questions, which have been responsible for about two-thirds of all disputes; they have also involved by far the greatest number of workpeople. Other causes have been the employment of particular classes or persons, questions involving trade union principles, details of working arrangements, discipline and hours of work. Relatively very few disputes have taken place about hours of labour during recent years, except in 1919 when important reductions in hours were made in many industries. During 1934 to 1937 there were many unofficial strikes, that is, strikes undertaken by bodies of workpeople without the approval of the trade union in the industry. 1 Since the war, disputes involving about two-thirds of all workpeople directly involved in stoppages have been settled by compromise; compromise solutions are especially frequent in the larger disputes. Stoppages involving about two-thirds of all workers in strikes and lock-outs are terminated by direct negotiation between the parties or their representatives ; settlements are effected for about one-fifth of the workers by means of third-party conciliation or arbitration. The chief cause of the increase in the severity of industrial disputes shortly after the war was the exceptional economic instability of the period and the difficulty of adjusting money wages to considerable changes in the general level of prices. The severe depression experienced by m:>st of the exporting industries was an aggravating factor. In the depressed industries the low wages and their contrast with wages in the sheltered home-market industries stiffened the resistance of the workers to further reductions which economic conditions in these industries often demanded. A further factor was, no doubt, the development, accelerated during the war, of national organisations of employers and workers. A breakdown of negotiations between such organisations involves serious conflict, although its usual effect is to prevent disputes by providing a final stage of negotiations. An increased sense of responsibility in leadership, improved machinery for negotiation, and greater stability of prices are some of the factors which have resulted in a rapid diminution in the losses from industrial disputes in recent years. 1 The Minister of Labour stated in the House of Commons t h a t in 1936 the number of industrial disputes not officially recognised by the trade unions concerned was 435, involving 210,000 workpeople and a loss of about 900,000 working days, or about one-half of the totals for all disputes. no INDUSTRIAL RELATIONS IN GREAT BRITAIN MACHINERY FOR COLLECTIVE BARGAINING 1 In the present section the chief features of machinery for collective bargaining and adjustment of disputes are illustrated by the methods used in coal mining, railway and road transportation, shipping and in the iron and steel, engineering, cotton, building, and hoot and shoe industries.2 Most of these are strongly organised industries, usually with a long record of joint relations. The methods are entirely voluntary arrangements established by agreement between the organisations concerned, except for certain statutory provisions for coal mining. As already stated, a statutory system is also in operation for the railway traffic grades, but it is essentially voluntary, as the Act of Parliament—the Railways Act, 1921— merely gives statutory effect to an agreement, subsequently modified, between the railway companies and the railway workers' unions. It will be seen that, although there are often common features, the machinery here described differs from industry to industry, being adapted to varying industrial conditions and to differences in the evolution and attitudes of the organisations of employers and workpeople. In some industries local or regional machinery plays the leading rôle, but more frequently the chief decisions are taken by national bodies. Machinery also varies according as an industry is localised or is distributed throughout the country. In some industries the machinery deals with all questions of working conditions, including general agreements on wages and hours, the application of these agreements in particular districts and establishments, and disputes which arise upon a wide variety of questions within the establishments; in other industries, wages, hours and similar matters are reserved for ad hoc conferences. There is also variation in the extent to which the different industries invite impartial arbitrators or conciliators to assist in effecting settlements when deadlocks arise. In some industries agreements provide for the regular use of this method as a last resort, while in others which have not adopted this system ad hoc agreements are often reached for such intervention for the settlement of a particular dispute. The machinery in operation has been successful 1 See Survey of Industrial Relations, pp. 268 to 279. The system of Joint Industrial Councils is reserved for separate treatment later. 2 METHODS OF NEGOTIATION in in settling without a stoppage large numbers of disputes arising in particular establishments or districts, and also national differences. The chief losses from strikes and lock-outs since the war have been due to occasional clashes on major issues between the great national organisations of employers and workers. Coal Mining The coal-mining industry has evolved during a period which extends back to about 1870 a highly developed system of joint machinery for the settlement of disputes. This industry has also been well supplied, especially since the war, with the facts of its economic position by a succession of Royal Commissions and committees of enquiry. In view, however, of the frequence and extreme severity of the stoppages from which British coal mining has suffered, it is evident that machinery and facts alone are not sufficient to ensure the maintenance of industrial peace if psychological relations between the two parties are unsatisfactory, if there is a clash of opinion upon vital economic and political principles, and if economic conditions are difficult. Although the Mining Association and the Miners' Federation are exceptionally powerful national organisations, they are both federations of local organisations, and the chief machinery for negotiation is in the various districts. The operation of this machinery is facilitated by the large measure of autonomy retained by the district organisations both of coal-owners and of miners. The systems of negotiation vary in detail from district to district, but there are many common features. Thus the workers and the management of each colliery endeavour to settle questions of purely local interest by joint discussion between the management and a deputation of the workers. If they fail to reach agreement the dispute is referred either to a special joint committee or to a District Conciliation Board consisting of equal numbers of owners' and miners' representatives. In some districts the Board has an impartial chairman or umpire who arbitrates upon the matter in the event of disagreement by the Board ; the parties are, however, under no obligation to accept the umpire's decision. There is no system for the settlement of local or district matters by a national body in the event of final disagreement in the district, although districts may refer disputes for investigation and report by the Coal Mines National Industrial Board constituted under the Coal Mines Act, 1930. 112 INDUSTRIAL RELATIONS IN GREAT BRITAIN Questions affecting a whole district and not merely a colliery or locality within the district are also usually considered by the District Conciliation Board. The most difficult problem with which these Boards deal is that of determining rates of wages, and this question was made more complicated some years ago by several changes in hours of work. From 1921 to 1926 general principles of wage regulation operative in all districts were adopted by national agreements and these were applied by joint district boards of similar constitution to, and often identical with, the District Conciliation Boards.1 National wage agreements came to an end on the insistence of the owners after the struggle of 1926, but the workers, compelled by exhaustion to accept district agreements, have not ceased to demand a return to national regulation. The strength of this demand is based partly on the general trade union principle of extending the scope of collective agreements, on a desire to reduce wage inequalities and to increase the power of the Miners' Federation, and on the relation of national wage regulation to the miners' programme for national ownership and control.2 The opposition of the owners to national wage agreements is no doubt determined partly by their desire to maintain differences in working conditions corresponding to variations in economic and mining conditions from district to district, and by their distrust of anything which would tend towards, or facilitate the establishment of, national ownership and control. The system of district agreements restored after the 1926 conflict was modified by the Coal Mines Act, 1930. This Act provides not only for regulation of the production and sale of coal and the reorganisation of the coal-mining industry but also for the constitution of a Coal Mines National Industrial Board to deal with wages and other conditions of labour.3 The Board of Trade was empowered to constitute this body, which was to consist of seventeen members. Before appointing the members, except the impartial chairman, the Board of Trade was required to consult the Mining Association about six members, the Miners' Federation about six members, the General Council of the Trades Union Congress, the Co-operative Union and the National Confederation of Employers' 1 The same, or closely similar bodies, with an impartial chairman, have statutory powers under the Coal Mines (Minimum Wage) Act, 1912 (see p. 149). 2 A scheme for the unification of mining royalties under national ownership was devised by the Government for consideration by Parliament in 1937. 3 The Act dealt also with hours of work, certain temporary changes being made which applied until the Coal Mines Act, 1926, lapsed in July 1931. METHODS OF NEGOTIATION 113 Organisations about one member each, and the remaining member was to be appointed after consultation with the Federation of British Industries and the Association of British Chambers of Commerce. The owners or the workers in any district may refer to the National Board any dispute between them about the regulation of wages or other conditions of labour throughout the coal mines in the district which they have been unable to settle b y using district machinery. The National Board must then conduct an enquiry into the dispute and report to the owners and workers concerned. Although the National Board has thus no power to regulate wages and other conditions either nationally or even in settlement of a district dispute, the colliery owners objected strongly to the system and, in consequence, the Board of Trade experienced difficulty in securing members for the employers' side. The Mining Association refused to suggest names and, with complete solidarity, each of the other employers' organisations declined to share in the constitution of the National Board. The chief reasons given for the refusal of the Mining Association to participate were that the terms of agreement in any district would be subject to review by a body the majority of which would be drawn from competing districts, and that District Conciliation Boards would be less likely to settle their own differences if these could be referred to a national body. The Mining Association was unwilling to discuss wage regulation with the Miners' Federation and maintained t h a t national negotiations are unsuited to an industry in which conditions differ so widely in the various districts. 1 Despite the refusal of the employers' organisations to suggest names, the Board of Trade proceeded to constitute the National Board b y appointing on the employers' side persons who, though not representatives of organisations, were willing to serve in their individual capacity. This evidently weakens the authority of the Board, which has nevertheless conducted investigations in several district disputes. In a temporary settlement of the hours question by legislation for one year, 1931-1932, a provision was included that wages in the various districts should not be reduced during the period 1 The Times, 7 Nov. 1930. The coal-owners had suggested t h a t instead of setting up a Coal Mines National Industrial Board any investigations into the causes and solution of a district dispute could be conducted b y a Court of Enquiry under the Industrial Courts Act, 1919. 8 114 INDUSTRIAL RELATIONS IN GREAT BRITAIN covered by the Act. Thus, during this year the Government was responsible for the maintenance of wages throughout the industry. In the summer of 1932 this responsibility ceased and was replaced by a guarantee of the employers to the National Government that they would not reduce wages for a further period of one year. Subsequently, wages have tended to rise. It is of interest to note that during negotiations with the coal-owners and coal-miners in 1932 the National Government declared its intention of ratifying the International Labour Convention on Hours of Work in Coal Mines, provided the chief coal-producing countries of Continental Europe would also ratify, and this declaration of policy facilitated the Government's task of maintaining peace in the industry. International agreement providing for simultaneous ratification of the Convention has not yet been reached. The position in the coal-mining industry has been reviewed somewhat extensively because of the interest in the struggle over district or national wage regulation, and because this industry easily holds the record for losses in industrial disputes. There has been no national mining stoppage since 1926, but serious strikes have taken place in several districts, particularly South Wales, Nottinghamshire and Scotland. Among the chief causes of these district disputes are wages and hours of work, especially in the application of the " spread-over " system of distributing permissible hours over a fortnight in other ways than by shifts of 7% hours a day. In South Wales and Nottinghamshire bitter disputes have arisen because of recognition by some colliery companies of so-called Industrial Unions formed after the 1926 stoppage. Recently, agreements have been reached with a view to solving the difficulties arising from the existence of rival unions in these districts. Railways The system of joint relations for the traffic grades of the railways differs from that in other strongly organised industries, being a development of a scheme embodied in legislation (the Railways Act, 1921) which applied methods voluntarily agreed upon by the companies and the unions.1 The parties were, however, free to terminate the scheme, or to make changes, and considerable modi1 The system of negotiation between the railway companies and the unions of railway shopmen (including those employed in railway carriage and wagon construction and repair, and in the signal, telegraph and other non-traffic departments) presents no special features. METHODS OF NEGOTIATION 115 fications were introduced by agreement in 1935. The system is more complete than that in many other industries, and ensures that the community shall be safeguarded as far as possible from stoppages of an essential service.1 Also, being mainly modelled on the recommendations of the Whitley Committee, the system resembles that of Joint Industrial Councils. It differs from the system of district councils in coal mining, its chief negotiating bodies being national in scope. The methods used for dealing with questions affecting all railway companies are distinct from those for questions affecting only one company. Questions of labour conditions, including wage rates and hours of labour, which affect all companies, are examined by a joint meeting of representatives of the four companies into which British railways were grouped under the Act of 1921 and of the three railway trade unions (the National Union of Railwaymen, the Associated Society of Locomotive Engineers and Firemen, and the Railway Clerks' Association). The agreement incorporated in the Act of 1921 provided that if the joint meeting failed to reach agreement, the questions in dispute were to be referred to a Central Wages Board, which had sixteen members, eight of whom represented the companies, four represented the National Union of Railwaymen, while the other two railway trade unions each had two representatives on the Board. Finally, differences which the Central Wages Board was unable to compose were to be referred to a National Wages Board. This body included not only representatives of the parties directly concerned but also a number of other persons. It was composed of seventeen members, six of whom were representatives of the companies, six were from the railway trade unions (i.e. two from each of the three unions), four represented the interests of railway " consumers " or users, and there was an impartial chairman nominated by the Minister of Labour. The consumers' representatives were nominated by four of the bodies invited to suggest names for the representation of outside interests on the Coal Mines National Industrial Board, namely the General Council of the Trades Union Congress, the Cooperative Union, the Association of British Chambers of Commerce and the Federation of British Industries. The National Wages Board was required to announce the result of its investigation 1 The machinery of joint relations in other essential public services, e.g. gas and electricity, is also highly developed. ii6 INDUSTRIAL RELATIONS IN GREAT BRITAIN within twenty-eight days from the date upon which any question was referred to it, and there was agreement between the railway companies and the trade unions that no stoppage should take place during this period. A number of important questions were successfully settled by this machinery, but the National Wages Board failed to reach any agreement on a proposal made by the railway companies towards the end of 1932 for a general reduction of wages. There was a complete deadlock in which the independent chairman was isolated, and his recommendation for much smaller reductions than those claimed by the companies was rejected by the unions. The companies did not attempt to enforce their claim and a stoppage was avoided, but in March 1933 they gave the required twelve months' notice to terminate their obligation to submit disputes to the Central and National Wages Boards. However, they stated their willingness to continue their participation in the other conciliation machinery incorporated in the Railways Act, 1921, and expressed themselves prepared to consider with the unions the setting-up of a new national system for wage regulation. Their action was based on the view that the existing machinery had proved defective, and not on a desire to depart from a regular system of collective negotiation. In the discussion of new machinery, the unions rejected a proposal of the companies for a tribunal, composed wholly of independent members, which would deal only with major issues, sit in private, and make obligatory determinations; they expressed preference for a tribunal on which they and the companies would be represented. Finally, at the beginning of 1935, the two parties agreed to a compromise according to which chief responsibility for settling disputes rests upon the representatives of the companies and the unions in joint discussions, but in the event of a breakdown on a major question the issue is referred to an impartial tribunal, the decisions of which may, however, be rejected. The Central Wages Board is replaced by the Railway Staff National Council, and the National Wages Board by the Railway Staff National Tribunal.1 The membership of the National Council is similar to that of the former Central Wages Board, consisting of eight representatives of the companies, four representatives of 1 The agreement also makes provision for local and sectional conciliation machinery. METHODS OF NEGOTIATION 117 the National Union of Railwaymen, and two representatives nominated by each of the other two unions. The function of the Council is to consider questions of salaries, wages, hours and other standard conditions of service within the scope of the national agreements in operation. Such questions are not normally to be carried beyond the Council, but issues involving the interpretation of a national agreement not settled by the Council may by consent of the parties be referred for decision by the (impartial) chairman of the National Tribunal, when a representative of each side may sit as assessor. Matters of major importance may be referred to the Railway Staff National Tribunal, which consists of a chairman appointed by agreement between the companies and the unions, or, failing agreement, by the Minister of- Labour after consultation with the parties. In addition to the chairman the Tribunal includes two other impartial members, one nominated by the companies and one by the unions.1 For the hearing of any issue each railway union which is a party to the issue may nominate not more than one representative as an assessor, and the railway companies acting jointly may nominate not more than the same number in all.2 No issue is to be referred to the Tribunal which has not previously been considered by the National Council, and there must be agreed terms of reference to the Tribunal. The Tribunal's hearings may be in public if the parties agree or if the Tribunal itself so decides. Decisions of the Tribunal, together with the facts and arguments submitted by the parties, are published. They are not binding on the parties, but it is hoped that in practice they will be accepted. It is agreed that in no circumstances shall there be any withdrawal of labour or any attempt on the part of the employees to hamper the proper working of the railways until any matter in dispute has been submitted through the proper channels to the higher management, or until the machinery of negotiation has been fully utilised. Since the Tribunal was constituted in 1935, it has been successful in settling several major issues, and the effect of its decisions in 1936 and 1937 has been to restore by stages all the cuts in wages made at the time of the depression in 1931, as well as to introduce other improvements in working conditions. 1 No director or official of any of t h e railway companies and no official or member of any of the railway unions is eligible for appointment. 2 Assessors do not sign the decisions of the Tribunal. Ii8 INDUSTRIAL RELATIONS IN GREAT BRITAIN Labour matters which affect only one railway company are dealt with by representatives of the company and of the three railway unions. There is also a system of local, sectional and general joint councils which deal with the application of decisions reached by the National Council and National Tribunal, and with efficiency and economy in the operation of the railways and the welfare of the workers. In dealing with questions of efficiency, economy and welfare these councils have entered the wider field of joint relations proposed by the Whitley Committee.1 This work also bears a practical resemblance to that which the much discussed UnionManagement Co-operation has developed duñng recent years on the Baltimore and Ohio, the Canadian National and other North American railways. The local councils, which correspond to the Works Councils of the Whitley Scheme and are called Local Departmental Committees, are formed for each department or group of grades which has more than seventy-five permanent workers at any station or depot. The Committees consist of not more than four representatives of the railway company and not more than four representatives elected by the workers in the department or group of grades. In these, and also in the sectional and general councils, the workers' representatives are not appointed by the trade unions but are elected by the whole body of workers concerned. The subjects considered by Local Committees include methods of improving efficiency, introduction of labour-saving appliances, welfare of the workers, and the most convenient arrangement of working hours. On each railway the various grades of workers are grouped into not more than five sections, and for each group a Sectional Railway Council is established. Each Council consists of not more than twelve representatives elected by the workers and not more than the same number of representatives of the company. The Sectional Councils deal with matters similar to those treated by Local Committees, including co-operation to secure increased business, efficiency and economy, together with the establishment of principles for recruitment and tenure of service, and the application of national agreements. Each railway also has a general council known as the Railway Council, which deals with the same matters as Sectional Councils provided the matters are of common interest to more than one section of workers or are referred to it after con1 See p p . i34-!35- METHODS OF NEGOTIATION 119 sideration by a Sectional Council. Railway Councils consist of not more than ten representatives of the workers, i.e. two from each Sectional Railway Council, and not more than ten representatives of the company. Road Transport In Britain to-day, road transport, whether of passengers or goods is mainly by motor vehicles, and the present section deals with this form of transport. The industry is a new one and its growth has been rapid. Unlike the other industries here reviewed, the employers' organisations and trade unions represent only a small part of the industry, collective agreements have only a limited application, and working conditions, especially in some sections of goods haulage, are unsatisfactory. In these circumstances and in view of the contribution which good conditions of work would make towards increasing public safety on the roads, and also of unfair competition with the railways, the Government has endeavoured to stimulate the development of organisations and of machinery for collective bargaining, and also to secure improvements by legislative measures. Considerable progress has been made in improving working conditions in the road passenger transport industry, both by legislation and voluntary agreements. The former severe competition of bus companies has been replaced by regional monopolies as a result of amalgamations, and this has facilitated the better regulation of working conditions. The process of amalgamation received further impetus when in 1928 the railway companies were granted road powers by legislation and entered extensively into partnership with the bus companies. In 1929 the railway companies agreed to grant to their road transport workers conditions of service somewhat similar to those of workers on the railways. Important provisions for regulating the working conditions of drivers and conductors of road passenger vehicles were included in the Road Traffic Act, 1930. The Act set up Traffic Commissioners for the licensing of public service vehicles (passenger transport), introduced regulations to prevent excessive hours and to ensure satisfactory conditions of work for road transport employees, and provided that the wages paid and the conditions of employment observed by the holder of a licence shall not be less favourable than those which would have to be paid and observed under the " fair wages " clause of a Government contract. Any question 120 INDUSTRIAL RELATIONS IN GREAT BRITAIN concerning this provision, if not otherwise disposed of, is referred by the Minister of Labour to the Industrial Court for settlement.1 The Act also included regulations to prevent excessive hours among employees engaged in the road transport of goods. The system of licences, an important object of which was to prevent an unnecessary increase in the number of road vehicles competing for traffic, was extended to the haulage of goods by the Road and Rail Traffic Act, 1933.2 The Act introduced three classes of carriers' licences, " A " licences for public carriers, " B " licences for limited carriers, i.e., those who carry goods either in connection with their own trade or for hire and reward, and " C " licences for private carriers limited generally to carrying goods only in connection with their own trade. The observance of fair wages and conditions of employment which had been applied by the 1930 Act to road passenger transport was extended to drivers and attendants employed by goods haulage undertakings holding " A " and " B " licences, and any questions in dispute are similarly referred to the Industrial Court for settlement. As, owing to lack of organisation and collective agreements, the wages and conditions of work varied widely not only from district to district but also between undertakings in the same area, it was recognised that observance of the " fair wages " obligation would be facilitated by the existence of comprehensive machinery to establish standards of labour conditions for the industry. With this object in view the Minister of Labour consulted representatives of the employers and workers, and agreement was reached to set up a National Joint Conciliation Board for the Road Motor Transport Industry (Goods) consisting of representatives of the two sides, with an independent chairman.3 After consultation with district conciliation boards, the Board reached agreement on rates of wages, a 48-hour guaranteed week, overtime rates, subsistence allowances and payment for holidays. The Board, however, was a voluntary body, its determinations had no statutory authority, and, in the absence of strong organisations of employers and workers, the provisions of its agreements were widely ignored. Holders of 1 An account of the Industrial Court is given on page 151. This followed a Conference on Road and Rail Traffic in 1932, which was presided over by Sir Arthur Salter. 3 The Board was set up for England and Wales but a corresponding joint board for Scotland was constituted. For undertakings with " C " licences joint negotiations were undertaken in various localities, notably London, for the purpose of regulating working conditions. 2 METHODS OF NEGOTIATION 121 " A " and " B " licences also complained that they were subject to unfair competition from many holders of " C " licences, who were not subject to the " fair wages " condition, and among whom least progress had been made towards satisfactory regulation of working conditions by voluntary methods. In these circumstances the need for more authoritative machinery became evident, and in 1936 the Ministers of Transport and Labour appointed a Committee under the chairmanship of Sir James Baillie to review the position. The Committee recommended the institution of a Central Board somewhat similar to the National Joint Conciliation Council but with three independent members and with provisions for giving statutory force to its determinations.1 This scheme would apply to holders of " A " and " B " licences throughout Great Britain.2 The most difficult problem is that of " C " licences which represent about 67 per cent, of all vehicles in the industry. Many drivers and attendants of such vehicles spend part of their time on other kinds of work, and this adds to the difficulties of introducing effective regulation of their conditions of employment. According to the information available to the Committee the wages in this section were " even lower than the minimum rates fixed by trade boards ", and normal hours of work in nearly all cases were " very considerably in excess of the 48-hour week ". The Committee, therefore, recommended that for " C " licence holders engaged in retail distribution a trade board should be set up, unless negotiations then in progress resulted in the institution of adequate machinery. For other sections under " C " licences the Committee recommended that the " fair wages " condition should be applied, whether wages were fixed by collective agreements or otherwise. Disputes would be referred to the Industrial Court or other tribunal, and an inspectorate would assist in securing observance. The Government is considering these recommendations, and if effect is given to them the whole of the road (goods) transport industry would be required to observe conditions defined by Parliament. The machinery, whether in the form of collective bargaining, trade board or joint council, would be based on representation of the employers' organisations and trade unions, with the addition of impartial persons where appropriate. All the wage rates 1 The Central Board would be advised by Area Boards. R o a d transport under the railways was excluded from the scheme, as this branch is already operating under effectively working machinery. : 122 INDUSTRIAL RELATIONS IN GREAT BRITAIN fixed would have binding force, except on those with " C " licences in non-retail trade, which, however, would, tor the first time, be required to observe the " fair wages " standard. Shipping 1 The present machinery for negotiation and regulation of working conditions in the Merchant Marine dates from December 1919, when the National Maritime Board was reconstituted.2 The object of the Board and of its District Panels is to secure closer co-operation between the employers and the employed along the following lines : (1) the prevention and adjustment of differences between shipowners, and masters, seamen and apprentices; (2) the establishment, revision and maintenance of a national standard rate (or rates) of wages and approved conditions of employment; 3 (3) the establishment of a single source of supply of sailors and firemen jointly controlled by employers and employed. This last provision is of special interest, being unique in British industrial relations. In its application it has ensured the elimination of abuses formerly associated with the recruiting of seamen, and is effective as a means of co-ordination. The shipowner has the right to select his own crew provided he uses the jointly controlled supply office. Equal rights of registration and employment must be secured to all seamen, and seamen have the right to select the ship in which they will serve. The Board consists of five panels representing each of the chief categories of persons employed in the Merchant Marine, namely, masters, navigating officers, engineer officers, sailors and firemen, and catering department personnel. There are also District Panels at each important port. Each panel consists of twelve representatives on each side, those on the employers' side being elected by the Shipping Federation and the Employers' Association of the Port of Liverpool jointly, and those on the employees' side generally by the appropriate association or union, i.e. the Mercantile Marine 1 This section is based on information given in The National Maritime Year Book. The Employers' Association of the Port of Liverpool made certain reservations in respect of rulings made by and taken over from the old Board to which they had not been parties. 3 The rates generally apply only to vessels, the crews of which are engaged in the United Kingdom on ordinary Board of Trade articles. 2 METHODS OF NEGOTIATION 123 Service Association, the Marine Engineers' Association,1 the Amalgamated Engineering Union, and the National Union of Seamen. The Panels sit separately and independently to determine matters appertaining to their own grade, but when sitting simultaneously they constitute the National Maritime Board which meets at least once in six months, and ottener when in the opinion of either side of any panel a question has arisen which it is desirable should be submitted to the whole Board. There are two chairmen of the Board, one elected by and from either side of the Board, and they take the chair alternatively; the same practice operates in each Panel. No resolution shall be regarded as carried unless it has been approved by a majority of members on each side of the Board or Panel, and a majority vote on either side shall be regarded as binding on all the members of that side. The functions of Panels include adjusting differences and disputes not settled by District Panels, preparing rules to secure observance of decisions of the Board, and framing recommendations on any action they consider should be taken by Government Departments or other authorities. When there is disagreement in a Panel the question shall be referred to the Board for decision, if either side of the Panel so desires. If, however, both sides agree, the question is referred to an independent person. Where this course is taken, a full statement of the points in difference is prepared, and this is submitted for opinion to a barrister nominated for one year by the President of the Bar Council. The barrister has power to call witnesses, but neither side shall be legally represented before him. Also the barrister's opinion or recommendation is not binding upon either side. The Panels settle the composition and functions of the respective District Panels.2 At various ports the District Panels appoint one or more representatives of each side of each Panel as Port Consultants. The duties of these Consultants are to secure the prompt manning of vessels, and to settle any differences which arise in this connection. Any differences connected with engagements or discharges are referred in the first instance to the Port Consultants concerned, but the Consultants have no power to 1 For the twelve representatives of the Masters on their panel, only six are nominated by t h e Mercantile Marine Service Association, and six, who shall be sea-going Masters, are elected by ballot among such Masters. 3 For sailors and firemen the District Panels (or District Maritime Boards) may be divided into Sectional Panels to deal respectively with passenger liners, cargo liners and foreign-going general trading vessels, and home trade vessels. 124 INDUSTRIAL RELATIONS IN GREAT BRITAIN alter or amend any rules, scales or principles formulated by the National Maritime Board. Any difference which the Port Consultants are unable to settle is referred to the District Panel, and, if necessary, to the appropriate Panel of the National Maritime Board. No stoppage of work or lock-out shall take place until any difference or dispute between shipowners and seamen has, if necessary, passed through the whole of this procedure. Also no strike pay or assistance, direct or indirect, shall be afforded by either organisation concerned or by any official or member of such organisation to any person or persons failing to observe the agreed procedure for settling disputes. Iron and Steel Unlike coal mining, the iron and steel industry has long enjoyed relative freedom from serious industrial disputes, and has preserved a record of pacific industrial relations which few other big industries can challenge. This has been facilitated by the system which has been in operation for many years of adjusting wage rates in many branches of the industry by sliding scales to changes in the selling prices of typical products. A highly developed system of negotiation, conciliation and arbitration has long been established. The present machinery provides for conciliation in all disputes. If a dispute arises in any works an attempt is first made to effect a settlement by means of a conference between the management and the men concerned. If this fails the matter is referred to a neutral committee consisting of persons from other works. If the committee is unable to find a solution, the dispute may be examined by a more representative conference of employers and workers, or may finally be submitted to arbitration. Questions affecting more than one works are dealt with by local, district or national conferences according to their scope and, if unsettled, are referred to arbitration. There are also conciliation and arbitration boards in various districts which endeavour to prevent or settle disputes by conciliatory methods. These boards usually consist of one employer and one worker representative from each works; in thus taking the works as basis and not the employers' and workers' organisations, the boards diner from joint machinery in most other industries. In addition to having a chairman and vice-chairman selected from amongst the members representing the employers and the workers, the board may have an impartial president who METHODS OF NEGOTIATION 125 attends special meetings on request and is accorded power to decide upon any dispute which the board has been unable to settle. Engineering 1 The operation of systematic methods of negotiation in the engineering industry extends over a period of more than thirty years. The problems which have menaced industrial peace have included not only those of wages and hours of labour but also the functions of management in workshop control. It is in this industry that the shop stewards' movement has had its greatest development and the powers of shop stewards and also of works committees in relation to those of the management are now regulated by an agreement of June 1922 which terminated the lock-out of that year. Joint relations are also complicated by the large number of trades in the industry and the combination of the workers, not into a single organisation, but into many separate unions. Thus, the terms of the important agreement of June 1922 were signed by or on behalf of forty-six unions. Frequent changes in machinery and methods of work, including the use of less skilled men on machinery, have raised problems which have been difficult to solve. Since the war the chief questions of interest have been dealt with nationally rather than locally. General alterations in wages, in the length of working week and in some other general conditions of work, are considered nationally by direct conference between the Engineering and Allied Employers' National Federation and the various unions. The first national wages agreement was in 1917 ; but in this and subsequent agreements the rates to be paid vary in different localities, being based upon rates which originated in local settlements. The present standard of hours of work —forty-seven per week—was originally fixed by national agreement in 1918. A scheme to provide annual holidays with pay was introduced by national agreement in 1937. General principles have been established by national agreement to regulate overtime, payment by results and other matters. For dealing with other differences, including local and district wage questions, an agreement called " Provisions for Avoiding Disputes " has been in force ever since the settlement of a general 1 See Thirty Years of Industrial Conciliation, published by the Engineering and Allied Employers' National Federation, Dec. 1927. 126 INDUSTRIAL RELATIONS IN GREAT BRITAIN dispute on hours of labour and workshop control in 1898. The present scheme was originally adopted in 1914 and renewed in 1922. It provides that an endeavour shall be made by the management and workmen directly concerned to settle any question which may arise between them. If they fail to do so, deputations of workmen shall be received by the employers concerned by appointment without unreasonable delay; the workmen may be accompanied by their trade union organiser, in which event a representative of the employers' association shall also be present. If agreement is not reached, either party is competent to bring the matter to a Local Conference between the local employers' association and the local representatives of the union, to be held within seven days unless otherwise mutually agreed. Should the question still be unsettled, either party has the right to bring the matter before a Central Conference regularly held on a fixed day each month. There shall be no stoppage of work, either partial or general, until the whole procedure outlined has been exhausted.1 During the thirty years from 1898 to 1927 about 2,200 questions were jointly discussed in Central Conference and nearly 6,000 wage movements dealt with; during the last ten years the Conference has continued to function on a similar scale. The number of stoppages which have taken place after the whole scheme of consultation has been applied has been very small. It is appropriate to mention here a scheme outside the field of collective bargaining which has been adopted in several districts for the main purpose of improving relations between employers and employed in the engineering industry by personal acquaintance and discussion. The scheme originated in Manchester where, in 1918, the Manchester Engineering Council was instituted to provide facilities for personal intercourse, discussion, investigation and the formulation of constructive proposals on questions of interest to the industry. Membership is open to all sections of the engineering industry, including employers, trade union leaders, managers, foremen, draughtsmen, clerical staff and men of any rank or status from the workshops. The Council was instituted in the belief that employers and workers have sufficient interests in 1 The methods of dealing with disputes in the shipbuilding industry are almost identical with those in engineering, with the addition t h a t if the Central Conference is unable to reach agreement, a Grand Conference is held between the Shipbuilding Employers' Federation and all the unions which are parties t o the agreement. METHODS OF NEGOTIATION 127 common to make joint discussion fruitful and likely to lead to better understanding. It undertakes no negotiations and members participate in its work only as individuals, and not as delegates of other organisations. As evidence of the relations established it is of interest to note that, during the lock-out of 1922, it was possible to hold meetings between the men who were locked out and the employers who locked them out, and to discuss the issues with good temper and a fair degree of detachment. The Manchester initiative led to the formation of similar councils in Sheffield in 1927, and in London in 1928. The councils arrange for lectures followed by discussions on questions of interest to the industry. They have also drawn up reports on specific questions, including apprenticeship, works committees, the manning of machines and the causes of, and practical proposals to remedy, industrial depression. Cotton 1 As in the engineering industry, general changes of wages and other questions affecting the whole industry, or the whole of the spinning or the weaving section, are discussed directly between the central employers' and operatives' organisations. 2 Joint rules for the settlement of local and district disputes have been in operation for nearly fifty years in the spinning section of the industry and for a still longer period in the weaving section. The local organisations of employers, and also of workers, have maintained considerable autonomy. The present rules provide that local matters in dispute shall be referred to a local joint meeting of representatives appointed by the local employers' association and b y the local operatives' association. Failing agreement, the matter shall be brought before one. or more central joint meetings consisting of representatives of central associations of employers and operatives. The joint rules provide that questions in dispute shall be considered without delay. No strike or lock-out shall be declared until the whole procedure has been followed. In the weaving section of the industry an interesting rule provides that joint central meetings of representatives of the employers' and operatives' associations shall be held at regular intervals during a strike or 1 The methods here described are mainly those in operation in Lancashire, t h e chief centre of this industry. 2 Wages are based on detailed piece price lists, some of which were established many years ago ; until recently the wages of weavers were based on a list adopted as early as 1853, but in 1934 negotiations were conducted which led t o the adoption of a new schedule of rates superseding t h e old list. 128 INDUSTRIAL RELATIONS IN GREAT BRITAIN lock-out. Many hundreds of local disputes are settled every year by local meetings, only a small percentage being referred to central meetings. In recent years the industry, which has experienced severe economic depression, has suffered from several serious stoppages, and during the years 1929 to 1932 the disputes in this industry caused much greater losses in working time than those of all other industries together. Among the chief issues involved have been wage rates, the observance of the forty-eight-hour week and other agreed conditions, and reorganisation of the industry, including proposals for an increase in the number of looms which a weaver should operate. The terms of settlements of disputes in 1932 provided for new conciliation machinery which includes persons of independent status. This machinery is used in the event of a breakdown between the two parties. The " more looms to a weaver system " was then considered by a joint body with an independent chairman and agreement was reached upon the conditions to be observed in a limited application of the system, including the additional wages to be paid to the operatives. In 1936 the trade unions in the cotton spinning section of the industry gave notice to terminate the clauses of the 1932 agreement which provided for the setting-up of the conciliation machinery to decide questions not settled by local and central joint meetings of employers and operatives. In the weaving section, however, the agreement on the use of conciliation machinery in the event of a breakdown between the two parties remains in force. The adverse economic conditions of the industry were responsible not only for severe disputes between the employers' organisations and the trade unions, but also for the payment of lower wages and the working of longer hours in many firms than those fixed by collective agreements. The number of breaches of agreed conditions increased. Considerable numbers of the employers concerned had not been members of the employers' organisations or withdrew from them in order to be free to introduce lower conditions, while many workers were willing to accept these conditions rather than risk losing their jobs. With such undercutting in wages and hours there was danger that the whole structure of collective agreements and standardisation of working conditions would be undermined and the industry find itself in a competitive chaos. With a view to preventing this disintegration proposals were considered by representatives of the employers' organisations and METHODS OF NEGOTIATION 129 trade unions in the manufacturing (weaving) section of the industry for the conditions fixed by collective agreements to be made legally binding upon all firms. Support was forthcoming for this project and, after the scheme had been urged upon the Government by both manufacturers and weavers, the Cotton Manufacturing (Temporary Provisions) Act was passed by Parliament in 1934. This measure enables statutory effect to be given to rates of wages agreed between representative organisations in the industry, with the object of preventing a minority of employers and workers from offering or accepting employment at wages lower than those provided for in the collective agreements. The Act is restricted in scope to the weaving side of the industry, and its effect is to enable the Minister of Labour, afte*- investigation b y a board appointed by him, to issue an Order extending wage agreements to employers who are not members of the appropriate organisations, provided organisations representing the majority of employers and operatives jointly apply for the issue of such an Order. 1 The Minister will issue an Order only if the board is satisfied that the organisations which are parties to the agreement are representative, and is unanimous in considering it expedient that an Order be made. The rates of wages fixed by an Order are a condition of the contract of every employed person, and any employer paying lower wages is liable to a fine of ¿10. The enforcement of an Order is left to those in the industry. In the application of the Act, Orders have been issued extending the scope of various representative wage agreements, the first Order being issued in 1935. 2 Building In the building industry, which is distributed in each town and district, the system of negotiation differs from that in the localised 1 A board shall consist of an impartial chairman and two other impartial members, and each organisation party to the application is entitled to appoint six of its members as assessors. 2 The Act was passed in the first instance for three years. In the wool textile industry in which collective bargaining had broken down during the depression, t h e trade unions demanded statutory regulation of their wages by the method of trade boards, owing to the absence of collective agreements, but the Minister of Labour did not support this solution. I n 1936, however, in consequence of t h e failure of the employers' and operatives' organisations to reach agreement, of growing unrest, and of representations by both sides the Minister of Labour appointed a board to enquire into wages and hours. The recommendations of the board provided a basis on which the organisations in the industry were able to reach agreement, with the anticipation of satisfactory relationships for the future. 9 130 INDUSTRIAL RELATIONS IN GREAT BRITAIN cotton industry because of the necessity for a network of joint committees covering the whole country. Major questions of wage rates, hours and conditions of labour involving money payments are regarded as national issues and are reserved for consideration by a joint national body, called the National Wages and Conditions Council. This body, which was set up in 1921, consists of representatives of several employers' organisations and of the trade unions. It has greatly simplified wage negotiations, avoided much waste of time in local negotiations, reduced the risks of conflicts and introduced greater stability by classifying the various towns into a small number of grades. For each grade wage rates are fixed, by occupation, which apply to all towns in the grade. Any local disputes which arise in the administration of agreements of the Council are dealt with by local and regional joint wages committees. Disputes other than those involving the application of decisions of the Council are considered in turn by local joint conciliation boards, district joint councils, regional joint councils, and, in the last resort, by the National Conciliation Board.1 Boot and Shoe Among important British industries, boot and shoe manufacture has one of the best records of industrial relations. The statement was made in 1929 that the industry had " enjoyed industrial peace for thirty-four years. During this period there had not been a general stoppage of work due to a trade dispute, and cessations of work due to individual disputes between Federated Employers and the National Union of Operatives had been few in number and short in duration ".2 The industry has since continued to maintain its high standard of industrial peace. The organisations have built up very complete machinery for joint relations and in its operation have shown mutual goodwill and understanding. As in many other industries general questions, including wages, 1 A Joint Industrial Council was established in the building industry for several years, but ceased to operate in 1921. I t may be noted here t h a t the building industry and the pottery industry had already evolved schemes for joint relations similar to the Whitley Committee's recommendations before the Committee's proposals were published. 2 Article in Manchester Guardian Commercial, by Miss R. TOMLINSON, Secretary of the Federated Associations of Boot and Shoe Manufacturers and Joint Secretary of the National Joint Industrial Council for the Boot and Shoe Industry. METHODS OF NEGOTIATION 131 hours, overtime rates and proportion of boys to adults, are discussed directly and adjusted uniformly on a national basis; they are dealt with in a National Conference between the Federated Associations of Boot and Shoe Manufacturers and the National Union of Boot and Shoe Operatives, and an impartial chairman is called in when there is disagreement. The Conference has set up a Joint Standing Committee consisting of three representatives of the employers, three representatives of the workers, and the impartial Chairman of the Conference to deal with the interpretation of national agreements. The detailed application of the national agreements and the establishment of piece rates to give an earning capacity 25 per cent. above the minimum weekly rates fixed in the agreements are undertaken b y local boards of arbitration and conciliation. These boards, on which employers and workers in the area are equally represented, also deal with disputes upon matters of local concern. The system of local boards was established by agreement after an acute dispute of six weeks' duration in 1895. The agreement, in which minor amendments have been made, is still in force. I t provides that no strike or lock-out shall be entered into b y any body of workmen who are members of the National Union or any manufacturers represented on any local board. Any disputes or grievances which arise are first considered b y the employers and workers directly concerned; then, if necessary, they are investigated b y the local manufacturers' association and the local branch of the union, and if these should fail to adjust them, the matter is referred to the local board. Finally, they may be submitted to impartial arbitrators or umpires. An interesting feature of the agreement is the system of monetary penalties for breach of the clause prohibiting strikes and lock-outs. 1 The penalties may be claimed if a strike or lock-out takes place and work is not resumed on the fourth day from notification of the stoppage. A guarantee fund of £1,000 from each side is vested in trustees and in the event of an " unconstitutional " strike or lock-out the amount of penalty is fixed by an impartial umpire and paid by the trustees to the aggrieved party. The number of such fines imposed during the whole period since 1895 averaged only about one in three years, and the amount of an average fine has been about £64. 