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INTERNATIONAL LABOUR OFFICE

STUDIES AND REPORTS
Series A (Industrial Relations) No. 34

CONCILIATION
AND ARBITRATION
IN

INDUSTRIAL DISPUTES

GENEVA
1933
Published in the United Kingdom
For

the

INTERNATIONAL LABOTJB OFFICE (LEAGUE OF NATIONS)

By P . S. K I N G & SON, Ltd.
Orchard House, 14 Great Smith Street, Westminster, London, S. W. 1.

IMPBIMBEIES EÉUNIBS S.A., LAUSANNE

PREFACE

Neither the Preamble to Part XIII of the Treaty of Versailles,
on which the International Labour Organisation is based, nor the
general principles contained in Article 427 of the Treaty specifically
mention conciliation and arbitration as a field of study proper
to the Organisation. Nevertheless, no doubts have ever existed
as to its competence to deal with this subject, and it is but right
that this should, be the case, because such competence logically
falls within the wider field defined in the second principle of Article
427 concerning the right of association for all lawful purposes of
the employed and the employers. Not the least important purpose
of such association is to enable working conditions to be determined
by negotiation between parties meeting on a footing of equality.
This means that the problems of the conciliation and arbitration
system, which is intended, either by voluntary agreement or by
compulsion, to bring these negotiations to a satisfactory conclusion,
come within the scope of the Organisation. Moreover, the general
purpose prescribed for it by the Preamble to Part XIII and by
the principles of Article 427, which may be briefly described as
the improvement of the economic and social position of the workers
and the removal of the existing antagonism between employers
and workers by peaceful means, clearly implies that any procedure
which is designed chiefly to secure this latter aim must be of vital
interest to the International Labour Organisation.
It is, therefore, not surprising that the International Labour
Conference, as early as the 1924 Session, adopted a resolution
submitted by Mr. Manilio, Finnish Government delegate, instructing
the International Labour Office, in the course of its investigations,
to devote attention to the question of the settlement of industrial
disputes and the steps taken in different countries to create a
conciliation and arbitration system 1.
Even before this resolution was adopted, the International
Labour Office felt it necessary to study the progress made with
1

INTERNATIONAL LABOUR O F F I C E : International

Vol. I , p . 485, and Vol. I I , p p . 538 and 641.

Labour Conference,

1924,

PREFACE

regard to arbitration and conciliation and particularly the development of legislation ; and it published matter bearing on the
question in Industrial and Labour Information and occasional
articles in the International Labour Review. The effect of the resolution was t h a t the whole question was more systematically studied,
on the basis of a plan approved by the Governing Body at its
Session in October 1924. This plan provided for the preparation
of monographs on the regulations in fifteen different countries
and for the drawing up of minor reports on the situation in a
number of other countries. The primary purpose was to compile
a general study of the subject from the international standpoint.
This plan has been followed, although it has been considerably
delayed by more urgent tasks. The present international study
is a comprehensive summary of the results of these various
enquiries.
Until such time as this volume was ready, important developments in this sphere were reported in Industrial and Labour Information and in the International Labour Review more regularly
t h a n formerly, so as to keep readers abreast of the trend of developments. The 'same provisional purpose was served by the
tentative analysis and international survey of the problems of
conciliation and arbitration in the International Labour Review 1,
and the summary of the most important events of each year given
in the Report of the Director presented yearly to the Conference
since 1924.
While this preliminary work was going on, the International
Labour Conference adopted at its 1927 Session the following
resolution submitted by Mr. de Michelis, Italian Government
Delegate :
The International Labour Conference requests the Governing
Body to consider the possibility of placing the question of the solution
of collective labour disputes on the Agenda of an early Session of the
Conference 2.
The adoption of this resolution, the purpose of which was
reiterated by a similar resolution submitted by the Indian workers'
delegate, Mr. Chaman Lall, at the 1928 Session, increases the
importance of the Office's work in this field, since it will serve as
a basis for the decision of the Governing Body on the question
1
International Labour Review, Vol. V, Nos. 1-3. A list of other publications
of the International Labour Office on this subject will be found in the bibliography
a t the end of this volume.
2
International
Labour Conference, 1927, Vol. I, p. 680.