1 This does not apply to stoppages arising from failure of t h e national organisations to secure a national agreement. 132 INDUSTRIAL RELATIONS IN GREAT BRITAIN It is convenient to mention here that, in addition to the machineryoutlined above, a National Joint Industrial Council was set up in 1919. In view of the existence of long-established methods for regulating wages, hours and other working conditions it was decided that the old machinery should be maintained and that these questions should be excluded from the Council's field of activity. Among the subjects which the Council has discussed during recent years are a scheme for the provision of holidays, the Factories Bill, oversea tariffs, Merchandise Marks Acts, British mark of origin, and the elimination of shoddy footwear. The operation of the machinery for conference and conciliation in the boot and shoe industry involves frequent meetings of employers and operatives in which mutual understanding has developed. The machinery " had stood the test of time. It has helped to steer the industry through the many difficulties common to other industrial ventures, such as the displacement of hand labour by machinery, the providing for a wide variety of manufactures carried on under varying conditions in different localities and the problems attaching to export trade and to foreign competition ".1 JOINT INDUSTRIAL COUNCILS Joint Industrial Councils, though part of the voluntary machinery for negotiation between employers and workers, are a less spontaneous development than most of the systems discussed in the preceding section. They are based on the recommendations of the Whitley Committee which was set up in October 1916 to make suggestions for securing a permanent improvement in the relations between employers and employed.2 The Committee considered that an essential condition was adequate organisation on the part of both employers and workers. A distinction was drawn between industries where organisation was strong and those where it was weak. A system of Joint Industrial Councils was proposed for the former, and trade boards, which are discussed in the next section of this chapter, for the latter. 1 From Miss TOMLINSON'S article already quoted. The Committee was originally appointed as a sub-committee of the first Cabinet Committee on Reconstruction ; though generally known as the " Whitley " Committee, its official title is the " Committee on Relations between Employers and Employed." 2 METHODS OF NEGOTIATION 133 Joint Industrial Councils, which consist of representatives in equal numbers of employers and of workers in any industry, differ from the systems of negotiation evolved before the war in some of the well-organised industries. Instead of being ad hoc bodies of varying composition, they are permanent organisations with defined constitution and functions agreed upon by the two sides. When working according to the Whitley Committee's recommendations they meet at regular and frequent intervals and not merely occasionally to consider matters in dispute, and the subjects with which they deal are much wider than wages, hours and conditions of labour. The main features of their activities were included in the proposals of the Whitley Committee, and a model constitution was drawn up by the Ministry of Labour. The Ministry of Labour also brought the scheme to the notice of employers' and workers' organisations in the various industries and offered to give assistance to any industry which wished to consider the establishment of a Council. It was understood, however, that each industry would adapt the scheme to its own needs, and, in practice, there are considerable differences between the Joint Industrial Councils in various industries. The Whitley Committee envisaged a comprehensive system of regular consultation between employers and workers throughout British industry, with facilities for voluntary conciliation and arbitration whenever the representatives of employers and workers in any industry were unable to settle their own differences. The plan for each well-organised industry included a National Joint Industrial Council representative of associations of employers and workers in the industry throughout the country, District Councils, similarly representative, to deal with matters affecting the industry in particular districts, and Works Committees representative of the management and the workers in particular establishments.1 Thus each industry would have a triple organisation in the workshops, the districts, and nationally. The scheme was, however, entirely voluntary and many important industries ignored the proposals, while others gave them only a partial application. 1 The Committee issued five reports, the first dealing with Joint Industrial Councils, including District Councils, for well-organised industries, the second mainly with trade boards for industries where organisation is weak, and t h e third with Works Committees; t h e subject of the fourth report was conciliation and arbitration, and the final report gave a general summary of the Committee's recommendations. 134 INDUSTRIAL RELATIONS IN GREAT BRITAIN Before indicating the extent to which effect has been given to the Whitley Committee's proposals a fuller account must be given of the principles advocated by the Committee or by the Government in its support of the scheme, especially with reference to National Joint Industrial Councils. The Committee were convinced " that a permanent improvement in the relations between employers and employed must be founded upon something other than a cash basis. What is wanted is that the workpeople should have a greater opportunity of participating in the discussion about, and adjustment of, those parts of industry by which they are most affected ". The Committee thus desired that there should be found means of enlisting the co-operation of labour on the constructive side of industry. This could be secured through the proposed Joint Industrial Councils, the general object of which would be " the regular consideration of matters affecting the progress and well-being of the trade from the point of view of all those engaged in it, so far as this is consistent with the general interest of the community". Underlying the whole scheme was the promotion of industrial harmony and efficiency. The interests of trade unions and employers' associations were to be safeguarded, as the Joint Industrial Councils were to be composed only of representatives of these organisations. Agreements reached by the Councils would carry the same binding force as other collective agreements, but thus would not possess the force of law. The Government, in a letter to trade unions and employers' associations sent out by the Minister of Labour in October 1917, explained that the proposal to set up Joint Industrial Councils " indicated no intention to introduce an element of State interference which had hitherto not existed in industry; in fact the Councils would be autonomous bodies and would in effect make possible a larger degree of self-government in industry. The scheme was certainly not intended to promote compulsory arbitration". It maintained for the organisations of employers and workers full responsibility for reaching agreements and thus avoided the difficulty often experienced under systems of compulsory arbitration that the early joint negotiations for settling a dispute may become perfunctory and unreal. The Government's statement also served to assure the trade unions that there would be no attack, either direct or indirect, upon the right to strike as a last resort in an industrial dispute, to which they attach great importance as an ultimate safeguard of their position. To encourage the industries METHODS O F NEGOTIATION 135 to set up Councils the Government stated." that the Councils will be recognised as the official standing Consultative Committees to the Government on all future questions affecting the industries which they represent, and t h a t they will be the normal channel through which the opinion of an industry will be sought on all questions with which the industry is concerned. I t will be seen, therefore, that it is intended that Industrial Councils should play a definite and permanent part in the economic life of the country . . ." For the attainment of the various objects indicated, especially the improvement of industrial relations, the Whitley Committee recommended t h a t the Joint Industrial Councils should give systematic consideration to many other matters than those hitherto treated b y representatives of employers' and workers' organisations in collective negotiations (wages, hours and other conditions of labour). They specified the following subjects as being among those suitable for consideration: (1) The better utilisation of the practical knowledge and experience of the workpeople. (2) Means for securing to the workpeople a greater share in, and responsibility for, the determination and observance of the conditions under which their work is carried on. (3) The settlement of the general principles governing the conditions of employment, including the methods of fixing, paying and readjusting wages, having regard to the need for securing to the workpeople a share in the increased prosperity of industry. (4) The establishment of regular methods of negotiation ' for issues arising between employers and workpeople, with a view both to the prevention of differences, and to their better adjustment when they appear. (5) Means of ensuring to the workpeople the greatest possible security of earnings and employment, without undue restriction upon change of occupation or employer. (6) Methods of fixing and adjusting earnings, piecework prices, etc., and of dealing with the many difficulties which arise with regard to the method and amount of payment apart from the fixing of general standard rates, which are already covered by (3) above. (7) Technical education and training. (8) Industrial research and the full utilisation of its results. (9) The provision of facilities for the full consideration and utilisation of inventions and improvements designed by workpeople, and for the adequate safeguarding of the rights of the designers of such improvements. (10) Improvements of processes, machinery and organisation and appropriate questions relating to management and the examination of industrial experiments, with special reference to co-operation in carrying new ideas into effect and full consideration of the workpeople's point of view in relation to them. ( n ) Proposed legislation affecting the industry. 136 INDUSTRIAL RELATIONS IN GREAT BRITAIN The scheme for Joint Industrial Councils when submitted to organisations of employers and workers in the summer of 1917 was favourably received. It failed to satisfy the aspirations of the workers for industrial self-government, pursuing instead the more modest purpose of outlining practical methods for applying modern views of the proper relations between employers and employed, including trade union recognition, greater facilities for conciliation, and regular joint consultation upon economic and industrial problems as well as upon working conditions. Failure of the scheme to satisfy the ultimate aims of labour was indicated by five members of the Whitley Committee in a note to the Committee's Final Report ; they recognised that the scheme would be likely to promote industrial peace and progress and gave their hearty support to it, but they expressed the view it could not effect a complete identity of interests between capital and labour, and that it could not be expected to furnish a settlement for the more serious conflict of interest involved in the working of an economic system primarily governed and directed by motives of private profit.1 The application of the Whitley scheme varied widely in the different industries. By many of the great well-organised industries it was not applied, mainly because other machinery which was considered to be no less satisfactory for negotiation and conciliation was already in operation, had been tested by experience, and could, if desired, be adapted to undertake the new functions included in the scheme of Joint Industrial Councils. Thus the coal-mining, iron and steel, engineering, shipbuilding, and cotton textile industries did not establish Joint Industrial Councils, while that constituted in the building industry broke down after a brief existence.2 Among industries which have set up Councils are printing, paper making, flour milling, boot and shoe, pottery, quarrying, mercantile marine, dock labour, and various branches of the chemical industry. There is a Council for the wool (and allied) textile industry, but its meetings have been infrequent during recent years as the result mainly of disagreement between the two sides about wage rates. Other branches of the textile industry which have formed Joint Industrial Councils include silk, hosiery, and carpet manufacture. As already stated, an agreed system of Joint Councils for the rail1 Final Report, note signed by Mr. J. R. CLYNES, Mr. J. A. HOBSON, Miss A. SUSAN L A W R E N C E , Mr. J. J. MAJLLON and Miss M O N A W I L S O N . 2 Sectional Trade Councils were, however, formed for painting and decorating, plastering, and plumbing. METHODS OF NEGOTIATION 137 ways was given statutory form in 1921, but modified by agreement in 1935. In addition, Councils have been set up in a number of small industries. Whitleyism has also been given considerable application in public utility services and in public administration, both local and central, Councils being established, for example, in the gas, tramway, waterworks and electricity supply industries, for the local authorities' non-trading services (manual workers), for the industrial establishments of the Admiralty, War Office, Air Ministry, and other Government departments, and for the administrative and legal departments of the Civil Service. 1 The industries and services which set up Councils included many in which trade unionism " had only recently attained a widespread influence ". For these, the system " promised to confirm the war-time gains in the way of recognition and standard rates and conditions. Perhaps for this reason the most active propagandists of Joint Industrial Councils in the trade union world were certain officials of general labour unions, which had brought in hundreds of thousands of unskilled and semi-skilled workers to unionism for the first time ".2 During the first four years of the scheme's application (1918 to 1921 inclusive) seventy-three Joint Industrial Councils were formed, while in less organised industries thirty-three Interim Industrial Councils were set up on somewhat similar lines ; fourteen of the Interim Councils were soon reconstituted as Joint Industrial Councils. A considerable number of Joint Industrial Councils ceased to function, especially during the early years, but most of those which became well established have continued in operation. The chief causes of the breakdown of Councils have been wage conflicts, weakness of organisation of employers and workpeople, and divergence of interests between different localities, between different sections of an industry and between large and small undertakings. In recent years the number of national Joint Industrial Councils has been about fifty, twenty of which have district or local joint bodies associated with them, and there are also certain other bodies constituted in accordance with the 1 Details of the application of the Whitley scheme to t h e end of 1922 are given in a Report on the Establishment and Progress of Joint Industrial Councils, 19171922, prepared by the Ministry of Labour. No similar comprehensive enquiry has since been made, b u t the Ministry of Labour Gazette gives d a t a on the activities of the various Councils. 8 H E N R Y CLAY: The Problem of Industrial Relations, p. 160. 138 INDUSTRIAL RELATIONS IN GREAT BRITAIN Whitley plan.1 It was estimated in 1925 that about three million workers were covered, and probably the present number is fairly close to this figure. An Association of Joint Industrial Councils and Interim Reconstruction Committees has been formed for the exchange of experience and the discussion of problems of common interest. The recommendation of the Whitley Committee that National Councils should be completed by District and Works Councils has not been extensively adopted. District Councils have been formed to supplement the National Councils mainly in the central and local Government and public utility services, e.g. electricity supply. They have been established in relatively few branches of private industry; for localised industries they are often unnecessary. As is indicated in a later chapter, Works Councils have been formed in a number of individual undertakings; they have, however, little or no organic relation with District and National Councils. The constitution and size of the National Councils vary according to thé requirements of each industry. Usually the Councils consist of representatives of trade unions and employers' associations; foremen and technical staffs are rarely represented, in consequence mainly of opposition by the trade unions.2 Councils range in size from less than twenty to more than sixty members. Usually Councils have equal numbers representing employers' and workers' organisations respectively, but where the numbers are unequal no difficulty arises as voting is by sides. Meetings are frequently attended by a liaison officer from the Ministry of Labour. Wide variation is found in the work undertaken and in the success of the various Councils. Few of them have dealt in practice with the whole or a large part of the field of consultation outlined by the Whitley Committee. Many of them have confined their attention almost entirely to wages, hours and other conditions of employment, which ordinarily form the subjects of collective bargaining. This has been due in part to the unstable economic conditions of the post-war years and the consequent necessity for frequent consideration of changes in wage rates. On these questions of wages, hours, and working conditions the system 1 These other bodies include four Interim Industrial Reconstruction Committees, three sectional trade councils in the building industry and nine district councils in industries for which no national council has been formed. Among the National Councils are included five Councils for Government industrial establishments and one for the administrative and legal departments of the Civil Service. 2 The Council in the pottery industry includes three honorary impartial members. METHODS OF NEGOTIATION 139 " has widened the basis of collective bargaining and has instituted permanent and systematic means for the review of wages and working conditions. In a large number of cases steps have been taken for the standardisation of wage rates and of hours throughout the industry. Various principles have been adopted, including the grading and classification of establishments and localities, and the adjustment of wages on cost-of-living scales, in some cases based on the rates of wages already in operation in the various districts ".1 Complaints are not infrequent that employers who disagree with a decision of their Council on wages, and also on other questions, fail to apply the agreed provisions, even withdrawing from the employers' organisation so as to be unfettered; other employers who have not joined the organisation are, of course, free to establish lower standards. To meet these difficulties proposals have been made that decisions of any Council which represents the great majority of employers and workers in an industry should, if the Council so desires, be given legal force and apply to the whole of the industry. The Whitley Committee itself considered that it might be desirable at some later stage for the State to give the sanction of law to agreements made by the Councils. These proposals have been supported by the Association of Joint Industrial Councils, though not by all the Councils themselves. The Trades Union Congress General Council has indicated agreement upon the general application of wage rates, but legislation for giving effect to the proposals has not up to the present been enacted, there being no strong support for, though there is growing interest in, the compulsory application and extension of agreements. In several industries the Joint Industrial Councils do not fix rates of wages. This is true of some of the most effective Councils, including those in the boot and shoe, pottery, and printing industries. Industries which exclude wage-fixing from the scope of the Councils have used previously existing joint machinery for this purpose. 2 Some Councils faced with acute wage problems have avoided a breakdown of the Council by the relegation of wagefixing to other machinery, the Council being maintained for the discussion of subjects about which there was less danger of conflict.3 Certain Councils have dore very useful work on other questions 1 Survey of Industrial Relations, p. 298. In the event of a breakdown, reference is sometimes made to the Joint Industrial Council. Thus, a t the beginning of 1931 a wage dispute in the pottery industry was referred to the Council and was finally settled by decision of its three honorary members. 3 Survey of Industrial Relations, p. 299. 2 140 INDUSTRIAL RELATIONS I N GREAT BRITAIN than wages and hours, among them being economic conditions, unemployment, foreign competition, compilation of statistics showing the economic position of the industry, prevention of waste, research into industrial problems, methods of wage payment, education, training and apprenticeship, paid holidays, welfare, health and safety, improvements ' of working conditions (lighting, heating, ventilation). The various subjects are dealt with by committees. Thus, for example, the Pottery Council has a Research Committee which has made enquiries with a view to the improvement of working conditions, especially those related to the worker's health, by such methods as prevention of dust and elimination of smoke; this Council has also set up a Statistical Committee which has made valuable compilations of data relating to the industry. Several Councils, e.g. the Flour Milling Council, have set up committees which conduct investigations on prevention of accidents and industrial diseases; in this work they are often assisted by representatives of the Home Office. Committees on apprenticeship and technical education are fairly numerous. Of special interest is the adoption of a Group Pension Scheme by the Flour Milling Council at the end of 1930. 1 As an indication of the recognition by some Councils of the close harmony of interests between employers and workers, reference may be made to a report adopted in 1928 b y the Council in the printing and allied trades. With a view to improving the position both of employers and workers by increasing the earning capacity of the industry and creating greater demand by reductions in the cost and improvements in the quality of printing, the Report recommended t h a t : (1) Employers should be urged to improve the efficiency of their works by scrapping old and installing new machinery and adopting improved methods of organisation and production of every kind. (2) Modern time-saving machinery and other methods to reduce the cost of production are beneficiai to all concerned. Employees should co-operate with the employers in the use of these methods. (3) Employers are recommended, when time-saving machinery is introduced, to endeavour to retain all their employees by transfer to other duties. 1 This scheme is designed to embrace t h e whole industry. I t is effected by insurance and is applicable to male employees of both large and small firms. I t safeguards the benefits of employees who transfer from one employer t o another within the scheme and it makes provision for pensions in respect of past service. The pension is based on contributions of one shilling per week b y t h e firm and equal contributions by the member. The annual pension payable a t the age of sixty-five is a t the rate of £i for each complete year of the worker's membership- METHODS OF NEGOTIATION 141 (4) Employees should be encouraged to make suggestions, through Works Advisory Committees, for improving methods of working and factory amenities, and should be suitably rewarded for suggestions adopted. These proposals represent an attitude b y workers to improvements in methods of production which differs considerably from that often attributed to them; it also shows recognition by the employers of the importance of avoiding unemployment due to rationalisation. These various indications of the activities of some of the more progressive Councils serve to illustrate the possibilities of the system where applied under favourable conditions. It must be emphasised that the Councils from the start have been working in a period of great economic difficulties. They have kept collective arrangements in being which otherwise would have disappeared. Membership of the Councils has enabled personal relations to be developed which have been an effective safeguard against breakdown. To sum up, Joint Industrial Councils have been successful in securing the systematic regulation of wages and other conditions of labour in a number of industries where methods of negotiation h a d previously been chaotic. By this means, and also by the consideration which some Councils have given to a wider range of problems, a considerable contribution has been made towards industrial peace and welfare. STATE REGULATION OF MINIMUM W A G E S It is appropriate t o examine in this chapter the methods of intervention by the State in the regulation of minimum wages, as the systems introduced in Great Britain approximate closely to collective bargaining and provide extensive opportunities for consultation and agreement between representatives of employers and workers. In fact, they are largely designed to encourage the development of joint negotiation. Intervention is of recent date, the earliest legislation in modern times being the Trade Boards Act, 1909. This was followed in 1912 by the Coal Mines (Minimum Wages) Act. During the war, in addition to regulation of the wages of munition workers, a system of wage-ñxing was introduced for workers in agriculture and this system has been renewed with certain modifications by the Agricultural Wages Act, 1924. Also a second Trade Boards Act extending the system introduced in 142 INDUSTRIAL RELATIONS IN GREAT BRITAIN 1909 came into operation in October 1918. The present section gives a review of these various systems.1 Trade Boards The trade boards system is the most important as well as the oldest example of State wage intervention in Great Britain. The 1909 Act was passed after more than twenty years of agitation for the suppression of " sweating ". The demand for legislation to prevent the worst abuses became more insistent from 1906 when the Anti-Sweating League was formed and engaged in effective propaganda. A comprehensive enquiry into earnings and hours, conducted by the Board of Trade in 1906, gave reliable information about the various trades and showed that exceptionally low wages were being paid in some branches of industry. In 1907 Mr. Ernest Aves, on behalf of the Board of Trade, who later became Chairman of Trade Boards, visited Australia and New Zealand to study the systems for fixing minimum wages which had been applied for several years in these countries in accordance with legislative provisions. In 1908 a Committee of the House of Commons reported in favour of legislation for the setting-up of boards to fix minimum wages in certain sweated trades. Finally, in 1909, the Trade Boards Act was passed on the lines of the Committee's recommendations. Under this Act the Board of Trade (after 1917 the Ministry of Labour) was empowered to set up a board to fix minimum wages in any trade in which the rate of wages was " exceptionally low as compared with that in other employments ". In the first instance the Act was applied only to four trades in which sweating was considered to be specially serious, namely, ready-made and wholesale bespoke tailoring, paper-box making, machine-made lace and net finishing, and chain making. In 1914 boards were established in four more trades: shirt making, sugar confectionery, tin box, and hollow-ware trades. About half a million workers were employed in the eight trades to which the Act was applied.2 1 No account is given of provisions for t h e introduction of the fair wages clause in Government and other public contracts, or of the temporary war-time system for regulating wages in munition trades. 2 This total includes workers in Ireland. Originally both the 1909 Act a n d the 1918 Act applied t o Ireland as well as to Great Britain. When t h e Irish Free State and t h e legislature of Northern Ireland were constituted, the Irish Free State continued to apply the Acts without modification, b u t in Northern Ireland certain changes were made by t h e Trade Boards Act (Northern Ireland) passed in 1923. METHODS OF NEGOTIATION 143 During the war, wage conditions and methods of wage regulation were abnormal in a great part of British industry, and wage orders issued by the Ministry of Munitions were applied to many of the workers in industries covered by trade boards. In preparation, however, for the return to peace conditions, the Whitley Committee made recommendations in favour of an extension of the scope and purpose of the trade boards. As already indicated, they drew a distinction between industries in which employers and workers were well organised and those in which organisation was weak and, for the latter industries, they proposed that the trade boards system should be used to provide a regular machinery for negotiation and decision on questions dealt with in the well-organised trades by collective bargaining. This recommendation implied a considerable change from the use of the system merely to prevent sweating in certain trades with exceptionally low wages. In 1918 an Act was passed amending the 1909 Act on the lines of the Whitley Committee's recommendations. It empowers the Minister of Labour to set up a trade board in any trade in which he is of opinion that " no adequate machinery exists for the effective regulation of wages throughout the trade, and that accordingly, having regard to the rates of wages prevailing in the trade or any part of the trade, it is expedient that the Acts should apply to that trade ". Thus, instead of the criterion of " exceptionally low wages " laid down in the earlier Act, emphasis is placed upon the absence of adequate machinery for wage regulation. During the three years which followed the passing of the 1918 Act there was a large increase in the number of trades covered by the legislation, but after the end of 1921 comparatively few changes have been made. At the end of 1936 forty-seven trade boards had been set up in trades or branches of trades covering more than 1,000,000 workpeople; approximately 70 per cent, of the workpeople were females.1 Contrary to the systems established by minimum wage legislation in certain other countries, where home-workers only or female workers only are covered, the British Trade Boards Acts apply 1 Report of the Ministry of Labour for the Year 1936. The number of trades covered by the system is somewhat less than the number of boards, for, whereas most trades have only one board for the whole of Great Britain, a few trades have one board for England and Wales and another for Scotland. The number of establishments on trade board lists a t the end of 1936 was 89,148. 144 INDUSTRIAL RELATIONS IN GREAT BRITAIN both to males and females whether working at home, in workshops, or in factories. Each trade has its own board which usually applies to the whole country. A board consists of representatives in equal numbers of employers and workers in the trade, together with a few impartial persons, one of whom presides; the number of impartial members must be less than one-half of the total number of representative members. Boards vary considerably in size, some trades requiring a large membership so that different types of work and different districts may be represented. The average membership is about forty; in practice, each board has only three impartial members. Members are appointed by the Minister of Labour. In trades where there is some degree of organisation, the employers' associations or the trade unions are asked to nominate representatives for appointment by the Minister of Labour. In addition, there are often representatives of unorganised sections of trades who are selected by the Minister. At the end of 1936 nearly 87 per cent, of representatives of employers and over 72 per cent, of representatives of workers on trade boards had been nominated by the trade organisations concerned.1 Each board is required to fix a general minimum time rate of wage. Lower rates may be fixed for juveniles and adult learners. A board may also fix lower rates for workers who are unable on account of an infirmity or physical injury to earn the rate which would otherwise be applicable to them; permits to work at such lower rates are usually issued if, after enquiry, circumstances justify them. Special rates above the general minimum may be fixed for different classes of workers in a trade. Boards may fix the normal number of weekly hours and the overtime rates of wages to be paid for excess hours, and other conditions of labour may also be regulated. When rates of wages are proposed by a board they must be communicated to employers and workers, and two months are allowed during which objections may be made. The board may then proceed to fix the rates or make new proposals. The rates do not become effective until they have been confirmed by the Minister of Labour. The Minister may refer a rate back to the board for reconsideration or ask the board to consider a rate, but he cannot fix rates. Rates confirmed by the Minister become legally binding, and employers paying lower rates are liable 1 District trade committees may be appointed by a board chiefly to advise it on local conditions; they are constituted on similar lines to the boards. METHODS OF NEGOTIATION 145 to fine or imprisonment as well as to payment of arrears of wages due to the workers. The Minister of Labour is responsible for the enforcement of the Trade Boards Acts and a special staff of inspectors has been established, which, in recent years, has numbered more than sixty officers. During 1936 the number of establishments inspected was 17,971, and the number of workers whose wages were examined was 211,251. These numbers represented about 20 per cent, of the total number of firms and of workers covered by the Acts. Arrears of wages amounting, in 1936, to ¿24,167 were paid on behalf of 5,711 workpeople employed in 2,117 establishments, or 11.8 per cent, of the total number of establishments inspected; in the great majority of cases of underpayment, the arrears of wages due were obtained without recourse to legal proceedings. In only nineteen cases were criminal proceedings undertaken against employers or their agents for various infringements of the Acts, and there was no case of civil proceedings. The workers themselves can initiate proceedings to obtain payment of wages due. The conclusion regarding compliance expressed in 1926 by the Committee on Industry and Trade is still valid. The Committee stated that, " generally, it may be said that there is little difficulty in securing compliance among the larger employers and that the great majoiity of workers employed in trade board trades receive at least the minimum. Among the smaller employers, compliance is certainly deficient, but this deficiency is less serious as it affects a comparatively small number of workers ".l The opinion is widely held that the trade boards system has been successful in " abolishing the grosser forms of underpayment and regularising wages conditions ", that it has afforded protection to the good employer against sweated wages paid by his less scrupulous rivals, and has provided a stimulus to improvements in working methods. 2 In several years indeed, the minimum rates fixed by various trade boards have been distinctly higher than those fixed for similar grades of skill by collective bargaining in some of the highly organised unsheltered trades. This has been due, to a large extent, to more favourable economic conditions. It is generally agreed that the operation of the Trade Boards 1 Survey of Industrial Relations, p . 293. These conclusions were expressed already in 1922 by the Cave Committee: Report to the Minister of Labour of the Committee Appointed to Enquire into the Working and Effects of the Trade Boards Acts, London, 1922. 10 2 146 INDUSTRIAL RELATIONS IN GREAT BRITAIN Acts has resulted in an improvement of industrial relations in the trades covered. One of the reasons for the great extension of application of the Acts in the early post-war years was to provide facilities for effecting settlements by negotiation. The Committee on Industry and Trade stated that " the fact that a trade board is in operation must have an important influence on the relations between employers and workpeople in a trade. In the first place, a body of badly paid workers find that the trade board will secure them a reasonable minimum rate of wages. While strikes on a large scale are beyond the capacity of such workers, sporadic outbursts, which in the aggregate may not be negligible, are likely to occur among them, and the existence of a trade board tends to reduce or even extinguish the likelihood of such outbursts ". The Committee also pointed out the value of the opportunities afforded by the regular meetings of the trade boards for full discussion with the employers by the leaders of the relatively weak organisations of workers. Such contacts have been found " to conduce to the amicable settlement of differences ". 1 Although the trade boards system has achieved valuable results, it has not been free from criticisms. These were especially frequent in 1921 when the post-war boom gave place to industrial depression with rapidly falling prices. Many of the boards were then new and were not working smoothly; there was delay, also, in adjusting wage rates to the new levels of prices. In view of the complaints, the Government appointed a Committee, under the chairmanship of the Rt. Hon. Viscount Cave, to enquire into the working and effects of the Acts. The Committee reached the conclusion that the system was beneficial, but that certain defects should be remedied. One of the chief features which they considered to be unsatisfactory was the fixing of wage rates for various grades of skilled workers considerably above the rates for unskilled workers and the enforcement of these rates by criminal proceedings. The Committee recommended that the minimum rates fixed for ordinary workers in the lowest grade in a trade should be thus enforced as a protection against sweating; the rates should approximate to the subsistence wage and be within the capacity of the trade to pay. The Committee were, however, opposed to the use of criminal proceedings to enforce the payment of higher rates. Certain of the Committee's recommendations have been applied in the adminSurvey of Industrial Relations, pp. 291 and 292. METHODS OF NEGOTIATION 147 istration of the 1909 and 1918 Acts, but the more fundamental proposals, including that dealing with the enforcement of higher rates than those fixed for the lowest grades of workers, could not be effected without amendment of the legislation.1 A Government Bill to give effect to the Committee's recommendations was introduced into the House of Commons in 1923, but was not proceeded with. Many difficulties of the early post-war years have been largely overcome with accumulation of experience in the operation of the system. Proposals to extend the application of the system still encounter opposition in some industries, but in others there is recognition by many employers that regulation has advantages over unrestrained competition in labour standards. After the initial difficulties of formation of a new board have been overcome, the system usually works smoothly and with considerable elasticity of procedure. Although relying ultimately on statutory authority, the boards have developed individuality, and the Ministry of Labour's task is to guide and advise rather than to control their operations. Minimum Wages in Agriculture Among low-paid occupations in Great Britain must be included agricultural labour, which also is weak in organisation. Instead, however, of applying the Trade Boards Acts to agriculture, special legislation has been passed providing for the setting-up of machinery to fix the wages of agricultural workers. The present system has evolved from a war-time measure (the Corn Production Act, 1917) which, in addition to regulating cultivation, established an Agricultural Wages Board for England and Wales to fix minimum rates of wages which were enforceable at law. In 1921 the fixing of legally enforceable minimum wages by a single national body, advised where necessary by district wages committees, gave place to a system of voluntary conciliation committees in the various districts, the rates of wages in any district being legally binding only if the committee exercised its right to secure their registration. This voluntary system was not very effective and came to an end in 1924, when the present system was introduced by the Agricultural Wages (Regulation) Act. 1 See Administration of the Trade Boards Acts, igog and lgi8 (Cmd. 1712, issued in 1922). The Trade Boards Act (Northern Ireland), 1923, is based on the recommendations of ah Advisory Committee on the application of the Trade Boards Acts t o Northern Ireland, which resemble those of the Cave Committee. 148 INDUSTRIAL RELATIONS IN GREAT BRITAIN Under this Act, which applies only to England and Wales, the Minister of Agriculture and Fisheries is required to set up an agricultural wages committee in each county or group of counties; actually nearly fifty committees have been set up. Each committee is required to fix minimum rates of wages for time work in its area, and may also fix minimum piece rates and special rates for overtime. As far as practicable the rates fixed shall be such that an able-bodied man's earnings will be " adequate to promote efficiency, and to enable a man in an ordinary case to maintain himself and his family in accordance with such standard of comfort as may be reasonable in relation to the nature of his occupation ". In specifying this basis for fixing wages the Act differs from the Trade Boards Acts which give no indication as to the principles to be applied. The composition of the committees is almost identical with that of trade boards; they consist of representatives in equal numbers of employers and workers, together with two impartial members appointed by the Minister and a chairman selected by the committee. In providing for the fixing of rates independently by a large number of separate county committees, the system differs from that under the Corn Production Act by which a single central body fixed agricultural wages in all districts ; it also differs from the trade boards system under which, with very few exceptions, a single board in each industry fixes wages in all districts throughout the country. Provision is, however, made by the Agricultural Wages (Regulation) Act for co-ordination of the work of the committees. A Central Agricultural Wages Board is set up, consisting of representatives of employers and workers, together with a number of impartial persons not exceeding one-quarter of the total membership of the Board; in practice there are eight members representing employers, eight representing workers and five impartial members. The rates of wages fixed by the committees do not become effective until confirmed by the Board, which may refer any rate back to a committee for reconsideration and may fix or vary a rate where a committee has failed to do so within a given period. Employers who pay wages at rates below those in force are liable to fine and payment of arrears of wages due to the workers. A staff of inspectors has been appointed to ensure the payment of the minimum rates fixed.1 1 A Report of Proceedings under the Agricultural Wages (Regulation) Act, 1924, for the year ended 30 September 1936, states t h a t the number of complaints METHODS OF NEGOTIATION 149 The Coal Mines (Minimum Wage) Act. The institution by legislation of a system for fixing minimum wages for coal miners had a different origin and purpose from trade boards and the machinery set up in agriculture. When the Coal Mines (Minimum Wage) Act was passed in 1912 the miners were amongst the highly paid and strongly organised bodies of workers in the country. The demand for the fixing of a guaranteed minimum time wage came from the Miners' Federation. Originally the demand was made to provide a safeguard to piece workers operating in abnormal places where extraction of coal was difficult. The normal practice had been to fix special piece rates for such work, but these were not always adequate and a miner might find at the end of a week that his output entitled him to receive only very low earnings. The demand of the Miners' Federation for a guaranteed time wage as a safeguard against unduly low earnings of piece workers was, however, enlarged in 1911 and the early months of 1912 to a demand for minimum guaranteed time rates for all grades of underground workers, without any reference to abnormal workplaces. Negotiations with the coal owners for the application of the proposed minima by collective agreements broke down, and in March 1912 the Miners' Federation for the first time called a national strike. During the six weeks' conflict which ensued the Government made various attempts to secure a settlement and finally the passing of the Coal Mines (Minimum Wage) Act met in part the miners' demands and contributed largely to the termination of the dispute. Like other British minimum wage Acts, this measure, which applies to underground miners, provides for the constitution of representative bodies. Minimum rates are to be fixed in each district by a joint district board. The Board of Trade can recognise as a joint board any body of persons which fairly and adequately represents the coal miners and employers of the district and is presided over by an impartial person. In fixing any minimum rate, boards are required to take into consideration the average daily rate of wages paid to workmen of the class for which the minimum rate is to be fixed. The rates maybe uniform for a whole district or may vary according to the special alleging underpayment showed a tendency to rise every year. This was probably due to the fact t h a t workers were becoming more alive to t h e facilities available for obtaining what is due to them, and not to any growing laxity by employers with regard to their obligations. 150 INDUSTRIAL RELATIONS IN GREAT BRITAIN circumstances of particular groups of mines. Workers who fail to observe the conditions laid down by a board regarding regularity and efficiency of work forfeit the right to the minimum rates, except where failure was due to causes outside their control. As under the trade boards system and in agriculture, the ordinary minima do not apply to workers handicapped by age or infirmity. No special provision is made for enforcement, presumably on the ground that the strength of organisation in the industry is an adequate safeguard against non-observance. In the first years of their operation the joint district boards were effective in raising the wages of a considerable number of workmen, chiefly unskilled time workers and also individual piece workers. There was considerable lack of uniformity in the working of the system in different districts, no method of co-ordination being provided. The system was affected by the outbreak of war and it has subsequently been neglected; the minima have not generally been kept up to date and the rates fixed by collective agreements in most districts have been higher than those fixed in accordance with the Act. Suggestions are sometimes made that the machinery should be restored, but they have hitherto received no strong support. The miners are still, however, favourable to the application of the minimum wage principle by legislation, and in recent years the Miners' Federation has demanded new legislation for fixing minimum wages, with a view to " pegging " wages while securing reduction of hours. STATE CONCILIATION AND ARBITRATION State intervention in industrial disputes is limited in Great Britain to the provision of facilities for voluntary conciliation and arbitration and the conducting of investigations into the causes and circumstances of disputes. Except temporarily for munition work during the war the principle of compulsory arbitration has not been applied, being opposed both by the trade unions and also by employers' organisations. The policy of the State is to leave the trade unions and employers' organisations to reach agreement by their own systems of negotiation, but to offer assistance if a breakdown occurs or appears imminent. It was not until the closing decade of the nineteenth century that a system of State intervention was introduced. A period of serious industrial unrest and disputes led to the appointment in METHODS OF NEGOTIATION 151 1891 of a Royal Commission to enquire into questions affecting industrial relations. The Commission reported in favour of legislation for the promotion of conciliation and arbitration, and the Conciliation Act, 1896, was passed to give effect to its recommendations. By this Act the Board of Trade was empowered: to enquire into the causes and circumstances of a difference; to take such steps as might seem expedient for bringing the parties in dispute together under an impartial chairman with a view to an amicable settlement; on the application of either employers or workmen, to appoint a conciliator; on the application of both parties, to appoint an arbitrator. In 1916 the powers which the Act conferred upon the Board of Trade were transferred to the newly formed Ministry of Labour. The Act remains in force, but since the passing of the Industrial Courts Act of 1919 has rarely been applied. As has been indicated in a previous section, the Industrial Courts Act is based on recommendations of the Whitley Committee. In addition to conferring upon the Minister of Labour powers of conciliation and arbitration somewhat similar to those exercised under the Act of 1896, two new features were introduced, namely, a permanent Industrial Court and a system of Courts of Enquiry. With regard to arbitration, whether by the Industrial Court or otherwise, the Act provides that the fullest opportunity shall have been given to any existing joint machinery in organised industries before a dispute is referred to arbitration. If such machinery fails to effect a settlement the Minister of Labour may, with the consent of both parties, refer differences to arbitration by the Industrial Court, by one or more arbitrators, or by a Board of Arbitration consisting of employers and workpeople with an independent chairman.1 This offers wide choice so that the machinery of arbitration may be the most appropriate to the circumstances of each dispute. The Court consists of persons appointed by the Minister of Labour, of whom some must be independent persons, some must be persons representing employers, and some must be persons representing workmen; one or more women must be appointed.2 Awards are not compulsory, being subject to acceptance by the parties, but are rarely rejected. 1 From 1908 onwards the Board of Trade had maintained panels of independent persons and of representatives of employers and workers from which to select members for Courts of Arbitration. 2 The Industrial Court evolved from t h e Committee on Production set up during the war to ensure maintenance of the fullest productive power of employees in engineering and shipbuilding work for Government purposes. The Committee, 152 INDUSTRIAL RELATIONS IN GREAT BRITAIN The permanence of the Industrial Court ensures the accumulation of experience by the investigation and settlement of a large number of disputes. It enables improved methods of investigation to be evolved and contributes to the development of certain principles which, having been found of value in settling various disputes, may be applied to new disputes presenting similar features.1 The second new feature of the Act is the provision that the Minister of Labour may, whether or not a dispute is referred to him, appoint a Court of Enquiry to make an investigation and report on any matters connected with or relevant to the dispute which he may refer to the Court. A Court may consist of one or of several persons. In conducting its investigations a Court may require persons who appear to have relevant information to furnish such particulars as the Court may require and, where necessary, to give evidence on oath, though there is no penalty for failure to do so. Any report of a Court of Enquiry must be laid as soon as possible before both Houses of Parliament and may also be published by the Minister of Labour; confidential information may not, however, be disclosed. The chief value of these Courts of Enquiry is to ensure the compilation of an impartial statement of the facts for the information both of the parties in dispute and of the public. The Courts also use the facts they have compiled as a basis for recommendations or conclusions which closely resemble awards; such recommendations or conclusions have no binding force, although they frequently influence the terms of settlement. In order to indicate the extent to which the systems of investigation, conciliation and arbitration under the Acts of 1896 and 1919 have been applied in practice, figures are tabulated below of the number of cases, including disputes settled without a stoppage, which were dealt with by the Board of Trade and the Ministry of Labour during the period from 1896 to 1936. The number of cases was small during the earlier years, the annual average between 1896 and 1909 being only twenty-six. The abnormal conditions during the war years are reflected in the exceptionally high figures in the course of its work, recommended the prohibition of stoppages of work a t undertakings producing for Government purposes; this was accepted by the Government and the Committee then sat as an arbitration tribunal, its functions on production being transferred to t h e Ministry of Munitions. 1 See an address by Sir WILLIAM MACKENZIE, who was for several years President of the Court, delivered a t a Conference on Systems of Fixing Minimum Wages and Methods of Conciliation and Arbitration organised by the League of Nations Union, Feb. 1927 (Towards Industrial Peace, London, 1927). METHODS OF NEGOTIATION 153 NUMBER OF CASES UNDER THE CONCILIATION ACT, 1 8 9 6 , AND THE INDUSTRIAL COURTS ACT, I 9 I 9 , DURING THE YEARS 1 8 9 6 TO I 9 3 6 Number of Year cases 2 26 1896-1909 . 2 82 1910-14 . . 1915 • • • 397 1,412 1916 . . . 1917 • • • 2,474 1918 . . . 3.583 1919 • • • 1,323 920 1920 . . . 272 1921 . . . 103 1922 . . . 167 1923 . . . 252 1924 . . . i Reports of the Ministry of Labour for the Year 1031 2 Annual average. 1 Number of cases Year 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 to 1936. 257 137 103 103 94 84 96. 77 52 69 80 90 for that period; in addition many disputes were dealt with under temporary legislation during the war. The extent to which the different methods available after the passing of the Industrial Courts Act have been applied is indicated by NUMBER OF DISPUTES TO WHICH D I F F E R E N T METHODS W E R E APPLIED UNDER T H E CONCILIATION ACT AND THE INDUSTRIAL COURTS DURING THE YEARS I 9 2 0 Arbitration settlements By the By ad hoc By single Boards of Industrial arbitrators Arbitration Court Year 192I 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 Totals TO I 9 3 6 . . 54° 122 37 "3 143 165 104 82 52 39 43 35 28 26 30 29 35 1,623 73 19 9 14 7 8 5 6 10 14 6 7 3 3 6 10 9 199 15 7 8 6 12 8 4 1 5 3 3 6 1 1 4 1 85 ACT 1 Conciliation settlements 2 286 123 48 33 83 73 24 14 42 38 31 48 45 22 29 41 45 1,025 Courts of Enquiry 3 1 1 1 7 3 1 1 18 l Compiled from Reports of the Ministry of Labour. Disputes settled without a stoppage of work are included. The number of cases under the Conciliation Act was very small. In addition, cases under the Road Traffic Act, 1930, were dealt with, the number disposed of in 1936 being 35. 8 Including in some years a few settlements providing for reference to arbitration which are also included under Arbitration Settlements. 154 INDUSTRIAL RELATIONS IN GREAT BRITAIN the second table above. This shows that arbitration by the Industrial Court and settlement by conciliation have been the methods chiefly adopted. After 1920 the reference of disputes to single arbitrators became relatively infrequent. The power of the Minister of Labour to set up Courts of Enquiry has been sparingly used : the disputes to which this method has been applied have, however, usually been important. It should be added that in the administration of the two Acts the Ministry of Labour has a staff of officials who are specialists in the problems of industrial relations. This includes a Chief Conciliation Officer of the Ministry in each important industrial region who undertakes conciliation within his area and keeps the Ministry informed of any development which may lead to a dispute. Action taken by the Ministry's officials is effective in securing the settlement oí many differences before they have reached a critical stage and, in this way, the need for recourse to the Industrial Court, to other methods of arbitration, to formal conciliation or to Courts of Enquiry is frequently avoided. CHAPTER V WORKS COUNCILS IN the previous chapter a description was given of machinery for collective relations between employers' and workers' organisations covering many establishments, but nothing was said about relations between the management and workers of individual factories. This second aspect of individual relations forms the subject of the present and the two following chapters. It is within each undertaking that the foundations of industrial peace must be laid, many problems outside the scope of collective agreements call for solution, while detailed application of the provisions of collective agreements to the conditions of each establishment is necessary. The rapid growth in the size of industrial undertakings and the consequent practical impossibility of direct personal contact being maintained between the higher management and the general body of employees have created the need for organised joint relations within the undertaking. The satisfaction of this need has been attempted in Great Britain, as in other countries, by the settingup of the regular machinery of works councils or committees. The Biitish development differs from that in several countries of continental Europe in being entirely voluntary, no legislation on'the subject having been enacted; nor is there any considerable support for compulsory measures. It is also unlike that in the United States of America; the British works councils run parallel with a strong trade union movement which largely controls the selection of workers' representatives, whereas in many industries in the United States trade unions were, until recently, almost non-existent and works councils formed the only machinery for joint relations between employers and workers. Furthermore the somewhat neutral attitude towards works councils adopted by the British trade union movement is very different from the bitter hostility shown by the American workers' organisations to " company unions ", which they regard as instruments of the employers to prevent or hinder the advance of trade unionism. In the following sections of this chapter an account is given of the development of works councils in Great Britain, special 156 INDUSTRIAL RELATIONS IN GREAT BRITAIN reference being made to the recommendations of the Whitley Committee, some of the main features of the constitutions of works councils are described and their chief functions and results are reviewed. A summary is given in Appendix VI of the constitutions and functions of works councils in several well-known undertakings. DEVELOPMENT Consultation about working conditions between the management and workers of individual factories has long existed in British industry. Usually this was quite unsystematic, consisting merely of the occasional presentation of specific complaints by a deputation of the workers to one or more representatives of the management. Even for this purpose, however, the woikers in a number of undertakings found it convenient to maintain informal works committees. In establishments where there were many trade unionists the shop stewards took a leading part in these committees and deputations; the pit committees in the coal-mining industry and the activities of the shop stewards and works committees in the engineering industry are outstanding examples of the extension of trade union activities into individual undertakings. These early developments showed wide variety of type and methods, an absence of regular meetings and a narrow range of activities. During the war rapid progress was made in the establishment of systems of consultation between management and workers. This was due largely to the need for joint discussion of the many changes which were being made in methods of work and systems of wage payment. Shop stewards or committees of workers were elected in many establishments to protect the workers' interests and even to demand greater control over workshop conditions. Some of these bodies of workers' representatives were associated with the trade unions, but others were independent and showed signs of revolt against them. On the side of management a growing need was felt for more systematic consultation with the workers. This found expression in frequent meetings of representatives of the management with the workers' committee, and in a few establishments regular constitutions were adopted for joint committees of management and workers. These developments and a growing recognition of the possibilities of regular machinery for joint consultation within individual undertakings led to attempts to accelerate progress and to give WORKS COUNCILS 157 guidance by making suggestions for the constitution and functions of works councils, while avoiding any element of compulsion. In 1917 the Whitley Committee recommended the establishment of joint works councils, representative both of management and workpeople, as part of a triple scheme of organisation in the workshops, the districts and nationally to secure improved industrial relations; the Committee was of the opinion that the complete success of works councils depended upon their being linked up and acting in close co-operation with district and national ind astrial councils. 1 About the same time, on the recommendation of the Whitley Committee, the Ministry of Labour conducted an enquiry and published a report on the origin, constitution and practice of works committees, with special reference to the influence of war developments. 2 The Ministry next published a model constitution and functions of works councils which could be applied with modifications to meet the requirements of each industry and establishment ; 3 also the services of officers of the Ministry were available to advise firms about the setting-up of works councils, but action was taken only with the approval of the joint industrial council concerned. Beyond this policy of encouragement, suggestion, advice and guidance the Government did not go. The Whitley Committee emphasised that " there are many questions closely affecting daily life and comfort in, and the success of, the business, and affecting in no small degree efficiency of working, which are peculiar to the individual workshop or factory ", and agreed that the purpose of a works council is to establish and maintain a system of co-operation in all these workshop matters. The Committee favoured the setting-up of joint councils of management and workpeople and not merely committees of workpeople only. They gave special attention to the relation of works councils to trade unions and employers' associations, strongly deprecating the establishment of works councils without the co-operation of these organisations. They also expressly stated t h a t the success of works councils would be very seriously interfered with if the idea existed t h a t such councils " were used or likely to be used b y employers in opposition to trade unionism". It was agreed 1 See First and Third Reports of the Whitley Committee; the Third Report (Cmd. 9085) deals only with works councils. 2 Industrial Reports No. 2, March 1918. 3 Industrial Reports No. 4, Jan. 1919. 158 INDUSTRIAL RELATIONS IN GREAT BRITAIN that works councils should not interfere with any matters settled by district and national agreements and that certain questions, e.g. wage rates and hours of work, should be settled by such agreements. The Committee considered that works councils would fail in their main purpose if they existed only to smooth over grievances. " They should always keep in the forefront the idea of constructive co-operation. . . . Suggestions of all kinds tending to improvements should be frankly welcomed and freely discussed." The successful utilisation of works councils in any undertaking should be regarded as of equal importance with its commercial and scientific efficiency, and one of the partners or directors or other responsible representative of the management would be well advised to devote a substantial part of his time and thought to the good working of the council.1 The ambitious and comprehensive plan outlined by the Whitley Committee for works councils in the various undertakings linked up with district and national Joint Industrial Councils into a complete network of joint relations failed of realisation. Reference has already been made in the previous chapter to the limited development of Joint Industrial Councils. Progress up to the present time in the formation of works councils has been much more meagre, although figures are not available to show the number of councils in existence at various dates. From 1918 and 1920 was the period of most rapid development. In a report on Joint Industrial Councils published by the Ministry of Labour covering the years 1917 to 1922, the statement was made that probably considerably over 1,000 works councils had been formed.2 Many of these councils have, however, ceased to function. In 1925 the Committee on Industry and Trade stated that the decline in the number of works councils would appear to have been fairly rapid since 1920 and that it was probably true to say that they have only survived in establishments in which there is a very definite desire on the part of both management and workpeople to make them a success.3 The decline was attributed to a gradual termination of the special conditions of war time which had necessitated many important adjustments of working conditions to the particular circumstances 1 Third Report of t h e Whitley Committee. Report on the Establishment and Progress of Joint Industrial Councils, J9J7-J922, p . 81. 3 Survey of Industrial Relations, p. 305. 2 WORKS COUNCILS *59 of individual establishments. Since the war attention has been directed mainly to general questions, especially wages, which have been settled not by negotiation within the separate establishments but by national or district agreements. It should not be concluded, however, that works councils have ceased to be of any significance in Great Britain. The Committee on Industry and Trade, while noting the decline between 1920 and 1925, was able to state that a large number of works councils had survived the difficult conditions of the period, and t h a t many of them had been successful in fulfilling the objects which the Whitley Committee had in view, and also in other directions. Special mention was made of the maintenance of works councils set up in the engineering industry in accordance with the provisions of an agreement reached in 1919 between the employers' federations and the trade unions and also of Local Departmental (Joint) Committees in the railway service set up by agreement between the companies and the unions following the Railways Act of 1921. 1 Since 1925 there does not appear to have been any outstanding movement either of expansion or of decline, and a number of works councils can now look back over a period of nearly twenty years of successful operation. This is particularly true of councils in certain large firms in various industries; as already indicated, the need of such firms for regular machinery for joint consultation is greater than that of small firms where the higher executives are in more intimate and frequent contact with their workers. CONSTITUTION The Ministry of Labour's report on works committees published in March 1918 showed great variety in composition and method of election of their members. It will be recalled t h a t the committees were usually representative of the workers only and that they formed deputations to meet the management when questions arose requiring joint discussion; joint committees with regular constitutions were rare. " In some works the representatives were elected by the whole of the employees voting as one constituency. More frequently, each Department or Shop formed a separate constituency and returned a proportion of the total number of members. Occasionally election was by occupations or trades. In some works the Committees were elected 1 Ibid., pp. 305-306. i6o INDUSTRIAL RELATIONS IN GREAT BRITAIN by the shop stewards of the various Trade Unions represented in the works. In other cases, all the members of a Union in the works elected a certain number of representatives. In certain cases, the method of election appeared to be by the 1members of each branch of a Union employed in the establishment." The variety illustrated by the above quotation has been largely maintained up to the present time, although a tendency towards greater uniformity has operated in consequence of the publication of a model constitution by the Ministry of Labour and some exchange of experience between firms. It is useful to review the model constitution suggested by the Ministry as it indicates all the chief constitutional problems; this review is given in relation to the practice of existing councils, many of which show features corresponding closely with those of the model. As already stated, the Ministry favoured the establishment of joint councils and not merely committees of workers only. Many joint councils have in fact been set up, but in some firms .committees of workers only are elected and recommendations are discussed with the management by a small delegation or commission. Somewhat similarly a few firms have adopted the system of a workers' advisory committee with meetings at regular intervals, presided over by a representative of the management, to whom proposals are submitted for the consideration of the management. In proposing joint committees the Ministry did not suggest that management and workers should be represented in equal numbers. This would not be practicable in all works ; also, as the Ministry recommended that decisions should be reached only by agreement between the two sides and not by a majority vote, equality of numbers would be unnecessary. The Ministry had already pointed out in its report on works committees that management has the executive power, and, unless impressed by the representations of the members of the committee or by the sanction which lies behind them, such representations will not lead to executive action. The report had further indicated that works councils operate by consultation, and that it would be a mistake to think in terms of voting or to think that even if there is voting its result is a formal decision by a majority vote; the method should be discussion for the removal of misunderstanding, and action will ensue if unanimity is reached between the two sides. Report on the Establishment and Progress of Joint Industrial Councils, p . 66. WORKS COUNCILS i6i The number of representatives on each side should vary according to circumstances, but the Ministry suggested that two, three or four members representing management would be adequate, while the workers might have five to twelve members according to the size and complexity of the particular works. Each side should have the right to bring in representatives of any departments affected by a question under discussion and not directly represented on the council. In practice in large works with a number of departments and grades of workers requiring separate representation, councils considerably larger than those proposed have been established; two or three of the largest councils have sixty or more members. If the works council is to consist of management and workers it becomes necessary to draw a line of demarcation between the two. On this question the model constitution gave no guidance. The chief grade about which doubt is sometimes entertained is that of foremen, but in practice these are usually classified on the side of management. In a few firms, however, the works council consists of management (excluding foremen) and representatives of the workers, and a committee of foremen is set up for separate relations with the management. The representatives of management, according to the Ministry of Labour's model, would be appointed by the firm, which should maintain a constant nucleus made up of such individuals as the managing director, the works manager and, where there is such an official, the labour or welfare superintendent. Nomination is the usual practice, although in some works councils part of the management's representatives are elected b y the different grades of management. The selection of workers' representatives presents greater difficulties. In the Ministry's model constitution it was suggested that the workers' representatives should normally be trade union members. This proposal was made partly, no doubt, in order to secure the co-operation of the trade union movement, b u t also to ensure cohesion of policy and uniformity of structure between the works councils and the district and national Joint Industrial Councils, which were based solely upon the representation of organisations. It was recognised, however, that in some circumstances, e.g. in factories where the workers are not strongly organised, it might be found necessary not to limit the workers' side to trade unionists. In practice there is little relation between works councils and Joint Industrial Councils, and the constitutions of u i62 INDUSTRIAL RELATIONS IN GREAT BRITAIN some, though not all, works councils make no provision in favour of trade union representation. In many firms, each worker, whether trade unionist or not, who has been employed by the firm for a specified period (for example, a year) has the right to vote for the workers' representatives on the council and is also eligible for election. Nevertheless, the trade unionists if fairly numerous in any works are usually able to manage the nominations and elections so that they secure many if not all the seats on the workers' side.1 In the Ministry's model constitution it was suggested that the workers' representatives should normally be elected by departments, due allowance being made for the various sections of workers engaged in any department. In large complex works where this method might result in a council of unwieldy size the recommendation was made that departmental committees should be set up to discuss matters affecting each large department, and that the workers' representatives in these committees should elect representatives to the works council. Difficulties arise in securing adequate representation of different classes of workers—craftsmen, semi-skilled and unskilled workers, men and women. Experience has shown that it is generally advisable that male workers should be represented by men and female workers by women ; a few firms have set up two works councils, one for men and the other for women. It has sometimes been found desirable for representatives to be elected by trades or crafts irrespective of the department in which they work. Where exceptional difficulty has been experienced in bringing skilled and unskilled workers together into the same council a separate body has been set up for each group, but this is rare.2 Difficulties have sometimes been overcome by the adoption of a system of proportional representation. In some firms a separate committee independent of the works council is set up for the clerical and technical staff. On various other constitutional questions the normal practice of works councils corresponds closely with the provisions of the model constitution. Thus elections are normally by ballot. 1 The Ministry of Labour suggested that the recognised district official of any trade union concerned might attend any works council meeting in an advisory capacity, b u t this has not normally been adopted. 2 The Ministry of Labeur was of the opinion t h a t such a system obstructs very considerably t h a t joint representation of common interests and desires which should find expression in a works council, and t h a t it tends to concentrate the attention of each body on points of divergence of interests. WORKS COUNCILS 163 Members usually hold office for a year and are eligible for re-election. In a few councils, however, the period is two or even three years; one or two of these councils, with a view to ensuring continuity, arrange that only a proportion of the members shall retire at the end of each year. Meetings are held at regular intervals; in large works the councils as a general rule meet only quarterly, but sub-committees and departmental committees usually meet once a month. Almost always provision is made for special meetings to be called, for example on the request of one side of the council. Meetings are usually held during working hours and the workers' representatives are paid at their ordinary rate of earnings for the time spent at the meetings. Opportunities are often provided for the workers' side of the Council to hold private meetings. Provision is generally made that the agenda for any council meeting shall be drawn up at a suitable interval before the meeting, and that no other item shall be discussed unless both sides agree to its introduction ; this tends to ensure adequate preparation and to avoid the expression of hasty and ill-considered opinions. Certain large undertakings with a number of separate factories have supplemented the activities of the councils in the various factories by holding inter-factory conferences at regular intervals attended by representatives from each works council. These conferences deal with matters of common interest and serve to co-ordinate the activities of the several councils. The foregoing has indicated the difficulty of some of the constitutional problems and the various solutions which have been reached. This variety is due partly to the different circumstances of the undertakings. Sometimes the main lines of the constitution were drafted by the management and submitted to the workers for approval before instituting the scheme. A more satisfactory method has been for the constitution to be drafted jointly by a committee of management and workers; in one firm such a drafting committee sat for nearly a year before agreeing upon a scheme. The position and attitude of foremen have sometimes constituted a serious problem, as often foremen have considered that they would be criticised by the workers' representatives in the council and their authority weakened. With a better understanding of the purpose and methods of works councils this difficulty has usually been surmounted. It has not always been found possible, however, to overcome constitutional and other difficulties; in a number of firms the management, though desiring to set up a IÔ4 INDUSTRIAL RELATIONS IN GREAT BRITAIN works council, has been compelled to relinquish the idea because the trade unionists concerned were opposed to representation of unorganised workers or held the view that their own interests were best safeguarded by direct relations between the union officials and the management. FUNCTIONS If there have been constitutional difficulties in the organisation of works councils, there have also been differences of opinion about their powers and activities. In early discussions they were regarded by some workers' unions as a step towards a greater democratic control of industry, but the interest shown by these unions declined when it became clear that executive power almost always remained with the management and that the councils were consultative bodies with advisory powers only. Even with this safeguard, the attitude of management in the different firms which have established councils varies considerably about the range of subjects with which they should deal. In many firms their activities are restricted in practice to the settlement of grievances and the consideration of questions of safety and certain aspects of welfare. In other firms, however, including those in which the most successful councils are found, the range of activities is much wider and covers most if not all the subjects suggested by the Ministry of Labour in its model constitution. The functions specified in the model constitution were prefaced by a general statement that the object of a works council is to provide a recognised means of consultation between the management and the workers. The consultation should give the workers a wider interest in and greater responsibility for the conditions under which they work, ensure the application of the provisions of collective agreements, and prevent friction and misunderstanding. It was emphasised that anything done by a works council must be consistent with the principles and provisions of the collective agreements in the industry. In accordance with this recommendation the fixing of standard rates of wages and hours of labour would be excluded from consideration by works councils. The following functions were specified; they are given here as an indication of the activities which have in practice been undertaken by Councils in the more progressive firms. The list was not meant to be exhaustive as, in addition to these activities WORKS COUNCILS 165 suitable for works councils in any industry, there are other functions which arise in some industries only. 1. The issue and revision of works rules. 2. The distribution of working hours; breaks; time-recording, etc. 3. The method of payment of wages (time, form of pay ticket, etc.) ; explanation of methods of payment; the adjustment of piecework prices, subject to district or national agreements; records of piece-work prices ; deductions, etc. 4. The settlement of grievances. 5. Holiday arrangements. 6. Questions of physical welfare (provision of meals, drinking water, lavatories and washing accommodation, cloakrooms, ventilation, heating, lighting and sanitation; accidents, safety appliances, first-aid, ambulance, etc.). 7. Questions of discipline and conduct as between management and workpeople (malingering; bullying; time-keeping; publicity in regard to rules ; supervision of notice-boards, etc.). 8. Terms of engagement of workpeople. 9. The training of apprentices and young persons. 10. Technical library; lectures on technical and social aspects of the industry. IT. Suggestions for improvements in method and organisation of work; the testing of suggestions. 12. Investigation of circumstances tending to reduce efficiency or in any way to interfere with the satisfactory working of the factory. 13. Collections (for clubs, charities, etc.). 14. Entertainments and sports. 15. The provision of facilities for the employees' side of the works council (or of a departmental committee, if any) to conduct its own work. In several undertakings one of the directors gives to the works council at regular intervals a detailed review of the state of trade with special reference to the prosperity and prospects of the undertaking. The workers' representatives, and through them the general body of workers, are thus brought into contact not only with questions of productive organisation but with the broadei national and international economic factors which affect the markets, selling price and profitableness of the firm. The Committee on Industry and Trade, in referring to this practice of periodical reviews, stated that it would be a wise policy for the management to take the works council into its confidence to the utmost extent possible, and expressed the opinion that nothing would be so likely " to foster a better understanding of the problems and difficulties of business enterprise and to evoke a spirit of loyal i66 INDUSTRIAL RELATIONS IN GREAT BRITAIN co-operation in the works. This view was strongly supported by evidence tendered to us ". 1 In a few firms certain administrative powers have been conferred upon the councils. Thus in one or two firms the councils are responsible for the workshop rules, for dealing with certain breaches of discipline, and for the administration of funds established for the benefit of the workers. This extension from consultative and advisory functions to administrative duties, in which responsibility is shared by management and workers, represents a distinct step towards a higher status for the workers.2 SUMMARY AND RESULTS OF EXPERIENCE The period of most widespread interest in works councils was during the war and the early post-war years. As already stated, many councils were then formed, and the Whitley Committee recommended that they should constitute an essential part of a comprehensive system of industrial relations. From about 1921, however, with the return of more normal conditions, interest declined rapidly, few new councils were formed and many of those which had been set up during the three previous years ceased to operate. Firms with works councils now in operation represent only a small part of British industry, although in most businesses there are recognised methods, by deputations of workers or otherwise, for exchange of views between management and workers. Some works councils deal only with a few trivial matters; others provide a valuable means for the removal of grievances and for improving welfare and working conditions. A few councils, however, especially those in large progressive firms, have a wider scope and include other activities which are definitely constructive.3 Also, although most councils have only advisory functions and final decisions for 1 Final Report. Mr. B. Seebohm Rowntree states that it is the policy of his Company " to give as much control t o the workers as is consistent with full efficiency ". (The Human Factor in Business, p. 136.) 3 For example, in Studies on Industrial Relations, I, published by the INTERNATIONAL LABOUR OFFICE, Studies and Reports, Series A (Industrial Relations), No. 33, Geneva, 1930, a section on the London Traffic Combine describes the undertaking's comprehensive and effective system of councils which is operated in agreement with the trade unions and deals with a wide range of important questions. 2 WORKS COUNCILS 167 executive action rest with the management, in one or two firms executive functions of some importance have been transferred to the councils. The constitution and functions of works councils are well summarised in the following quotation from the Final Report of the Balfour Committee on Industry and Trade which had made investigations into the working of twelve successful councils selected as being representative of different types of industry and establishment. They state: " Within the selected sample we found a wide variety of form and constitution, from the fully organised joint Works Committee with its secretariat and office, to the Committee consisting solely of workpeople's representatives, with or without an employer as chairman, including a combination of the two methods in the form of a large Shop Committee consisting solely of workpeople's representatives meeting by themselves, but electing a smaller number of delegates to constitute the workpeople's side of a joint Works Committee. As a rule no importance was attached to numerical equality, questions being generally settled by agreement between the two sides. In most cases the workpeople's representatives were elected by ballot in the various departments of the works, and sometimes, but not always, membership was confined to trade unionists. . . . In all cases meetings were held at regular intervals, and this regularity was generally considered to be essential to success. The nature of the questions dealt with varied widely ; but broadly speaking it covered the whole range of ' industrial welfare ' and questions affecting workshop amenities and grievances, without, however, trenching, as a rule, on the fixing of wages and hours." There has been little support for works councils either b y the trade unions or the employers' organisations. In the engineering industry, railway transportation and in one or two industries in which Joint Industrial Councils have been set up, the trade unions have been parties to agreements by which works councils have been established. Their usual attitude, however, has been one of watchful and even suspicious neutrality, while sometimes they have shown definite hostility. The apathy shown has been due to the belief that, under the present system of industrial control, works councils can exercise little power and that they often deal only with trivial details. Few works councils have been formed as a result of trade' union initiative. Where, however, the management of a firm has proposed the setting-up of a works council, the trade unions have frequently, though not always, refrained from opposition and have sometimes given their support when they have been satisfied that no attempt would be made to undermine the trade union position. There is also wide recognition in i68 INDUSTRIAL RELATIONS IN GREAT BRITAIN the trade union movement that works councils would form an essential part of a system in which workers' control of industry would be greater than at present. Employers' organisations have also been apathetic towards works councils and consequently the initiative for their formation has rested largely with the management of individual firms. Where no works councils have been set up, the usual attitude of the management is that the results likely to be obtained would not provide an adequate return for the time, cost and energy involved in their operation. Also, there is not frequently an unwillingness to set up regular machinery which might, in fact, interfere with the complete executive freedom of the management. In firms which have established works councils, the degree of success is related to the keenness of the interest shown by management and workers, but especially by management. Where apathy has been shown the results have been meagre, but where there has been determination on both sides to make the councils a success valuable results have usually been obtained. The Balfour Committee on Industry and Trade expressed the opinion that the most essential conditions for a successful works council " are not the perfection of its proper constitution, still less its observance of uniform rules, but the existence of a sufficiently wide field of questions within its competence to provide material for regular meetings, and the presence in the works of persons who are keenly interested in promoting co-operation and good feeling. Perfunctory meetings at irregular intervals, with unattractive agenda and slender practical results, will quickly lead to failure ". 1 The Committee found that one of the commonest reasons for the failure of councils which had ceased to exist was the want of sufficiently important functions and subjects for consideration. Even where interest is adequate, difficulties are frequently encountered during the first year or two of a council's activity, largely upon questions of scope and method, but subsequently the machinery works more smoothly as experience accumulates and as mutual understanding develops between the two sides. The general verdict of the management of a number of large firms where works councils have been in operation for several years—and the verdict appears to be supported by the workers— is that, although many of the results are intangible, the councils 1 Final Report. WORKS COUNCILS 169 have made a valuable contribution to the improvement of relations, and that both welfare and efficiency have increased. Works councils are superior to the system of occasional consultation between management and a deputation of workers, as the latter tends to be restricted largely to complaints and grievances whereas works councils provide a basis also for constructive activities. Questions of discipline and complaints are settled more systematically and in accordance with principles of justice consistently applied. Esprit de corps is developed, the management have a recognised channel for the explanation of their problems and for making known any changes which they propose in conditions and methods, and the workers can make their points of view known to the management. Grievances can be dealt with openly at an early stage instead of smouldering under the surface. The councils thus act as a most efficient safety-valve. They exercise a restraining influence both on managers and men because of the knowledge that unsatisfactory practices would come out for discussion in the full light of day. Works rules and discipline often become a matter of mutual concern and joint responsibility. Many of the councils have offered a means whereby the workers' representatives can secure an insight into problems of business administration and a wider outlook which is of value both to the worker and to the firm. This insight, together with information supplied at regular intervals about the state of trade and the prosperity of the undertaking, has tended to create interest in improved methods and to act as a check upon hasty and illconsidered action by the workers. With a better understanding of the conditions of business success, a greater sense of responsibility has developed among the workers; this has enabled some firms to increase the number and importance of the questions in which control is shared between management and workers. 1 Also many useful suggestions have been made b y the workers for the elimination of waste and for improvements in tools, productive methods and organisation. I t must be repeated t h a t these results on the constructive side have been obtained by only a small minority of works councils and that most firms are satisfied if the councils provide effective means for dealing with grievances and are successful in matters 1 See, for example, B. SEEBOHM ROWNTREE : The Human Factor in P- 154- Business, 170 INDUSTRIAL RELATIONS IN GREAT BRITAIN of welfare and recreation. Nevertheless the fact that a number of councils have contributed during a period of fifteen years or more to an improvement of industrial relations within the factory and that several councils have been able to show valuable constructive results is leading to some increase of interest in the system. CHAPTER VI INDUSTRIAL WELFARE THE attitude towards industrial welfare work in Great Britain is at present in a state of transition. Some years ago many employers took a narrow view of its scope and purpose. They regarded it as being limited to a few measures for the convenience and comfort of workpeople, and their point of view was paternalistic and almost philanthropic. More recently, however, investigation and experience have shown that there is an intimate relation between working conditions and the workers' efficiency, and many progressive employers now recognise that welfare work, widely interpreted, is an essential part of business management. Its scope has, therefore, been greatly enlarged and it is now sometimes defined so as to be almost synonymous with labour management. 1 There is growing support among British business men for the conclusions reached in The Human Factor in Business, published in iç;2'5, by Mr. B. Seebohm Rowntree, who had been Director of the Welfare Department at the Ministry of Munitions during the war. He claims that the cost of welfare schemes is more than compensated by improvements in industrial relations and efficiency, and that, far from being an expensive luxury, the development of wide measures of welfare is a necessity under modern conditions if a business concern is to attain the greatest success.2 " As industry becomes every day more mechanised, standardised and repetitive, the need for welfare work, that is the humanising of conditions of employment, becomes more necessary." 3 On the other hand, the trade union movement is suspicious of certain types of welfare and of some of the motives for which they are introduced. Industrial welfare in its widest sense is considered in Great 1 Certain questions, e.g. the use of wage incentives, which are usually regarded as outside the scope of industrial welfare, are, however, important parts of labour management. 2 The Human Factor in Business, p p . 171-173. 3 H O M E O F F I C E : Welfare and Welfare Supervision in Factories, p. 4. Welfare Pamphlet No. 3. 172 INDUSTRIAL RELATIONS IN GREAT BRITAIN Britain to include any arrangements of working conditions, organisation of social and sports clubs, and establishment of funds b y a firm, which contribute to the workers' health and safety, comfort, efficiency, economic security, education and recreation. Frequently the workers are consulted about and participate in the operation of the schemes. To specify in greater detail, the following subjects are included within the scope of welfare work: x i. Activities within the Factory (a) General well-being of the worker—supply of drinking water, messrooms and canteens, protective clothing, cloakroom, washing and sanitary conveniences, changing rooms and baths (for some industries and occupations), general amenities. (b) Health—ventilation, removal of dust, heating, lighting, medical supervision. (c) Prevention of fatigue—length of working day, rest intervals, facilities for sitting, labour-saving appliances. (d) Safety—prevention of accidents, first-aid and ambulance. (e) Fitting the worker to the work—selection, training, transfer and promotion. 2. Activities outside the Factory (a) Education and recreation—lectures, clubs, sports. (è) Financial—benevolent, thrift and pension schemes. It is proposed to deal with some of the above subjects in this chapter and to reserve others for treatment in the following chapter on " Labour Management ". It must be emphasised, however, that in the present stage of development in Great Britain any division of subjects between " Industrial Welfare " and " Labour Management " is largely arbitrary. There is also a close connection between the subject-matter of these two chapters and that of Chapter V (Works Councils) since in many undertakings those responsible for labour management use the councils as a means for consulting representatives of the workers before introducing changes in working conditions and other matters affecting the workers; also welfare schemes are frequently operated by or in association with works councils. I n the present chapter accounts are given of statutory welfare requirements, and of voluntary measures for promoting the general well-being of workers (i (a) above), for facilitating social, educational and recreational activities and for establishing benevolent, thrift, pension and other schemes which provide financial benefits (2 (a) and (b) above). Labour 1 See the range of subjects given in Home Office Welfare Pamphlet No. 3. INDUSTRIAL WELFARE 173 co-partnership and profit-sharing are included with the financial schemes. The following chapter deals with voluntary methods adopted by management, often on the basis of experiment and scientific investigation, for the selection and training of workers, improvement of health and safety, and the prevention of fatigue (1 (b), (c), (d), and (e) above). It also gives an account of research in these subjects, and of exchange of experience between labour managers. The Institute of Labour Management, which was known until 1931 as the Institute of Industrial Welfare Workers, is described in that chapter among organisations which facilitate such exchange of experience. On the other hand, the Industrial Welfare Society is dealt with in the present chapter, although many of the problems of labour management are included within the range of its activities.1 I Statutory Requirements Statutory welfare consists of legislative provisions to secure minimum standards of health, safety and well-being of workers, and these are mainly defined in the Factories Act, 1937. This Act, which consolidated and amended earlier legislation, lays down minimum requirements for temperature, ventilation, lighting, sanitation, cleanliness, removal of dust or fumes, and space per worker, adequate means of escape in the event of an outbreak of fire, and the fencing of dangerous machinery and other equipment in factories and workshops. Among special requirements for the employment of women is the provision, the application of which is limited to London and Scotland only, that women shall not be employed within four weeks after giving birth to a child; this is a much lower standard than that set by the Draft Convention of the International Labour Organisation. The Act also empowers the Home Office to issue special regulations for dangerous trades, it prohibits the use of white phosphorus in the manufacture of matches, and prohibits the employment in any factory of women and young persons in certain processes connected with lead manu1 The title of the Society's periodical is Industrial Management. Welfare and Personnel 174 INDUSTRIAL RELATIONS IN GREAT BRITAIN facture. A number of the regulations are designed to reduce the risk not only of accident but of industrial disease, e.g. anthrax (from hides, skins, wool and hair), lead poisoning, and silicosis (from cutlery grinding, etc.). The use of special protective clothing, gloves, gauntlets, goggles or respirators is required in various occupations. The welfare section (Part III) of the Factories Act, 1937, requires certain arrangements to be made for the well-being of factory workers. An adequate and conveniently accessible supply of wholesome drinking water shall be provided. Other amenities to be provided include suitable washing facilities (from 1 July 1939 1), cloakroom accommodation, and seats for female workers. The Home Secretary may make special regulations requiring additional arrangements to be made for the welfare of workers employed in special classes of work. The Act also requires the provision in all factories of adequately stocked and readily available first-aid boxes or cupboards, with a trained person in charge. Various Acts of Parliament apply the provisions of the International Labour Conventions on night work of women and young persons, minimum age (fourteen years) for admission of children to industrial employment, minimum age for employment of children at sea, minimum age for employment of young persons as trimmers and stokers, and compulsory medical examination of children and young persons employed at sea. The Home Office is responsible for ensuring the application of the statutory welfare provisions mentioned above, and the Home Secretary is given wide powers to restrict, modify or extend the provisions of the Factories Act. The factory inspectorate has succeeded in securing a considerable measure of co-operation by the employers, with the result that, under previous legislation, higher standards of health, safety and welfare have been progressively attained. Co-operation is effected both in the daily contracts between inspectors, employers and workpeople in the factories and in consultations between the inspectorate and representative employers and workers in the trades concerned when special regulations are being framed. In several industries the Joint Industrial Councils have taken an active part in promoting improved standards and in securing better compliance with statutory provisions. 1 For persons employed in processes in which lead, arsenic or any other poisonous substance is used or in which there is liability to an affection of the skin the provision of washing facilities is required after r July 1938. INDUSTRIAL WELFARE 175 Miners' Welfare Fund Mention must be made of the special statutory arrangements for the welfare of workers in the coal-mining industry. The Mining Industry Act, 1920, provided for the establishment of a Fund, derived from a compulsory levy of iif. a ton of coal output, to be used for " purposes connected with the social well-being, recreation, and conditions of living of workers in or about coal mines, and with mining education and research ". Subsequently the basis of revenue was changed to its present one of a levy of y2d. a ton of coal output together with a levy of one shilling in the pound on all mining royalties. The Annual Report for 1936 showed that between 1921 and the end of 1936 the Fund had received a total of £15,976,000, and that all but about £500,000 had been allocated for specific schemes. The Fund is administered by a Central Miners' Welfare Committee appointed by the Board of Trade. The Committee is representative of the Mining Association and the Miners' Federation, with an independent chairman ; it is advised by District Committees, twenty-five in number, consisting of representatives of the owners and management of the coal mines in the district, and an equal number of representatives of workmen in and about such mines. Under the Mining Industry (Welfare Fund) Act, 1934, the Miners' Welfare Committee is required to make two preliminary appropriations each year from the proceeds of the output levy : (1) such sum as will, together with the proceeds of the levy on royalties for each year, amount to £375,000, which is used for providing pithead baths, with accommodation for drying men's working clothes, and canteens; and (2) a sum of £20,000, which is applied to research into methods of improving the health and safety of workers in and about coal mines. The remainder of the income of the Fund is divided in the proportion of four-fifths for District Funds, to be used locally, and one-fifth for the General Fund. The General Fund has been used mainly for research on health and safety and for higher mining education.1 More than one-half of the amounts assigned for district expenditure have been used for recreation purposes, chiefly the provision of sports grounds and social institutes. Most of the remainder available for the districts has been used for health purposes, mainly the provision of convalAn annual grant is made to the Safety in Mines Research Board. 176 INDUSTRIAL RELATIONS IN GREAT BRITAIN escent homes, hospitals, ambulance and nursing services, and a small proportion has been spent on junior education.1 The provision of pit-head baths demands special consideration. In this matter British practice has hitherto been less advanced than that in some other countries. The need for adequate provision has, however, long been recognised, but until recent years progress was slow. The inadequacy of accommodation was indicated by data published by the Royal Commission on the Coal Industry (1925). The Commission's Report stated that up to the end of December 1924 only some thirty pits had been equipped, or were about to be equipped, with bath accommodation for miners. " On the basis of ten men to one shower-bath, the accommodation so far provided is sufficient for a maximum of 20,000 men, or roughly 2 per cent, of the total number employed." 2 Up to the time of the Royal Commission's enquiry the Miners' Welfare Committee had regarded the general establishment of pit-head baths as being beyond their scope, but had allocated nearly £116,000 for the installation of baths in selected places in the hope of encouraging their provision elsewhere. The Royal Commission expressed their conviction that the effect of the general establishment of pithead baths upon the health and comfort of the miners, upon the well-being of their wives and families, and therefore upon the general contentedness of the mining population, would be so considerable as to make this a subject which should engage immediate and effective attention. They recommended that the work should be undertaken by the Miners' Welfare Fund which should be increased by a contribution from mining royalties.3 Effect was given to this recommendation by the Mining Industry Act, 1926, which provided that the proceeds of a special levy called the Royalties Welfare Levy of one shilling in the pound on the rental value of rights to work coal and of mineral way-leaves should be paid to the Miners' Welfare Committee and used for the present to establish pit-head baths and facilities for drying clothes.4 This 1 Details of expenditure from the Miners' Welfare F u n d are given in the Annual Reports of the Miners' Welfare Committee. U p to the end of 1936, ¿5,300,000 of the whole Fund had been allocated for indoor and outdoor recreation, ¿3,400,000 for convalescent homes, hospitals, ambulance and other health services, and about ¿2,000,000 for education and research. 2 Report of the Royal Commission on the Coal Industry (1925), Volume I, p. 205 (Cmd. 2600). 3 Ibid., p p . 208-209. 4 This levy'is included at t h e beginning of this section as p a r t of the revenue of the Miners' Welfare Fund. INDUSTRIAL W E L F A R E 177 has resulted in much progress. During the years 1927-1936, a total of more than ¿4 million had been spent on pit-head baths ; and by the end of 1936 baths had been completed or were under Construction for the accommodation of over 300,000 miners. It is intended to accelerate the rate of construction so that by the end of 1944 pit-head baths will have been provided for practically all the workpeople employed in the industry. II Voluntary Welfare While in very many firms welfare activities are limited largely or entirely to the minimum of legal requirements, in others voluntary measures, often far in advance of statutory standards, have been introduced which contribute to the health, well-being and economic security of the workers and to the improvement of relations between workers and management. Successful welfare schemes had already been instituted b y a small number of firms during the nineteenth century, but no great progress was made until the years of the war when abnormal conditions necessitated special measures for the welfare of workers. Some war-time welfare measures were, indeed, compulsory, being taken in compliance with Orders issued by the Home Office for the health and comfort of munition workers, especially women and juvenile workers. Voluntary measures were, however, taken by large numbers of firms, mainly as a result of advice and assistance given by the Welfare Department of the Ministry of Munitions and by the Home Office. Encouragement was provided by allowing the employer to charge much of his welfare expenditure against excess profits, and by other methods of financial relief. Many firms undertook capital expenditure (e.g. for canteens, clubs, recreation grounds) and appointed supervisors to look after the welfare and comfort of workers in the factories and to provide opportunities for social activities and recreation during the workers' leisure time. With the return to peace-time conditions and the advent of trade depression at the end of 1920, voluntary welfare suffered a marked setback. But the experience which had been gained during the war had shown progressive employers that welfare was not merely of value during exceptional circumstances but also that under 12 178 INDUSTRIAL RELATIONS IN GREAT BRITAIN normal conditions it could make a valuable contribution to industrial efficiency. Thus the Committee on Industry and Trade stated that : " It is one of the beneficial legacies of war-time experience that there is a more widespread and intelligent appreciation of the social and economic importance of factors which diminish fatigue and enhance the fitness of the worker and improve the amenities of the workplace." x Consequently during recent years progress has been resumed and the principles underlying welfare work have been steadily gaining acceptance.2 Although the activities of the Welfare Department of the Ministry of Munitions were terminated shortly after the war, the State, through the Home Office, has continued to encourage employers to introduce or extend voluntary welfare work.3 Systematic efforts in this direction have also been made by the Industrial Welfare Society, the Institute of Industrial Welfare Workers (now the Institute of Labour Management), the Industrial Health Research Board and the National Institute of Industrial Psychology. In several industries the Joint Industrial Councils have given considerable attention to industrial welfare, and their recommendations have resulted in an extension of welfare work in many firms.4 Detailed figures are not available to show how far these efforts have been successful. In 1926 the number of firms which were known by the Industrial Welfare Society to have schemes in operation was about 1,30o.5 Since then considerable progress has been made. In his Annual Report for 1929 the Chief Factory Inspector stated : " In spite of trade depression and other adverse circumstances, a great deal of progress is reported in the provision of welfare amenities. This progress is most marked in the case of new firms or firms moving from congested town areas into the country, or from the City of London into the suburbs." 6 After 1929 progress was interrupted for the five years of the world depression in consequence of the inability or unwillingness of many firms to undertake the necessary costs, but since 1934 the advance has been resumed. Among firms which have introduced welfare schemes there is 1 Survey of Industrial Relations, p. 26. Home Office Welfare Pamphlet No. 3, p . 3, and Survey of Industrial Relations, p . 190. 3 See Welfare Pamphlets issued by the Home Office. 4 The position during the years 1917 to 1922 is indicated in the Report on the Establishment and Progress of Joint Industrial Councils, published in 1923. Subsequent developments are reviewed in the annual reports of the various Councils. 5 Survey of Industrial Relations, p. 191. 6 Cmd. 3633, p . 54. 2 INDUSTRIAL WELFARE 179 wide variety in the number and types of schemes adopted. In many firms welfare work is limited to a few measures for the convenience of workers, e.g. a room where they can eat their midday meals, cloakroom, washing and sanitary accommodation. In some firms, however, especially those employing large numbers of workers, most or all of the schemes described in the present and the following chapter are in operation. Certain firms " appear to aim at the creation of a model community in which the workpeople shall find full scope for their physical, mental and moral development. Not only are the best possible arrangements made for the comfort of the workpeople inside the factory, and the work organised so as to involve the least possible strain, but all such matters are being considered in consultation with the representatives of the employees." 