PBEFACE

and possibly also for subsequent discussion at the International
Labour Conference.
The present volume is a comparative analysis of the legislation
of various countries on the conciliation and arbitration procedure
adopted for the prevention and settlement of trade disputes
concerning the fixing of working conditions.
I t is scarcely necessary to point out that in addition to conciliation and arbitration procedure, there are other social institutions which m a y have an indirect effect in preventing trade
disputes : in particular works councils, profit-sharing and copartnership, welfare work and other steps taken to improve
what have been described in English-speaking countries as " industrial relations ".
None of these measures or systems is considered in this study.
Their nature is so different from t h a t of conciliation and arbitration
that they must be dealt with in a special enquiry. Even the
legislation on the minimum wage, which has many points of similarity with the conciliation and arbitration system, is only mentioned
occasionally when necessary for the sake of clarity. The subject
has already been dealt with in a separate publication of the International Labour Office to which the reader may be referred for
fuller particulars \
The study now published is divided into two parts. The first,
entitled " General Problems of Conciliation and Arbitration ",
consists of a systematic international survey of conciliation and
arbitration in the settlement of collective disputes. I t aims at
showing, by the method of comparative law, the variations in t h e
regulations of the different countries, which range from simple
conciliation and investigation to compulsory arbitration and t h e
compulsory enforcement of arbitration awards.
The second part, entitled " Conciliation and Arbitration in the
Different Countries ", describes in the form of monographs the
law in force on t h e subject of conciliation and arbitration in fifty
States. While the first part thus gives a general idea of the
regulations in individual States and aims at an orderly arrangement of the problems involved, the second part contains the material
on which the general survey is based.
The various monographs have been prepared on as uniform a
1
INTERNATIONAL LABOUB OFFICE : Minimum Wage-Fixing Machinery. Studies
and Reports, Series D . (Wages and Hours of Work), No. 17. Geneva, 1927.

1 *

PREFACE

plan as was possible in view of the special nature of the laws and
regulations analysed for each country. The first section of each
monograph discusses the economic background and the history
of legislation on conciliation and arbitration. The second deals
with the regulations in force, and the third describes the opinions
of those concerned and gives statistics of labour disputes and their
settlement. The more important monographs conclude with a
fourth section briefly summarising the main features of the study.
I t has been thought expedient to group the monographs on
geographical lines similar to those used for the series of studies
on freedom of association1. The fact is that between the subject
of these studies and that of the present report there are many
points of contact, as will appear moreover from the frequent
references made in the course of this work to the studies on freedom
of association. The order adopted here has a further advantage
over the alphabetical order in that it groups the countries more
or less according to the similarity of their systems of regulation
and thus conduces to a more methodical arrangement of the volume.
It is inevitable that in works of this kind, covering a very
large number of countries, a considerable interval of time may
separate the completion of some of the studies. In order to prevent
repeated revision of those completed earlier, events subsequent
to their completion have been summarised in appendices following
each study.

1
INTERNATIONAL LABOUR OFFICE : Freedom of Association.
and Reporte, Series A, Nos. 28-32.

5 volumes. Studies

CONTENTS
Page
PREFACE

GENERAL PROBLEMS OF CONCILIATION
AND ARBITRATION
CHAPTER I : Introduction

The Nature and Purpose of Conciliation and Arbitration .
The Main Differences between Important Systems : The
Methods of Conciliation and Arbitration
CHAPTER H : The Settlement of Labour Disputes : Independent and
Official Conciliation and Arbitration Machinery. — Institutions
for the Settlement of Disputes
A. Independent and Official Conciliation and Arbitration
Machinery
B. Conciliation and Arbitration Machinery
General Observations
Special Features
CHAPTER m

: The Parties

3
8

15
15
18
18
23
44

The Capacity of the Parties
Capacity to Conduct Proceedings ; Capacity in Special Cases ;
Capacity t o Appear and Act in Court

CHAPTER IV : The Institution of Proceedings
Application b y the Parties
The Opening of Proceedings a t t h e Request of a Public
Authority
The Opening of Proceedings b y the Institution ex-officio. .
Obligation to Notify Disputes and to Apply for Settlement ;
Suspensive Prohibition of Strikes and Lock-Outs . . . .
Position while Cases are Pending ; Pleas of Pendency ;
Determination of Competence ; Amendment of the Issue

56
56

CHAPTER V : The Proceedings

60
61
63
74
77

The Proceedings
Particular Principles : Informality ; Official Action ; Investigation ; the Taking of Evidence ; Publicity ; Oral Procedure ;
Direct Competence ; Rapidity
The Course of the Proceedings : Obligation of the Parties to
Attend ; Exclusion or Challenge of Members of t h e Court
or Board; Maintenance of Order during Sessions; Elucidation of the Facts