1 Outside the factory facilities are provided for a wide variety of social, educational and recreational activities. These firms endeavour to secure from their workers " something of the same kind of loyalty that attaches to a college ".3 They are, of course, very exceptional, but their initiative and the results of their experience are of great value in pointing out the lines along which progress may be made. The cost of welfare schemes in different firms gives some indication of variations in the extent to which measures have been adopted. Information is available for only a few firms. Data obtained by the Industrial Welfare Society from twelve firms show an average running cost for welfare of £1 per worker per annum. This covered such items of expenditure as the salaries of the welfare supervisor and the ambulance-room attendant, the groundsman's wages and the firm's contributions to the benevolent fund and education scheme. It did not include allowance for capital expenditure, or the workers' contributions (often 2d. to /\d. per worker per week) to the schemes. A cost of £1 per worker per annum would represent less than 1 per cent, of the total wages bill. The cost in the twelve firms ranged from 10s. or less to £2 or more per worker per annum. 3 In firms which have developed elaborate and complete schemes of welfare along the lines indicated in the preceding paragraph the cost is considerably greater. Some firms contribute an amount equal to as much as 8 or 10 per cent., or even more, of their wages bill 1 Survey of Industrial Relations, p . 192. Ibid., p . 192. INDUSTRIAL W E L F A R E SOCIETY : The Introduction p . 36. 2 3 of a Works Welfare Scheme, i8o INDUSTRIAL RELATIONS IN GREAT BRITAIN towards the cost of their welfare schemes. The costs are highest in firms which have established old-age pensions, sickness benefit schemes and paid holidays. Thus, Mr. B. Seebohm Rowntree has estimated that a sum equal to between 3 and 4 per cent, of the total wages and salaries bill of Messrs. Rowntree and Co., Ltd., is necessary to cover the annual cost of its financial schemes which afford to the workers a substantial measure of economic security against sickness, invalidity, unemployment, old age and death; * to this should be added the cost of many other welfare schemes introduced by this firm. The cost of a week's annual holiday with pay, which a considerable and growing number of firms and industries have introduced, is about 2 per cent, of the annual wages bill. 2 On the subject of the costs of industrial welfare it is relevant to quote the following passage from a speech by His Majesty the King, when as H.R.H. the Duke of York he was President of the Industrial Welfare Society: " To-day the question for employeis is not whether they can afford to adopt this or that form of welfare work, but rather whether they can possibly afford to do without it." ARRANGEMENTS FOR THE GENERAL W E L L - B E I N G OF W O R K E R S Many arrangements for the general well-being of workers are directly related to health or to recreation, education and social activities, and these are dealt with either in the next section of this chapter or in the following chapter. Attention is here directed to various other arrangements made for the well-being and convenience of the workers. Along broad general lines it is becoming increasingly recognised that, as the worker must spend so much of his lifetime in the factory and as he is subconsciously influenced by his surroundings, efforts should be made, as far as possible, to introduce reasonable brightness and attractiveness in place of the drab depression so often found in factory buildings. For obvious reasons the best results have been obtained in new buildings in rural and suburban areas, but even in old city factories improvements have often been made. External surroundings as well as internal appearance have been made more pleasant, and the phrase " The Factory in a Garden " which has been used in describing one works might also 1 B. SEEBOHM ROWNTREE: The Human Factor in Business, p. 126. In addition to a week's holiday with p a y each year, many firms pay their workers for six public holidays each year. 2 INDUSTRIAL W E L F A R E i8i be applied appropriately to others. 1 Several undertakings with large factories in suburban areas have not merely given an attractive internal and external appearance to the works itself, but have taken the initiative in the development of model communities, with a high standard of housing and provision of extensive facilities for social activities, education and recreation. The best-known and most complete of these " industrial " communities associated with the undertakings are Bournville, developed by Cadbury Bros., Ltd., and Port Sunlight by Lever Bros., Ltd. To assist in the organisation and management of arrangements for the convenience and well-being of workers within the undertaking and for leisure-time activities, several hundreds of firms, employing more than 400 or 500 workers, have appointed welfare supervisors or superintendents. In large undertakings several persons are appointed for this work, some being responsible for welfare inside the factory, others for recreation and social activities, some deal only with welfare for men, others for women, and still others for youths and girls. Leisure-time activities are reviewed in the next section. The provisions most frequently made for the convenience of the worker qua worker include cloakrooms, canteens, drinking water, washing arrangements, and rest rooms. The best cloakrooms are fitted with a separate hanger for each worker, heat can be turned on so that damp outdoor clothing is dried, and methods or organisation and control are adopted to prevent pilfering. As already stated, drinking water must be provided in all factories; at present the ordinary tap is much more frequent than vertical or oblique jets or fountains, which are preferable as cups or glasses are not required. Wash-bowls or troughs, which become obligatory in 1939, are already fairly common and in some firms hot and cold water are supplied. Where many workers take their midday meal at the works it is convenient if washing accommodation is located near or on the way to the canteen. Reference has already been made to pit-head baths for coal miners. A small but growing number of manufacturing firms also provide baths for persons engaged on specially dirty processes. Experience has shown that such provision, together with accommodation for the worker to change into clean clothes before going home, reacts favourably upon his self-respect and upon 1 The description has been applied to the factory of Cadbury Bros., Ltd., at Bournville. i82 INDUSTRIAL RELATIONS IN GREAT BRITAIN the type of worker who will undertake this class of work, and is a relief from the domestic point of view. A growing number of firms, especially among those employing considerable numbers of women, provide rest rooms for the use of workers who are temporarily unwell. These rooms are frequently near to the ambulance room or works surgery and are supervised by trained nurses. Turning now to the question of canteens or dining-halls, these are not merely convenient for the workers but conduce to efficiency by avoiding the fatigue often involved to the worker in rushing home for a midday meal and by ensuring a reasonable standard of nutrition and a hot meal, which is particularly desirable in cold weather. The amount of accommodation required depends not only on the number of workpeople employed but also their habits and the distance of their homes from the factory. Some large works provide midday meal accommodation for several thousands of workpeople. In some factories a separate room is provided for each sex, while others have one room for adults and another for juveniles. There is growing recognition that the rooms should be bright and comfortable so that the worker may secure the maximum rest and recreation during the meal interval. With this object, rooms are often simply but attractively decorated and furnished, small tables for four, six, or at the most eight people are replacing the long benches, while instead of forms without backs, comfortable chairs are being introduced. Music is sometimes provided, by radio or otherwise, during the meal, while in several works concerts or lectures are given periodically in an adjoining room before work is resumed. Experience has shown that an open space, especially a garden or lawn, near the canteen, is much appreciated for walking, or even for a short game after the meal. Canteens or dining-halls are provided and maintained by the companies.1 They are often suitable for use also for concerts, dancing and other social activities in the evenings. The firm usually pays for equipment, lighting and heating, while some firms pay a subsidy towards running expenses. Generally, prices are charged to the workers to cover the cost of food, cooking arid service, cleaning, breakages, and, in many firms, the salary of the manageress. In other words the food is served at cost price, and some firms claim that the workers can obtain a good meal 1 In a considerable number of works t h e canteens were constructed out of excess profits during the war. INDUSTRIAL W E L F A R E 183 at as low, or even lower cost than in their own homes. About gd. to is. is a usual price for a meal consisting of meat, vegetables and pudding. Some firms make a small reduction to workers who take weekly tickets. Workers usually are not required to take the full meal, but may make purchases to supplement food which they have brought from home. Meals which the workers bring with them are usually heated free or for a nominal charge, and free boiling water is supplied. In addition to supplying meals or refreshments at the midday interval, many canteens provide tea and biscuits or other similar refreshments during a rest pause in the morning and afternoon. These may be served in the canteen or brought round the workrooms on trolleys, and a small charge is usually made. Food may also be supplied in the evenings for persons working overtime and, frequently, refreshments are provided for sports and social meetings. Canteens are usually managed by the firm, sometimes with the assistance of a workers' advisory committee which makes suggestions about prices, kind of food, etc., and which, in certain firms, is accorded an opportunity to examine the accounts. 1 RECREATION, SOCIAL ACTIVITIES AND EDUCATION The activities here described differ from those reviewed in the previous section in being leisure-time facilities outside the working day. Their object is to meet the needs of the workers for recreation and amusement and to promote harmony and good fellowship among them. They vary widely according to the policy and size of the firm, whether it is located in an urban, suburban or rural district, and whether it is near to, or remote from, the workers' homes. The general practice of large numbers of firms is to review existing facilities offered by public bodies or voluntary associations in the neighbourhood, and, if these are inadequate, to co-operate with the workers in meeting their needs. In this way overlapping and duplication are avoided. Also, the firm endeavours only to give a lead in meeting the real needs of the workers instead of offering facilities for which there is no great demand, and which might even be resented as an attempt to interfere with the workers' free use of leisure time. The workers are usually closely associated 1 Pamphlets on factory canteens and messrooms have been issued in the Home Office Welfare Series. i84 INDUSTRIAL RELATIONS IN GREAT BRITAIN with representatives of the management in the organisation of these leisure-time activities and contribute to current expenses. Capital expenditure is almost always borne by the firms, and many of them regard this as a form of " prosperity sharing " supplementary or alternative to ordinary profit-sharing by money payments. Sport The most characteristic of the leisure-time arrangements made by British firms is the provision of facilities for outdoor recreation. In several thousands of firms playing-fields are provided and teams organised, some of them having begun these activities before the close of the nineteenth century. In a number of firms the facilities are limited to the provision of a football ground and, perhaps, one or two tennis courts and a bowling green, but in a considerable number of large undertakings the opportunities are much more extensive. The range of facilities is indicated in part by the area available for games, this being only a few acres in some firms but extending to more than ioo acres in others, equipped with a large pavilion, dressing-rooms and shower-baths, and laid out to meet the requirements of the various games. In one of the most complete schemes (Cadbury Bros., Ltd.), there are nearly twenty football pitches, a similar number of cricket pitches, nine or ten hockey pitches, more than forty tennis courts, several bowling greens, together with an open-air swimming bath, and facilities for athletics and net-ball, while fishing, cycling, harriers, rambling, and other activities are organised. On a Saturday afternoon this firm has nearly a hundred teams, comprising a total of 650 to 1,000 players from among the workers, engaged in the various games; in one year, apart from casual games, 221 teams took part in 2,218 matches, involving over 2,000 players.1 The Gas Light Sports Association, organised for a number of undertakings in the gas and light industry in the London area, has about forty works and office clubs with nearly 8,000 members, including a large playing membership. These and many other organisations act in accordance with the motto " Players, not spectators ", and a valuable method of ensuring a large number of participants has been the organisation of inter-departmental competitions. Inter1 See The Factory and Recreation, Bournville Works. issued by the Publication Department, INDUSTRIAL W E L F A R E 185 works football and other competitions are also organised in many districts as well as matches with other clubs within easy travelling distance, and these games and also the inter-departmental competitions are valuable in the development of esprit de corps. The ground and pavilion are provided and maintained b y the firm, which also usually makes an annual contribution to current expenses and, in the larger undertakings, may pay the whole or part of the wages or salaries of groundsmen, the club secretary and other persons employed to organise the various activities. Membership, which is voluntary, involves the payment of contributions, the proceeds being used mainly for the provision of equipment. A practice in many firms is for a small contribution, e.g. Y2d. or id. per week, to be made to a general sports fund ; in some firms the contribution is based on earnings, e.g. id. per £1 received in wages. Not infrequently the contribution covers membership both of the sports club and of a social club or institute for indoor amusements. Usually, in addition to the general contribution, each member makes a special contribution of id. or 2d. per week to the sports sections (football, cricket, tennis, etc.) in which he or she actively participates. In a number of large firms separate clubs, with different rates of contributions, are organised for men, women and girls, and youths. Sports clubs are usually managed along democratic lines. In many medium-sized and large firms a central committee decides upon general policy and finance and co-ordinates the work of the separate sports sections; it consists of representatives of the management together with representatives of the workers elected by the separate sections. Sometimes the control of general policy is undertaken b y a committee of the works council. Separate committees largely or entirely elected b y members specially interested are set up for the organisation of each sport. In addition to sports, many firms provide facilities for other outdoor activities. One of the chief is the offer of allotments at low rents and the encouragement of the allotment holders b y co-operative purchase of seeds and other requisites, b y awarding prizes for the best plots, and by holding vegetable, fruit and flower shows with prizes for the best exhibits in various classes of produce. In some firms several hundred allotments are rented to the workers. Week-end camps and other excursions are organised especially for youths, these being facilitated in firms working a five-day week or having a whole Saturday free once a month. Holiday camps i86 INDUSTRIAL RELATIONS IN GREAT BRITAIN and tours, including visits abroad, are also arranged by some firms.1 Social Activities Indoor recreation and social activities are often organised in close association with, or along similar lines to, outdoor games. In some firms social activities are few, being limited mainly to an occasional dance or concert held in the works canteen. In many large firms, however, social clubs with a wide varitty of activities are organised. Well-equipped and furnished club premises are usually provided in or near the works, or sometimes in a central position easily reached from the workers' homes. These often include a hall suitable for concerts, lectures and dances, a refreshment counter, a billard-room, reading-room and library mainly of fiction and.other popular literature. The cost of the premises and their maintenance, and part of, or all, the cost of furniture, equipment and management are borne by the firm. Membership is voluntary; those workers who participate are usually required to pay a small regular contribution to general expenses and special contributions of 2s. or 3s. a year for each sectional activity in which they join. Responsibility for organisation is shared by representatives of management and workers. Among the chief activities are concerts, dances, whist drives, billiards and other games. In some firms special societies are formed for music (choral and instrumental), dramatic art, folk dancing and photography. Classes in dress-making, cookery and nursing are often organised for girls, and in woodworking, metalworking and other crafts and utility hobbies for boys. Exhibitions of arts, crafts and hobbies are held in some undertakings. Opportunities are frequently given to the workers' families and sometimes friends to attend or take part in various activities. In certain large firms one or more full-time supervisors are appointed to assist in the work of organisation. Education Turning now to the provision of educational facilities, it is intended to deal here with general education only, leaving voca1 Many firms grant an annual holiday of a week or more during the summer. I n an increasing number of firms paid holidays are accorded, the duration being sometimes determined by length of service. Some firms reduce the payment if a worker's attendance or time-keeping has been unsatisfactory during the year. INDUSTRIAL WELFARE 187 tional training schemes for consideration in the next chapter. The former is mainly, though not entirely, a voluntary leisuretime activity, whereas much vocational training is done during working hours. It is impossible, however, to separate completely these two branches of education, and the present review should therefore be read in conjunction with the account given of vocational training. Schemes which are designed to widen the general outlook may be of a vocational value equal to or greater than narrowly specialised courses of instruction. In practice the two branches are frequently organised in close association. Educational courses are often arranged in connection with social clubs and, indeed, some of the classes and societies mentioned in the preceding paragraph might have been included equally well among educational facilities. There is among considerable numbers of British workers a keen appreciation of the value of education and a desire to take advantage of any facilities offered. " This straining towards culture (for want of a better word) on the part of the worker is real, and side by side with the story of industrial disputes must be read the story of his efforts in this direction, for they are active in many places. Industry itself can help him greatly, and he has learnt not only to trust but value its overtures through the facilities it is providing." 1 Firms assist the worker by advice, encouragement to use educational courses in the neighbourhood, and by organising classes to supplement these courses. The development of definite educational work in industrial and commercial undertakings is one of the objects of the Association for Education in Industry and Commerce. While certain types of vocational training, e.g. apprenticeship, have a long history, one need go back for little more than half a century to find the earliest efforts at imparting a broader education within the confines of a factory. " Nor was it before the beginning of the present century that any great interest was aroused in this type of education, or any great importance attached to it. At the present time there are perhaps one hundred British firms which can claim to carry on systematic educational work, but the number having a distinct Education Department is certainly much smaller." 2 On the 1 Work and Play, issued by the Bournville Publication Department, p. 43. Education in the Factory : An Account of the Education Schemes of Cadbury Brothers, Ltd., by R. W. FERGUSON, B . S C , A.R.C.S., issued by the Publication Department, Bournville Works. 2 i88 INDUSTRIAL RELATIONS IN GREAT BRITAIN other hand, many more firms give encouragement especially to their young workers to pursue courses of study, e.g. by paying fees for successful attendance at evening classes. Firms with the most developed educational schemes appoint a full-time education adviser, sometimes with assistants, for the purposes indicated above, as well as to organise vocational training. A few firms have even erected and maintain school buildings. Suggestions of the workers about educational work are sometimes made through a committee of the works council. In outlining the facilities offered by various firms a distinction must be drawn between those for young persons and those for adults; classes for young persons may be divided into day courses and evening courses. Some firms arrange that all their employees under sixteen or eighteen years of age shall attend school during the day-time for one or two half-days per week, and wages are paid for this time at the usual rates; the subjects taught usually include arithmetic, English language and literature, manual work and gymnastic exercise. Evening classes in similar subjects are organised for their junior employees by some firms, sometimes with separate courses for youths and girls, but the practice is much more common to encourage attendance at evening schools, technical and commercial colleges in the district. This often brings the firm into association with the local education authorities. Many firms return the fees to students who have attended 75 or 80 per cent, of the meetings of specified classes and whose work has been satisfactory. Prizes are also offered, scholarships are provided to cover part of, or all, the cost of full-time attendance at colleges and universities, and fees are returned to candidates who have been successful in public and professional examinations. Mention may also be made of camp schools and educational tours which a few firms have organised. For adult workers the educational facilities usually consist of popular lectures held monthly during the winter, and smaller groups for the study of such subjects as history, economics, literature and psychology along the lines of Workers' Educational Association classes. In a few firms arrangements are made for selected workers to attend summer and week-end schools and conferences organised by such bodies as the Co-operative Union, the Workers' Educational Association, and the League of Nations Union. INDUSTRIAL W E L F A R E Works 189 Magazines Mention may be made of the practice adopted by several hundred firms to publish works magazines on subjects of interest to their workpeople. These include personal news about employees, information about the sports, social and educational activities of the works, summaries of works council affairs, and data about the regulations and financial position of savings, pension and other funds. Photographs are often a prominent feature. Usually the workers are encouraged to contribute articles and illustrations. Some magazines also review the business situation and technical matters, and are used as an advertisement to customers as well as for the interest of the workers. Management m a y use the magazine as a suitable means of making certain communications to the workpeople. Magazines are usually issued monthly or quarterly. The costs of printing and publication are borne largely or entirely by the firm. In some firms no charge is made, but in others the workers pay id. or 2d. per copy. * * The activities described in the foregoing sections, though limited to a minority of firms, nevertheless represent a considerable contribution to the utilisation of the workers' leisure. Against the objection that the workers continue to meet the same people with whom they are associated during the day's work may be set the advantage of providing facilities which would not otherwise be available ; there is also ease of organisation, and often convenience on account of nearness to the workers' homes. Although it is impossible to measure the value of these activities there is ample evidence that they are appreciated by the workers, while there is a wide measure of agreement that the firms benefit by greater efficiency and improved relations. FINANCIAL SCHEMES Five chief types of financial schemes are here described: (1) (2) (3) (4) (5) Labour co-partnership and profit-sharing; Pension schemes; • Savings schemes; Sickness and benevolent schemes; Unemployment benefit schemes. ico INDUSTRIAL RELATIONS IN GREAT BRITAIN Labour co-partnership and profit-sharing schemes, which are dealt with in some detail, differ from pension, savings, unemployment benefit and benevolent schemes. They are designed to contribute towards the improvement of industrial relations by associating the worker directly with the prosperity of the firm. They provide for a better sharing by the workers in the prosperity of their firm than is possible where only standard wages common to all firms in the industry and district are paid. They also serve as savings schemes if the interest payments or shares in profits are accumulated instead of being paid out year by year to the workers. The main object of the other schemes described in this section is to reduce to a greater or less extent the economic insecurity of the worker. They provide for old-age pensions, encourage systematic saving for superannuation, and afford some safeguard against hardships resulting from sickness, invalidity and unemployment. They supplement the measures of State insurance. Labour Co-Partnership and Profit-sharing 1 Schemes of profit-sharing or co-partnership have been established in a few of the more progressive firms in many different industries. The schemes have been introduced almost invariably on the initiative of the firms, though frequently in consultation with their workpeople. During the twenty years immediately preceding the great depression there was an almost uninterrupted growth in the number of firms practising profit-sharing or co-partnership, and also in the number of workpeople entitled to participate. The numbers of firms and of workpeople, however, represented only a very small fraction of the total numbers in the country, while, 1 This section is based mainly on data given in the Ministry of Labour's Report on Profit-sharing and Labour Co-partnership in the United Kingdom, published in 1920 (Cmd. 544), in the Survey of Industrial Relations of the Committee on Industry and Trade, in articles on the subject published annually in the Ministry of Labour Gazette and in publications of the Industrial Co-partnership Association. Profitsharing may be defined on the lines adopted b y t h e International Congress on Profit-sharing in 1889, as the payment, in accordance with an agreed scheme, of a share fixed in advance, and not variable year by year at the discretion of the employer, of the profits of an undertaking to a substantial proportion of its ordinary employees, in addition to their wages. In labour co-partnership the worker receives a share of profits and in addition acquires some share in the capital and control of t h e undertaking in which he is employed. The Industrial Co-partnership Association considers t h a t the workers may share in control in one or both of the following ways: (1) by exercising ordinary rights and responsibilities as a shareholder, (2) by the formation of a co-partnership committee of workers, having a voice in the internal management. INDUSTRIAL W E L F A R E 191 owing to the depression, there was a distinct decline between 1930 and 1936. Propaganda is undertaken in favour of profit-sharing and copartnership b y the Industrial Co-partnership Association, the activities of which are mainly supported by individual employers and firms, though a few workers' leaders participate. Employers' organisations have not declared their attitude to profit-sharing and co-partnership. Individual employers who have initiated schemes have done so chiefly in the hope of securing improved relations with their workers by a harmonising of the interests of capital and labour. Most, though not all, employers seem to be satisfied that this object has been to some extent attained. Those who anticipated a considerable and permanent stimulus to increased exertion by their workers have often been disappointed; the initial stimulus tends to wear off in time, and the workers come to regard the bonuses as a right. Also the bonuses are usually too small and remote from the efforts of the individual employee to give an important stimulus to output; workers often lose interest in the scheme if profits, and therefore bonuses, decline. Many schemes do, however, seem to increase goodwill b y satisfying, in part at least, the sense of social justice. The general attitude of the trade unions is one of indifference or opposition, and hostility has been expressed in resolutions adopted b y the Trades Union Congress. The main ground for the opposition of organised labour is that they believe the schemes to be designed to undermine trade union solidarity by strengthening the bonds which attach the worker to the firm in which he is employed. The trade unions recognise that their policy of establishing standard rates of wages to be paid b y all firms in a given industry and district often enables the most efficient firms to make large profits. Hitherto, however, they have directed their attention towards political methods of dealing with large profits through the channels of taxation rather than towards schemes of profit-sharing and co-partnership, which would confer differential benefits according as the workers are employed in prosperous or in struggling firms. At the end of 1936 the number of schemes in operation in businesses other than co-operative societies was 266; 1 of these, 1 The number of co-operative societies which had schemes in operation was 152, with over 42,000 workpeople, of whom 39,700 participated, or were entitled t o participate, in the benefits. 192 INDUSTRIAL RELATIONS IN GREAT BRITAIN 19 were started before 1901 and 31 more were started during the first decade of thé present century, while 176 schemes dated from 1919 or later. About 371,000 workpeople were employed in the business concerned, but only about 220,000, or about 60 per cent. of the workpeople, participated, or were entitled to participate, in the benefits.1 In 1913 the number of schemes in operation was 152, with about 73,000 workpeople entitled to participate; the number of workpeople thus nearly trebled during twenty-three years. The total amount of bonus distributed, or credited, in 1936 under 211 schemes for which information is available was ¿2,228,300, and 178,300 employees were entitled to participate. The average amount of bonus was £12 gs. lid. per employee; this represented an addition to earnings of 6.3 per cent. In 1913, the average amount of bonus was £5 5s. ud. per head, or 5.9 per cent, of earnings. In each year during the decade from 1927 to 1936 a considerable proportion (from one-seventh to one-third) of schemes failed to earn sufficient profits to yield a bonus. On the other hand, some schemes show exceptionally good results. The South Metropolitan Gas Company has paid during forty years a total of over £1,000,000 ; the workers own about £750,000 of the Company's capital and elect three of themselves as directors. Messrs. Clarke, Nickolls and Coombs, a firm of confectioners in London, have distributed about £750,000 in a period of forty years, or an average of over 15 per cent. added to earnings each year. Messrs. Lever Brothers have distributed over £2,500,000 in twenty years. Messrs. J. T. and J. Taylor, a textile firm at Batley, in Yorkshire, have paid out about £800,000 in forty years and the employees own more than half the capital of the undertaking. Many schemes—more than one-half of the schemes started— have been discontinued, most of them after an effective duration of under ten years. Among the chief causes of termination are failure of the firm to make adequate1 profits, changes of management, and dissatisfaction of the employers owing to the apathy of their workers. The state of trade seems to have an effect both on the inauguration and on the termination of schemes, periods 1 Participation is sometimes limited to employees who are able and willing to deposit savings with t h e firm, or to purchase shares in the undertaking; in some schemes participation is restricted to persons who have attained a certain age, or who have been in the employment of the firm for a minimum number of years. INDUSTRIAL W E L F A R E 193 of good employment being favourable to the establishment of new schemes. The gas industry is the only one in which profit-sharing and co-partnership schemes have been introduced by a large proportion of the chief companies. I n this industry, too, few schemes have been terminated and some have been in operation for over twenty years. This unique situation is due in part to the special conditions of the industry, which has a local monopoly; it is, however, also due to the success of the South Metropolitan Company's system, which was introduced in 1889, and the extension of this system to other companies. Other industries which have a considerable number of schemes and of workers participating include metal, engineering and shipbuilding, textiles, food and drink manufacture, chemicals, and insurance, banking, and other financial businesses. Recently a number of schemes have been introduced in the electricity supply industry, especially in London. Of all schemes in operation at the end of 1936, 152 were profitsharing and 114 were co-partnership. The most usual type of profit-sharing scheme (95, or almost 36 per cent, of the total of 266 schemes at the end of 1936) provides for a cash bonus based on profits or dividends. Co-partnership schemes encourage employees to acquire capital in the undertakings in which they work and may accord them the right to participate in control. Forty-six of these schemes provide for the issue of shares free, or for their purchase b y employees on specially advantageous terms ; this type of scheme is often voluntary, and only a minority of employees (about 20 per cent.) have participated. In other co-partnership shareholding schemes, including many of those introduced b y gas companies, a proportion of profits is reserved for the workpeople and either invested wholly in the capital of the firm, or part is capitalised and part distributed in cash or paid into a provident fund. Sixty-eight schemes of this type were in operation at the end of 1936. I n the great majority of undertakings the capital held by the employees is only a very small proportion of the total capital. Consequently the voting power of employees at a shareholders' meeting is almost negligible in all but a very small number of undertakings; quite frequently employees' shares do not carry voting rights. The influence and control exercised b y the workers in profitsharing a n d co-partnership schemes is almost invariably small, and shareholders' meetings have provided little opportunity for 13 194 INDUSTRIAL RELATIONS IN GREAT BRITAIN the workers to learn about the economic problems of the undertaking. A more satisfactory method is the holding at regular intervals of meetings of employees, at which the bonus is declared and a review given of trade conditions and prospects ; many British firms with profit-sharing or co-partnership schemes have adopted this practice, and some schemes usefully supplement it by setting up representative committees of workers which perform certain administrative functions in the working of the schemes. Pension Schemes The schemes here described are those which provide for the regular payment of life pensions according to an established scale to workers on retirement from the service of their firm. Several of the oldest of these schemes date from the closing years of the nineteenth century and others were introduced early in the present century before old-age pensions were provided under State legislation. Since the war there has been a considerable increase in the number of schemes, and at the present time probably about 3,000 firms have introduced pension systems. While many of the schemes apply only to the non-manual staff, a growing number are for manual workers, the number of such workpeople covered, being considerably more than half-a-million. Some of the schemes apply to only small numbers of workpeople, but many firms employing several thousands of workpeople have introduced pension schemes for the main body of their manual workers.1 Thus the pension funds of one well-known manufacturing firm have a membership of over 10,000 workpeople, the total amount accumulated in the funds is about £2,000,000 and the firm and the workpeople each contribute about £44,000 per annum. The State encourages the formation of pension funds by exempting them and the contributions of the firm from taxation. Most schemes are set up by private trust deeds and are self-contained, but some firms operate their schemes in association with an insurance company, while the Flour Milling and Wallpaper Manufacturing Industries have established schemes open to all firms in these industries. A review is given below of the chief features of pension schemes, based on an analysis of the systems in operation in many well-known firms; special attention is given to conditions of membership, contributions, and pensions. In Appen1 For example, Imperial Chemical Industries, Limited, which had previously operated schemes for the staff and foremen, introduced a workers' scheme in 1937. INDUSTRIAL WELFARE 195 dix VIII summaries are given of the provisions of several funds which illustrate different systems.1 ' Membership Membership of pension schemes is usually voluntary. Workpeople wishing to join are required to indicate their desire to do so by filling up a prescribed form. Some firms have one pension scheme open to all persons employed, whether male or female, wage earners or salaried staff; directors of the company are usually excluded, though in some funds directors promoted from the ranks may be members. Frequently firms have established two separate funds, one for men and the other for women. Again, some firms have three funds, for salaried staff, male wage earners, and female wage earners respectively. Another arrangement is that of separate pension schemes for salaried staff and male wage earners, and no provision for pensions for female wage earners. Still other systems are found, including funds for salaried staff only. In the present section no account is given of funds limited to salaried staff only, or of the separate funds for salaried staff in firms which have also set up funds for wage earners. Where separate funds for men and women wage earners are set up or where women are excluded altogether from the schemes, the chief reasons are that women's contributions and pensions are at a lower rate than men's in consequence of their lower earnings, and that large numbers of women leave their employment between the ages of twenty and thirty on marriage. In some firms a savings fund instead of a pension fund is established for women; other firms pay pensions to the comparatively few women wage earners who remain in their service to pensionable age, but make the payment directly out of revenues instead of setting up a pension fund which would involve considerable administrative work. Contributions Usually pensions are paid from a fund to which the worker and the firm each make equal contributions. In a few schemes the contributions are unequal, while in some schemes the workers only make regular contributions but the firm pays amounts adequate to 1 Other examples are given in an article by A. D. K. Owen on " Employees' Retirement Pension Schemes in Great Britain ", International Labour Review, J u l y 1935 ; see also The Exit from Industry, a report issued in May 1935 by P . E. P . (Political and Economic Planning). IQ6 INDUSTRIAL RELATIONS IN GREAT BRITAIN maintain the solvency of the fund and pensions are paid according to a scale considerably higher than would be covered by the workers' contributions alone. Non-contributory schemes are rare. When schemes are being started firms frequently make special payments so that their older workpeople may receive pensions, although these workpeople have not paid much in contributions. Two main systems of contributions may be distinguished. Under one system, the contributions are equal for workers of different age and the amount of the pension varies according to the number of years of contribution. Thus in one firm the worker pays is. per week and the pension payable at sixty-five years of age is £i per annum for each year of service. Under the second system the amount of the pension is fixed and the contributions vary according to the age at which the worker joins the scheme. For example, the pension in one firm is £1 per week, and if a worker joins at twenty years of age his contribution is 8d. per week and the firm pays a similar amount; if a worker is older when he joins the fund the rate of contribution is higher. Whichever system is applied, the worker is usually required to make contributions for a minimum period, which is usually fifteen to twenty-five years. In some schemes the amount of contribution, and also the rate of pension, varies according to the worker's wages; the contribution is sometimes a given percentage of the wage. The amount of contribution varies considerably in the different schemes. In one firm the men contribute 3d. per week and the firm 5¿. per week to the men's fund, while the women contribute 2d. per week and the firm 2d. per week to the women's fund. In several other firms the member's contributions are 3d. or qd. per week. Considerably higher contributions are paid in some firms, the weekly payment in several schemes being is. or is. 3d., or even is. 6d. or 2s. or more per week. The highest rates of contribution apply to the better-paid workers in schemes where the rate varies according to the wage, or to workers who are thirty to forty years of age when they start contributing to a scheme with a fixed pension. Pensions For men the usual age from which pensions are payable is sixtyfive, but in some firms the age is sixty. For women the pensionable age is frequently sixty or sixty-five, but in a few firms it is fifty-five. Frequently retirement with an adjusted pension is allowed at any time within five years of the usual pensionable age. In some INDUSTRIAL WELFARE 197 firms retirement is compulsory at the pensionable age, but in others it is optional. As already indicated the amount of pension may differ according to the length of period during which contributions have been made, or may be of fixed amount involving a high or low rate of contribution according to the age of members when they join the fund. The amount of pension varies considerably in the different firms, being dependent upon the aggregate of contributions for each member. In some firms the maximum pension for men at the age of sixty-five after forty years or more of contributions is 14s. or 15s. per week; in others the pension is £1 per annum for each year of service, while in another the pension is approximately one-half of the wage. Several firms pay a maximum pension for men retiring at sixty or sixty-five years of age of between £z and £1 10s. od. per week. A pension in proportion to the aggregate of wages paid to the worker during the whole of his service is the basis adopted in one scheme. For women the pension is often less than that for men, in several firms the maximum being about 10s. per week. Other Provisions Most schemes include regulations about the payments to be made if a member dies or withdraws from the service of the firm before reaching pensionable age. The usual practice is for the member, or the representative of a deceased member, to receive the amount of his own contributions together with 3 or 4 per cent. compound interest. Under a few schemes the representative of a deceased member is entitled to receive both the member's and the firm's contributions with compound interest. In one scheme, however, no payment is made in respect of the contributions of a deceased male member. In another firm a member who leaves the service before sixty-five may receive immediately the refund of his own contributions, together with 3 per cent, compound interest or he may decide to wait for a pension at sixty-five, based on his own contributions plus 3 per cent, compound interest if his service is less than seven years but including the firm's contributions also if he has completed seven years' service. Some schemes provide that total or partial incapacity for work after a fixed period, e.g. ten years, of membership of the pension fund shall entitle the member to receive a pension based on the joint contributions of the member and the firm. Several schemes include a provision that, if a member in receipt ig8 INDUSTRIAL RELATIONS IN GREAT BRITAIN of a pension dies before his own contributions and those of the firm have been exhausted, either the difference is paid to his dependants, or the pension is paid to them for a fixed period. A few firms have a Widows' Benefit Fund separate from the Pension Fund, from which pensions are paid to the widows of workers dying during service or of retired members who had been receiving a pension. The amount of the widow's pension is based on the actual or prospective pension of the husband. The payment of a widow's pension is subject to certain restrictions as to age on marriage, age at time of husband's death, and length of period during which the husband has paid contributions to the Pension Fund; in one or two schemes the entire cost of widows' pensions is borne by the firm, whereas in others the worker also contributes. The cost of administering pension schemes is borne by the firm. Many firms require no medical examination before a worker becomes a member of the Pension Fund. It is impossible to indicate at all exactly the results of pension schemes. The firm provides a convenient unit for organising pensions schemes; the worker is encouraged to make provision for his old age and is safeguarded from making contributions to outside funds which are not infrequently badly managed. Many firms claim that the provision of pensions results in better morale and loyalty. Little effect upon labour turnover has been noted except perhaps that turnover is reduced among men over about thirtyfive or forty years, of age. The termination of the services of the older workpeople is facilitated; an income for life is provided, and firms no longer need to consider retaining the services of aged workers as a form of " charity ". Savings Schemes Many firms encourage thrift among their workers by establishing funds in which regular savings may be accumulated. Some schemes are intended as a means of accumulating a considerable sum which is paid to the worker on retirement ; the accumulated savings may either supplement a pension or be a partial alternative. Other schemes are for specific objects, the chief of which are saving for holidays or for the purchase of his home by the worker.1 Even 1 Sometimes clothing clubs are instituted and the workers' contributions, together with interest and possibly a bonus, are paid out once a year, for example a t the beginning of winter, for the purchase of clothing. INDUSTRIAL WELFARE 199 in firms where the system of paid holidays is in operation, funds have sometimes been established in which the workers can accumulate sums to supplement the amounts paid by the firm. Savings schemes are voluntary; usually the worker authorises the firm to make regular deductions of a specified amount each week from his wages and an individual account is kept for each worker; within limits the worker is free to decide the amount to be deducted. In some schemes, however, the worker is required to make deposits of £1 or multiples thereof. Firms rarely add amounts to the workers' contributions, though with few exceptions they bear the full cost of administration.1 Workers' representatives frequently participate in the work of administration. Some firms guarantee the rate of interest on deposits, but others pay the actual rate which the invested deposits have earned. Four or 5 per cent. is the rate usually guaranteed, but sometimes it is as high as 8 per cent. In most firms deposits can be withdrawn at any time on due notice being given, but payments from holiday savings funds are made only once a year, just before the holiday begins. Many different systems are in operation. In some firms the savings fund is set up under a trust deed, and the deposits are invested in trustee securities. In other firms the system of stock purchase is adopted; workpeople who join the scheme are given facilities to purchase stocks or shares in the company at specially favourable prices and easy conditions of payment. One firm combines the system of share purchase by employees with a form of profit-sharing according to which dividend at double the rate declared on the ordinary shares is paid to them whenever the ordinary dividend is not less than 5 per cent. Many firms encourage their employees to purchase National Savings Certificates issued by the Government and offer favourable conditions for payment. Another method is to give facilities and specially advantageous terms to workers for the payment of the premiums on life insurance policies.2 A frequent practice is for money to be advanced to the worker at low rates of interest for the purchase of his house, the loan being repaid by regular instalments. Many pension schemes 1 Some firms, which may also have instituted savings schemes, pay quite independently a lump sum (sometimes ¿ioo) on retirement after a specified period of service, the cost of the benefit being borne by the firm. 2 Some firms p a y the annual premiums on life insurance policies for their workpeople. Provision is made by this means for the workers' dependants, although the workers themselves are not required t o make savings for payment of the premiums. 200 INDUSTRIAL RELATIONS IN GREAT BRITAIN serve as savings funds when they provide for payment of the workers' contributions together with interest and sometimes an amount added by the firm to workers or their representatives in the event of retirement or death before pensionable age; this is especially true of schemes for women's pensions, because of the large number of women who retire to be married or for other reasons before reaching pensionable age. One firm has a savings scheme for women under thirty-five years of age, but when this age is reached membership is automatically transferred to a pension scheme. Works savings schemes, especially those in which regular deductions are made from wages, have undoubtedly been of advantage to the worker. Without the encouragement and regularity of the scheme, workers would save less and would be likely to lose some of their savings by unwise investment. That the schemes are appreciated is indicated by the very large number of workers who voluntarily participate in them and by the large amounts, totalling many thousands of pounds in some firms, which are accumulated. Sickness and Benevolent Schemes Sickness and benevolent schemes have a long history in many British undertakings. They originated in ad hoc collections of money by workpeople to help one of their fellows in distress. The method of making collections was, however, unsystematic, it did not give a reasonable guarantee that assistance would be forthcoming, and it suffered from the defect that popular workpeople would receive larger benefits than others equally deserving. In order, therefore, to make the relief of necessitous cases less precarious, regular funds were established by the workpeople from which grants were made according to circumstances, and at the end of each year any unused amount was distributed to the members in proportion to their contributions. A further development was the institution of sickness funds from which benefits were paid according to a fixed scale to all members absent from work as a result of sickness or accident ; the workers knew exactly the amounts they would receive in the event of such absence. Frequently the companies have encouraged the formation of these schemes, often by bearing the cost of administration and sometimes by making contributions to the funds. Each of the methods outlined above is found in some British firms. In the present section sickness and other schemes which provide benefits according to a fixed scale are first described, and an account is then given of benevolent INDUSTRIAL W E L F A R E 201 schemes under which grants are made of amounts which vary according to the circumstances of the beneficiary. Appendix I X gives the chief provisions of the sickness benefit schemes of a number of well-known firms. The sickness benefit schemes of most firms are based on weekly contributions b y the workpeople, by authorised deduction from wages. The workpeople almost invariably participate in the management of the scheme, sometimes through the works council. In many schemes the firms make no direct contribution to the fund, but bear the cost of administration. In some schemes, however, the firms make considerable contributions. Thus one firm contributes a sum equal to 50 per cent, of the amount expended in sickness benefit and administration, with a maximum of 16s. gd. per member per annum. A few firms bear the whole cost of sickness benefit schemes. Where the workpeople make contributions, membership is voluntary. Age limits for membership are fixed in some schemes, for example, over sixteen and a half years and under forty years; in some schemes evidence of good health must be furnished by applicants for membership. Frequently separate funds are set u p for men and women respectively, with different rates of contribution and scales of benefit; special arrangements are often also made for juvenile workers. In several firms the men are divided into two grades according to occupation or earnings, and for one grade the contributions and benefits are higher than for the other. In one or two firms a maximum rate of contribution is fixed, but workers may pay smaller amounts with correspondingly lower rates of benefit. The amount of contribution varies considerably. For men the rates range, with few exceptions, from 3d. or 4¿Ü. per week to i s . per week, a frequent rate being (yd. per week. For women, the usual range is from 2d. per week to 6d. per week. Generally, workpeople make no contribution during periods of absence owing to illness. The sickness benefits vary considerably both in their amount and the number of weeks during which they are paid. They are usually independent of amounts received under the National Health Insurance and Workmen's Compensation Acts, but in a few sickness schemes the benefits are related to these amounts. Thus one firm has undertaken to make up the benefits under the Acts to a total of 80 or 90 per cent, of the worker's full weekly wage for a period of thirteen weeks. Another firm reduces the benefits by any amounts received in compensation by workpeople absent as a result 202 INDUSTRIAL RELATIONS IN GREAT BRITAIN of an industrial accident. The figures below show the scales of benefit in operation for adults in several firms where the benefits are largely or altogether independent of those received under the Acts. The rates of contribution are also given. Frequently benefits are not paid for the first two or three days' absence. Some schemes require membership for a period of three or six months before benefits are payable. Frequently a provision is introduced that a member who has been absent and has drawn benefits for the whole of the specified number of weeks shall not be entitled to further benefits for twelve months. 1 A member who has drawn benefits for part of the specified period and is again on the fund before the expiration of twelve months is often entitled to draw benefits only for the remainder of the period. Usually RATES OF CONTRIBUTION AND SCALES OF BENEFIT OF SEVERAL SICKNESS BENEFIT SCHEMES Scales of benefit Scheme No. I Sex of member Male Female 2 3 4 5 6 Male Female Male Female Member's weekly contributions! 4<2. 4¿. 1 5 . Od. 6d. 6d. 2d. 2 225. od. for i s t 26 weeks 3 14s. od. for i s t 26 weeks 3 24s. od. for 16 weeks gs, od. for 16 weeks 12s. od. for 26 weeks 2 8s. od. for i s t 6 weeks Male 6d. 15s. od. for i s t 8 weeks Female 3d. 7s. 6d. for i s t 8 weeks Male Female Male Female 3d. 3d- 1 os. od. for 13 weeks ios. od. for 13 weeks I2S. od. for 26 weeks 12s. od. for 26 weeks — Reduced weekly rate Full weekly r a t e u s . od. for further 26 weeks 3 js. od. for further 26 weeks 3 — — — 4 4s. od. for further 6 weeks js. 6d. for further 4 weeks 4 5s. od. for further 4 weeks — — — 1 Contributions by the firm, other than costs of administration, are made only as follows: Scheme i, 50 per cent, of cost of scheme up to a maximum by the firm of i6s. gd. per member per annum; Scheme 5, the firm makes an annual grant which covers about one-fifth of the benefit; Scheme 6, the whole cost is borne by the company. 