CHAPTER V I : The Conclusion of the Proceedings
Means of Arriving a t Proposals for Conciliation and Arbitration
Awards ; Voting, Time Limit and Cost of Proceedings .
Form, Grounds and Period of Validity of Conciliation and
Arbitration Decisions
Nature and Scope of Conciliation and Arbitration Decisions ;
Methods of Enforcing Conciliation Proposals and Arbitration
Awards

102

103
109
113

CONTENTS

Legal Remedies against Conciliation and Arbitration Decisions ;
The Question of Revision
CHAPTER V I I : Conciliation and Arbitration
ciples. — Conclusions

as Contrasting

Page

125

Prin-

SUPPLEMENTARY N O T E

130
142

CONCILIATION AND ARBITRATION IN T H E
D I F F E R E N T COUNTRIES
GREAT BRITAIN
§ 1. Economic Background and Development
Evolution of the Present System
§ 2. The System in Force
Governmental Systems
Non-Governmental Machinery
§ 3. Results and Opinions
Methods of Settlement
§ 4. Summary
Bibliography

145
146
149
150
153
158
160
165
166

I R I S H F R E E STATE

168

FRANCE
§ 1. Economic Background and Development
§ 2. The System in Force
Conciliation
Arbitration
Conciliation and Arbitration in Collective Disputes
between Shipping Companies and Crews
Conciliation and Arbitration in Collective Disputes
between Sea-Fishing Undertakings and Crews . .
§ 3. Results and Opinions
§ 4. Summary
Bibliography

170
175
175
176
177
178
179
184
185

BELGIUM
§ 1. Economic Background and Development
§ 2. The System in Force
§ 3. Results and Opinions
§ 4. Summary
Bibliography

187
189
191
193
193

LUXEMBURG
§ 1. Economic Background and Development
§ 2. The System in Force
§ 3. Proposed Legislation
§ 4. Statistics

194
195
197
198

NETHERLANDS
§ 1. Economic Background and Development
§ 2. The System in Force
Conciliation
Arbitration
Enquiries

200
202
203
205
206

CONTENTS

IX
Page

§ 3. Results and Opinions
§ 4. Summary
Bibliography

207
210
211

SWITZERLAND
§ 1. Introduction
General Machinery of Government
History of Conciliation and Arbitration
§ 2. The System in Force
Conciliation Procedure
Arbitration Proceedings
§ 3. Results Achieved by Conciliation and Arbitration in the
Cantons
Bibliography

212
212
213
216
218
231
233
237

GERMANY
§ 1. Introduction
§ 2. The System in Force
Nature of Conciliation and Arbitration in German Law
Voluntary and Official Conciliation and Arbitration
Tho Conciliation and Arbitration Authorities . . . .
The Parties
Conciliation and Arbitration Procedine
The Conclusion of the Proceedings
Binding Awards
The Enforcement of the Award
§ 3. Statistics
§ 4. Summary
Supplementary Note

239
241
241
244
245
252
255
262
264
268
271
273
275

Bibliography

277

DANZIG (Free City of)
AUSTRIA
§ 1. Economic Background and Development
§ 2. The System in Force
Statutory Conciliation and Arbitration Machinery
.
Conciliation and Arbitration Machinery Provided under
Collective Agreements
§ 3. Results and Opinions
Achievements of the Conciliation Boards and Suggested
Reform of the Austrian Conciliation and Arbitration
System
§ 4. Statistics
Bibliography .

279

281
284
284
291
293
293
295
297

HUNGARY
§ 1. Economic Background and Development
§ 2. The System in Force
Conciliation on the Basis of the Order of 4 September
1923
Conciliation through Industrial Inspectors and Mining
Authorities
Conciliation on the Basis of Wage Agreements . . . .