2 Maximum. 3 Victims of accidents receive reduced rates or no benefits according to the amount received in accident compensation. The firm pays certain auxiliary sickness benefits. 4 These benefits are paid to men in Class 1 ; the benefits to men in Class 2 are one-third less, the contribution being similarly lower. 1 A few firms have a special fund for assisting members suffering from longcontinued illness who have exhausted their sickness benefits. INDUSTRIAL WELFARE 203 benefits are not paid if the sickness or accident is the result of the worker's own excess or misconduct. Arrangements are generally made for workpeople in receipt of benefits to be visited by a representative of the scheme. Other safeguards against abuse of the scheme are introduced. While in receipt of benefit workpeople are not to undertake work or otherwise act in a way which would be likely to retard their recovery; one scheme provides that they shall not frequent public-houses, while several schemes require them to be at home at an early hour in the evening. Some schemes arrange that any surplus in the fund at the end of each year, after carrying a reserve forward, shall be divided among the members. A few funds provide that members who leave the service of the firm shall receive a proportion, e.g. 50 per cent, of their contributions less any benefits received, provided there is a sufficiency of funds. Some sickness benefit schemes also pay funeral benefits. In some firms, however, special arrangements are made for the payment of such benefits. The cost is sometimes borne by the firm, but in a number of firms funds are built up from contributions by the workpeople. Some schemes provide for the payment of funeral benefits in respect not only of the death of members but also of members' wives. Benefits in respect of adults range from £8 or £10 to as much as £40. Closely related to sickness benefit funds are schemes which provide for free treatment at the hospitals. These are often based on regular contributions of id. or 2d. per week by the members together with sums paid by the firm. Membership is voluntary. The benefits often include free treatment for the worker's wife and children as well as for himself. Very many firms which have no scheme of regular weekly contributions organise the raising of funds for the hospitals by means of collections. In return the hospitals give preference to the workpeople in obtaining entrance to the hospitals. A few large firms maintain their own hospitals. Some firms have their own convalescent homes, the land and buildings being usually provided by the firm while the workers contribute to the cost of maintenance. Many firms assist their workers to meet the cost of medical attention, convalescent treatment and surgical appliances. Benevolent schemes for providing assistance according to circumstances where workpeople are in special difficulties owing to sickness or other causes have been instituted by a large number 204 INDUSTRIAL RELATIONS IN GREAT BRITAIN of firms. In some schemes the necessary funds are provided and administered by the firm. In others the firm gives facilities for the establishment of a fund based on collections among the workpeople; the fund is often managed by a works committee which makes grants to alleviate cases of proved distress among the workpeople. Many schemes are based on regular voluntary contributions by the workers (e.g. id. per week), together with subsidies by the firm. Representatives of the workers take a large part in the work of administration. In making grants under any type of benevolent scheme, the financial circumstances of the worker and the number of dependants are taken into consideration. Unemployment Benefit Schemes x The schemes reviewed here provide benefits additional to those paid under the State unemployment insurance system. In some schemes the employers and trade unions are associated, while in others benefits according to an established scale are paid from funds maintained by employer's contributions alone; another system is for the firm to give a guarantee to workers who have been in its service for a certain number of years that they shall receive the whole or a specified part of their wages during periods of short time or unemployment. About twenty schemes covering 60,000 or 75,000 workpeople were known to be in operation recently. Some of them were affected by the change made for reasons of economy in the autumn of 1931 in the State system. The change involved the application of a " means test " to workers who had exhausted their right to benefits under the State scheme and who then appealed to the Public Assistance Committees for financial aid; this method has been continued in the present unemployment assistance scheme. The adoption of the means test by the State has resulted in firms ceasing to pay additional benefits usually after twenty-six weeks which would be likely to reduce the amount of public assistance granted. A system of additional unemployment benefits was introduced in 1921 by the Joint Industrial Council of the Match Manufacturing Industry. The employers and trade unions are thus associated in the scheme, which covers almost the whole of the industry. Each of the six firms covered undertakes to set aside 1 per cent, of the 1 This section is based on an article on " Employers' Additional Unemployment Benefit Schemes in Great Britain", by MARY B. GILSON and E . J. RICHES, International Labour Review, March 1930. INDUSTRIAL W E L F A R E 205 amount paid in wages until a joint fund or pool has been accumulated equal to 5 per cent, of wages, or £25,000, whichever is the greater sum, and this fund shall be maintained. Persons over eighteen years of age who have been regularly employed in the industry for a continuous period of six months immediately before becoming unemployed and who are members of trade unions represented in the Joint Industrial Council are entitled to benefit. The weekly rate of benefit for men is 9s. and for women 5s. ; a supplement of is. 6d. is paid in respect of each dependent child. The number of weeks during which these benefits are paid depends on length of continuous employment after reaching eighteen years of age; one week's benefit is paid for each two months up to two and a half years of such employment, and one week for each complete year be3^ond two and a. half years' employment. In addition each eligible worker contributes 2d. per week to his trade union, and unemployment benefits of 6s. per week are paid in respect of this contribution. I t is provided that the total benefit from the State, the firm and the trade union shall not exceed the average wage of the worker. I n consequence of membership being limited to members of trade unions over eighteen years of age, about one-half of the workers are eligible. The Bradford Dyers' Association, Ltd., introduced into a working agreement with the trade unions as early as 1907 a provision under which dismissal benefits were paid for a period of twenty weeks. The system was terminated at the instance of the unions some years before the State scheme was introduced. Benefits have, however, been paid on an ex gratia basis, usually at the rate of £1 per week for twenty weeks, to men displaced on account of reorganisation, closing of works, surplus, etc., the cost being borne equally by the unions and the Association. The Joint Industrial Council for the Flour Milling Industry has instituted a scheme for the re-settlement of operatives displaced b y developments in the organisation of the industry. A number of individual firms operate similar schemes. Apart from schemes based upon association between the firms and the trade unions, some ten firms have introduced independent unemployment benefit schemes. Most of the firms are in chocolate and confectionery manufacturing or in stationery and other paper products. All the schemes were established during or after the 1921 depression. Several of them provide benefits paid by the firms alone, in others the firm and the workers both contribute and in one scheme only the workers contribute. I n some schemes 2o6 INDUSTRIAL RELATIONS IN GREAT BRITAIN the benefits are paid out of the ordinary resources of the firm, while in others a special fund is maintained. One firm has established a considerable fund from which payments are made to workers on short time, but any balance in the fund at the end of each year is distributed to all adult employees in amounts proportionate to their length of service; the scheme thus operates as a form of prosperity sharing. A chief purpose of some of the schemes is to augment short-time earnings during periods of seasonal shortage of work. In some schemes workers on short-time or temporarily unemployed are guaranteed payments at full rate or three-quarters of the full rate for a large part of the normal week (e.g. forty, forty-two, or forty-three and a half hours in different schemes), less the amount of any State benefit received; for temporary unemployment the number of weeks during which the guarantee operates is sometimes limited, e.g. to twelve weeks. Other schemes specify a scale of payments to workers on short time or temporarily unemployed which varies according to sex, number of dependants, and age (adult or juvenile) ; some of them provide that payments under the scheme together with any unemployment benefits received from the State and from trade unions or other societies shall not exceed a given proportion, e.g. 75 or 80 per cent., of full-time earnings. Most of the schemes provide also for the payment of substantial dismissal benefits if dismissal is due to lack of work or other causes beyond the workers' control.1 In many schemes the amount of benefit varies according to the number of dependants of the worker, higher amounts are paid to men than to women, and juveniles receive lower rates than adults. For adult male workers without dependants the full weekly benefit ranges from js. 6d. in some schemes to about 20s. in others, in one scheme the full benefit is 50 per cent, of average weekly earnings. In most schemes the full rates of benefit are paid for periods which range from six weeks in some firms to thirteen weeks in others, and half rates for a further similar period. Reduced benefits are often paid to workers who have been employed by the firm for less than a specified period (e.g. two years). In several schemes the number of weeks during which benefits are paid varies according to length of service. 1 A number of firms which have not established additional unemployment benefit schemes pay a lump sum to workers discharged because of lack of work. INDUSTRIAL WELFARE 207 Joint committees of representatives of the firm and the workers take part in the administration of many of the schemes described above. Firms reserve the right to terminate the schemes, though some have undertaken that they will give three or six months' notice of their intention to exercise this right. Although yet of very limited application the schemes represent an attempt to supplement the benefits paid under the State scheme. In those firms which pay benefits in proportion to earnings the skilled worker receives amounts more adequate for the maintenance of his standard of living than the flat-rate scale which applies under the State scheme to skilled and unskilled workers alike. The schemes also have the advantage that they offer some inducement to the firms as far as practicable to stabilise their employment by reducing the amount of short time and the number of dismissals. THE INDUSTRIAL WELFARE SOCIETY The Industrial Welfare Society, presided over for many years by H.M. the King when he was H.R.H. the Duke of York, was formed in 1918 by Robert R. Hyde, the Director of the Society, and by various employers who were of the opinion that the welfare work undertaken during the war by the Ministry of Munitions should be continued on a voluntary basis and should, under peace conditions, be guided by industry rather than by a State department. The Society endeavours to retain for industry the responsibility for, and the direction of, industrial welfare work. It exists for the purpose of focusing attention upon and developing the various activities (industrial, educational and recreational) within the scope, in the widest sense, of industrial welfare. It also serves as a clearing-house for information. The membership of the Society consists largely of industrial firms, although individuals may also be members. The Society supplies member firms with information about the different phases of welfare work. It discusses with employers the welfare schemes which would be applicable to their own particular works and circumstances. Assistance has been given along these lines to many firms in the establishment or development of practical schemes. The Society will arrange for the services of a professional or other expert to advise its members on welfare matters. It advocates that in each firm there should be a responsible person 2o8 INDUSTRIAL RELATIONS IN GREAT BRITAIN in charge of all personnel work, whether a director, manager, or welfare supervisor, and it will recommend persons qualified for positions as labour managers, welfare supervisors, canteen managers, etc. A monthly publication—Industrial Welfare and Personnel Management—is issued in which articles of general interest to management are a regular feature.1 Studies have been prepared giving detailed information about specific welfare schemes, including their cost, methods of financing, and regulations which have been found by experience to give good results. Each year since 1920 the Societyhas organised a conference on welfare work which is usually attended by representatives from between 100 and 200 firms. At more frequent intervals conferences are held for discussion and exchange of experience on special subjects. It is appropriate to end this chapter by summarising the conclusions upon welfare work expressed by the Director of the Industrial Welfare Society, on the basis of evidence collected from upwards of 400 firms. He claimed that welfare work is increasing both in volume and scope; that it is regarded by progressive employers as an integral part of management; that, although its value cannot be estimated in terms of cash, it has a beneficial effect both directly and indirectly upon productive capacity and efficiency; and that it results in better health, better adjustment of the worker to his work, greater interest and effectiveness, reduced labour turnover and improved industrial relations.2 1 This publication is also the official organ of the British Industrial Purchasing Officers' Association and the British Works Management Association. a Paper read by R. R. H Y D E before the Royal Society of Arts. CHAPTER VII LABOUR MANAGEMENT SYSTEMATIC study of the problems of labour management is a recent development in British industry. Most, if not all, of the problems themselves are as old as industry. While factories remained small the employer was able to maintain close contact with his workpeople and to apply a co-ordinated if unscientific policy. The growth of large-scale undertakings and changes in methods and conditions of work, including reduced hours of labour and increased wages, have compelled attention to be directed to determining the most appropriate system of labour management and scientific means for ensuring the most efficient use of labour. Labour management " is now coming to be regarded as of very great importance to the success of any undertaking. . . . Business is not exempt from laws which regulate other forms of human association and requires for its success good intelligent leadership ".1 The types of labour management still predominant in British industry are: (i) the departmental system, in which each departmental manager is responsible for his own labour policy; (2) the so-called " line and staff " system, which resembles military organisation, with the managing director or works manager in a position of supreme authority in labour as in other matters and with all departmental and other officials subordinate to him. Each of these methods has certain disadvantages and, in endeavouring to avoid them, a few large undertakings have introduced a third system called the functional system. Under this system in its most developed form one of the directors undertakes responsibility for labour policy and any expenditure involved, and a labour or employment manager is appointed to give effect to the policy. The labour manager stands in a similar relation to the labour problems of the factory as does the production manager to problems of output and the engineer to the machinery. Increased interest is being shown in this functional type of organisation. 1 Survey of Industrial Relations, p. 192. 14 210 INDUSTRIAL RELATIONS IN GREAT B R I T A I N Among the chief subjects within the scope of labour management are: (i) recruiting and selection of workers, including application of vocational selection tests; (2) training of workers, including instruction of apprentices and learners and training for promotion ; (3) health, safety, general welfare of workers, including the observance of statutory requirements; (4) consultation with workers, including the functioning of works councils, suggestion schemes, and investigation of grievances; (5) labour turnover; (6) the determination of methods and rates of remuneration. The last of these is a particularly important subject, and includes time studies which provide the necessary basis for many " incentive " systems of payment. Where the functional type of organisation has been introduced some firms make the labour manager responsible for wages and time studies, while others include it among the responsibilities of the production manager. One firm at least charges the production manager with responsibility for time studies, and the labour manager is required to ensure that the relative wages of different categories of workers are fair and in accordance with agreements. In other respects also there is considerable variation between firms as to the work delegated to the labour or employment department. In some large undertakings specialists are appointed for various branches of the work; they include works doctors, nurses, welfare supervisors, educational, psychological and timestudy experts. Many of the subjects which fall within the scope of labour management have already been reviewed in the two previous chapters on works councils and industrial welfare respectively. 1 The present chapter deals with vocational selection and vocational training (including apprenticeship), health and safety (other than statutory requirements), and suggestion schemes. It also gives an account of various organisations which are conducting research work and which arrange for exchange of experience between persons engaged in labour management. Systems of wage payment, and time studies associated with some of these systems, are not discussed as they would require detailed treatment beyond the scope of the present volume. However, it may be noted that a comprehensive enquiry conducted by the 1 " Labour or employment management has come to be regarded in many quarters as the central activity to which other branches (of industrial welfare) are subsidiary and round which they group themselves." (Home Office Welfare Pamphlet No. 3, p. 14.) LABOUR MANAGEMENT 211 Board of Trade in 1906, supplemented by more recent data for coal mining, showed approximately 72 per cent, of the workpeople covered by the returns to be on time work and 28 per cent, on piece work or other systems of payment by results. 1 In the exporting industries the proportion of piece workers is considerably higher than in industry as a whole; thus the 1906 enquiry showed t h a t 40 per cent, of workers in the chief exporting industries were on piece work. Since 1906 there has been a tendency in some industries, e.g. engineering, to apply more widely the various systems of payment by results, but time work remains predominant in British industry and is favoured by many trade unions. Payment by results is rare in some industries; thus in building, public utilities and railway transportation, 95 per cent, or more of the workpeople are on time rates. A large proportion of workers in the textile and clothing industries are paid on piece rates. In 1906 in the cotton textile industry between 60 and 70 per cent, of the workpeople were paid by results; the iron and steel, engineering, and shipbuilding industries were in an intermediate position with about 25 to 35 per cent, paid by results ; in printing and paper, chemicals, and the food, drink and tobacco group, time work was more important, only about 15 to 20 per cent, being paid according to output. 2 In coal mining, according to an enquiry in 1924, approximately 40 per cent, were paid on an output basis. In most industries some occupations are predominantly on piece rates, e.g. textile weavers, and hewers in coal mining. Unskilled general labourers are usually employed on time wages, and therefore, among skilled and semi-skilled workers engaged in the manufacturing processes, the proportions paid b y results would be higher than those indicated above. Almost every method of payment by results has some application, but the straight piece-work system, including group piece work, predominates. 3 In many industries the conditions of payment by results and often the rates themselves are fixed by collective agreements, and labour managers or others in the undertakings are free 1 The results are published in detail in a series of volumes; a summary is given in Survey of Industrial Relations, pp. 105-122. Agriculture is not included. 2 These various percentages are those shown by the 1906 enquiry, but are probably still fairly representative, except for some of the metal trades. 3 I t m a y be mentioned here t h a t the Bedaux System, which mainly limits itself to determining standard outputs, without considering the rates of pay or the premiums for output above standard, has been introduced by a number of large British firms during recent years. 212 INDUSTRIAL RELATIONS IN GREAT BRITAIN to introduce or modify the systems and rates only within defined limits. Sometimes, however, the limits are wide, for example, where the agreement merely ensures a guaranteed time minimum and fixes the percentage above the time wage which workers on piece rates should earn. VOCATIONAL SELECTION AND TRAINING Selection The usual method of selecting workers to fill vacancies is by à brief personal interview and a preliminary trial following recommendation or direct application.1 For skilled workers a trade test may be set to supplement enquiry about previous experience. Growing interest is being shown in the application of systematic tests of ability, especially to juveniles. A number of firms now use, along with the interview, a series of physiological and psychological tests to determine such qualities as general intelligence, reaction time, rhythm and co-ordination of hand and eye.2 Sometimes there is also a medical examination. The tests applied in different firms are based on careful studies of the type of work and the most suitable qualities required. In some firms the tests have been established after investigation and advice by the National Institute of Industrial Psychology (see page 226). Before tests are used for selecting workers their appropriateness is determined by applying them to workers already employed, and the results of the tests are compared with the actual performance of the workers in their jobs in the factory. Selection of workers is usually undertaken by the manager or the heads of departments, but in firms where labour or employment managers have been appointed selection is made by them in consultation with the heads of departments. A number of firms have established separate employment departments for men and women. Where systematic selection tests are applied these are supervised by the regular employment staff. A few firms, however, have set up psychological departments which frame and apply selection tests 1 Employers are assisted in securing suitable workers by the employment exchanges and the trade unions. For juveniles, special Juvenile Employment Bureaux have been established by t h e local education authorities and over 170 Juvenile Advisory Committees have been formed.in locahties throughout Great Britain t o assist in giving vocational guidance to juveniles and in placing them in suitable employment. 2 One firm uses the tests to select about double the number of persons required and the final selection from these is made b y the method of interview. LABOUR MANAGEMENT 213 as well as undertake various other duties. Messrs. Rowntree and Company's psychological department, which was set up in 1922, consists of two fully trained industrial psychologists, one engineer who specialises on movement study, and several clerical assistants. In 1929 this firm made an investigation into the value of the psychological department, and in balancing the estimated savings against the cost it was found that the department had paid its way several times over.1 Among the advantages claimed by firms which apply selection tests are greater accuracy in choosing the most suitable workers, shorter time required to train workers, increase in efficiency and earning capacity, greater contentment among the workers and lower labour turnover. Up to the present, tests have been used much more widely for the selection of juveniles than of adults. Training Very large number of applicants selected for industrial employment receive no systematic training and they gain experience in haphazard fashion by assisting and observing other workers. But in many occupations skill is acquired by apprenticeship, and employers are now giving greater attention to training for semiskilled work. There is also the question of training for foremanship. These aspects of training are reviewed below. First, however, it is of interest to give an account of the system of initiation schools which' a number of firms have introduced. The object of the initiation school is to make easy for young workers the transition from school to factory life. The system has been introduced by several large firms which recruit a considerable number of juveniles when they become available for employment at the end of each school term. Instead of being put immediately to work in a department the first few days or even the first week of employment is spent in classes, and instruction is given about the works and industrial life. A tour of the works is made, an account is given of the sources of the raw materials used, and the chief processes are explained. A description is given of the organisation of the works, the chief rules, safety precautions against accidents, and the welfare activities in which the worker is entitled to participate. Use is made of the cinematograph for purposes of illustration. 1 Statement made by a representative of the firm at the Discussion Meeting of t h e International Industrial Relations Association, held in Upper Bavaria in 1929. (Report of the Meeting, p. 106.) 214 INDUSTRIAL RELATIONS IN GREAT BRITAIN Apprenticeship or an equivalent system of learnership is still the chief method of training juveniles for skilled work in a number of industries.1 It has been estimated from the results of a special enquiry conducted by the Ministry of Labour in 1925-1926 that there were then 315,000 boy apprentices and 110,000 boy learners in Great Britain, or about one-fifth of the male workpeople under twenty-one years of age in industrial occupations were either apprentices or were employed under some form of training substituted for or alternative to apprenticeship.2 Only 30 per cent. of employers took boys for some recognised system of training. The chief industries in which apprenticeship and learnership are important are building and woodworking, engineering, shipbuilding, printing, pottery manufacture in North Staffordshire, glass manufacture, certain public utility services and industrial work in various Government departments. On the other hand, apprenticeship and learnership are rare or non-existent in the chief occupations of mining, quarrying, brick and tile manufacture, iron and steel, chemicals, textiles, paper-making, and the distributive trades. 3 In these industries juvenile workers usually begin on light jobs; they gain experience by observing the experienced workers and are promoted as vacancies occur. In the industries in which apprenticeship is usual, the burden of training apprentices is borne to a greater extent (in relation to their size) by the smaller than by the larger firms.4 There is also, in some industries, much variation in different parts of the country. Thus in the building, woodworking and allied trades, according to the Ministry of Labour's Report, only 15.7 per cent, of the employers in London who supplied information had any boys in training as against 63.5 per cent, in Scotland and nearly 60 per cent, in the northern counties of England; also in London there 1 In apprenticeship the employer contracts t h a t the trade shall be taught to the worker, and the worker contracts to serve throughout a specified period of years. Under the system of learnership the relationship is less formal, b u t the worker is engaged for a recognised period of years and is given definite facilities for learning a branch or process of the industry. 2 Report of an Enquiry into Apprenticeship and Training for Skilled Occupations in Great Britain and Northern Ireland, IÇ2J-ZÇ26. The enquiry covered firms employing nearly 3,000,000 workpeople. The Report, which consists of seven volumes, was briefly summarised in the Ministry of Labour Gazette, Nov. 1927, Feb., March and July 1928. 3 Apprenticeship is usual in wallpaper manufacture. In the clothing industry there is very little apprenticeship, but juveniles are usually trained under a more or less definite system of learnership for a period of years. 4 Ministry of Labour's Report. LABOUR MANAGEMENT 215 was only one boy in training to every seven journeymen, as compared with one to every 2.4 journeymen in the northern counties. The Ministry's enquiry showed that apprenticeship proper has changed and is changing its traditional forms. There is a distinct tendency for the substitution of an oral agreement for a written indenture. The traditional apprenticeship of seven years beginning at the age of fourteen is giving place to five years beginning at the age of sixteen. Of the boys who each year enter some definite form of industrial training about 27,000 start at fourteen years of age, 15,000 at fifteen, and 30,000 at sixteen. By far the most common method of training is still the timehonoured one of attaching an apprentice to a skilled workman, but employers in increasing numbers are introducing schemes for more systematic instruction. A few companies (e.g. in engineering, shipbuilding and railway service) have established technical classes on their own premises, and special teachers are appointed in some large firms to instruct apprentices. A small number of companies insists upon apprentices and learners supplementing their practical workshop training by attendance at technical or trade classes, but in more firms time off without loss of pay is granted to attend classes a t technical schools and colleges and at the universities, attendance is encouraged by refunding evening class and other fees if satisfactory progress is shown, and prizes or merit bonuses are awarded. Facilities for technical instruction provided by* the local educational authorities are readily accessible from most, though not from all, works. In addition to measures taken by the firms one or two Joint Industrial Councils have formulated schemes for the training of apprentices. 1 A number of trade unions have also shown interest in the training of apprentices, while many unions have made rules regulating conditions of employment of apprentices, e.g. age of starting, length of apprenticeship, and ratio of apprentices to journeymen. There has been a tendency in some industries during recent years for apprenticeship and learnership to decline relatively in importance. Thus in industries in which the rates of wages of skilled workmen have fallen to low levels and prospects are poor owing to prolonged trade depression, boys are somewhat reluctant 1 For example, the Joint Industrial Council for the Printing and Allied Trades s evolved a scheme. 2i6 INDUSTRIAL RELATIONS IN GREAT BRITAIN to undertake long periods of training and are attracted by the relatively high wages paid after short periods of training in semiskilled occupations in many industries. The increasing specialisation of process and the greater use of automatic and semi-automatic machinery have resulted in a growing number of workers being able to acquire adequate experience after a period of training extending over a few weeks or months. In many works these semi-skilled jobs are still learned by assisting and observing the experienced workers, and the acquisition of the best methods is a matter of chance. But there has been an increase in the number of firms which have introduced systematic training. This is often based on movement study, the most convenient movements and arrangement of materials being analysed and then taught to new workers either by special instructors or more usually by experienced workers with ability to teach others. Instructional workshops equipped with machines are sometimes provided and new workers are taught the processes in these training rooms instead of in the factory proper; the practical training is supplemented by theoretical instruction. Systems for training foremen and forewomen and workers considered suitable for promotion to these grades of responsibility are in operation in a number of firms. The training occupies an hour or two a week during a period which varies from three months in some firms to two years in others; also in some but not in all of these firms the training takes place during working time. A main purpose is to broaden the general outlook, and therefore the training is not narrowly vocational. It consists of lectures, discussion groups and visits to other factories. The lectures may include general subjects, e.g. elementary economics, psychology, history and hygiene; they also cover more specialised subjects such as the firm's policy and administrative methods, factory organisation, processes of manufacture in the industry, costing, elimination of waste, labour management, rate-fixing, the Factory Acts, and social insurance. No guarantee of promotion is given to workpeople selected for training, but they are given first consideration when vacancies occur. HEALTH AND SAFETY Increased attention has been directed during recent years to working conditions conducive to the health of the workers, and LABOUR MANAGEMENT 217 progress has been made in the improvement of conditions and in the application of measures for accident prevention. Reference has already been made to statutory requirements, but many undertakings have gone far beyond the minimum standards prescribed by legislation. There is, however, need for an extension of the practices introduced by the most progressive firms. The losses which industry suffers from sickness among the workers is insufficiently recognised. It is true that the amount of time lost from sickness partly reflects the general state of health of the community and that the responsibility of the public health authorities is involved, but there is no doubt that a considerable improvement could be effected if appropriate methods were adopted throughout industry. The importance of the problem is shown by the fact that in England and Wales alone the number of weeks for which sickness and disablement benefits were paid during recent years among an average of over 16 million persons covered by the National Health Insurance Acts was between 25,000,000 and 30,000,000 per annum, or the equivalent of about 3 per cent, of full working time ; * in 1935 the number of persons covered in Great Britain and Northern Ireland was 18,882,550, and the total benefits amounted to £31,767,000. In addition to the time lost as a result of sickness, account must be taken of the reduced productivity of workers who, though sick, remain at work. Some years ago an official statement was made by the Chief Medical Officer of the Ministry of Health that the loss of time due to sickness, most of which is preventible, probably costs the country not less than ten times more than that which it loses owing to strikes and labour disputes.2 During the years 1927-1937, with the smaller losses from disputes, the proportion was very much higher. Industry can make an important contribution towards improvement by applying the principles established by the scientific investigations of the Industrial Health Research Board and other bodies, and much loss and dislocation of work could be avoided. These- principles have received considerable application in a number of firms. Among the chief measures adopted are improvements in ventilation, heating, humidity standards, lighting, and elimination of dust, reduction of fatigue by avoiding unduly long 1 Annual Reports on the State of Public Health by the Chief Medical Officer of the Ministry of Health. Benefits are not paid for the first three days. 2 Annual Report for 1923. 2i8 INDUSTRIAL RELATIONS IN GREAT BRITAIN hours, introduction of rest pauses especially in repetitive work,1 provision of seats, arrangement of work and design of machinery to avoid awkward postures and to eliminate unnecessary movements, and special measures in certain occupations (e.g. the use of suitable spectacles to reduce eye-strain among workers engaged upon fine work). Measures for the prevention of industrial diseases encountered in certain occupations have also been applied. Many large firms employ fully qualified doctors and nurses, and have established well-equipped works surgeries. In some firms the doctor is on full time, while in others he is on part time, attending at the v/orks each morning or on certain days each week. Some of the most complete schemes include a full-time doctor, an assistant woman doctor and several trained nurses. On the preventive side, the doctor makes suggestions for improvements in working conditions which will conduce to better health. He also examines the sickness records of the works, gives advice to individual workers who wish to consult him, and he or one of his staff attends cases of accident or illness in the works; initial or emergency treatment only is given and cases involving absence from work are referred to outside doctors or to the hospitals. The medical staff in some undertakings, including many in the food industries, examines most or all applicants for employment. A dental department is organised.in a number of undertakings; in several large firms this consists of one or more full-time dental surgeons, nurses and dental mechanics. Thus, one undertaking employs three whole-time dental surgeons, five dental nurses and a dental mechanic and has four dental surgeries, two waiting rooms and two recovery rooms ; treatment is compulsory for all employees under eighteen years of age, and the services of the department are available for other employees. In some firms a dentist is employed part time, visiting the works each morning or on one or two days each week. A few firms employ an oculist and an optician who visit the works on one or two days each week. Ultra-violet ray clinics have been introduced in a number of works. Such elaborate schemes are limited to a small minority of big undertakings, but in many other firms an ambulance room, equipped for the rendering 1 The practice is extending of introducing a rest interval of five or ten minutes in the middle of the morning and afternoon, especially for workers engaged upon repetitive work. A change of posture is encouraged, while opportunity to obtain a cup of tea or other light refreshment is offered. Experience has shown t h a t in certain kinds of work the introduction of rest intervals is usually followed by some increase in output, notwithstanding the shorter time worked. LABOUR MANAGEMENT 2ig of first-aid in cases of sickness or accident, is provided, with a trained nurse in charge; also firms which employ large numbers of women often provide a rest room for the use of those temporarily indisposed. Medical services are usually provided free for all juvenile workers and sometimes for adults, although a small charge is made for medicine. In the dental departments adults are charged amounts which cover the cost of material and labour, but juvenile workers are often treated free or at very low rates. Where spectacles are required these are supplied at wholesale prices. In some large works the cost to the firm of the medical and dental departments totals several thousand pounds per annum, but it is claimed that the expenditure is fully justified b y the reduction in the amount of sickness and improvement in efficiency. On the question of industrial accidents, increased attention has been given both to preventive measures and also to improving the first-aid treatment given to victims of accidents. It is now increasingly recognised that, in addition to Government regulations and improvements in the fencing of dangerous machinery, much voluntary effort is required by management and workers in the individual undertakings. Many firms undertake systematic education of their workpeople with a view to diminishing the number of accidents. Frequently a member of the staff is responsible for maintaining a high standard of working conditions which will contribute to safety. Safety-first committees are set u p consisting of representatives of the higher management, foremen and workers. These committees meet regularly to discuss suggestions for improving standards of safety, and frequently they enquire into any accidents which have occurred. Safety-first posters are displayed in various parts of the works and propaganda campaigns are undertaken at intervals. The National Safety-First Association, which was formed in 1919, undertakes industrial safety propaganda, including the issue of literature and the organising of conferences. 1 This voluntary organisation supplements the work undertaken by the Home Office and the Mines Department. Reference has been made earlier to the establishment of ambulance rooms for giving first-aid to victims of accidents. Workers are encouraged to attend at the ambulance room for the dressing of minor injuries so that septic poisoning may be avoided. A I t works in close association with the Industrial Welfare Society. 220 INDUSTRIAL RELATIONS IN GREAT BRITAIN widespread practice, even where ambulance rooms are not provided, is for an ambulance brigade to be formed in the works. Members of the brigade are regularly instructed in first-aid and give emergency treatment when accidents occur. First-aid boxes are placed in suitable positions throughout the works and representatives of the ambulance brigade are responsible for keeping up the necessary supply of dressings and other appliances. SUGGESTION SCHEMES Many firms, both large and medium sized, have introduced suggestion schemes and this practice is extending. Some of the schemes date from about the beginning of the present century. The purpose is to encourage the workers to make any suggestions for improvements in machinery, organisation, methods of work, and quality of products, for elimination of waste of time, energy or materials, and for increasing the health, safety, and well-being of the workers. Workers in any undertaking are, of course, free to make such suggestions, but experience has shown that few are made unless there is systematic encouragement and a clear indication that suggestions will be welcomed, together with organised methods for their communication and examination.1 In most schemes blank forms are provided on which the workers make their suggestions. The forms may then be placed in boxes provided for the purpose in each department or in some other convenient place in the works, or they may be addressed directly to the management. Arrangements are often made for assistance to be given to the worker, if necessary, in expressing his idea. Provision is made that suggestions shall be considered without delay, usually within one to four weeks ; in some works they are examined by the management alone and in others by a committee on which both management and workers are represented. Frequently the name of the worker making the suggestion is not disclosed to the committee, a number being used for identification purposes. In almost all schemes the firms make money awards for successful suggestions. The amounts of awards are based upon such criteria as the saving in money, time or materials likely to result from the application of the idea, or upon its novelty, ingenuity or the greater 1 A memorandum on suggestion schemes prepared by t h e Industrial Welfare Society gives an account of various methods. LABOUR MANAGEMENT 221 convenience to which it leads.1 The amount of the award may be fixed by the committee or the decision may rest with a director. Experience has shown that there should be no limit to the amount of award, otherwise the workers will suspect that the firm is endeavouring to secure valuable ideas without making adequate payments. Occasionally an award of £100 or more has been paid, but usually the amounts range from a few shillings to two or three pounds. Supplementary awards are sometimes made if the value of the idea proves to be greater than had been anticipated. In some works provision is made for arbitration if a worker considers that an award is too small. Accepted suggestions are noted on the workers' record cards and are taken into consideration in making promotions or granting wage increments. Frequently the nature of successful suggestions, the name of the worker and the amount of the award are posted in the department or published in the works magazine; in one firm at least the awards are made publicly at a social function. Protection of patent rights is provided for in many schemes. In some firms the number of awards is about one-third of the number of suggestions made; more usually the proportion is one in six or seven, while sometimes it is still smaller. It has been found valuable to explain to the workers concerned the reasons why suggestions have been rejected, to thank them for putting forward the idea and to invite them to make further suggestions. It is not usual to give monetary rewards to foremen and other supervisory categories, as the making of suggestions is considered to be a regular feature of their work. Sometimes the introduction of suggestion schemes has not been welcomed by foremen, on the grounds that their authority might be weakened and that a criticism of their efficiency was implied. This difficulty has, however, been overcome by regarding the making of many suggestions by his workpeople as a point in the foreman's favour, and by closely associating the foremen with the operation of the scheme. Generally speaking, suggestion schemes have proved of value, especially in large-scale industry, by providing opportunities for the workers to exercise their initiative and to show intelligent interest in promoting the efficiency of the undertaking and in its working conditions. 1 I n determining the value of a suggestion, allowance must be made for the cost of any necessary installation which the firm must bear in giving effect to the idea. 222 INDUSTRIAL RELATIONS IN GREAT BRITAIN RESEARCH AND EXCHANGE OF E X P E R I E N C E During recent years, and especially since the war, British firms have shown growing interest in scientific methods of dealing with the problems of labour management. Research has been undertaken both by individual firms and by public and private bodies, while many facilities have been developed for exchange of experience between persons regularly engaged in the practical work of labour management in the factories. In these ways considerable progress has been made in determining the methods which are likely to give the best results both in productive efficiency and in improved relations. Reference has already been made to the activities of the Industrial Welfare Society, the Industrial Co-partnership Association, and the National Safety-First Association, all of which compile data, disseminate information and organise conferences upon various aspects of labour management. Descriptions are given below of the work of the Industrial Health Research Board, the National Institute of Industrial Psychology, the Institute of Labour Management, and Management Research Groups. All these bodies except the first are voluntary organisations, while only one of them—the Institute of Labour Management—dates from before the war. Dissemination of information and exchange of experience are also facilitated by other bodies. The Home Office, though primarily interested in the observance of statutory measures, is able through the daily contacts between its inspectors and employers in the factories, to extend knowledge about the most appropriate methods of dealing with many problems of health, safety and other working conditions. The Home Office Industrial Museum established in London is a permanent exhibition of up-to-date methods for promoting industrial safety, health and welfare. Since 1919 a series of conferences for works directors, managers, foremen and forewomen has been held usually each half-year at Balliol College, Oxford, to discuss problems of business and labour management. The conferences were started on the initiative of Mr. B. S. Rowntree with a view to promoting better industrial relations and a better understanding of methods of business and labour management. The average attendance has been about one hundred, and the discussions have covered a wide range of practical questions. LABOUR MANAGEMENT 223 In the academic field, research and instruction in industrial psychology and other problems of labour management have long been undertaken in the universities, and university professorships have recently been endowed by Sir Montague Burton in Leeds, Cardiff and Cambridge to deal with these and other aspects of industrial relations. Various problems of labour management have been included in the programmes of conferences on industrial relations and allied subjects organised by the National Industrial Alliance, 1 the Industrial Christian Fellowship and other religious organisations, and the Association for Education in Industry and Commerce. The Industrial Health Research Board 2 The Industrial Health Research Board, originally called the Industrial Fatigue Research Board, is a Government body established at the end of 1918. It consists mainly of scientists, representatives of industry (including labour) and Government officials. Its chief object is to carry out systematic research into the relations of hours of work, other working conditions and methods of work to the human body, having regard both to the preservation of health among the workers and to industrial efficiency. In other words, the Board's main concern is to determine what conditions of labour are favourable to the worker's health and will result both in increased production and in decreased sickness, labour turnover, lost time and accidents. It also endeavours to educate public opinion in industry so as to ensure the fullest practical application of the results of its research work. The Board, which is now under the control of the Medical Research Council, continues work on industrial health and production begun by the Home Office and carried on during the years 1915 to 1917 by the Health of Munition Workers Committee. An attempt made in 1921 to terminate its work on grounds of economy was unsuccessful, owing to protests raised especially by Labour Members in the House of Commons. In its earlier work the Board conducted separate researches in certain industries, including iron and steel, tinplate, cotton, silk, linen, boot and shoe, pottery, laundry and glass. Among 1 An outline of the work of the National Industrial Alliance is given in Appendix X. 2 See Survey of Industrial Relations, pp. 171-178, and Annual Reports of the Board. 224 INDUSTRIAL RELATIONS IN GREAT BRITAIN the problems dealt with were movement study, the comparison of different shift systems, and the influence of hours of work and ventilation on output. The conclusions reached, even though tentative and liable to be modified by further research, were published immediately on completion of any investigation. The objects of this method were to enable the Board to acquire knowledge of the human factor over a wide field of industry, to discover the problems deserving of closer investigation, and to educate opinion in the various industries to recognise the importance of industrial health research. Later, the Board adopted its present method of selecting for detailed study certain general problems of interest not to a single industry but to many industries. The types of problems are largely determined by the state of industrial technique. This is indicated by the following quotation on the subject of industrial fatigue taken from the Board's conclusions in its Eleventh Annual Report i1 " The study of industrial fatigue in heavy work, which was among the first investigations undertaken by the Board, has now reached a stage which has in their opinion shown conclusively the fallacies of long hours and the benefits of suitable environmental conditions and of scientifically imposed rest pauses. The fatigue with which the Board is now more concerned is the mental state produced by hours of monotonous work in an industrial world of progressively mechanised production ". Among the general problems investigated are: (i) hours of work, and particularly their arrangement within the working day and week; rest pauses in heavy work and in repetitive work; shift systems; (2) the personal factor in accident causation ; (3) the design of machinery in relation to the requirements of the operator; (4) manual dexterity, including the effects of training; vocational guidance and selection; (5) the effects of monotony in work; incentives; (6) the relation between illumination and efficiency in fine work ; the relief of eye-strain by the use of special spectacles for fine work; (7) the effects of noise and vibration, of heating and ventilation. Report for the year ended 30 June 1931, p. 5. LABOUR MANAGEMENT 225 Although the Board gives major attention to general problems, the needs of particular industries are not neglected, and investigations on specific problems are undertaken at the request of Government departments and industrial associations. Among investigations of special interest to particular industries and occupations which have been completed during recent years are : (1) a study of telegraphists' cramp; (2) the relation of atmospheric conditions to the working capacity and accident rate of miners ; (3) fan ventilation in a weaving shed ; (4) effect of artificial humidification upon sickness rates of cotton weavers; (5) sickness among operatives in Lancashire cotton spinning mills (with special reference to workers in the cardroom); sickness of London Transport Workers; (6) investigation into the sickness experience of printers. 1 The various problems are studied partly by full-time paid investigators who conduct researches and experiments in the factories or other working places, and partly by laboratory researches under academic direction for which financial grants are made. The Board frequently invites representatives of the employers and workers in any industry in which investigations are being conducted to serve on an advisory Committee ; the members of these Committees assist the Board by obtaining the co-operation of undertakings in the industry, by making suggestions on technical aspects, and by criticising the results before publication. The Board has been granted facilities for investigation in various Government undertakings (under the Admiralty, War Office, Air Ministry and Post Office). Some of its researches have been conducted in collaboration with the Department of Scientific and Industrial Research and other bodies. 2 The results of the investigations are published in special reports. It is not within the scope of this study to describe the conclusions reached. Many of them " involve no revolutionary 1 This investigation was conducted at the request of the Joint Industrial Council for the Printing and Allied Trades, and the Newspaper Proprietors' Association of London. 2 Until 1921 the Board was under t h e joint control of the Department of Scientific and Industrial Research and of the Medical Research Council. 15 226 INDUSTRIAL RELATIONS IN GREAT BRITAIN change in factory organisation, and in some cases do little more than place upon a scientific and statistical basis empirical practices adopted by individual workers and by enlightened firms ". 