298
301
301
302
303

CONTENTS

Page

§ 3. Results and Opinions
§ 4. Summary
Bibliography

304
305
306

CZECHOSLOVAKIA
§ 1. Economic Background and Development
§ 2. The System in Force
The Settlement of Disputes in virtue of Legislation .
The Labour Court as Conciliation Authority . . . .
Conciliation and Arbitration Machinery Established by
Autonomous Official Bodies
Non-Governmental Conciliation and Arbitration Machinery
§ 3. Results and Opinions
§ 4. Summary
Bibliography

317
320
323
324

POLAND
§ 1. Economic Background and Development
§ 2. The System in Force
General System
Special Legislation (Agriculture)
Conciliation
Arbitration
§ 3. Results and Opinions
§ 4. Summary
Bibliography

326
329
329
329
330
331
332
335
335

BALTIC STATES (Estonia, Latvia, Lithuania)
Historical Development

336

ESTONIA

§ 1. Basic Facts
§ 2. The System in Force
§ 3. Results
LATVIA

§ 1. Basic Facts
§ 2. The System in Force
§ 3. Results
LITHUANIA

§ 1. Basic Facts
§ 2. The System in Force
M E M B L TERRITORY

Summary
Bibliography
DENMARK
§ 1. Economic Background and Development
§ 2. The System in Force
Conciliation
Arbitration in Justiciable Disputes
Provisions for Arbitration Laid Down in Collective
Agreements

307
310
310
315
316

338

338
338
340
341

341
341
342
345

345
345
346

346
347
348
350
350
352
353

CONTENTS

XI
Page

§ 3. Results and Opinions
§ 4. Summary
Bibliography

354
355
356

FABÖE ISLANDS

357

ICELAND

358

NORWAY
§ 1. Economic Background and Development
§ 2. The System in Force
§ 3. Labour Law Jurisdiction
§ 4. Results and Opinions
§ 5. Summary
Bibliography

359
362
365
367
368
369

SWEDEN
§ 1. Economic Background and Development
§ 2. The System in Force
Conciliation
Adjudication of Justiciable Disputes and Arbitration.
§ 3. Results and Opinions
§ 4. Summary
Bibliography

370
372
372
374
375
378
378

FINLAND
§ 1. Economic Background and Development
§ 2. The System in Force
Conciliation . . . . '
Arbitration
§ 3. Results, Opinions of the Parties Concerned and Plans for
Reform
§ 4. Summary
Bibliography

380
382
382
384
385
386
386

UNION OF SOCIALIST SOVIET REPUBLICS
§ 1. Historical Survey
Before the Revolution
After the Revolution
§ 2. The Present Policy
Bases of this Policy
Evolution of the Present System of Settlement of
Disputes
Present System of Settlement of Disputes
§ 3. Conciliation and Arbitration Institutions
Conciliation Boards
Arbitration Courts
§ 4. Statistics of Disputes
Disputes in 1924-1925 and 1925-1926
Disputes in 1926-1927 and 1927-1928
Appendix I : Joint Committees
Appendix DI : Labour Courts
Bibliography

387
387
392
395
395
398
401
404
404
408
410
410
412
416
420
422

CONTENTS
Page

ITALY
§ 1. H i s t o r i c a l D e v e l o p m e n t
§ 2. T h e S y s t e m i n F o r c e
General Observations
Conciliation P r o c e d u r e
J u d i c i a l S e t t l e m e n t of Collective L a b o u r D i s p u t e s . .
P r o h i b i t i o n of S t r i k e s a n d L o c k - O u t s
§ 3. S t a t i s t i c a l D a t a
§ 4. S u m m a r y
Appendix I : Work in Ports
A p p e n d i x I I : I m p o r t a n t Cases D e a l t W i t h b y t h e L a b o u r C o u r t s
Bibliography

424
432
432
434
439
443
446
450
451
454
457

SPAIN
§ 1. E c o n o m i c B a c k g r o u n d a n d D e v e l o p m e n t
§ 2. T h e S y s t e m i n F o r c e
General O b s e r v a t i o n s
F o r m , C o m p o s i t i o n a n d D i s s o l u t i o n of t h e J o i n t B o a r d s ,
a n d R e l a t e d Questions
F u n c t i o n s a n d P r o c e d u r e of t h e B o a r d s
T h e D e t e r m i n a t i o n of G e n e r a l C o n d i t i o n s of E m p l o y ment
Special P r o c e d u r e in Case of L a b o u r D i s p u t e s . . . .
J o i n t B o a r d s for R a i l w a y s
Special F u n c t i o n s of t h e P r o v i n c i a l L a b o u r Delegates
a c c o r d i n g t o t h e D e c r e e of 29 M a y 1931
. . . .
§ 3. Statistical D a t a
§ 4. S u m m a r y
Bibliography
PORTUGAL
Bibliography

460
463
463
466
468
469
471
472
473
474
475
476
477
481

GREECE
§ 1. E c o n o m i c B a c k g r o u n d a n d D e v e l o p m e n t
§ 2. T h e S y s t e m in F o r c e
Conciliation
Arbitration
Opinions
Bibliography