1 But the methods and working conditions of a large part of British industry fall much below the practices which have been proved by experience and experiment to give the best results. The Board is therefore endeavouring in the interests of health and efficiency to secure by means of publicity in the various industries a more widespread adoption of the conlcusions reached. The National Institute of Industrial Psychology The National Institute of Industrial Psychology is a voluntary organisation founded in 1921 for the study of industrial psychology and the practical application of its results.2 Its general aim is to reduce waste of human energy and to increase contentment throughout industry. If this object is to be attained, the worker must have the satisfaction of doing the work for which he is best fitted, by his aptitude and abilities, in an atmosphere of understanding and goodwill. The Institute, therefore, gives attention to vocational guidance and selection ; it further seeks to eliminate conditions, both physical and mental, which cause needless strain, fatigue or friction, and to substitute conditions which promote co-operative activity. As its work developed the Institute found it necessary to extend its activities beyond a narrow application of physiological and psychological science. It is not enough merely to make such changes as the introduction of reliable methods of vocational selection and the elimination of bad movements or posture, bad lighting and ventilation. The workers' psychology is affected by the general efficiency of organisation and morale in an undertaking, and the Institute gives consideration to these broader aspects. The scope of the Institute's work includes : (1) Elimination of unnecessary movements; determination of the most advantageous arrangement of hours of work and 1 Tenth Annual Report of the Board, 1929. The Institute has been financed partly by donations from firms and individuals and the subscriptions of its members, and partly by grants from various funds, including the Carnegie United Kingdom Trust Fund and the Laura Spelman Rockefeller Memorial. Firms which invite the Institute to conduct investigations and make recommendations on their behalf pay for these services, while individuals who ask it for vocational guidance are charged a fee. 2 LABOUR MANAGEMENT (2) (3) (4) (5) (6) (7) 227 rest ; planning the lay-out of plant ; co-ordination of processes in production; reduction of monotony and increase of interest. Methods of wage payment and other incentives. Efficient and scientific vocational guidance and selection. Determination of conditions which tend toward the maximal health, comfort and well-being of the worker, and toward the best relations between management and labour. Factors influencing the sale of products (e.g. advertisement, salesmanship, designing). Provision of training courses for managers, foremen and investigators; lectures for employers and workers. Research work in industrial psychology and physiology and the publication of results. Although the Institute, like the Industrial Health Research Board, conducts research into fundamental problems common to many undertakings and industries, it gives special attention to the needs of particular firms and of individuals (by vocational guidance). The Institute has a staff of trained investigators and, at the request of individual firms, conducts detailed enquiries in the undertaking and makes recommendations on the basis of actual observation, collection of data and experiment. Such investigations have been carried out in factory and office on behalf of several hundred industrial concerns, many of them important and well-known firms, in a wide range of industries, including coal mining, gas manufacture, building, engineering, motor-car manufacture, textiles, clothing, food preparation, the distributive trades, and transportation. The investigators have the advantages that, not being members of the firm's staff, they are free from the suspicion of bias, they approach the problems with fresh minds unfettered by the traditional methods of the firm, and they bring to their work experience of methods which have proved successful in other undertakings. 1 There is evidence to show that many of the investigations have resulted in increased output, reduced waste, less fatigue (physical and mental) and greater interest by the employee in his work, increased earnings, and improved industrial relations. It is of 1 A number of the Institute's investigators and trainees have been appointed t o posts in industrial undertakings. 228 INDUSTRIAL RELATIONS IN GREAT BRITAIN interest to note that, as is indicated in Annual Reports of the Institute, the human factor is not restricted to working conditions, movement study and the like in their narrower sense, but enters into nearly all the wider aspects of industrial reorganisation, and " with the modern developments of rationalisation the Institute's services are in increasing demand for the organisation of productionplanning departments, personnel departments, and office routine, for the maintenance of esprit de corps, for the determination of the best lay-out, routine and equipment, and not merely for the improvement in lighting, ventilation, posture, training, etc ".1 The Institute's work in vocational guidance is chiefly concerned with adolescents, assistance being offered to educational authorities, teachers and parents. The advice given to individuals is based upon careful consideration of: (i) the child's achievements, (2) facts supplied by parents, (3) psychological tests. The Institute, in collaboration with the Industrial Health Research Board, has conducted researches into the problems of vocational guidance. Other subjects into which researches have been carried out by the Institute include methods of occupational analysis, performance tests of intelligence, tests of mechanical ability, tests of manual dexterity, and tests of attention. The results are published in special reports or in the Institute's monthly journal. On the educational side the Institute and the Industrial Health Research Board are associated with the teaching of industrial psychology in the School of Economics of the University of London. The Institute also, by lectures and publications, spreads knowledge of the subject and indicates the practical value to employers, managers and workers of the results of research. The Institute of Labour Management 2 The movement which led to the formation of the present Institute of Labour Management began before the war in Welfare Conferences held in 1909 and 1913. Following the second Conference an organisation known as the Welfare Workers' Association was founded in 1913 with the chief object of maintaining contact between persons engaged in industrial welfare work in the various undertakings. 3 During the war, largely as a result of the Ministry 1 Annual Report, 1930. This section is based on information communicated by officers of the Institute. 3 Among other objects were the keeping of a record of factories in which welfare work was undertaken, and the maintaining of a register of possible recruits to the profession. 2 LABOUR MANAGEMENT 229 of Munitions requiring the appointment of women to supervise the working conditions of women and girls in Government and controlled factories, the number of welfare workers increased rapidly and contact was established between them for exchange of experience in several industrial centres. In 1917 the original Association constituted itself into a professional body, full membership being restricted to welfare workers. Two years later the Association, the members of which were mainly women welfare supervisors, amalgamated with two bodies consisting only of men engaged in industrial welfare work. A further development took place in 1924 when the amalgamated society was incorporated as a professional body under licence from the Board of Trade with the title of the Institute of Industrial Welfare Workers. In 1931 there was an important development of policy when the title was changed to the Institute of Labour Management. This change was due in part to the fact that many employers placed a narrow interpretation upon the expression " industrial welfare work ", and consequently welfare supervisors were often, in practice, limited to a few functions including responsibility for canteens, first-aid, rest rooms, social and sports clubs. On the other hand, there was a growing tendency for firms to set up labour or employment departments responsible for the firm's labour policy, and performing such functions as the selection and training of workers, application of works rules and discipline, supervision of working conditions, health, safety, social and welfare services, and joint consultation in works councils. In factories where a broad interpretation had been given to welfare, the welfare superintendent, through acquiring a specialised knowledge of the firm's labour problems, was frequently the best-qualified person to undertake labour management, and was gradually recognised by the employer to be responsible for the administration of labour policy. In view of these changes, the Institute adopted its new title so that it would not only be free from the danger of a narrow interpretation of welfare work, but would also include within its scope the wider aspects of labour management. It is too early yet to draw final conclusions as to the effects of the change in name, whether many of those now employed as labour managers will become members of the Institute, and whether employers will recruit the staffs of their labour departments from those who have undertaken the training and attained the qualifications required for membership of the Institute, but progress has been made in these directions. 230 INDUSTRIAL RELATIONS IN GREAT BRITAIN Although for historical reasons its membership still consists largely of welfare supervisors, the Institute is officially constituted as a professional association of men and women engaged in labour management (industrial welfare work, staff management and employment administration).1 Its chief objects are to promote and develop the science of labour management ; to foster and maintain investigations and research into the best means and methods of applying the science of labour management in the interests of industry and all engaged therein; to extend, increase and disseminate knowledge and exchange information and ideas in regard to all questions relating to labour management; to take steps to secure that those who contemplate undertaking labour management and desire to become members of the Institute shall have received or shall receive special training. Through the Institute, an endeavour is made to formulate a common policy, to work out a technique, and when necessary to take united action on matters concerned with developments and improvements of labour management. For many years regular meetings and conferences have been held nationally and also locally, branches of the Institute having been formed in the chief industrial regions; these meetings and conferences have provided opportunities for frequent exchange of experience. A journal, now called Labour Management (formerly Welfare Work), has been issued monthly since 1920. The Institute serves as a bureau of information and also as an employment bureau for its members. Management Research Groups The formation of Management Research Groups began in the year 1926. Their object is " to enable business men to exchange ideas on their common problems, and to benefit in a practical way from each other's experience, with the least possible expenditure of time and effort ".2 Their promoters were of the opinion that organised co-operation by exchange of experience would lead to improved industrial efficiency, higher profits, higher wages, better 1 The scope of the work undertaken is defined t o include the selection, training and supervision of employees, research into all matters concerning employment, and knowledge of the laws afiecting employment in general, and the trade or industry in particular. I t also includes attention to working conditions, health safety and general well-being of the employees, and all schemes of co-operation between employer and employed. 2 Management Research Groups : What they are and how they work, General Series, No. i, July 1927. The present section is based mainly on this publication and on information supplied by officials of the organisation. LABOUR MANAGEMENT 231 industrial relations, and a higher standard of living for the community. These consequences would follow from the wider application of up-to-date methods of management which had been found to give good results in certain firms. The success obtained along these lines by the Manufacturers' Research Association, which had been formed in Massachusetts, U.S.A., shortly after the war, exercised a considerable influence upon the formation and development of Management Research Groups in Great Britain. In 1926 three groups of firms were formed to exchange experience and collaborate in the collective study of most phases of management. By the summer of 1931 there were ten groups, and most of them have subsequently met regularly. In order to ensure maximum freedom in the exchange of information, groups generally consist of businesses not directly in competition with each other. A convenient number of firms in a group is from about ten to fifteen. It has been found desirable that the firms in any group should be approximately similar in size; for example, so different are many of the management methods appropriate to firms with more than 5,000 workers from those suitable for firms employing less than 500 workers that representatives of such firms would find less value in exchange of experience than in discussing problems with representatives from firms of roughly their own size. One of the original groups consisted of companies employing not less than 1,500 persons; in other groups most of the firms are smaller, one group, for example, consisting of firms employing under 500 persons. Most of the groups are made up of firms in the same locality, experience having shown. that, for convenience and economy, a radius of about 100 miles gives a suitable area; at least one group, however—that consisting of the largest firms—includes undertakings in widely separated localities throughout England. The work of the various groups is co-ordinated by a central headquarters in London, but as the whole idea is free and spontaneous co-operation, any group may remain entirely autonomous and make its own secretarial arrangements independently of the Central Office. As already indicated, the groups discuss almost all problems of management, including finance, production, marketing, selling, office management and higher control. Considerable attention has been directed to the problems of labour management. Among the subjects on which there has been discussion and exchange of experience are: the functions of labour management; methods of selecting workers, including psychological tests; the training of 232 INDUSTRIAL RELATIONS IN GREAT BRITAIN workers; methods of wage payment; hours of work; suggestion schemes; labour management problems resulting from rationalisation; prevention of accidents; internal social services, including pension funds, sickness and accident funds, thrift and holiday funds, medical service, works councils, education, canteens, social clubs, and recreation. In studying any question the groups do not follow a standardised procedure. Naturally, however, when labour matters are discussed the firms are represented by their labour or employment managers or others responsible for their labour administration. Information is collected from each firm by means of questionnaires, and meetings are held at frequent intervals. If any firm has obtained good results from an experiment, a representative of the firm describes the methods adopted, while a visit to the works may be arranged to see the scheme in actual operation.1 No attempt is made to formulate final conclusions on any subject. Each firm forms its own opinions and makes whatever practical use it desires of the data and methods reviewed. It would be difficult to attempt a detailed appreciation of results, but there is obviously much value in the regular contacts established between the specialists òf various firms, in the pooling of information, and in the stimulus to a wider application of methods which individual firms have found to be successful. 1 There is, of course, no obligation upon any firm to disclose any information which t h e y wish t o keep private. CHAPTER VIII CO-OPERATION IN NATIONAL ECONOMIC COUNCILS EXPERIMENTS in the establishment of permanent national machinery representative of employers and workers in all the chief industries for the joint consideration of general industrial and economic subjects of mutual interest have been more tentative in Great Britain than in certain continental European countries. Several early attempts to institute national councils were premature and did not achieve much success, while little use is at present being made of machinery established in 1929 for co-operation between the General Council of the Trades Union Congress, representing the workers, and the Federation of British Industries and the National Confederation of Employers' Organisations, representing the industrialists. The Economic Advisory Council, set u p b y the Prime Minister in 1930 to advise the Government, bears some resemblance to certain advisory bodies abroad; it is, however, a small body and is not designed to relieve Parliament of the burden of technical, economic and industrial questions. In view of the congestion of Parliament and the large and growing proportion of the time it devotes to industrial and social questions, proposals are sometimes made for the institution of a more representative body than the Economic Advisory Council—even for an industrial parliament—but up to the present these proposals have not received extensive support. The early attempts to institute national bodies widely representative of employers and workers were concerned mainly with industrial unrest and the development of more effective means of settling disputes, rather than with broader economic questions. Thus in 1911, following serious strikes by railwaymen, seamen and dockers, the Government set up an Industrial Council to supplement and strengthen the conciliation machinery operated by the Board of Trade in accordance with the Conciliation Act of 1896. The Council consisted of twenty-seven persons—thirteen employers' representatives, an equal number of workers' representatives and an impartial chairman. It had a brief uneventful 234 INDUSTRIAL RELATIONS IN GREAT BRITAIN existence and disappeared during the abnormal conditions of the war years. During the war two voluntary organisations were established for the improvement of relations between employers and workers, and in '1925 they amalgamated to form the National Industrial Alliance. A sketch of the objects and activities of this body is given in Appendix X. NATIONAL INDUSTRIAL CONFERENCE, 1919 The menace of exceptional industrial unrest shortly after the conclusion of the war led the Minister of Labour, in February 1919, to call a National Industrial Conference, consisting of representatives of the great employers' organisations and trade unions, of Joint Industrial Councils and trade boards, together with members of the Government. The Conference was thus representative of the whole of British industry, ranging from industries in which employers and workers were highly organised to those with only weak organisations. The object of the Conference was to examine the causes of, and to suggest remedies for, industrial unrest. A committee of the Conference reviewed and reported upon a wide range of questions, including not only hours, wages, employment and unemployment, but also the best methods of promoting co-operation between capital and labour. Some of the chief conclusions on conditions of labour were: 1 (1) the establishment by legal enactment of the principle of a maximum normal working week of forty-eight hours; this was to be subject to certain exceptions, especially that higher or lower maxima might be applied in any trade by collective agreement; (2) the establishment by legal enactment of minimum timerates of wages, to be of universal applicability; extension of the trade boards system, and the application of minimum time-rates fixed by collective agreements to all employers in the trade concerned; (3) organised short time, regulated by joint representative bodies in each industry, has considerable value in periods of depression ; Government housing schemes and State development of new industries should be undertaken to increase Survey of Industrial Relations, pp. 307-309. NATIONAL ECONOMIC COUNCILS 235 the demand for labour; Government orders should be regulated with a view to stabilising employment; (4) more adequate unemployment, sickness, infirmity and oldage benefits; the wider application of the system of unemployment insurance and its extension to under-employment. Several of these recommendations have been put into effect either in the administration of legislation already enacted or by new Acts of Parliament. Thus the recommendation on Unemployment Insurance has been applied, other systems of social insurance have been improved, the trade boards system has been more extensively applied, and Government housing schemes have been undertaken on a large scale. These measures have contributed greatly to social welfare during post-war years. The Conference also reached important conclusions on questions of relations and co-operation between organised employers and organised workers. Remarkable progress had been made during the war years in the recognition of trade unions by the employers. This was due mainly to the great increase in numbers and strength of the trade union movement, to trade union recognition by the Government, and to the frequent joint consultations which took place during the war years between the Government and the representatives of organised employers and workers. Therefore, whereas before the war employers in not a few industries had refused to recognise the trade unions, the Conference readily agreed that the basis of negotiation between employers and workpeople should be full and frank acceptance of employers' organisations and trade unions as the recognised organisations to speak and act on behalf of their members. The Conference further recommended that a permanent National Industrial Council should be established to advise the Government on national industrial questions. It was proposed that this Council should consist of 400 members, of whom one-half should be elected by employers' organisations and one-half by trade unions, and should be presided over by the Minister of Labour. No steps were taken to p u t this ambitious-scheme into operation. TURNER-MELCHETT CO-OPERATION AND ITS SEQUEL Several years of exceptional industrial unrest passed before another attempt was made to establish a system of national 236 INDUSTRIAL RELATIONS IN GREAT BRITAIN consultation. The enormous losses suffered by British industry from the coal stoppage and General Strike of 1926 compelled consideration to be given to the possibilities of improving industrial relations and of finding more peaceful methods of adjusting differences. A conciliatory attitude was manifested at the 1927 Trades Union Congress in Edinburgh and a resolution was passed which stated that no section of the community was more desirous of industrial peace than the workers. In moving this resolution a willingness was expressed to meet the employers in conference and to hammer out solutions to problems. A few weeks later the National Confederation of Employers' Organisations in one of its occasional public statements referred to the resolution of the Trades Union Congress and indicated its own desire to contribute towards the promotion of industrial peace. Shortly afterwards, in November 1927, the late Lord Melchett (then Sir Alfred Mond), in association with about twenty other prominent industrialists, invited the General Council of the Trades Union Congress, the Chairman of which was then Alderman (now Sir) Ben Turner, to enter into discussions covering the entire field of industrial reorganisation and industrial relations. The invitation expressed the view that the movement towards industrial co-operation had recently received a great accession of strength, that common interests of employers and workers were more powerful than the apparently divergent interests which seemed to separate, and that full and frank co-operation would contribute to the restoration of industrial prosperity and the corresponding improvement in the standard of living of the population. Although the industrialists who issued this invitation did so in their personal capacity and not in any way as the representatives of employers' organisations, the General Council agreed to take part in discussions with them and a Conference on Industrial Reorganisation and Industrial Relations was arranged. It is interesting to note that the initiative for this Conference came from industry and not, as for the 1911 Council and the 1919 Conference, from the Government. The General Council's action in co-operating with the industrialists was criticised at the Trades Union Congress both in 1928 and 1929 by a minority who held that to collaborate with the " enemies of Labour " was a serious menace to the interests of the working-class movement. A large majority, however, supported co-operation on the grounds expressed by the General Council that, thereby, the unions would have a NATIONAL ECONOMIC COUNCILS 237 voice as to the way industry is carried on, that in the application of its ultimate policy of industrial control the movement would find more use for an efficient industry than for a derelict one, and that the unions could use their power to promote and guide the scientific reorganisation of industry as well as obtain material advantages from the reorganisation. During 1928 and 1929 the Conference discussed a wide range of subjects and issued a series of reports embodying its conclusions on trade union recognition, victimisation, rationalisation, methods for the prevention of disputes, unemployment, and the gold reserve in relation to industry. It also favoured the establishment of a National Industrial Council, the employers' side of which would consist of representatives of the National Confederation of Employers' Organisations and of the Federation of British Industries, and not, as in the Conference, of individuals who were responsible to no organisation and were merely expressing their own personal opinions. It was considered that the Council should: (1) hold regular meetings once a quarter for general consultation on the widest questions concerning industry and industrial progress ; (2) establish a Standing Joint Committee for the appointment of Joint Conciliation Boards; (3) establish and direct machinery for continuous investigation into industrial problems. The proposal for setting up a Council along these lines was approved by the Trades Union Congress in 1928, and the Conference then invited the National Confederation of Employers' Organisations and the Federation of British Industries to participate with the Trades Union Congress in the establishment of the proposed National Industrial Council. The two employers' organisations did not accept the proposal, but suggested instead that some other method of consultation might be evolved, and, as a result of negotiations in 1929 between them and the General Council of the Trades Union Congress, a scheme for the joint discussion of a wide range of subjects of mutual interest was agreed upon. Recognising that it would be impracticable for two series of discussions on the same range of topics to proceed simultaneously, the Conference on Industrial Reorganisation and Industrial Relations then decided that its own work should 238 INDUSTRIAL RELATIONS IN GREAT BRITAIN be terminated and in a final report expressed the hope that the new machinery would not only take its place as an integral, permanent feature of the industrial system, but would justify itself by the contributions it would make to the solution of the grave economic problems with which industry is confronted. The Conference concluded its report by stating its conviction that the fullest consultation between the representatives of organised employers and organised labour is essential to the welfare of British industry and its future prosperity. Before outlining the method and results of this more formal consultation, it is of interest to summarise the chief conclusions of the " parent " Conference, even though, on the employers' side, they carry the authority only of individuals and not of organised employers. The report on trade union recognition regarded the Trades Union Congress, representing the affiliated trade unions, as the most effective organisation and as the only body which possesses the authority to discuss and negotiate on all questions relating to the entire field of industrial reorganisation and industrial relations. It also recognised that industry in this country had benefited by the progressive increase in the volume of negotiations which had taken place between employers and representatives of trade unions, and by the enormous growth of joint machinery for such negotiations. This had proved so beneficial that it should be encouraged and extended. Towards this end the Conference considered that it is definitely in the interests of all concerned in industry that full recognition should be given to all bona-fide trade unions as the appropriate and established machinery for the discussion and negotiation of all questions of working conditions, including wages and hours, and other matters of common interest in the trade or industry concerned. The Conference was of the opinion that negotiations between employers and workmen are facilitated by workmen being members of a trade union, and also by employers likewise being organised. The report was thus reminiscent of the Whitley Committee's conclusions. On the question of victimisation, which was especially acute in 1927 after the conflicts of 1926 and has been a frequent cause of industrial friction, the Conference considered that it is most undesirable that any workman should be dismissed or otherwise penalised on account of his membership of a union, on account of his official position in a union, or on account of any legitimate NATIONAL ECONOMIC COUNCILS trade union activities. Where a prima-facie case is established that a workman has been dismissed or otherwise penalised for trade union membership or activities, some appeal machinery should be provided for the investigation and review of such a case. The report on rationalisation endorsed the definition adopted by the World Economic Conference at Geneva in May 1927,1 and welcomed the tendency towards rationalisation " in so far as it leads to improvements in the efficiency of industrial production, services and distribution, and to the raising of the standard of living of the people ". Emphasis was laid upon the need for safeguards to ensure that the interests of the workers do not suffer by the adoption of those measures of rationalisation which tend to displace labour or to modify in undesirable ways the conditions of work. On the other hand,, it was recognised that various practices and rules, including those established by trade unions, may hamper the progress of rationalisation; with a view, therefore, to ensuring adequate adaptability and elasticity in industry, it was suggested that the trade unions and employers should consider the advisability of making agreed experimental variations from these practices and rules. In considering methods for the prevention of disputes the Conference recognised the beneficial work which is being carried on by existing joint machinery and favoured the improving or strengthening of this machinery wherever possible. It regarded the application of the element of compulsion as unacceptable and undesirable. It proposed that the existing machinery should be supplemented by a system of Joint Conciliation Boards.2 In the event of failure to settle a dispute within any industry the matter would be referred, on the application of either party, to a Joint Conciliation Board for investigation and report without undue delay. In order to facilitate the investigation it was thought desirable that both parties should arrange that no stoppage of work or alteration in conditions should take place pending the report of the Board. The personnel of the Boards should not be permanent, but should in each case consist of the representatives 1 The Geneva Conference had defined rationalisation as " the methods of technique and reorganisation designed to secure the minimum waste of either effort or material. I t includes the scientific organisation of labour, standardisation of both material and products, simplification of processes, and improvements in the system of transport and marketing." 'These Boards were to be appointed by a Joint Standing Committee of t h e National Industrial Council which the Conference proposed should be set u p . 240 INDUSTRIAL RELATIONS IN GREAT BRITAIN most suitable for dealing with the particular industry or matter tending towards dispute. On unemployment an interim report only was issued, the principal recommendations of which were : an enquiry into the consolidation of existing pensions and insurance funds should be set up by the Government; funds for assisting emigration should be largely increased, and a scheme of settlement extending over a period of twenty years should be set up; unemployment in the mining industry should be considered as a special case and relief measures and schemes continued at an accelerated rate ; export credits should be extended; augmented pensions should be made available to workers of sixty-five and over who cease work; the Government should create and maintain a development fund capable of financing important national schemes, and further extension of constructional schemes of a permanent character should be undertaken ; rationalisation should be pressed forward as rapidly as possible, in consultation with trade unions as to the best method of dealing with displacement, and with assistance for displaced labour, where possible, from a labour reserve fund constituted by firms or industries out of profits; serious consideration should be given to the question of raising the school-leaving age ; a Government enquiry into currency and banking policy should be undertaken immediately. On the subject of the gold reserve in its relation to industry, the Conference doubted whether it is practicable or desirable that the credit policy of the country should be determined more or less automatically by gold movements, as in pre-war days. Greater flexibility and international co-operation on the lines of the plan proposed at the Genoa Conference, 1922, were advocated with the objects of economising the use of gold, regulating its distribution, and preventing undue fluctuations in its value. Turning now to the consultations between the National Confederation of Employers' Organisations, the Federation of British Industries and the General Council of the Trades Union Congress, it had been recognised from the beginning of the Turner-Melchett discussions that the preferable course would be for more formal representation of the employers. There was, however, the difficulty, which was indicated in the invitation originally sent by Sir Alfred Mond and his colleagues to the General Council of the Trades Union Congress, that there was no single existing organisation of employers which could undertake discussions both on labour questions and on broader economic and commercial questions. As has been seen, NATIONAL ECONOMIC COUNCILS the National Confederation deals with the former and the Federation of British Industries with the latter. This difficulty appears to have been one of the reasons why the employers' organisations did not accept the proposal of the Turner-Melchett Conference for the setting up of a National Industrial Council. I t also made necessary the introduction of a special mechanism, which is described below, when the scheme of formal consultation was finally arranged. The chief features of the scheme, which was unanimously adopted by the three organisations in December 1929, are as follows : (1) The Trades Union Congress, Confederation, or Federation of British Industries can propose as subjects for discussion any matter within their respective provinces which is of common interest to British industry, it being understood t h a t these discussions will not invade the provinces or trespass upon the functions of the individual constituents of the three organisations. (2) Having regard to the separate spheres and functions of the two employers' organisations, these bodies will set up an allocation committee the sole function of which will be to say whether any given subject proposed by any of the three organisations is one which concerns the responsibility of the Confederation or the Federation or both. If an organisation declines to discuss any subject proposed, it will give its reasons to the organisation which proposed the subject. (3) Unless otherwise agreed upon, all discussions and correspondence arising out of the scheme shall be confidential to the three organisations, and when a subject has been discussed no action shall be taken on any conclusions reached until these conclusions have been specifically approved by the organisations concerned. (4) As some indication of the types of subjects in regard to which the machinery could operate, the following illustrative list was drawn up: unemployment, industry and finance, taxation of industry, social services, education and industry, delegated powers of Government departments, inter-Empire trade, international trade (mainly tariff questions), trade facilities, insurance of export credits, general international labour questions, industrial and commercial statistics. 16 242 INDUSTRIAL RELATIONS IN GREAT BRITAIN Discussions under this scheme have been few, they are ad hoc, taking place when agreement is reached on a subject. No provision is made for regular meetings or for a permanent staff such as were features of the National Industrial Council proposed by the TurnerMelchett Conference. Up to the beginning of 1932 four questions had been agreed upon for discussion, but subsequently the machinery has been neglected. Of these questions, three concerned the Federation of British Industries and the Trades Union Congress General Council, and only one the National Confederation and the General Council. In 1930 the question of industry and finance, with reference to the work of the Macmillan Committee,1 was discussed by the General Council and the Federation and the two bodies were in substantial agreement; no joint statement of conclusions was, however, issued and each body gave its evidence independently before the Committee. The same two organisations also examined the subject of Commonwealth trade and a joint memorandum was submitted to the Government immediately before the opening of the Imperial Conference in the autumn of 1930. This memorandum emphasised the paramount importance of measures being taken to increase inter-Commonwealth trade. It specially recommended that the Imperial Conference should set up adequate machinery for economic consultation between the various parts of the Commonwealth. This machinery, which should include a representative Commonwealth Economic Conference to meet at regular intervals and a permanent Economic Secretariat, should conduct investigations with a view to the formulation of a constructive Commonwealth economic policy and should facilitate its practical application. The Imperial Conference, London, 1930, and the further Conference in Ottawa in 1932 gave partial effect to the proposed development; but the suggestion for the setting up of a permanent Economic Secretariat was not adopted. In 1931 arrangements were made for discussions to take place between the Federation and the General Council upon the general position of the British film industry, with special reference to the working of the Film Quota Act. The single subject jointly discussed by the National Confederation 1 This Committee was set up to enquire into banking, finance and credit, paying regard to t h e factors, both internal and international, which govern their operation, and to make recommendations calculated to enable these agencies to promote t h e development of trade and commerce and the employment of labour. NATIONAL ECONOMIC COUNCILS 243 and the General Council was the grave problem, proposed by the General Council, of the displacement of labour arising from reorganisation of British industry and the fact that in many cases adequate provision is not being made to tide over the transition period. The existence of a system for consultation between the three great bodies of employers and workers is of value in itself, though its operation has produced no outstanding results. The mechanism is, however, available for use when needed. ECONOMIC ADVISORY COUNCIL The Economic Advisory Council differs widely both in purpose and structure from the system of co-operation between the Trades Union Congress General Council and the two great employers' organisations. The Council was set up, in accordance with a decision of the Government announced in January 1930, to advise the Government in economic matters and to study developments in trade and industry and in the use of national and imperial resources, the effects of legislation and fiscal policy at home and abroad, and all aspects of national, imperial and international economy with a bearing on the prosperity of the country.1 With the approval of the Prime Minister the Council may initiate enquiries and advise upon economic matters, including proposals for legislation. The Council is a permanent body and its reports are presented to the Cabinet. The Prime Minister is chairman of the Council, which includes more than twenty other members. Several of these are Cabinet Ministers and the remainder are other persons chosen by the Prime Minister in virtue of their special knowledge and experience in industry and economics. These other persons are appointed as individuals and there is no representation of employers, workers, or any other interests as such. This limits the contribution which the Council might make to the improvement of industrial relations. Industrialists and labour are, however, both represented on the Council by individuals who thus co-operate in advising the Government. The Council may also invite the assistance, as advisers or as members of any committees which may be appointed, of persons 1 The objects and organisation which are summarised in this section are given in Treasury Minute dated 27 January 1930, appointing an Economic Advisory Council, Cmd. 3478. 244 INDUSTRIAL RELATIONS IN GREAT BRITAIN who have expert knowledge of industrial, labour or other conditions. The Council has a small staff of officials. A body of this kind could evidently serve a useful function in making recommendations based upon economic rather than upon political considerations. Any action which may result from the advice tendered is, however, determined by political interests, since it is taken on the sole responsibility of the Government. Also the public have no means of appreciating the extent of divergence between the recommendations of the Council and the action taken by the Government, as the work and reports of the Council are usually confidential.1 Because of the confidential character of the Council's activities, it is not possible here to give an account of the investigations which it has undertaken or to indicate the nature of its recommendations. The Council has no doubt discussed many important economic questions, but there is no means of. judging its effectiveness when consulted, while on many important issues the Government has not sought its advice. Its methods largely preclude it from influencing public opinion, and at present it seems to be used even less than in the years immediately after its formation. 1 The results of various investigations for which the Council has been responsible have been published. One of these was an enquiry by a delegation into industrial conditions in the iron and steel industry in France, Belgium, Luxemburg, Germany and Czechoslovakia. There is the report of a committee on the cotton industry suggesting the remedies which Lancashire should adopt t o secure an improvement for the cotton trade. A report on industrial research and development drawn up by a committee of t h e Council has also been published. CHAPTER IX CONCLUSIONS A REVIEW of industrial relations in Great Britain during the last thirty or forty years shows many changes and contrasts. Some industries have been storm centres of unrest, and industrial conflicts have been frequent and severe. Other industries, no more fortunate in their economic conditions, have preserved an untarnished record of industrial peace. Industrial warfare, which had been exceptionally severe during the five years before the war, was resumed with redoubled violence in the five years from 1919 to 1923. A lull in 1924 and 1925 was followed by the catastrophe of 1926 when, in this one year, the aggregate of time lost, chiefly in the General Strike and the nine months' stoppage in the coal-mining industry, was considerably greater than during the whole of the fifteen years from 1905 to 1919.1 Then, in marked contrast with pre-war and early post-war years, the period from 1927 to 1937 was remarkably free from serious conflicts, and the aggregate duration of strikes and lock-outs if spread over all workpeople in the country represented a loss of working time to British industry of little more than one day in five years, or an average of less than two hours each year. For an understanding of British industrial relations it is necessary to take into account the changes in economic conditions during the present century and the effects of these changes on the temper and attitude of employers and workers in different industries. During the period from 1900 to 1920 prices were rising and pressure by the trade unions was usually effective in securing increases in money wages and other successes. Indeed, the conflicts of 1910 to 1914 were the result partly of the pressure of rising prices upon the workers' standards of living and partly of the spread of Socialist ideals and enthusiasm, and growth of organisation among the workers. The war years were marked by growth in prestige of the 1 The aggregate loss in working days during the five years 1910 to 1914 was about 80,000,000, and during the five years 1919 to 1923 was about 178,000,000. The aggregate in the year 1926 was 162,000,000. 246 INDUSTRIAL RELATIONS IN GREAT BRITAIN trade union movement, almost complete recognition, agreement to many of its demands, and Government promises of improved conditions. During the years 1919 and 1920 prices were still rising and the trade unions secured many increases in money wages during these years, as well as important reductions in hours of labour. For twenty years, therefore, trade unionists, leaders and rank and file together, had enjoyed success. Many gains could be claimed, though some were only nominal, for example, the adjustment of money wages to changes in the cost of living. Membership also had grown steadily for two decades and in 1920 had reached the remarkable figure of over 8,000,000. The movement was full of enthusiasm and confidence. Then came a reversal of economic trends. A period began which was marked by deflation, falling prices, persistent severe unemployment, world economic crises, and a painful transition of British industry to new conditions of world trade. Even before the war there were indications that British exports would be likely to encounter increasingly severe competition from growing industries abroad and that Britain's commanding position of the nineteenth century was rapidly passing. The onset of this change had, indeed, been largely responsible for the resistance offered by employers to the demands of the workers during the years 1910 to 1914. But the pre-war difficulties were small compared with those after the war, including extravagant currency fluctuations abroad, deflation at home, high tariffs and other barriers to British trade abroad, and the necessity for rationalising the basic industries, reducing the size of some, and developing new industries. It is not surprising that both trade unionists and employers found difficulty in adjusting their policies and methods to such fundamental changes. Leaders on both sides had experienced only rising prices and reasonable prosperity and their technique of negotiation and the psychology of their followers required modification. The economic depression fell with much greater force upon industries competing in world markets than upon those sheltered from foreign competition. Workers in many unsheltered industries were unwilling without a struggle to allow their wage rates and standards of living to fall considerably below those of workers in sheltered industries, and this partly explains the greater severity during the early post-war years of conflicts in unsheltered industries. In some unsheltered industries the changed conditions were quickly recognised and peaceful adjustments were made. But it was not CONCLUSIONS 247 until after the disasters of 1926 that the necessity of going to great lengths of mutual concession in order to avoid conflicts was at last realised throughout almost the whole of British industry. The changes in temper and policy after 1926 are indicated by the contrast between the business depression of 1921, which was attended by conflicts of exceptional severity, and the still deeper depression of 1930-1933, which was marked b y few important disputes, and losses from stoppages were small. The events of 1926, like those of the world war, proved that both sides must be permanent losers in any conflict of more than very short duration. In that year 162,000,000 working days were lost, trade unions expended £5,500,000 in dispute pay, and losses of trade and wages were enormous. Persistent unemployment, reduced business profits and declining trade union membership in recent years have also contributed to a greater determination to solve differences by peaceful means. This determination has been especially evident in the coal-mining industry, which for many years had been the main storm centre of British industrial relations. Apart from conflicts in this one industry the record of relations would, in view of the wide changes in economic and industrial conditions, have been remarkably good. This industry, which had enjoyed steady expansion for several decades up to 1913, found itself after the war with a volume of capital and labour capable of producing coal in considerable excess of market requirements. A long period of difficulty and depression was inevitable, but it was not until after 1926 that there was a real determination to avoid the additional losses and misery resulting from conflict. During the years 1927 to 1933 economic conditions in the coalmining industry remained severely depressed and standards of living low, but conflicts were reduced to comparatively small proportions. Even more noteworthy has- been the maintenance of a high standard of industrial relations, including the peaceful settlement by negotiation of many demands for increases in wages, during the years of recovery from 1934 to 1937. These have been years of increased wages and no great stoppages of work. The question arises whether the more peaceful relations of the last ten years will be maintained. No answer to this question can be hazarded, although signs are not wanting of a desire on the part of both employers and workers to avoid the attitudes and conflicts of the early postwar years. 248 INDUSTRIAL RELATIONS IN GREAT BRITAIN To concentrate upon past conflicts and the magnitude of losses from disputes would convey a false impression of British industrial relations. Even in the most disturbed years only a small minority of workers and employers are involved in stoppages. Agreements are continually being reached by conference and negotiation and, as described in Chapter IV, elaborate machinery for joint relations and conciliation has been set up in most of the well-organised industries. It is true that machinery alone affords no guarantee of industrial peace. The early post-war experiences of the coalmining industry, which has a comprehensive system of district joint conciliation boards, prove that machinery will inevitably break down if the will to maintain peace is absent. But regularly constituted machinery of negotiation is essential and can greatly facilitate the reaching of agreements. The formation of great national organisations of employers and workers has led to the establishment in recent years of national machinery for negotiation. This has various advantages. Policy can be co-ordinated, general principles applied, and, while conditions of work can be adjusted according to the special circumstances of each district, a wider view is possible than when negotiations are conducted independently in each area. Also arrangements are usually made for regional disputes to be referred to national boards; these boards are more likely to find a basis for settlement than the immediate disputants, whose judgment may be warped because of personal grievances and questions of prestige. National organisation, however, has its own dangers. Failure to settle a difference may involve the stoppage of a whole industry throughout the country. In considering the number of great national disputes shortly after the war it should be remembered that national negotiation and determination of conditions is a recent development, and it is significant that, except in the textile industries which are highly localised, there has been no great industry-wide stoppage since 1926. Evidently the importance of responsible leadership is greatly increased when great organisations are formed. Those whose experience had been based upon local negotiations, where a stoppage at a few establishments or even of a whole district was on a relatively small scale, did not immediately adjust themselves to the conditions and responsibilities of national leadership. But there are indications of the growth of a larger sense of responsibility and a greater willingness to face the facts. This results in a narrowing of the margin of difference CONCLUSIONS 249 between the two sides until, except where some vital principle is involved, maximum gains to either side from a conflict are more than counterbalanced by the inevitable losses involved. Also the general experience seems to have been that such a narrowing of the margin of difference follows from the closer association of the workers with economic questions and industrial management. The establishment of national unions and systems of negotiation has contributed to an increase in strikes not recognised by the trade unions concerned. In 1936 more than one-half of the number of strikes and about one-half of the total number of working days lost were the result of unofficial strikes. The workers in a factory or locality may consider that their demands are not adequately supported by the national union, and they t r y to enforce their demands by independent unofficial action, often in violation of agreements between the national union and the employers' organisation on the procedure to be followed for settling disputes. Or they may be influenced by agitators who disagree with the policy of conciliation and negotiation pursued by the union. Any considerable extension of such revolts against the authority of the unions would weaken the trade union movement and endanger the whole system of collective agreements by which working conditions are so widely regulated. It is improbable, however, that the recent wave of unofficial strikes will assume serious proportions, and in the strongly organised industries there is a high standard of discipline and also respect for collective agreements by the rank and file of the trade union movement. 1 There is still scope for improving the machinery for negotiation in various industries. Also a valuable development would be for industries to agree as a last resort to submit to impartial investigation and arbitration differences which the interested parties had 1 On this question the Report of the Ministry of Labour for the Year 1936 stated t h a t the smoothness with which adj ustments in working conditions were generally made affords further evidence of the effectiveness of the various forms of joint machinery and of the resolve of employers' and workpeople's organisations t o use constitutional methods of settlement. There can be no doubt t h a t the existence of constitutional machinery maintained wages during the depression a t a higher level t h a n would otherwise have been possible and stimulated other means of reducing costs. The desire to obtain higher wages as soon as economic conditions improved gave an opportunity t o irresponsible elements t o encourage unconstitutional action. The year was, however, marked by a strong resistance t o unofficial methods, and this was probably due to a recognition of the fact t h a t such methods tend t o destroy organisation and machinery built up by many years of effort, and indeed t h a t unconstitutional action is sometimes adopted with t h a t object. 250 INDUSTRIAL RELATIONS IN GREAT BRITAIN been unable to settle between themselves. It would be far too much to expect that such submission would succeed in preventing all disputes, but the magnitude of the issues involved is now so great that reference to some wider tribunal than a meeting of the disputants themselves is desirable and should be effective in preventing many conflicts. In encouraging this development it would be necessary to avoid the danger evident in some systems of compulsory arbitration that the disputants, knowing there is a further tribunal, might make only perfunctory attempts to agree among themselves. To be effective, under British conditions, responsibility for reaching agreement must mainly rest with the parties concerned, their own efforts being, however, supplemented by a final outside review. Already facilities of this kind are offered by the Industrial Court, but hitherto the great organised bodies of employers and workers have not adequately used its machinery. The number of industries is, however, increasing in which agreements have been reached that in the last resort the parties shall submit matters in dispute to a committee or board consisting not only of representatives of employers and workers in the industry, but also of several impartial persons. Within the undertakings, developments are taking place which cannot fail to make a contribution to industrial peace. The bullying foreman has largely disappeared. More consideration is being given to the human factor, for reasons not of paternalism but of productive efficiency. This is indicated by increase in the number of labour managers, growth of welfare work, and greater interest in the results of scientific research into problems of industrial health and psychology. The growing size of undertakings and the amalgamation of businesses have made necessary the co-ordination of labour policy and the establishment of principles which can be applied consistently to large numbers of workers. The appointment of labour managers who are leaders of men is essential if the growing gulf between the heads of large-scale enterprises and the workers is to be bridged. This is the more necessary as the type of worker demanded in industry is steadily changing. The day of " brawn and muscle " is over, and modern industry needs alert, active men who can adapt themselves to changes in technique. But these workpeople are more sensitive to their treatment and to the conditions under which they work, and they are quicker to demand their rights. The modern manager of a labour force must make proper allowance for these changes. With such men CONCLUSIONS 251 "he can no longer be a dictator, or afford tobe tactless". 1 There is no doubt that a wide extension of the methods of human management adopted by a number of progressive British firms would greatly reduce friction and suspicion and remove many of the underlying causes of conflict. The diminution of poverty which has resulted from improvement of the real wages of unskilled workers and from the establishment of comprehensive schemes of social insurance may be expected to reduce discontent and unrest. As a consequence of the organisation by the State of systems to make provision for the worker in sickness, unemployment and old age and for his children's education and welfare, some of the anxieties which in the past increased the risks of dispute between employers and workpeople have been greatly diminished and transferred to another field. The recent steady extension by individual undertakings and whole industries of paid annual holidays is another indication of the trend of social progress. It is true that there is still much dissatisfaction among the workers about the great inequalities in the distribution of the national income, and also about the methods by which industry is controlled. They welcome, however, the increase of educational facilities which give opportunities to the children of workers with small incomes to advance to posts of responsibility in industry, commerce and the professions. The gradual breaking down of the privileged position of birth and wealth is doing much to remove the sense of injustice among the workers and to diminish the intensity of the class war. In other ways the status of the worker has been considerably improved in recent years. An advance has been made by wide recognition of the trade unions. Within some factories the system of works councils gives the worker an influence in determining his labour conditions, and this system might be given wider application. In the larger questions of national industrial and financial policy both workers and employers are directly or indirectly brought into consultation. The results of the Turner-Melchett scheme of co-operation in the discussion of broad economic issues have been meagre, but the maintenance of closer relations between the great organisations of employers and workers would usefully supplement the comprehensive machinery for negotiation in the various indus1 See Industrial Health Research Board, Sixteenth Annual 30 June 1935. Report, year ending 252 INDUSTRIAL RELATIONS IN GREAT BRITAIN tries. The growing importance of public regulation of industry in the interests of the community is tending to reduce hostility among the workers to the present economic system, and to satisfy in part their aspirations by ensuring that industry is organised and operated not merely in the interest of the shareholders but also of the workers and consumers. To summarise, very comprehensive machinery for negotiation and conciliation of disputes has been developed in Great Britain, largely by voluntary agreements between organised employers and workers. Various improvements in this machinery could usefully be made. Also the methods of labour management, industrial welfare, and joint consultation about working conditions introduced by progressive firms merit much wider application. They would contribute to the development of better temper and greater harmony between employers and workers, which is essential if the former scale of conflicts is not to be renewed. Without improvement in temper the most elaborate and complete systems of machinery will be ineffective. Considerable changes of outlook are taking place. The old spirit of bitterness and violence of the nineteenth century resulting from low standards of working conditions, unwillingness of employers to recognise organisations of workers, and often their determination to destroy the unions, is giving place to better mutual understanding. More reliable data are being brought under review during negotiations, there is a greater willingness to face the facts, and, in consequence, the margin of difference between the two sides is being narrowed. Experience of the heavy losses to employers and workers caused by national conflicts is teaching the lesson that the technique of negotiation of pre-war days, when break downs usually involved only local stoppages, is not appropriate under present conditions. Above all, there is growing recognition of the common interests of employers and workers in the prosperity of British industry, especially in view of the intensity of post-war international competition. It is upon these common interests both within the undertakings and in the wider field of collective relations that the foundations of industrial peace must be built. Many of the problems which gave rise to acute differences and severe conflicts in the past now present little difficulty. But the progress of industrial and economic evolution is continually bringing new problems in its train. Among those which will continue to be of outstanding importance in the future is rationalisation in its CONCLUSIONS 253 widest aspects, including industrial reorganisation, mechanisation, and the relation between industry and finance. Closely associated with the rationalisation of industry are the problems of industrial relations involved in the formation of cartels, trusts, and monopolies, both national and international, and in the progress of economic planning. There is the question of the functions of employers' organisations and trade unions in branches of industry in which the community has undertaken partial or full responsibility and in which the Government or the local authorities determine policy and participate in economic organisation and the regulation of working conditions. Support for the extension of State systems for the regulation of labour standards wherever voluntary methods are inadequate is increasing. In some industries the problem of giving statutory authority to the provisions of collective agreements is debated. The possibilities of future depressions of trade are gravely considered and there is growing demand that industry and the State should take systematic measures to reduce instability of employment. Although these great issues involve the possibilities of conflict between employers and workpeople, they nevertheless provide a field for the development of closer co-operation. 254 APPENDIX I SHORT BIBLIOGRAPHY BOARD OF TRADE. (i) G e n e r a l Statistical Abstracts for the United COMMITTEE ON FINANCE AND INDUSTRY. COMMITTEE ON NATIONAL E X P E N D I T U R E . Kingdom. Report (June 1931). Report (July 1931). POLITICAL AND ECONOMIC PLANNING. Report on the British Social Service's. SHIELDS, B. F . The Evolution of Industrial Organisation. (2) BOARD O F T R A D E . Economic Conditions Journal. COMMITTEE ON INDUSTRY AND TRADE. Efficiency. Further Factors in Industrial Final Report. B A N K OF ENGLAND. Statistical Factors in Industrial and Commercial and Commercial Efficiency. Summary. R O Y A L COMMISSION ON THE COAL INDUSTRY (1925). Report. BOWLEY, A. L. Some Economic Consequences of the Great War. The Division of the Product of Industry : An Analysis of the National Income before the War. The Change in Distribution of the National Income, 1880-1913. and STAMP, Sir Josiah. The National Income in 1924. CLARK, Colin. The National Income, 1924-1931. National Income and Outlay. CLAY, H . The Post-War Unemployment Problem. COATES, W. H. The Citizen's Purse. Manchester Statistical Society, December 1931. COLE, G. D. H., and M. I. The Condition of Britain. LIBERAL INDUSTRIAL ENQUIRY. Report on Britain's Industrial Future. LONDON AND CAMBRIDGE ECONOMIC SERVICE. Monthly Bulletin. LOVEDAY, A. Britain and World Trade. PiGou, A. C , and CLARK, Colin. The Economic Position of Great Britain. Economic Society Memorandum No. 60 (June 1936). Royal R O Y A L ECONOMIC SOCIETY. Journal. R O Y A L STATISTICAL SOCIETY. Journal. (3) W a g e s a n d W o r k i n g C o n d i t i o n s MINISTRY OF LABOUR. Abstracts of Labour Statistics. Standard Time Rates of Wages and Hours of Labour in Great Britain and Northern Ireland. Gazette (monthly). Report of an Enquiry into Apprenticeship and Training for the Skilled Occupations in Great Britain and Northern Ireland, 1925-1926. Vols. 1-7. Report to the Minister of Labour of the Committee Appointed to Enquire into the Working and Effects of the Trade Boards Act (1922). Report on Collective Agreements between Employers and Workpeople in Great Britain and Northern Ireland. Vol. 1 (1934). R O Y A L COMMISSION ON UNEMPLOYMENT INSURANCE. Reports (1931 and 1932). C H I E F INSPECTOR OF FACTORIES AND W O R K S H O P S . Annual Reports. BEVERIDGE, Sir W . Unemployment (1909 and 1930). BOWLEY, A. L. Prices and Wages in the United Kingdom, Wages and Income in the United Kingdom since i860. and HOGG, M. H . Has Poverty Diminished ? 1914-1920. APPENDICES 255 FISHER, A. G. B . Some Problems of Wages and their Regulation in Great Britain since 1918. GILSON, M. B . Unemployment Insurance in Great Britain. LLEWELLYN SMITH, Sir H . (Editor). A New Survey of London Life and Labour. RAMSBOTTOM, E . C. The Course of Wage Rates in the United Kingdom, 1921-1934. Journal of t h e Royal Statistical Society. Part IV. 1935. R O W E , J . W. F . Wages in Practice and Theory. Wages in the Coal Industry. ROWNTREE, B . Seebohm. The Human Needs of Labour. SELLS, D. M C D . The British Trade Boards System. WILLIAMS, G. The State and the Standard of Living. W O L F E , H . Labour Supply and Regulation. YATES, M. L. Wages and Labour Conditions in British Engineering. (4) Trade U n i o n i s m , Labour Policy, and t h e Co-operative Movement CITRINE, W. M. The Trade Union Movement in Great Britain. COLE, G. D. H . Self-Government for Industry. Organised Labour. Short History of the British Working-Class Movement. CUNNISON, J. Labour Organisation. F A Y , C. R. Co-operation at Home and A broad. FERGUSON, L. B. The Trade Disputes and Trade Unions Act, io.2y. HENDERSON, A. Trade Unions and the Law. H I L T O N , J., MALLON, J . J., MAVOR, S., R O W N T R E E , B . S., SALTER, Sir A., STUART, F . D. (Joint Editors), Are Trade Unions Obstructive ? An Inquiry. LLOYD, C. M. Trade Unionism. MILNE-BAILEY, W. Trade Union Documents. Trade Unions and the State. MONTGOMERY, B. G. D E . British and Continental Labour Policy. SLESSER, H . H., a n d BAKER, C. The Law of Trade and Impartial Unions. TILLYARD, F . The Worker and the State. T R A D E S U N I O N CONGRESS. Annual Reports. W E B B , Sidney and Beatrice. History of Trade Industrial Democracy. The Consumers' Co-operative Movement. (5) Unionism. Employers' Organisations In addition to t h e publications mentioned in this section information is given in t h e constitution a n d rules, annual reports, and journals of various employers' organisations. Information on policy is available in evidence given b y various organisations before Royal Commissions and Government Committees and in statements published in t h e press. MINISTRY O F LABOUR. Directory of Employers' Organisations, etc., 1932. Associations, Trade Unions, E N G I N E E R I N G AND A L L I E D E M P L O Y E R S ' NATIONAL FEDERATION. British Joint Engineer- ing Industry. Realities and Problems. Thirty Years of Industrial Conciliation. FEDERATION OF B R I T I S H INDUSTRIES. British Industries Annual Reports. Register of British Manufacturers. (periodical). M I N I N G ASSOCIATION O F GREAT BRITAIN. Historical Review of Coal Mining. Chapter X X I I I : " T h e History of Organisation in t h e Coal I n d u s t r y " , b y W. A. L E E . NATIONAL CONFEDERATION O F E M P L O Y E R S ' ORGANISATIONS. Hours Convention. A Statement of the Facts (1927). Statements o n The General Industrial Situation Insurance (published in 1931). The and on Washington Unemployment 256 APPENDICES (6) I n d u s t r i a l R e l a t i o n s COMMITTEE ON INDUSTRY AND T R A D E . Survey of Industrial MINISTRY OF LABOUR. Reports (annual). Report on Profit-Sharing and Labour Co-partnership Relations. in the United Kingdom (1920). Report on the Establishment and Progress of Joint Industrial Councils, igiy- ZÇ22. INTERNATIONAL LABOUR OFFICE. Studies on Industrial Relations: Reports (Industrial Relations), No. 33. Also I I , No. 35. AMULREE, Lord. Industrial Arbitration in Great Britain. ASKWITH, Lord. Industrial Problems and Disputes. BOWIE, J . A. Sharing Profits with Employees. CARPENTER, C. Industrial Co-partnership. CLAY, Henry. The Problem of Industrial Relations. HOBSON, J. A. Conditions of Industrial Peace. INDUSTRIAL CO-PARTNERSHIP ASSOCIATION. INSTITUTE OF LABOUR MANAGEMENT. Co-partnership I. Studies and (periodical). Labour Management (periodical). LEAGUE OF NATIONS U N I O N . Towards Industrial Peace. Report on the Proceedings of a Conference at t h e London School of Economics, February 1927. MACKENZIE, W. H. The Industrial Court: Practice and Procedure. RANKIN, M. T. Arbitration Principles and the Industrial Court. R A F F E T Y , F . W . Partnership in Industry. R E N O L D , C. G. Workshop Committees. ROWNTREE, B . Seebohm. The Human Factor in Business. SEYMOUR, J. B. The Whitley Council's Scheme. (7) H e a l t h a n d Welfare COHEN, P . The British System of Social Insurance. DEPARTMENT OF M I N E S . Miners' Welfare Fund, Reports of Committee. H O M E OFFICE. Welfare Pamphlets. INDUSTRIAL H E A L T H R E S E A R C H BOARD. INDUSTRIAL WELFARE SOCIETY. (periodical). Annual Industrial Reports. Welfare and Personnel Management INSTITUTE OF INDUSTRIAL W E L F A R E W O R K E R S . Welfare Work (periodical published until 1931 1 ) . K E L L Y , E . T. (Editor). Welfare Work in Industry. L E E , John. Principles of Industrial Welfare. MARTIN-LEAKE, M., and SMITH, T. The Scientific Selection and Training of Workers in Industry and Commerce. M Y E R S , C. S. Industrial Psychology in Great Britain. NATIONAL INSTITUTE O F INDUSTRIAL PSYCHOLOGY. NATIONAL S A F E T Y - F I R S T MOVEMENT. Journal, a n d Annual Reports. Various publications. VERNON, H. M. Industrial Fatigue and Efficiency. W E L C H , J. J., and MILES, G. H. Industrial Psychology in Practice. 1 The organisation then changed its title to t h e " Institute of Labour Management " ; see section (6) of bibliography. A P P E N D I X II AVERAGE WEEKLY FULL-TIME RATES OF WAGES OF ADULT WORKERS IN CERTAIN OCCUPATIONS IN SOME OF THE CHIEF INDUSTRIES, AT JULY 1914 AND 31 DECEMBER 1936 1 Weekly rate of wage Industry and occupation Industry and occupation 31 Dec. 1936 July 1914 s. griculture : Ordinary labourers . . ngineering : Fitters and turners . . Patternmakers . . . Labourers lipbuilding : Shipwrights Labourers oot and shoe a : Skilled men Women aking : Table hands urniture making: Cabinet makers . . . French polishers . . . rinting and bookbinding : Hand compositors 3 . . Bookbinders . . . . Weekly rate of wage 18 i. s. 32 4 38 I I 42 I 64 I 41 23 7 O 27-3OS. I7-18S. 30 I 68 3 46 8 62 0 43 0 54 36 62 1914 s. d. 0 22 IO July 0 0 Building : Bricklayers Carpenters Painters Labourers 40 i 39 II 36 3 27 0 Electrical installation : Wiremen 39 4 Railway service : Engine drivers . . . 40 6 Goods porters . . . . P e r m ' t way labourers. 22 22 0 0 4 Tramway service : Drivers Conductors 1 31 2 7 10 1 Road transport : One-horse carters 39 5 37 5 d. 7 0 11 70 9 . . 25 7 Dock labour (per day) : General cargo workers 6 1 26 9 5 35 8 73 33 11 73 7 10 Local authorities : Labourers 1 Twenty-second Abstract of Labour Statistics of the United Kingdom (Cmd. 5556), pp. 82-86. For most occupations the figures are averages of the time rates recognised by employers' and workers' organisations in the principal centres. Certain industries (e.g. coal mining and textiles) in which the characteristic occupations are on piece rates are not included in the table. 2 National agreed minimum rates. The pre-war rates were adopted in 1914 to come into force in 1915. 3 Book and job. * Extra payment was made to drivers performing over a certain mileage per day. ö Non-trading services. 258 APPENDIX III FULL-TIME HOURS OF WORK IN VARIOUS INDUSTRIES, 1914 AND DECEMBER 1936 The figures given are weekly hours unless otherwise stated. They represent t h e usual situation, although in some districts or for some grades of workers in several of the industries there are minor differences from the figures shown. I n most industries the reductions shown were made during the years 1919 and 1920. Full-time hours of work Industry and class of work Dec. 1936 Building 1 Coal mining : Underground work, per shift 2 Surface work Engineering and shipbuilding . . Electrical installation Iron and steel and tinplate: Shift work, per shift Day work Other metal trades Cotton Wool Other textile trades Boot and shoe Railway service (traffic grades) . Other transport services : Dock labour, per day . . . . One-horse drivers Tramways Printing Baking Furniture making Pottery Chemical : Shift work, per shift Day work 49% 83 51 to 58 53 or 54 53 or 54 4414-44% 7% 44 to 49 47 47 8 or 12 53 53 or 54 55% 55 Vi 54 to 56 52% 47 47 48 48 48 46 48 9 to 10% 56 & over 54 to 60 50 or 51 48 to 60 46 y2 to 54 52 48 48 48 44 to 48 44 to 47 47 12 53 or 54 8 47 J 1 Account is taken of both summer and winter hours. 2 In order to obtain the average time underground one winding time should be added to the figures; in 1936 the average duration of a winding time was about half an hour. A shorter shift was usually worked on Saturday. 3 Except in Northumberland and Durham. 259 APPENDIX IV MEMBERSHIP OF TRADE UNIONS, I913, 1920, I93O, 1935, AND 1936 The statistics tabulated below for the chief industrial groups a t the end of each of the years 1913, 1920, 1930, 1935 and 1936 are compiled from returns collected by the Chief Registrar of Friendly Societies, and by the Registrar of Friendly Societies for Northern Ireland, from trade unions registered under the Trade Union Acts, and by t h e Ministry of Labour from unregistered unions. They cover all organisations of employees (salaried and professional workers as well as manual wage earners) which include among their functions t h a t of negotiating with employers with t h e object of regulating the conditions of employment of their members. They include a small number (probably less t h a n 50,000) of members of Irish Free State branches and of other oversea branches of certain unions. The figures for 1936 are provisional. MEMBERSHIP OF TRADE UNIONS, I 9 1 3 , I92O, 1 9 3 ° . 1935 AND 1936 (ooo's omitted) Total (males and females) Group of unions 1936 1930 Agriculture, horticulture, etc. 1 . . . Mining and quarrying Metals, machines, conveyances, etc. 1 . Textile : Cotton Bleaching, dyeing, finishing, etc. . . Other textile Clothing Woodworking and furniture 2 . . . . Paper, printing, etc Building, public works contracting, etc. x Other manufacturing industries, and miscellaneous services 3 Transport and general labour : Railway service Water transport Other transport (road, dock, etc.) and general labour Commerce, distribution and finance . National and local government 4 . . . Teaching Totals 21 920 560 210 1,158 1,171 372 91 243 461 I18 255 236 87 227 563 117 293 327 146 618 I94 566 234 113 1,685 4OO 465 I98 4.135 8,339 67 84 108 46 120 5 35 612 601 31 629 592 1 1 > 559 \ 432 1 1 33 679 686 t 429 176 58 167 .55 195 275 204 298 149 145 152 449 417 452 [851 1 f 911 -1,052 1 1 296 480 243 324 519 246 4,825 4,868 5,3o8 159 64 187 306 248 378 227 1 The figures for these industrial groups are exclusive of the membership of the Transjxirt and General Workers' Union and the National Union of General and Municipal Workers, which are included in " Transport and general labour ". 2 Excluding carpenters and joiners, who are included under " Building ". 3 Comprising the pottery and glass, food, drink and tobacco, leather, chemicals, rubber, brushes, musical instruments, entertainments and sports, etc. 4 The figures exclude teachers', tramway workers' and general labour unions, for which see " Teaching " and " Transport and general labour ". 5 A certain number of persons are members of more than one union, but the duplication thus involved is believed to be negligible. (Source: Ministry of Labour Gazette, Oct. 1931. and Oct. 1937.) 2Ö0 APPENDIX V INDUSTRIAL DISPUTES INVOLVING STOPPAGES OF WORK, 1893 TO 1936 Statistics are given below of the number of disputes, t h e number of workpeople involved and t h e aggregate duration in working days of all disputes in progress in Great Britain and Northern Ireland during the period from 1893 to 1936. Disputes which involved less t h a n ten workpeople and those which lasted less than one day are omitted except where t h e aggregate duration (that is, the number of workpeople multiplied by t h e number of working days) exceeded one hundred days. The number of workpeople includes, in addition to workpeople actually on strike or locked out, those workpeople who, though not themselves on strike or locked out, were thrown out of work owing to t h e disputes a t the establishments where t h e disputes occurred. NUMBER OF INDUSTRIAL DISPUTES, NUMBER OF WORKPEOPLE INVOLVED AND AGGREGATE DURATION, 1893 TO I 9 3 6 Number of disputes beginning in the year Year 1893-1900l 1901-1910 1 1911 1912 1913 1914 1915 . . . . 1917 1918 1919 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 . . 753 453 872 Total number of workpeople involved (ooo's omitted) 281 220 952 834 1,462 1.459 672 664 447 448 532 276 972 73° 872 1.165 1.352 1,607 1,116 2,59i 1.932 1,801 763 57 6 628 710 603 323 308 552 4°5 613 441 2.734 108 Aggregate duration in working days of all disputes in progress during the year (ooo's omitted) 10,050 4,020 10,160 40,890 9,800 9,880 2,950 2,450 5.650 5.880 34.97° 26,570 85,870 19,850 10,670 8,420 7.950 162,230 1,170 I.390 8,290 4,400 6,980 6,490 1,070 302 124 431 422 420 533 389 357 379 471 553 134 271 818 316 1,960 1,830 655 558 13,622 307 490 136 960 Averages of 1893-1936 1 Annual averages. (Sources: COMMITTEE ON INDUSTRY AND TRADE: Survey of Industrial Relations, and Ministry of Labour Gazette.) 2ÖI A P P E N D I X VI CONSTITUTION AND FUNCTIONS OF WORKS COUNCILS Summaries are given below of the constitutions and functions of works councils which have been set up in several large undertakings. The selection has been made so as t o illustrate various types of constitution in undertakings in different industries and districts. The Bradford Dyers' Association, Limited This Association comprises a large number of branch works scattered over a wide area, chiefly in Yorkshire and Lancashire. I t s system consists of councils a t various branch works, and quarterly conferences attended by representatives from each works council. Works Councils These are set up in accordance with agreements between the Association and the trade unions. The agreements provide t h a t there shall be set up a t each branch works employing more than fifty employees a works council consisting of not fewer t h a n five representatives of the workpeople in addition to two nominees of the unions, and persons appointed by the management as their representatives. The shop delegates for the time being shall be ex officio t h e two representatives of the unions, and where there is only one shop delegate he shall be one representative and the other nominee of the unions shall be another employee at t h e works. A works council shall not discuss any matter of hours, wages, piece-work rates, etc., which are t h e subject of agreement with t h e unions, and which it shall be clearly understood are outside the province of the works councils. With these exceptions any m a t t e r of mutual interest may be discussed by a works council. Most of the subjects in the Ministry of Labour's list, which is reproduced in Chapter V of this study, have been dealt with by one or other of the Association's councils. Some councils give special attention to certain subjects, while other councils interest themselves in other matters. Among the subjects which have received major consideration are safety; suggestions for improvements in working conditions and efficiency (rewards are paid for useful suggestions) ; education ; sport and recreation ; sick, benevolent, and saving funds. Quarterly Conferences Separate conferences are held for works councils in Yorkshire and for those in Lancashire, but liaison is maintained between them. The main purpose of the conferences is t o co-ordinate the activities of t h e works councils. Each branch works council is entitled to send representatives of management and of workers to the conferences. The subjects are the same as those dealt with by the works councils. Also a review of the state of trade, with special reference to the position of t h e industry, is given by one of the directors. The detailed work of the conferences is referred to committees. APPENDICES 2Ó2 Dunlop Rubber Company, Limited, Joint Factory Birmingham Council The council is set up for the general purpose of securing agreement between management and workers about wages and general conditions of employment by full explanation and discussion, thus avoiding the issuing of arbitrary rules and instructions by the management. It aims at encouraging the closest co-operation, mutual understanding and confidence between management and workers on all matters of common interest; it provides constitutional means for the ventilation of grievances, their removal and the prevention of disputes ; it promotes and fosters the social welfare of the Company's workers. The council consists of not more than twenty-four management members appointed by the directors for such period as the directors shall determine, and a number of operative members elected by secret ballot, on the basis of one member for each 150 workers, by departmental constituencies. The present numbers are eighteen management members and forty operative members. The voting power of each side of the council is equal, whatever may be the number of members of either side present a t any council meeting. The chief qualifications for operative members a r e : (a) workers of twenty-one years of age or over and who have had a t least one year's service with the Company are eligible; (6) foremen, assistant foremen, charge-hands and other persons having influence in employment or discharge are not eligible. Workers must be employed in the voting constituency for which they are nominated. Nominations of candidates signed by three voters in the constituency must be made in approved manner not later than fourteen days before the date of the election. Operative members are elected for three years, one-third of the members retiring automatically each year, b u t being eligible for re-election. Provision is made for the filling of vacancies on the council. All operatives with at least one month's service with the Company are entitled to vote. The officers consist of a chairman and secretary nominated by the Company, and an operatives' chairman and operatives' secretary elected annually by the operatives' side of the council from among their members. The council shall meet every three months, but extra meetings may be held when necessary upon the requisition of twelve members, or a t the request of the general purposes committee, or of the directors. The operative members shall meet not less than once a month. Members of the council are paid for the time occupied a t meetings or on other joint factory council business, the basis of payment being the sum lost by them through their absence from work. Matters for discussion at the regular quarterly meeting should be notified to the secretaries, in writing, a t least three days before the date of the meeting. No recommendation shall be regarded as made or resolution passed unless it is approved by a majority of members of both sides of the council, except as indicated below. Each side of the council or of any committee shall have the right to withdraw temporarily from any meeting for private discussion of any matter under consideration. General Purposes Committee The committee is set up mainly to provide a recognised channel of communication between the employees and the Company; to secure the largest possible measure of joint action between them; t o base these relations on mutual understanding and confidence; to consider matters referred to it by the management, the joint factory council or the operatives; and to present suggestions to the management. Its functions shall be purely advisory or consultative. APPENDICES 263 The following are specified as subjects suitable for discussion: (1) welfare and social subjects; (2) suggestions; (3) working hours; (4) regularity of employment; (5) output; (6) improvements in methods and machinery; (7) discipline; (8) grievances; (9) wages. The committee shall consist of not more than twelve management members appointed by the Company (at present the number is four), and not more t h a n sixteen operatives selected each year by the operative members of t h e joint factory council from among their number. The voting power of each side of t h e committee shall be equal. The committee shall meet once a month, but extra meetings may be held when necessary on the request of four members. The rules about payment for time spent a t meetings, the making of recommendations and the passing of resolutions are similar to those of t h e joint factory council. Procedure for Dealing with Complaints A worker or workers desiring to raise any question in which they are directly concerned shall first discuss it with their foreman, and, if they so desire, in t h e presence of their joint factory council representative. Failing settlement within a reasonable time, the joint factory council representative shall take the matter up with the shop manager, who shall, if necessary, consult the works manager within twenty-four hours. Formal records shall be kept of complaints and t h e settlements reached. If no settlement is arrived at within a time fixed b y t h e mutual consent of the works manager and representatives concerned, the question shall then be referred to the general purposes committee and/or the joint factory council. Should the council fail to reach agreement upon any subject, they may appoint an arbitrator upon the majority vote of each side of the council, whose decision shall be final. No stoppage of work shall take place until the question has been fully dealt with in accordance with the above procedure, and then only upon a two-thirds majority vote of one or other side of the council a t a full council meeting, when a t least twenty-four hours' notice of such a stoppage shall be given in writing. Any stoppage of work occurring before t h e above procedure has been followed shall not receive the support of any member of the council or any other employee. Operative members of the council shall have t h e power to instruct the workers to cease work when t h e above procedure has been exhausted without a settlement having been reached. N.B. — Any employee wilfully breaking the rules of the joint factory council, including the rules for dealing with complaints, shall be considered t o have voluntarily terminated his or her employment with t h e Company. Imperial Chemical Industries, Limited Imperial Chemical Industries, Limited (hereafter termed " the Company " ) , has a large number of factories in different parts of the country. The basis of its scheme is the establishment of a works council a t each factory. From these works councils, representatives are elected t o group councils, which are arranged according to the main products of each factory (e.g. alkali, dyestuffs, acids and salts, etc.). Recently, the number of group councils was twelve. Each group elects representatives to a central council covering the whole Company. Works Councils These provide regular and recognised opportunities, (a) for the joint consideration by management and employees of t h e various problems affecting t h e employees which arise in the day-to-day activities of the factory; (6) for the management to make communications to t h e employees and to ascertain the views of t h e employees upon any particular matter. 264 APPENDICES Their duties include: (a) consideration of matters affecting the well-being of the employees a t the particular factory (ventilation, lighting, temperature and cleanliness of workrooms, lavatory accommodation, recreation, etc.); (&) consideration of suggested amendments of works rules; (c) consideration of questions aSecting time-keeping, output, accident prevention, waste of time or material, discipline, etc.; (d) examination of grievances; (e) administration of benevolent, holiday, hospital and other similar funds. The functions of a works council are generally advisory and decisions are transmitted in the form of recommendations to the factory management. Matters which, in the opinion of the chairman, are likely to affect another factory are referred to the group council; also matters upon which a works council fails to agree may be referred to t h e group council. Each works council consists of representatives of the management and of the employees in equal numbers. To secure adequate representation, the employees at each factory are classified into sections. The employees in each section nominate candidates, and each trade union representing employees in any section is invited to make nominations. Persons nominated for each section are submitted to a poll of the section. Employees' - representatives must have been in the service of the Company or of one of its constituent companies for not less than five consecutive years and must be employed at the factory concerned. To be entitled t o vote at any election, persons must have been employed by the Company continuously for the whole of the year preceding the date of the election and still remain in its employment. Directors of each constituent company are responsible for the control and management of elections. In the event of two candidates receiving an equal number of votes, the one with the longer service shall be chosen. All representatives of the employees and also those of the management retire annually, but are eligible for re-election or re-appointment. A member vacates office by ceasing to be employed at the factory, by resignation, b y the request in writing of two-thirds of his side of t h e council, or by absence, without reasonable excuse or leave of t h e council, from two consecutive meetings. Council meetings are held once a month and as often in addition as the council may consider necessary. A meeting shall be convened at any time a t the request of the chairman or of one-half of t h e members. On request, t h e factory management shall accord reasonable facilities during working hours for separate meetings of employees' representatives. The chairman of a council is appointed b y those directors of t h e constituent company who are delegates of management on the council. Executive directors, other than those formally appointed as management representatives, shall be ex-officio members of t h e council, but without voting power. Group Councils These deal with problems affecting factories whose major products are similar and whose employees have thus a direct common interest. Their duties include co-ordination of the activities of the works councils within the group, discussion of matters of common interest affecting employees in the group, and serving as a link between the works councils and t h e central council. Matters which, in the opinion of the chairman, are likely to affect another group shall be referred to the central council. If a group council fails to reach an agreed recommendation upon any matter within its competence, it m a y refer the matter to the central council. Group councils consist of representatives of t h e management and of the employees in equal numbers, elected annually from and by the works councils comprising t h e group. The membership of the different councils ranges from six to thirty-four. Members vacate office for reasons similar to those which apply to works councils. Group councils meet twice a year, and at other times as provided for works councils. The chairman shall be nominated by t h e directors of the Company. APPENDICES Central 265 Council This body discusses matters affecting the employees of the Company as a whole and is recognised as a n appropriate channel of communication between the directors of the Company and the employees in the various factories. I t co-ordinates t h e activities of t h e group councils, considers matters referred t o it by t h e m or by t h e directors of the Company, and discusses any other matters concerning contentment, security and efficiency throughout the various factories. Its functions are generally advisory and consultative, its recommendations being transmitted to t h e directors of the Company. The council consists of representatives of the management and of t h e employees in equal numbers, elected annually from and b y t h e group councils. The total number of representatives is forty-two, the numbers from the various groups ranging from four t o ten. Members of the executive committee of the Company are ex-officio members of t h e central council, but without voting power. The central council meets twice a year, and at other times according to provisions similar to those which apply t o works councils. A member vacates office if he ceases t o be employed in t h e particular group of whose group council he is a representative or for other reasons similar t o those which apply to members of works councils. General Provisions No council in the scheme is competent to discuss any matter which is the subject of an operative agreement between t h e Company and any trade union, except b y written consent of t h e trade union concerned. Any council may invite the attendance in a consultative capacity of any non-member who m a y be in a position t o give information on any matter under consideration or who may desire to make representations on any matter; within this provision, the power to invite t h e attendance of a trade union official is vested in t h e workers' representatives on any council. Questions are decided b y a majority of votes. Voting is by show of hands unless a ballot is demanded by one-third of t h e members present. Administrative expenses are borne by the Company. Minutes are kept of all proceedings under the scheme ; copies of works council minutes are communicated to t h e secretary of t h e appropriate group council and to the secretary of the central council. Group council minutes are forwarded to the secretary of the central council and to the secretary of each works council within the group. Members of all councils are paid reasonable travelling expenses and for lost time incurred owing t o attendance at meetings of a council or sub-committee. Peek Frean and Company, Limited, Biscuit Manufacturers, London The system consists chiefly of two bodies: (1) a works committee, the membership of which consists of some thirty-six elected employees below the grade of foreman (or supervisor), and to these are added four nominees of the management with power t o vote; the members elect a secretary from among the employees of t h e Company and he shall have voting power in t h e committee; (2) a smaller body, known as the joint council, consisting of representatives of management and an equal number of representatives of t h e workers appointed by the works committee. In addition to these two bodies there are two committees of supervisors, one for men and the other for women. Works Committee Membership is restricted to employees of the Company. Female members shall be a t least nineteen years of age and have had not less than one year's service with t h e Company; male members shall be at least twenty-one years of age and 266 APPENDICES have had not less t h a n three years' service. Managers and foremen are not eligible for election. Each different section of the works elects its own members, every worker in a section being entitled to vote irrespectively of age or length of service; a section elects one member for every 125 workers or part thereof, with a maximum of three members per section. 1 Elections are annual by secret ballot. Candidates for election must be nominated; no nomination is valid unless the nominee has given his consent in writing and is supported by at least four electors in the section for which he is nominated. Members are eligible for re-election. A member of the works committee who is absent from two consecutive meetings without adequate reason is Hable to lose his seat. The committee is convened by the secretary in consultation with the chairman as business arises, or on the request in writing of ten members. Time spent by members on committee work in work hours shall be paid for as nearly as can be ascertained as if members had remained a t work. The chairman and vice-chairman are elected by the members from among their number. The functions of the works committee are to investigate proposals and make recommendations t o t h e directors of the Company or the joint council on such subjects as works rules; hours of work and conditions of employment; wages, including method and time of payment and the adjustment of rates, b u t excluding standard rates; discipline; grievances; holidays; conditions of workrooms; safety; training of apprentices and young persons; constructive ideas and employees' suggestions for improvements in methods, processes, organisation, etc. Joint Council The functions of the joint council are to investigate proposals and make recommendations to the directors and if desired to the works committee for the effective carrying out of the objects of the works committee. The joint council shall consider and report on matters submitted to it by the directors or by the works committee and on original business introduced by a member; the discussion of original business shall be postponed on a two-thirds majority vote of the works committee representatives present and voting, in order t h a t the matter may be referred to the next meeting of the works committee for the ascertainment of its views. The joint council consists of not less than eight or more t h a n twelve representatives of the management nominated by t h e directors and an equal number of members of the works committee. The representation of the works committee on the joint council shall consist of its chairman and vice-chairman and as m a n y elected members as shall together equal the number of management representatives. One from each of t h e supervisors' committees shall be elected by them t o the joint council and shall be included in the representatives of the management nominated by the directors. The Company's employment manager shall ex-officio take p a r t in the discussions but shall not vote. The chairman of the joint council shall be elected by the joint council from among their number; he shall have a casting vote in addition to his ordinary vote. The secretary of the works committee shall be secretary of the joint council and shall not vote, b u t may take p a r t in the discussions. All members hold office until the next general election of the works committee. Provision is made for the filling of vacancies. The joint council shall meet in work hours not less frequently t h a n once a quarter. Time spent by members on joint council work shall be paid on the basis of a full week's earnings. The joint council has several very active standing sub-committees 1 Sections are free, subject to the approval of the works committee and certain other restrictions, t o arrange sectional committees as and when they consider them desirable. APPENDICES 267 constituted on t h e same principles as t h e council itself (i.e. half management and half representatives of t h e works committee) ; the present standing sub-committees deal respectively with suggestions, safety and works rules. Rowntree and Company, Limited, Chocolate Manufacturers, York The scheme comprises a dozen or more departmental councils and a central works council. Also shop steward representation is an integral part of the system. Departmental Councils These councils, which deal with matters affecting the department, consist of approximately equal numbers of t h e administrative staff and of rank and file workers. The workers' side consists in t h e first place of a shop steward, or, where more t h a n one union or craft is concerned, two or more shop stewards who are ex-ofßcio members elected b y t h e trade unionists in the department. The remainder of t h e workers' representatives (usually t h e great majority) is elected b y ballot of all t h e workers in the department who have been employed by t h e firm for six months or more and are over eighteen years of age. Neither membership of t h e council nor voting is thus confined to trade unionists, b u t in practice trade union influence ensures t h a t substantially the members elected are trade unionists. Councils vary in size, the aim being t h a t each defined section of workers shall be represented. Nearly one-half of t h e councils have a total of twelve members or less (including both management and workers), several have fourteen, sixteen, or twenty members and one or two have more t h a n twenty members. The councils normally meet monthly, or more frequently if necessary; all meetings are held during working time and workers are paid a t their ordinary rates or average earnings for time spent at t h e meetings. 1 The Central Council This consists of twenty-three administrative representatives partly elected by the different grades of management, and partly ex officio, and twenty-seven worker representatives elected by t h e departmental councils. Each member is elected for three years, one-third retiring annually. Meetings are held once a month and are conducted in accordance with the rules governing public meetings (i.e. formal proposing and seconding of resolutions, amendments, etc.). They are held during working time and workers receive their ordinary wage rates or average earnings. The only limitation upon the subjects which may be discussed is t h a t basic working conditions fixed b y collective agreement (by the Interim Industrial Reconstruction Committee) are excluded. A quarterly trade review, including details of sales and prospects, is given b y one of t h e directors and discussed b y the council. All decisions of t h e central council and also of departmental councils, are subject to the veto of the board of directors on the one hand and the trade union on the other. Approved proposals are carried into effect b y the executive committee of the council or by one of the special committees appointed by the council (e.g. the unemployment committee which administers the company's unemployment scheme, the theft committee which " tries " all cases of theft and reports monthly to the central council, and t h e appeal committee which hears appeals from workers who feel t h a t they have been unfairly treated and gives final decisions). These various committees consist of representatives of management 1 Doubt has been expressed as to the value of the departmental councils and t h e view has been advanced t h a t some of the councils, especially those on which girls predominate, have not really been of much use. When, however, in 1925, t h e question of their abolition was considered by t h e central works council, the decision was in favour of their continuation (The Human Factor in Business). 268 APPENDICES and workers. Through them the firm has developed its policy beyond consultation t o the sharing of control with the workers over certain matters usually determined solely b y the management. Minutes of the central council meetings are published in the works magazine, which is distributed t o every worker. The Stanton Ironworks Company, Limited This Company comprises eight separate establishments (ironworks and collieries) scattered over several counties in the Midlands. There are three committees at each establishment: (i) general committee of employees elected by the employees, (2) executive committee of employees elected b y the general committee, (3) works committee comprising executive committee of employees and the management. General Committee Each establishment is divided into sections for voting purposes, and each section has allotted to it a specified number of representatives on the general and on the executive committees. At some of the larger works there are seventy or more members on the general committee. The general committees are elected annually b y secret ballot. Every workman is entitled t o nominate candidates a n d to vote in elections. The committee usually meets once a month in the workers' own time, b u t on premises provided b y the Company. I t elects t h e executive committee and prepares the agenda of questions for submission t o the works committee joint meeting with the management. Executive Committee Generally speaking these committees consist of about one-third to one-quarter of the number of members on the general committee. Members of the executive committee are elected b y sections b y the votes of the representatives of each section on the general committee. Four times a year the eight executive committees in the Company hold a joint meeting in their own time, but out-of-pocket expenses are refunded to them. Works (or Colliery) Committees The works committee is a joint committee of t h e management and of the executive committee of employees. It meets monthly and is normally presided over by t h e managing director. Other management representatives are t h e departmental managers who attend each meeting, and representatives from t h e general body of foremen who sit in rotation so t h a t within t h e course of twelve months each foreman takes p a r t in a t least one meeting. T h e members of t h e executive committee of employees are paid for t h e hours of their attendance. At least seven days' notice of any matters which it is desired t o discuss shall be given b y either side to t h e other. The subjects dealt with include adjustments of wages, overtime, working conditions, discipline and absenteeism, safety and first-aid, suggestions for obtaining greater efficiency, rewards for suggestions, housing, allotment gardens, education and recreation, benevolent fund and pensions. General Rules Agreements entered into with the Company by t h e trade unions continue t o be dealt with by t h e unions, excepting t h e interpretation of an agreement which will be first dealt with by t h e works committees. The committees at collieries of t h e Company are an exception and do not undertake t h e interpretation of collective agreements. The works committees are t h e first court to deal with any question of grievance at the works, before the matter is reported to the trade union; no individual APPENDICES 269 employee shall, however, raise any question at a works committee until his foreman has had an opportunity to consider the matter. Rules provide for the method to be adopted if a deputation of employees desires to interview the management. If the question affects the whole of the works, the deputation shall consist of the full executive committee. No stoppage of work shall take place until the executive committee have had an opportunity of discussing matters with the management. 270 APPENDIX VII INDUSTRIAL CO-PARTNERSHIP AND PROFITSHARING SCHEMES Summaries are given below of the chief features of industrial co-partnership and profit-sharing schemes which have been introduced by several firms. The schemes selected illustrate different methods, and the firms are in different industries and districts. The various notes are based on statements issued b y t h e firms or on publications of t h e Industrial Co-partnership Association. The Brush Electrical Engineering Company, Limited The co-partnership scheme adopted b y this Company came into force in 1926. Employees share any surplus profit with the shareholders; t h e surplus in any year is the profit shown after deducting amounts for depreciation and t h e necessary charges on agreed principles and agreed rates, and a dividend of 10 per cent, per annum on the shares of the Company. For purposes of distribution of surplus t h e employees are classified into (1) craftsmen and others on the time wages list; (2) staff on t h e weekly wages list; (3) staff on t h e salaries list. The surplus profit is distributed among these three groups and to the shareholders, in proportion to the total wages, salaries and dividends paid for the year. The employees receive by far the larger share of a n y surplus, since on the average the total of wages and salaries is about six times t h e amount of dividends on the ordinary shares. The part of the surplus due to the employees is divided amongst the individual employees. Each employee has the opportunity of taking his proportion either in cash or in fully-paid ordinary shares of t h e Company a t par. No restrictions are imposed on such shares issued to employees. They rank equally in every respect with those held by other shareholders and can be kept for permanent investment or sold. The management of the scheme is controlled by a Co-partnership Council consisting of eight members and a Chairman; two members are elected b y each of the three groups of employees mentioned above. Bryant and May, Limited This scheme, which is known as t h e Brymay Co-partnership Scheme, was introduced in 1919 by this firm of match manufacturers. The chief features of t h e scheme are: (1) The surplus profits which the directors recommend for distribution, after allowance for depreciation and reserves, the dividend on preference shares, and a dividend of 10 per cent, free of income t a x on t h e ordinary and partnership shares, are divided equally up to a total of a sum not exceeding t h e equivalent of a dividend of 10 per cent, on 1,200,000 ordinary shares of £1 each, between t h e ordmary shareholders in t h e shape of extra dividends, and t h e employees in t h e shape of bonus. The amount payable to the employees, however, is limited to a sum equal to 12% per cent, of the total wages and salaries paid during the year. (2) Opportunity is afforded t o the employees to become co-partners by using the amount of their bonus, or such part of it as they may wish to subscribe, for partnership shares. APPENDICES 271 The total amount payable to the employees is paid to a trustee, who is required by a trust deed to distribute first among holders of partnership shares such sum as is necessary to make up the dividend on partnership shares t o the same amount, but not exceeding 15 per cent, free of tax, as paid on t h e ordinary shares when such dividend exceeds 10 per cent, free of tax, while t h e remaining amount is allocated t o all employees who have been for two years or more exclusively engaged in the Company's employment, other than directors, in proportion to the amount of salary or wages actually received b y them during the business year in respect of which t h e distribution is made. 1 The partnership shares, of which 200,000 of £1 each were created a t the inception of the scheme, carry no interest in the Company's reserve funds. They are issued to the employees at par, and must be relinquished t o the Trustee a t the par value on the death of t h e employee, or normally on the employee leaving the Company's service. Otherwise the shares are not transferable or saleable, and may not be pledged as security for loans. An employee who holds fifty or more partnership shares is entitled to attend and vote a t the general meetings of the Company. The committee of management of the Trust consists of not more than fourteen persons, of whom one-half are directors of the Company, or shareholders nominated b y t h e directors, and the other half are employees or persons appointed by them. John Mackintosh and Sons, Limited The profit-sharing scheme in operation in this Halifax firm of confectioners and sweet manufacturers was introduced in 1922. Half t h e ordinary shares of t h e Company are " preferred " and the other half " deferred ". The average of the rates of interest on these two groups of shares is taken as the profit-sharing rate. The workers receive a dividend on their wages a t this rate, and it is paid out in cash. Payments are not, however, made in a lump sum, but are distributed week by week during t h e following year as a bonus on wages. 2 The sum due t o each worker is included in the pay envelope, the amount of t h e wage and of t h e bonus being clearly distinguished on t h e envelope. Under this scheme there is no prior payment t o capital, the same rate being paid to t h e worker on his wages as is received by the shareholders. South Metropolitan Gas Company The co-partnership scheme established by this Company dates from 1889. The original scheme provided for t h e payment in cash of a percentage on all salaries and wages, the percentage rising and falling, like the shareholders' dividends, proportionately with t h e price a t which gas was sold. Various modifications have been made, and in 1920 the scheme was incorporated in an Act of Parliament obtained b y the Company. This provides t h a t surplus profits, after payment of 5 per cent, dividend on the ordinary stock and 6 per cent, on any new ordinary stock, should be divided in the proportion of three-quarters to t h e consumers, by way of reduction of the price of gas, and one-fourth equally between capital and labour, i.e. between the ordinary shareholders in increased dividends, and t h e employee co-partners of the Company in a uniform percentage bonus on their salaries and wages. 1 The amount allotted to the salaries or wages of those employees who have been employed for less t h a n two full business years, or whose work has been irregular or unsatisfactory, is not paid t o such employees, b u t is transferred to a fund for the benefit of employees or ex-employees of the Company, their widows or dependants. 2 The share of profit to the permanent staff is paid half-yearly. 272 APPENDICES A standard price for gas was fixed, and at the end of every year in which gas has been sold a t a figure below the standard, the amount thus saved to the consumers is calculated. This sum is then regarded as the consumers' share, and as representing three-quarters of the surplus profits. If and so far as the balance of the net revenue account in the opinion of the directors permits, a sum not exceeding one-quarter of the surplus profits is divided in the manner described above. One-half of the bonus is invested in the Company's ordinary stock in the name of trustees until the amount credited to any co-partner is sufficient t o give him a stock certificate in his own name. The remaining half of the bonus is left in the Company's hands t o accumulate a t interest, or it m a y be invested in stock with the trustees, or it may be withdrawn in special circumstances. The trustees are the employee directors, together with the president and secretary of the Company. Shareholding employees elect representatives on the board of directors. The number of employees' directors shall not exceed three, of whom one shall be a salaried officer, and the other two employees in receipt of weekly wages. The qualification of an employees' director is to have been for not less t h a n fourteen years and continuing to be an employee of the Company, and to have held for not less t h a n twelve months prior to the date of election, and continuing to hold, a specified amount of stock (¿120 to ¿200) accumulated under the co-partnership scheme. Voting power in electing employees' directors varies according t o the amount of stock held. / . , T. and J. Taylor, Limited This firm, which is one of the older firms in the woollen cloth trade, with works a t Batley, Yorkshire, introduced its profit-sharing scheme in 1892. For the first three years the scheme applied to the higher ranks only, but since 1895 it has included the whole of the employees remaining with the Company t h e full year. The scheme provides that, after making due allowance for depreciation, any profit which may remain after paying 5 per cent, on capital is apportioned between capital and labour according to their respective amounts, i.e. any percentage of profit received by capital beyond 5 per cent, is also declared on the year's total wages, and every worker who has been employed during the whole of the year is credited with a bonus at not less than t h a t rate on his or her year's wages. Double bonus is given to those not less than twenty-one years of age who have been with t h e Company a t least five years. For t h e years 1895 to 1914 inclusive, t h e bonus on wages was not given in cash but wholly in the form of fully-paid £1 shares in the Company. For subsequent years the bonus has sometimes been given partly in shares and partly in British Government securities or cash. Such portion of the total wages paid as has been earned b y workers who have not remained t h e whole year does not confer bonus on them, b u t the bonus which would otherwise go to them is carried to the Workers' Benefit Fund. Bonus shares do not carry votes, b u t they entitle the owner t o the same rate of dividend as any other shareholder. An employee must have a holding equal to his year's wages before he can sell any of his shares. He may then, if he wish, sell any surplus beyond t h a t holding, b u t any shares for sale must be offered first t o t h e secretary of t h e Company for use in t h e next bonus distribution. Persons leaving the Company's employment are required to sell their shares within six months. The employees of this firm own more than three-quarters of the capital and thus receive the greater part of the profits. 273 APPENDIX VIII PENSION SCHEMES IN VARIOUS UNDERTAKINGS An account is given below of t h e chief features of pension schemes established by several large undertakings in different industries and districts. The pensions paid under these schemes are supplementary t o any old-age pensions which beneficiaries may receive from the State. Many firms have separate schemes for manual workers and salaried staff; where a firm has two schemes, t h a t which applies to manual workers is described here. The schemes are frequently embodied in trust deeds. Outlines of other schemes are given in an article on " Employees' Retirement Pension Schemes in Great Britain ", by A. D. K. Owen, published in the International Labour Review, July 1935. The problem of works pension schemes is also reviewed in The Exit from Industry, a report issued in May 1935 b y P.E.P. (Political and Economic Planning). Cadbury Bros., Limited Bournville Works Pension Fund (Men) l This Fund, which has 5,000 members, is based on t h e joint contributory principle. I t is managed under a trust deed and among the seven trustees are two elected b y the workpeople. Two arbitrators, one appointed by t h e Company and one by t h e members of the Fund, may be called upon in the event of any failure of agreement. In t h e history of the scheme, however, neither of t h e arbitrators has been called upon t o act. Membership. —• With minor exceptions, the Fund is open to all male employees above the age of sixteen years and under fifty years at t h e time of entering the Company's service. Contributions. — The scheme is a joint contributory one: the Company and the members make equal contributions. The contribution of t h e member varies according to his age at the time of entry. I t ranges from 2 % per cent, of his wage or salary a t the entry of sixteen, t o 5.4 per cent, at t h e entry age of forty-nine. 2 A t the entry age of twenty-five t h e contribution is 3 per cent, of wages and it rises by 0.1 per cent, for each year by which the worker's age at entry is increased. On t h e introduction of t h e scheme, in order t o deal with t h e problem of employees who, a t its inception, had been in the Company's service for varying periods of years and for whom no fund had been accumulated from which t o provide pensions, a Subsidiary Fund was set up t o which the Company made a special grant. Pensions. — The pension age is sixty years, when any member may retire and claim his pension; this age is not, however, compulsory and t h e average age of retirement is now about sixty-one years. T h e annual pension payable t o each member is a percentage of his aggregate wages in respect of which contributions have been paid. At the commencement of t h e Fund in 1906 t h e rate was £1 for every ¿100, b u t increases have been made and the rate in operation in 1929 was 1 Details of the operation of this fund, including statistics showing the number of members and of pensioners, income from investments, amounts paid in pensions, and t h e total amount of the fund, are given in Pension, Provident, and Benevolent Funds : an Account of the Schemes in Operation at Cadbury Bros., Ltd., Bournville, issued b y t h e Publication Department, Bournville Works. The present note is based on this publication. 2 These rates apply in respect of wages up t o ¿250 per annum. Special rates are fixed in respect of wages exceeding ¿250 per annum. 18 274 APPENDICES £i u s . 6d. for every £100 of aggregate wages. Thus an employee whose annual earnings had been ¿200 during forty years' service would receive in pension ¿126 per annum, i.e. £1 u s . 6d. for each ¿100 in the aggregate earnings of ¿8,00o. 1 A system of additional pensions was introduced in 1920 in consequence of t h e change in the value of money and the inadequacy of the pensions of t h e older members of the Fund. Other provisions. — A member who leaves the Company's service for any cause before reaching pension age is entitled to receive his own contributions together with compound interest a t the rate of 2 % per cent, per annum. The scheme pays the accumulated contributions of t h e subscriber with compound interest to his widow, or representatives, if he dies while in t h e service of t h e firm.2 The contributions of t h e Company are not paid out to people who retire or die before reaching pension age, b u t remain in the Fund t o be applied t o general pension benefits. Bournville Women's Savings Trust and Pension Fund For workers under t h e age of thirty-five years this is largely a savings scheme, b u t for those over the age of thirty-five it is transformed into a Pension Fund. Membership. — With certain exceptions membership is open to all women and girl employees above t h e age of fifteen and under the age of forty-three years a t the time of entering the Company's service. Contributions. — The scheme is a joint contributory one, b u t t h e Company's contributions are at the rate of 50 per cent, of the members' normal contributions. The Company, however, also guarantees to make the interest up t o 5 per cent. per annum. The normal scale of contributions varies according t o the age of subscribers who are earning less t h a n 25s. per week. For those under eighteen years of age t h e contribution is 6d. per week; between eighteen and twenty-one years it is cd. per week, and over twenty-one years of age is. per week. For members earning over 25s. b u t under 30s. per week the normal scale of contribution is is. 3d. per week. Members earning not less than 30s. b u t under 40s. per week contribute is. 6d. per week, and for every 10s. in excess of 40s. the contribution is increased by 3d. per week. Apart from the normal contributions, additional contributions may be made, but these are not supplemented by payment from the Company. Pensions. — Pension age is fifty-five years. The pension is based on the contributions and interest standing t o the credit of the subscriber's account at t h e time of retirement, not including any portion of the Company's contributions. For a woman who retires a t t h e age of fifty-five years the pension from the normal contributions is a t the rate of £1 13s. qd. for every ¿10 standing to her credit. Thus, a woman who had been employed b y the Company for forty years a t an average wage of 30S. to 40s. per week would have standing t o her credit a total of ¿483 3s. 8d. and the rate of pension would be ¿81 10s. 2d. per annum. Other provisions. — The members' contributions may be withdrawn plus compound interest at the rate of 5 per cent, per annum by those leaving t h e Company's service or by their representatives in the case of death before pension age. 1 The number of pensioners in December 1936 was about 650 and the pensions amounted to about ¿84,000 per annum. 2 There are also benefits from a special Dependants' Provident Fund. This provides normally for t h e payment on the death of an employee before reaching pension age of a capital sum t o the widow or other dependant equal t o six months' wages plus one month's wages for every five years of service above ten, unless this capital sum is less than would have been payable under the Pensioners' Widows' Fund. APPENDICES Pensioners' Widows'. Fund 275 x Membership. — Membership is open to members of the Men's Pension Fund who are twenty-one years of age and over. Contributions. — The contribution payable by each member is one-third of the subscriber's normal contribution to the Men's Fund. Contributions are deducted from wages. The Company pays t o the Fund an amount equal to the members' contributions. The normal pension payable is a t t h e rate of 7 / 8 per cent, of t h e aggregate wages upon which contributions have been paid. Pensions. — The beneficiaries are the widows of members of the Men's Fund who die while in receipt of a pension from the Fund or who, having attained pension age (sixty), are still in the Company's service at t h e time of their death. The widows of members who were over sixty years of age at marriage are not entitled to a pension and a reduction is made in the pension payable t o "widows who are more than a certain number of years younger t h a n their deceased husbands, ranging from 97 per cent, of full pension when she is five years younger down to 25 per cent. when she is twenty-nine years or more younger, 3 per cent, being deducted for each year within these limits. Other provisions. — The member, or his representatives, may withdraw his contributions to t h e Widows' Fund plus compound interest a t 2 % P e r cent, per annum if he leaves t h e service of the Company for any reason before attaining pension age, or dies while in service before pension age or, being entitled to a pension, is a bachelor, widower, or marries when he is sixty years of age or over, or becomes a widower while receiving a pension, or dies without leaving a widow entitled t o a widow's pension. The member's representatives are also entitled to any balance of his accumulated contributions and interest in t h e Widows' Fund should his widow die before receiving in pension an amount equal to such total contributions and interest. J. J. Colman, Limited (Carrow Works) The Carrow Works pension scheme is one of the oldest in the country, being first established in 1899. I t is administered b y trustees, not less t h a n two being appointed by the members and the remainder by t h e Company. The quorum is five trustees. Membership. — Membership includes male employees aged seventeen or over, engaged a t Carrow Works, Norwich, in manual labour or as foremen, timekeepers, firemen, watchmen or caretakers. 2 Contributions. — The Company deducts 4a. per week from t h e wages of contributing members not over sixty-five years of age. Pensions. — Pensions are payable on retirement at sixty-five years of age or over. The amount varies according to the age of entry in the Company's service. The pension for life payable to workmen who entered t h e Company's service a t the age of seventeen is 145. per week; this consists of 10s. from the Company and 4s. from the Fund of the member's contributions and interest. Other provisions. — A member leaving the Company's service by reason of total incapacity arising from ill-health and after completing ten years' membership 1 If a male employee dies before reaching pension age, his dependants benefit not only from his accumulated contributions and interest, but also from t h e special Dependants' Provident Fund. 2 The firm established a separate scheme, with pensions normally at sixty-five years of age, for male salaried staff based on 5 per cent, of salary contributed by each member and an equal amount paid by t h e Company, and credited to t h e account of each member a t 3 y2 per cent, compound interest. 276 APPENDICES receives out of the Fund a reduced pension based on the value of his contributions plus 3 y2 per cent, compound interest. A member leaving the Company's service before completing ten years' service or for any reason other t h a n ill-health, and t h e representative of a member dying in the Company's service under sixty-five years of age will receive out of the Fund the amount of his contributions plus 3 per cent. compound interest. Should a member in receipt of a pension die before he has drawn from the Fund sufficient t o exhaust his contributions with 3 per cent. compound interest up to the date of his retirement, his representatives are entitled to receive the difference between such total sum and the total already paid t o him as pension from t h e Fund. The Company guarantees interest for the Fund a t the rate of 3 y2 per cent. Note. — The proportion of women who remain with the firm until the age of sixty-five has not been sufficient t o justify their inclusion in the scheme, though on retirement the women receive a pension. Pilkington Workmen's Pension Fund Bros., Limited 1 This Fund is administered by Trustees, one-half of whom represent the firm and t h e other half represent the employees. Membership. — Membership is compulsory for all employees except: (1) workers who have not completed one year's service; workers who are under twenty-one years of age; persons who are eligible for the staff superannuation scheme; and (2) women workers, for whom membership is optional. Contributions. •— Each member contributes is. 2d. per week and t h e firm contributes an equal amount for not less than forty-eight weeks in each year of employment until the member is sixty-three years of age or until the member retires on pension, if earlier. The worker is required t o authorise the firm t o deduct his contributions from his wages. Provisions are made for the payment of arrears of contribution by a member who has been absent owing to sickness or accident or for an appropriate diminution in the amount of pension. Pensions. — Any member may retire on pension on or after his sixtieth birthday and shall not retire later t h a n his sixty-fifth birthday, unless the firm see fit t o defer his retirement, which they m a y do at their discretion in exceptional cases. The rate of pension will vary according to the age a t which contribution started and t h e age a t retirement. No increased pension shall be obtained b y postponing retirement after the sixty-third birthday. The following figures indicate the weekly pensions payable on retirement at the age of sixty-three or over according to t h e age a t which t h e member began t o make contributions: Age at which contributions began 21 years 30 years 40 years Weekly pension payable on retirement at the age of 63 years or over 1 . Men Women 27s. cd. 16s. 6d. 8s. $d. 24s. lod. 14s. yd. js. 3d. 1 A reduced pension is paid if contributions are in arrears. The complete scale shows t h e pension payable in respect of contributions which began in each year of age from twenty-one years t o fifty-nine years. Pensions 1 I n addition to this Fund there is a Workmen's Supplementary Pension Fund provided by t h e Company to supplement t h e pensions of men who were employed a t t h e beginning of the contributory Workmen's Pension Fund. APPENDICES 277 are appropriately smaller for members who retire a t sixty, sixty-one or sixty-two years of age. The pensions for women are smailer t h a n those for men because of their greater expectation of life. In the event of a member being compelled to retire after not less t h a n t e n years' employment and retiring voluntarily before reaching his sixtieth birthday on account of failure of health or other physical incapacity, such t h a t the member is permanently incapacitated from doing his ordinary work, t h e trustees m a y give from a n y age a pension actuarially equivalent to the normal pension a t the age of sixty years, or alternatively m a y p a y t o t h e member a n equivalent lump sum. Other provisions. — Where a member has been compelled by failure of health or physical incapacity to retire before completing ten years' employment he shall receive back t h e whole of his own contributions together with the firm's contributions in lieu of interest. A member who retires voluntarily or is dismissed shall be entitled to receive his own contributions together with simple interest a t 4 per cent, per annum except where there have not been at least two years' contributions or where dismissal is for dishonesty or gross misconduct, or retirement takes place t o escape such dismissal, when t h e member's own contributions will be returned without interest. Any member who dies before reaching his sixtieth birthday or a woman member who leaves for marriage (provided marriage takes place within three months of leaving) shall be entitled t o the member's own contributions together with the firm's contributions in lieu of interest. If a pensioner dies before having received in pension an amount equal to all his contributions together with all the firm's contributions, the difference shall be paid t o his nominee, personal representatives, or next of kin. The rules of the Fund m a y be modified or t h e Fund wound up if the actuarial value of the maximum pension under the Fund a t sixty years of age, together with t h e amount of pension under a State scheme, shall exceed three-quarters of t h e weekly wage rate of unskilled labour employed by the firm. The rules may also be adjusted t o ensure the actuarial solvency of t h e Fund, e.g. b y varying t h e amount of pension or the age a t which pensions become payable. Any dispute about t h e administration of the Fund shall be referred to an impartial arbitrator. Rowntree and Company, Pension Limited Fund Membership. — The Fund is open to all male employees, whether manual wage earners or salaried staff, between t h e ages of twenty and forty-five and to all female employees between the ages of twenty-five and forty-five, provided they have been in t h e service of the Company for six months and are on the regular staff. Membership is voluntary. Contributions. — Contributions vary according to age of entry and wages or salary received. They cannot b e more t h a n t h e greater of t h e following sums: (a) 2 y2 per cent, of average wages or salary, or (b) a sum not exceeding 5 per cent. of average wage or salary, which will give a pension : for a man at sixty-five years of age of 25s. a week or half his average wages or salary, whichever is the greater amount; for a woman at fifty-five years of age of 155. a week or half her average wages or salary, whichever is t h e greater amount. The firm's contribution is proportionate to the members' contributions; it is varied according t o the requirements of t h e Fund. Pensions. — Pensions are payable: to men a t the age of sixty-five (except travellers, sixty), but retirement is optional between the ages of sixty and sixty-five with adjusted pensions; to women a t the age of fifty-five, b u t retirement is optional between the ages of fifty and fifty-five with adjusted pensions. The amount of pension is usually 50 per cent, of wages or salary. 278 APPENDICES Pensions are payable, under certain conditions indicated below, to widows of employees. Pensions are paid monthly; they may be discontinued if a pensioner improperly discloses any of the Company's secret processes or recipes, or, without the consent of t h e directors, enters any occupation or employment competing with the business of t h e Company. Other provisions. — In t h e case of a contributor leaving t h e service of t h e Company, or dying before reaching pension age, t h e total accumulation of the subscriptions, together with 2 % per cent, compound interest, will be paid t o t h e subscriber or the next of kin. This is subject to the provision for a male subscriber t h a t he does not leave a widow entitled t o widow's benefit. Pensions based on t h e actuarial value of their own and the firm's contributions are payable to contributors who have become totally or partially incapacitated for work, and who have contributed to the Fund for an uninterrupted period of not less than ten years. 1 If a subscriber dies after pension age before having received in pension the total accumulation, together with 2 % per cent, compound interest, the residue will be paid t o t h e personal representative of the subscriber, except where a male subscriber leaves a widow entitled t o widow's benefit. Employees are not subjected to medical examination as a condition of joining the Pension Fund, b u t all employees are medically examined on entering t h e Company's service. Widow's Benefit Fund In relation to the above Pension Fund for employees, pensions are paid to all widows aged fifty and over at the death of the husband, subject to t h e following limitations: (1) the parties must both of them have been under the age of fifty a t the date of their marriage; (2) t h e marriage must have preceded t h e death of the husband by at least ten years; (3) the husband must have been for an uninterrupted period of ten years prior to his death a contributing member and/or pensioner of the Pension Fund. If t h e widow is not less t h a n sixty-five years of age a t the time of her husband's death, her pension will be one-half of t h a t paid to her husband, or which would have been paid t o him had he reached pension age. If she is less t h a n sixty-five years of age, her pension will be reduced by one-fiftieth for each year she is below the age of sixty-five. Only widows over fifty years of age at t h e time of their husband's death will be eligible for pensions. The minimum pension is 10s. The husband's accumulations in the Pension Fund are transferred to t h e Widow's Benefit Fund. If the widow should die before she has received in pension the full accumulation, the residue is paid t o her legal representatives. Pensions are paid during widowhood only; a gratuity or bonus of one year's pension is payable on second marriage. Members of t h e Pension Fund p a y no additional subscription for t h e Widow's Benefit Fund, any extra cost being borne by t h e Company. A ¿50 Death Benefit is paid in respect of male members of the Pension Fund whose wives are not eligible for a widow's pension, and in respect of bachelors and widowers who are members of the Pension Fund. Wiggins Teape and Company (191c), Limited This firm, together with Alex. Pirie and Sons, Limited, and firms associated with these two Companies, have three separate pensions funds, for male workers, for female workers, and for male salaried staff respectively. Entrance t o all funds 1 These small pensions are generally increased from another fund, called the Invaliditv Fund. APPENDICES 279 is voluntary. The two funds for workers are described in this note; they were established in 1927. 1 Wiggins Teape and Alex. Pirie Pensions Fund Membership. —- Membership is open t o male workers of sixteen years of age and upwards and under fifty-five years of age (under sixty-four for workers already in the service of one of the contributing firms when the Fund was started). Workers who wish to become members are required to make application t o the trustees of the Fund. Membership m a y be retained in the Fund during absence owing t o sickness or temporary unemployment for a period of twenty-six weeks, or, at t h e discretion of the trustees, for a further twenty-six weeks. Contributions. — The members' rate of contribution is •¡¡d. per week, which is deducted from the wages, and t h e firms pay $d. per week per member. The member's contributions cease a t sixty-five years of age. Pensions. — Every member who leaves the service of a contributing firm at or after sixty-five years of age with a t least ten years' service is entitled t o receive a weekly pension during the remainder of his life of an amount calculated according to t h e length of his service. The maximum pension of £1 per week is payable in respect of service of forty-eight years or upwards; t h e rate of pension falls b y degrees t o 10s. per week for thirty-eight or thirty-nine years' service and to a minimum pension of is. per week for ten to thirteen years' service. Other provisions. — Any member who leaves the service because of permanent incapacity or for any other reason is entitled t o receive the aggregate amount of his own contributions together with compound interest thereon a t 2 % per cent. per annum. No payment is made in the event of the death of a member. I n special circumstances the trustees may, if requested in writing by a person in receipt of a pension, pay a lump sum in cash actuarially equivalent in value to a part n o t exceeding 50 per cent, of the pension. A committee shall be appointed in respect of each factory, mill or works of each of the contributing firms. Each committee shall consist of six persons, of whom three shall be members of the Fund employed a t the factory, mill or works and elected a t a meeting of the members there employed ; t h e other three persons on any committee shall be appointed by t h e board of directors of the contributing firm. The chairman shall be one of the three representatives of the firm and shall have a casting vote in case of an equality of votes. The powers of the committee are determined b y the trustees. Provision is also made for meetings of the members of t h e Fund. Wiggins Teape and Alex. Pirie Pension (Female Workers) Fund Many of the general provisions of this Fund are similar t o those of the men's fund. Contributions. — The members' rate of contribution is id. per week and t h e firms also pay id. per week per member. 1 The Staff Pension Fund, which is for males only, is on somewhat similar lines. Members contribute 2 % P e r cent, of salary or, if any salary is in excess of ¿500 per annum, an amount equal t o 2 % P e r cent, on ¿500; t h e firms contribute an equal amount. Pensions, based on salary and length of service, are payable on retirement at or after sixty-five years of age (or earlier in special cases). Also on retire^nent a lump s u m 4 & p l a e e d 4 o t h e i n e m b e r s ' credit on which ^they receive interest until death, when the sum is paid t o their representatives. There is a Savings Fund for female staff and for male staff in receipt of a salary over ¿500 per annum. The members and t h e firm make equal contributions, each paying 2 y2 per cent, of t h e salary, or, for male members, of the excess of salary over ¿500; on retirement or death of a member t h e joint contributions with interest (4% per cent.) are paid out. 28o APPENDICES Pensions. — Pensions, variable with length of service, are payabie on retirement a t or after sixty-five years of age. The maximum pension of ios. per week is payable in respect of service of forty-eight years and upwards; the rate of pension falls b y degrees to 5s. per week for thirty-eight or thirty-nine years' service, and t o a minimum pension of 2s. per week for twenty-four or twenty-five years' service. Other provisions. — If any member leaves t h e service of a contributing firm by reason of permanent incapacity or for a n y other reason, or dies under t h e age of sixty-five, she or her legal personal representatives shall be entitled to receive the amount of her own contributions together with 2 % per cent, per annum compound interest. If a member leaves the service under the age of sixty-five years for the purpose of being married and is married within three months, she shall be entitled t o receive, in addition t o t h e amount of her own contributions with compound interest at the rate of 2 % per cent, per annum, a sum of 10s. for each completed year of service. 28l APPENDIX IX SICKNESS BENEFIT SCHEMES IN VARIOUS UNDERTAKINGS Summaries are given below of the general provisions of sickness benefit schemes established by a number of leading companies. They illustrate especially the varying rates of contribution and benefit. The schemes described are limited t o those which p a y benefits according to a fixed scale; no account is given of benevolent schemes under which workpeople receive benefit according t o their circumstances. Montague Burton, Limited The object of t h e Employees' Sick Benefit Club established by this Company is t o provide b y voluntary contributions a fund for t h e mutual relief of its members during sickness or accident, the benefits received being supplementary t o t h e operation of t h e National Insurance Act and t h e Workmen's Compensation Act. The scheme is administered by a committee which includes one or two representatives from each department of t h e works. Contributions.— These are deducted from wages a t the following rates: MEN. First Class : 6d. per week. Second Class : 4a. per week. WOMEN. JUVENILES. 3d. per week. 2d. per week. Members must b e employed for thirteen weeks and have had thirteen contributions deducted from wages before being entitled to benefit. Members continue t o p a y their contributions during illness. Benefits. — Benefits are paid according t o t h e following scale: MEN. WOMEN. JUVENILES. Fiist Class : 15s. per week for eight weeks and 7s. 6d. per week for a further eight weeks. Second Class : 10s. per week for eight weeks and 5s. per week for a further eight weeks. JS. 6d. per week for eight weeks and ¡s. per week for a further four weeks. 5s. per week for six weeks and 2s. 6d. per week for a further four weeks. Maternity benefits and death benefits are also paid. Other Provisions. — Sick visitors are appointed t o visit members who are in receipt of benefits, and provisions are made t o prevent abuse. Any member who has received full sick allowance shall n o t be entitled t o any further allowance for a period of twelve calendar months; a member who has drawn partial benefits and resumed work shall, if again sick before t h e expiration of twelve calendar months, be entitled t o draw only up t o t h e full sick allowance less allowances received for a previous illness. APPENDICES 282 Members leaving the service of the firm shall receive 50 per cent, of the contributions paid less any benefits received, subject t o there being a sufficiency of funds. Cadbury Bros., Limited Membership. — Membership of the Sick Benefit Scheme of this Company is voluntary. The fund is open to employees over sixteen and a half years of age. Rates of Contributions. •— Members sixteen and a half t o eighteen years of age pay 3d. per week, while those over eighteen years of age pay 4a. per week. Contributions are deducted from wages. No contribution is made during a period of sickness. The Company contributes a sum equal t o 50 per cent, of t h e amount expended in respect of sickness and administration, with a maximum of 16s. gd. per member per annum. Benefits. — Benefits vary according to the age and sex of members. The rates during the first twenty-six weeks of sickness are: Age Men I6%-I8 145. Women gs. 18-22 Over 22 18s. 22s. 14s. 14s. Half of the above rates are paid for a further period of twenty-six weeks. Benefits, therefore, extend over the whole year. The minimum time for which benefit may be claimed is three days. Where an employee is away owing to accident and is in receipt of compensation, his sick benefit either is not paid or is reduced in amount. Other Provisions. — In addition to the scheme outlined above there is a noncontributory Auxiliary Sick Benefit Scheme instituted b y the Company under which certain members of the Sick Benefit Scheme over eighteen years of age are entitled t o a benefit of 55. per week in cases of consecutive sickness of more t h a n four weeks up t o a total of twenty-two weeks in any consecutive twelve months. The members eligible are married men, single men and women over eighteen years of age with a person or persons wholly dependent on them, and men and women over t h i r t y with or without dependants. To qualify for membership the worker must be a voluntary member of a registered friendly society which does not periodically divide its funds, or of a registered trade union, and be entitled t o sickness benefit from such sources of a t least 10s. 6d. per week for men and js. 6d. per week for women, or have endeavoured to obtain such benefit and been rejected on grounds of age or infirmity. There is a Juvenile Sick Benefit Scheme for juveniles under sixteen and a half years of age t o whom benefits are paid by t h e Company. Arrangements are also made for supplementary benefits for workers absent on account of accidents. Another scheme provides for additional benefits for workers with more t h a n four children under fourteen years of age, or under sixteen years of age if remaining a t school. Dunlop Rubber Company, Limited This Company has instituted a scheme of provident benefits, the whole cost of which is borne by the Company. No contributions are made b y the operatives and the scheme is administered by the directors. The scheme applies t o all operatives, both male and female. There are three sections, one providing sickness and accident benefit, a second providing death benefit, and a third providing superannuation benefit. The present note is limited to t h e sickness and accident benefit. Workpeople who have been in the service of t h e Company for six months are entitled to benefit. Rates of benefit during total disablement are 12s. per week for adults and 6s. per week for juveniles. These benefits are payable for a maximum period of twenty-six weeks in any calendar year. A worker who has received twenty-six benefits in any period of twelve calendar months is required to qualify by six months' service before being entitled to any further benefit. APPENDICES For workpeople paid. Employees 9 p.m. and 7 a.m. not to follow any 283 on half-time employment, benefits at half the above rates are in receipt of benefit are not to be absent from home between in summer, and between 7 p.m. and 8 a.m. in winter. They are other occupation while in receipt of benefit. Peek Frean and Company, Limited This Company has instituted two separate schemes, one for men and the other for women. Men's Sick Club This Club provides benefits for members in case of sickness or accident. Membership is voluntary. All men in the service of t h e firm who are not more than forty years of age are eligible. Members of the Club share in its management. Medical evidence as to t h e state of health shall be furnished t o the Management Committee. Contributions. — The rate of contribution is 15. per week, which is deducted from wages. Benefits.— The rate of benefit is 24s. per week for a period not exceeding sixteen weeks to members absent from employment because of sickness or accident. No payment is made for illness of less t h a n two days. Having received sixteen weeks' benefit a member shall not be entitled to further benefit until after fifty-two weeks' consecutive work. A member who, having received less t h a n sixteen weeks' benefit, has resumed work and is again sick shall, unless he has been off the Fund for fifty-two weeks, be entitled to benefit only for the remaining p a r t of sixteen weeks. If t h e sickness or accident is the result of the member's own excess or misconduct, he shall not be entitled to benefit. Other Provisions. — Members in receipt of benefit are visited regularly by a representative of t h e Fund. Members who are frequently sick m a y lose their right t o membership. A member of the Fund in receipt of benefit is required not t o frequent public-houses, or get intoxicated or undertake any kind of business, or do anything which may retard his recovery. The penalty is loss of part or t h e whole of the benefit. Members in receipt of benefit are required to be in their homes throughout specified hours from evening t o morning. Women's Supplementary Sick Club This has been established on somewhat similar unes to the Club for men. A contribution of 6d. per week is paid and benefits are at the rate of 9s. per week. Each year any surplus in the Fund, after carrying forward certain sums, is divided among the members in proportion to their contributions. Rowntree and Company, Limited The Men's Friendly Society, which was established in 1910, took t h e place of an old Dividing Society which had been in operation for about twenty years. Cmitribulions. •— The amounts of weekly contribution vary, b u t members may pay up to 6c?. per week. Benefits.— For those members who pay contributions a t the rate of 6d. per week the sickness benefit is 12s. per week for a period of twenty-six weeks. For those who make smaller contributions the amount of benefit per week is proportionately smaller. A Sick Club has also been established for women. Contributions. — The rate of contribution is 2d. per week. Benefits. — Sick benefit is paid a t the r a t e of 8s. per week for six weeks and of 4s. per week for a further six weeks. 284 APPENDIX X THE NATIONAL INDUSTRIAL ALLIANCE The National Industrial Alliance is a voluntary organisation formed b y the amalgamation in 1925 of the National Alliance of Employers and Employed and the Industrial League and Council, which date from the war years. The principal object of the Alliance is to negative t h e idea t h a t there is an essential and necessary antagonism between the interests of employers and employed, and t o promote the acceptance of the fact t h a t the future prosperity of the whole nation can best be secured by a frank recognition t h a t these two interests are co-relative and. interdependent. Its membership is open t o national and local employers' organisations and trade unions or federations of trade unions, representatives of firms, and individuals who are in sympathy with its objects. The Alliance endeavours to promote goodwill and active co-operation between employers and employed by setting up joint committees in industrial centres. Meetings and conferences are arranged for the discussion of current problems in a friendly atmosphere, while conciliation may be undertaken on t h e invitation of both parties to a dispute. The Alliance also seeks to extend economic knowledge by arranging classes conducted under university or other recognised educational auspices. I t considers t h a t a sound knowledge of economics is one of t h e essentials for industrial peace, that systematic study of t h e subject b y employers and workers will remove many misunderstandings, that such study will show t h e soundness of the principle of co-operation in industry, and t h a t t h e faults of t h e present system can best be remedied b y those who have a practical understanding of economic principles. A publication called Unity is issued monthly which discusses current events of mutual interest to employers and employed, including the activities of Joint Industrial Councils, methods for improving industrial relations adopted by individual firms, and the work of the International Labour Organisation. INDEX Accident prevention, 219 Agricultural Wages Act (1924), 104,141, 147 Agricultural Wages Board, 147 Allied Association of Bleachers, Dyers, Printers and Finishers, 81 Amalgamated Engineering Union) 61, 63 Amalgamated Society of Tailors and Tailoresses, 80 Amalgamated Union of Building Trade Workers, 61 Amalgamation of trade unions, 61, 63 Anti-Sweating League, 142 Apprenticeship, 214-216 Arbitration, 102, 109, n o , 124, 150 et seq. Associated Society of Locomotive Engineers and Firemen, 115 Association of British Chambers of Commerce, 89, 113, 115 Association of Joint Industrial Councils, 138, 139 Association of London Master Tailors, 80 Association for Education in Industry and Commerce, 187, 223 Aves, Ernest, 142 Baillie, Sir James, 121 Balance of payments, 10 Balance of trade, 8, 9 Bedaux System, 211 n Benevolent schemes in industrial undertakings, 205 Booth, Charles, 28 Boot and Shoe Manufacturers' Association, 87, 131 Bowley, A. L., 27 n, 28 Bradford Dyers' Association: — Unemployment Benefit Scheme, 205 •— Works Council Scheme, 261 British Federation of Master Printers, 87 British Iron, Steel and Kindred Trades Federation, 62 Brush Electrical Engineering Company, Co-partnership Scheme, 270 Bryant and May, Co - partnership Scheme, 270, 271 Building Industry, Methods of negotiation, 129 Burton Ltd., Montague, Sick Benefit Club, 281 Burton, Sir Montague, 223 Cadbury Bros. Ltd., 181, 184 — Pension Funds, 273-275 — Sick benefit scheme, 282 Canteens, 182, 183 Cave Committee, Report, 145 n, 146 Central Wages Board (Railways), 115 Chambers of Commerce, 82 Citrine, Sir Walter, 68 n, 70 n, 71 Civil Servants, conditions of trade union membership, 59 Clarke, Nicholls and Coombs, Profitsharing Scheme, 192 Clay, H., 137 n Clynes, J. R., 136 n Coal Mines Act (1930), 103, i n , 112 — (1931). 104 Coal Mines (Minimum Wage) Act (1912), 1 4 1 , 149 Coal Mines National Industrial Board 111-113 Coal mining, District Conciliation Boards, i n , 113 —, Earnings, 26 —, Hours of work, 30 —, International Labour Convention (Hours), 114 —, Methods of negotiation, 111-114 —, Pit-head baths, 176 Coal-owners' Associations, 80 Coates, W. H., 28 n Cole, A. S., 210 n Cole, G. D. H., 60, 65 n Collective Bargaining, 101 et seq. —, Machinery for, n o —, Methods in Building, 129; Coal mining, 111-114; Cotton, 127; Engineering, 125; Iron and Steel, 124; Railway Transportation, 114-118 —, National, 1, 2, 3, 101, 105, n o , i n , 125 Collective relations, Development of, 101 Colman, J. and J., Pension Scheme, 275-276 Committee on Industry and Trade, Reports, 145, 158, 159, 168 Committee on National Expenditure, 38 286 INDEX Committee on Relations between Employers and Employed (Whitley Committee), 132 et seq. Compulsory conciliation and arbitration. Attitude of employers' and workers' organisations, 74, 150 —, Policy of t h e State, 134, 150 Conciliation 101,109,112,124,150 et seq. Conciliation Act (1896), 102, 105, 151 Confederation of Shipbuilding and Engineering Unions, 65 Conspiracy and Protection of Property Act (1875), 5 6 Contracting-in, 59 Contracting-out, 59 Control of industry, 51, 75, 76, 98, 99, 112, 251 —, Method of co-partnership, 190-194 Co-operative societies, 44 Co-operative Union, 112, 115, 188 Co-partnership, 190-194 —, Definition of, 190 n —, Representative schemes, 270-272 —, Trade union attitude, 76, 191 Cost of living, 19, 20, 21, 22 — Sliding scales, 105 Cotton industry, Methods of negotiation, 127 Cotton Spinners' and Manufacturers' Association, 80, 84, 87 Courts of Enquiry, 152 Craft unions, 61 Currency and prices, 19, 20, 21, 22 Dispute pay, 54 Dunlop Rubber Company, Sickness Benefit Scheme, 282-283 —, Works Council Scheme, 262-263 Earnings, 24-27 Economic Advisory Council, 233, 243244 Economic conditions, 1 et seq. Economic planning, 252 Education, 42, 43 —, Facilities provided b y undertakings, 187, 188 Emigration, 3 Employers' Organisations, 77 et seq. —, Contributions, 86, 87 —, Development, 78 —, Management, 87, 88 —, National co-ordination, 89 —, Number, 83 —, Objects, 85 —, Policy, 98 —, Structure and constitution, 83 Employment, 15 Engineering and Allied Employers' National Federation, 84, 87, 125 Engineering industry, Methods of negotiation, 125, 127 Factories Act (1937), 173 Family Allowances, Attitude of Trades Union Congress, 75 Federated Associations of Boot and Shoe Manufacturers, 131 Federation of British Industries, 82, 89, 91, 96, 97, 113, 115, 233, 240-242 Federation of Master Cotton Spinners, 84 Ferguson, R. W., 187 n First-aid, 165, 219 Five-day week, 33 Flour Milling Employers' Federation, 87 —, Group Pension Scheme, 140 Foreign trade, 7, 8 Foremen, Training of, 216 Funeral benefit schemes in industrial undertakings, 203 General Federation of Trade Unions, 65 General labour unions, 62 General Strike (1926), 52, 58 —, Action of Trades Union Congress, 72 Gilson, M. B., 204 n Gold Standard, suspension of, 20, 21 —, Views of Turner-Melchett Conference, 240 Health in Industry, 210-220 —, Dental departments in undertakings, 218, 219 —, Medical departments in undertakings, 218, 219 —, Research in coal-mining industry, 175 —, Work of Home Office, 174 Health insurance, 40 Hogg, M. H., 27 n Holidays with pay, 180, 186 n Home Office, Industrial Museum, 222 —, Promotion of industrial health and safety, 174 Hospital funds in industrial undertakings, 203 Hours of work, 29-35, 234 —, Attitude of employers' organisations, 98, 99 —, Attitude of trade unions, 69, 74 —, in Coal mining, 30; Engineering, 125; Heavy work, 224 —, Statistics of, 258 Housing by industrial undertakings, 199 Hyde, R. R., 207, 208 n Imperial Chemical Industries, Works Councils Scheme, 263-265 287 INDEX Imperial preference, 8 Incorporated Federated Associations of Boot and Shoe Manufacturers, 87 Industrial accidents, provision of firstaid boxes, 174 Industrial Christian Fellowship, 223 Industrial Co-partnership Association, 190 n, 1 9 1 , 222 Industrial Court, 152 Industrial Courts Act (1919), 105,113 n, 151-154 Industrial disease, protection against, 173. 174 Industrial disputes, 113 —, Methods of settlement, 154 —, State intervention in, 150 Industrial Health Research Board, 178, 217, 222, 223 Industrial Museum, Home Office, 222 Industrial Transference Scheme, 18 Industrial unionism, 50, 61 Industrial Welfare Society, 173, 178 179, 180, 207-208, 2 i 9 n , 222 —, Director of, 207, 208 Industries, Relative importance of, 4- 5 Initiation schools, 213 Institute of Industrial Welfare Workers, 173, 178, 229 Institute of Labour Management, 173, 178, 222, 228-230 International Federation of Trade Unions, 72 International Industrial Relations Association, 213 n International Labour Conference : Nomination of British employers' delegate, 91 ; workers' delegate, 72 International Labour Conventions, on Hours in coal mining, 114; Hours in industrial undertakings, 34, 74, 89, 92, 93, 98 ; Minimum age, 174; Night work, 174 International Labour Office, 166 n International Organisation of Industrial Employers, 91 Iron and Steel industry, Methods of negotiation, 124 Iron and Steel Trades Confederation, 62 Joint Industrial Councils, 85, 103, 132 et seq. —, Constitution and size, 138 —, Development of, 137, 138 —, Promotion of welfare work by, 178 Juvenile Advisory Committees, 212 n Juvenile Employment Bureau, 212 n Labour colleges, 70 Labour co-partnership, 190-194 —, Attitude of trade unions, 191 —, Definition of, 190 n Labour Management, 209 et seq. —, Institute of, 173, 178, 222, 228-230 Large-scale undertakings, Effect of growth on labour management, 209, 250 Lawrence, A. Susan, 136 n League of Nations Union, 188 —, Conference on Minimum Wages, , Conciliation and Arbitration, 152 n Learnership, 214-216 Leisure time, Facilities for use of, 33, 34, 181 et seq. ; Educational facilities, 186-188 ; Social activities, 186; Sport, 184-185 Lever Bros. Ltd., 181 —, Profit-Sharing Scheme, 192 Lock-outs and strikes, 107-109 London and Cambridge Economic Service, 24 London Life and Labour, New Survey of, 27, 28 London Society of Compositors, 61 Mackenzie, Sir William, 152 n Mackintosh and Sons, John, Profitsharing Scheme, 271 Mallon, J. J., 136 n Management Research Groups, 222, 230-232 Manchester Engineering Council, 126 Manufacturers' Research Association (U.S.A.), 231 Maternity benefit, 42 Means test, 41, 204 Melchett-Turner Conference, 95, 103, 107, 235-243, 251 Melchett, Lord, 236 Migration, 3 Miners' Federation of Great Britain, 65, 66, i n , 112, 149-150 Miners' Welfare Fund, 34, 75 Minimum age for industrial employment, 42 Mining Association of Great Britain, 79, 84, 84 n, 87, 106, 111-113 Mining Industry Act (1920), 175 — (1926), 176 Ministry of Labour, Promotion of conciliation and arbitration, 151-154 —, Trade Board Administration, 142147 Mond, Sir Alfred, 236, 240 National Allied Building Trades E m ployers, 84, 87 National collective agreements, 102, 105, no 288 INDEX National Confederation of Employers' Organisations, 35 n, 82, 83, 85, 89, 90 et seq., 112, 236, 237, 240243 —, Attitude towards Washington Hours Convention, 92 —, Views on the industrial situation, 93-95 —, Views on unemployment insurance, 94. 95 National economy, 99 National Economy Act (1931), 38 National expenditure, Committee on, 37 National Farmers' Union, 81 National Federation of Building Trades Employers, 80 National Federation of Building Trade Operatives, 65, 66 National Federation of Merchant Tailors, 80 National income, 28 National Industrial Alliance, 223, 234, 284 National Industrial Board (Coal Mines), 104 National Industrial Conference (1919), 82, 91, 103, 234-235 National Industrial Council, Proposals for, 235, 237, 241 National Institute of Industrial Psychology, 178, 222, 226-228 National J o i n t Industrial Council (Boot and Shoe Industry), 130 n, 131 National Union of Blastfurnacemen, 62 n National Union of Boot and Shoe Operatives, 130, 131 National Union of General and Municipal Workers, 63 National Union of Manufacturers, 89 National Union of Railwaymen, 50,62,63 National Wages Board (Railways), 115 Nationalisation, Attitude of employers' organisations, 98 —, Attitude of trade unions, 69, 76 Old-age pensions, 41 Open shop principle, 98 Osborne Judgment, 57 Overtime rates, 33 Owen, Robert, 47 Peaceful picketing, 56, 57 Peek Frean and Company, sick clubs, 283 —, Works Council Scheme, 265-267 Pension funds in industrial undertakings, 194-198 —, Contributions to, 195, 196 —, Membership of, 195 —, Representative schemes, 273-280 Piece-work, extent of application, 211 PilkingtonBros., Pension Fund, 276-277 Pit-head baths, 175-177 Population (Great Britain and Northern Ireland), 2 Prices, wholesale, 19-22 Printing and Kindred Trades Federation, 65, 66 Production, 7 Profit-sharing, 190-194 Profit-sharing, Attitude of t r a d e unions, 76, 191 —, Definition of, 190 n —, Representative schemes, 270-272 Protective clothing, 174 Psychological tests, 212-213 Public Assistance Committees, 38, 204 Railways Act (1921), 103, n o , 115 Railway Clerks' Association, 115 Rationalisation, 75, 82, 99, 253 —, Definition of, 239 —, Views of Turner-Melchett Conference, 240 Real wages, 22-24 —, International comparisons of, 29 Rest pauses, 218 n, 224 Riches, E . J., 204 n Road Transport, Methods of negotiation, 119 Rowntree, B. Seebohm, 166 n, 169 n, 1 7 1 , 180, 222 Rowntree and Coy., Pension Fund, 277-278 —, Psychological Department, 213 —, Sickness Benefit Schemes, 283 —, Widows' Benefit Fund, 278 Royal Commission on Coal-mining. I n d u s t r y (1925), 107 —, on Labour (1891), 101, 151 —, on Unemployment Insurance (1931), Evidence of National Confederation of Employers' Organisations, 94, 95 Russian Federation of Trade Unions, 72 Safety-first measures, 219 Salter, Sir Arthur, 120 n Savings schemes in industrial undertakings, 198-200 Sciare, C , 80 n Scottish Trades Union Congress, 61 Selection tests, 212 Sheltered industries, Wages in, 24 Shipbuilding Employers' Federation, 126 n Shipping, Methods of negotiation, 122 Shipping Federation, 81, 87, 88 n Shop stewards, 156, 160 Sickness benefit schemes in industrial undertakings, 200-204, 281-283 —, Rates of benefit, 202; Rates of contribution, 201 289 INDEX Sliding scales for wage adjustment, 102, 105, 124 Smith, Sir H . Llewellyn, 27 n Social insurance, 35-36 —, attitude of employers' organisations, 94, 95, 96 —, attitude of trade unions, 74, 75 South Metropolitan Gas Coy., Copartnership Scheme, 192, 193, 271, 272 Stamp, Sir Josiah, 28 Stanton Ironworks Coy., Works Council Scheme, 268-269 Sterling, Depreciation of, 19 Strikes and lock-outs, 107-109 —, Causes of, 109 —, Methods of settlement, 106 •—, Statistics of, 260 Stock ownership, 190-194, 199 Suggestion schemes, 220, 221 Sweating, Prevention of, 142, 145 Sympathetic strikes, 51, 52, 57, 59 Taff Vale Case, 56 Taylor, J., T. and J., Profit-sharing Scheme, 192, 272 Time studies, 210 Time work, Application of, 211 Tomlinson, R., 130 n, 132 n Trade Boards Act (1909), 142 —, Act (1918), 143 —, Act (NorthernIreland, 1923), 142 n, 147 n Trade Boards System, 81, 142 et seq. —, Application of, 144, 145 —, Size of boards, 144 —, Whitley Committee recommendations, 143 Trade depression, Effect on trade unions, 51 Trade disputes, Definition of, 57 Trade Disputes Act (1906), 56 Trade, Disputes and Trade Unions Act (1927), 52. 58, 59 Trade union amalgamations, 60, 63 Trade union federations, 64 Trade union movement, 46 et seq. —, Association with Labour Party, 73 —, Development of, 47-52 —, Policy, 73-76 —, Structure, 60 Trade unions. Definition of, 58 —, Finance, 54 —, Legal position, 55-60 —, Membership, 52-54, 259 —, Political funds, 55, 57-58 —, Recognition of, 50, 51, 79, 80, 82, 98, 101-103, 235, 238 Trade Unions Act (1871), 55 Trade Unions Act (1913), 58 Trades Councils, 67-69 Trades and Labour Councils, 67 Trades Union Congress, 49, 50, 52, 63, 65, 69, 236, 237 —, Anglo-Russian Advisory Committee, 72 Trades Union Congress General Council, 70, 71, 112, 115, 236, 240-243 —, Membership, 69 —, Objects, 69, 70 —, Powers, 71, 72 Transport and General Workers' Union, 63 Triple Alliance (1921), 51 Turner-Melchett Conference, 95, 103, 107. 235-243, 251 Turner, Sir Ben, 236 Unemployment, 10-19 —, Effects of, 18 —, Views of Turner-Melchett Conference, 240 Unemployment benefit schemes in industrial undertakings, 204-207 Unemployment insurance, 36-40 —, Report of Royal Commission on, 37 —, Views of National Confederation of Employers' Organisations, 94-95 —, number of workpeople covered by, 11 United Patternmakers' Association, 61 Unsheltered industries, wages in, 24 Victimisation, Viewsof Turner-Melchett, Conference, 238 Vocational guidance, Work of National Institute of Industrial Psychology 226 Vocational selection, 212, 226 Vocational training, 213, 227 Voluntary conciliation and arbitration, 1 0 1 , 150 et seq. Voluntary welfare work, 177 et seq. Wage payment, Systems of, 211 Wage rates, 23-24 —, Statistics of, 257 Washington Hours Convention, 34, 74, 89, 92, 98 Webb, S. and B., 46 Welfare Department (Ministry of Munitions), 177, 178, 207 Welfare work, 171 et seq. —, Cost of, 179, 180 —, Financial schemes, 190-207 —, For workers' leisure time, 183-188 —, Industrial Welfare Society, 173, 178, 179, 180, 207-208, 219, 222 —, Relation to labour management, —, Scope of, 171, 172 —, Statutory, 173 et seq. —, Voluntary, 177 et seq. 29o INDEX Whitley Committee, 82, 103, 115, 118, 132-139, 157-159 —, Recommendations of, 132, 135, 138, 151. 157 Wholesale Clothing Manufacturers' Association, 81, 84 n Widows' benefit funds, 198 Widows' pensions, 41 Wiggins, Teape and Coy. (1919), Pension Funds, 278-280 Wilson, Mona, 136 n Women workers, Organisation among, 53. 54. 63 Wool (and Allied) Textile Employers, Council, 81, 84 Woollen and Worsted Trades' Federation, 81, 84 Workers' control of industry, 51, 75, 99, 164, 168 Workers' Educational Association, 43, 70, 188 Workers' Educational Trade Union Committee, 43 Works magazines, 189 Works councils, 155 et seq. Works councils, Attitude of employers' organisations, 168; of foremen, 163; of trade unions, 167 —, Constitution of, 159-164, 261-269 —, Development of, 156-159 —, Functions, 157, 158, 164-166, 261269 —, Relation to trade union movement, 155. 157. 159 —, Results of experience, 166-170 —, Voluntary establishment of, 155 Worsted Spinners' Federation, 84 York, H.R.H. the Duke of, 180, 207