482
484
484
485
486
487

YUGOSLAVIA
§ 1. E c o n o m i c B a c k g r o u n d a n d D e v e l o p m e n t
§ 2. T h e S y s t e m i n F o r c e
G o v e r n m e n t a l Conciliation a n d A r b i t r a t i o n M a c h i n e r y
§ 3. Results
§ 4. S u m m a r y
Bibliography

488
491
491
493
494
495

BULGARIA
§ 1. E c o n o m i c B a c k g r o u n d a n d D e v e l o p m e n t
§ 2. S t r i k e S t a t i s t i c s
Bibliography

496
499
499

CONTENTS

RUMANIA
§ 1. Economie Background and Development
§ 2. The System in Force
Conciliation and Arbitration under the Act of 4 September 1920 concerning the Regulation of Collective
Labour Disputes
Conciliation and Arbitration Machinery Instituted b y
Collective Agreement
§ 3. Results and Opinions
§ 4. Summary
Bibliography

500
501
501
505
506
507
507

U N I T E D STATES OF AMERICA
§ 1. Economic Background and Development
§ 2. The System in Force
Governmental Systems
Non-Governmental Systems
§ 3. Results and Opinions
§ 4. Summary
Bibliography

508
512
512
518
528
531
532

CANADA
§ 1. Economic Background and Development
§ 2. The System in Force
Setting Up of the Board
Functions of the Board
Compulsory Measures
Miscellaneous Provisions concerning Procedure . . . .
Operation of the System
The Conciliation and Labour Act
Railway Boards of Adjustment
Provincial Acts
§ 3. Results and Opinions
Statistics
Opinions
§ 4. Summary
Bibliography

533
535
535
535
536
536
537
538
538
539
539
539
542
543
544

LATIN AMERICA
ARGENTINE R E P U B L I C

§ 1. Economic Background and Development
§ 2. Present Provincial Legislation
§ 3. Statistical Data
§ 4. Summary
Bibliography
BOLIVIA

Bibliography
BRAZIL

Economic Background
Present System
Supplementary Note

547

547
561
553
555
556
557

568
559

559
560
563

XIV

CONTENTS
Page
564

CHILE

§
§
§
§

1.
2.
3.
4.

Economic Background and Development
The System in Force
Statistical Data
Summary

COLOMBIA

§ 1. Economic Background and Development
§ 2. The System in Force
§ 3. Results and Proposals for Reform

564
567
570
572
574

574
575
578

CUBA

579

EQUADOR

580

GUATEMALA

§ 1. Economic Background and Development
§ 2. The System in Force
MEXICO

581

581
581
584

§ 1 Economic Background and Development
§ 2. The System in Force
General Information
Composition and Election of the Boards
Competence and Procedure
Execution of Awards ; Strikes and Lock-Outs . . .
§ 3. Summary

584
588
588
589
590
591
593

Bibliography

593

PANAMA

594

PERU

595

URUGUAY

Statistical Data and Proposed Legislation
Bibliography
VENEZUELA

Bibliography

596

597
598
599

599

UNION OF SOUTH AFRICA
§ 1. Economic Background and Development
§ 2. The System in Force
Conciliation Machinery
Compulsory Provisions
Arbitration
Public Utility Services
Penalties
§ 3. Results and Opinions
§ 4. Summary
Bibliography

600
601
602
603
603
604
604
605
606
606

AUSTRALIA
§ 1. Economic Background and Development
§ 2. The Systems in Force
The Federal System

607
609
609

CONTENTS

XV
Page

New South Wales
Victoria
Queensland
South Australia
Western Australia
Tasmania
§ 3. Statistics
§ 4. Summary
Bibliography

613
617
620
624
626
628
629
635
636

N E W ZEALAND
§ 1. Economic Background and Development
§ 2. The System in Force
The Industrial Conciliation and Arbitration Act . . .
The Labour Disputes Investigation Act
§ 3. Results and Opinions
§ 4. Summary
Supplementary Note
Bibliography

638
641
641
645
646
649
650
653

INDIA
§ 1. Economic Background and Development
§ 2. The System in Force
§ 3. Results and Opinions
§ 4. Summary
Bibliography

654
658
660
661
661

CHINA
§ 1. Introduction
§ 2. The System in Force
General Principles
The Conciliation and Arbitration Authorities . . . .
Conciliation and Arbitration Procedure
Restrictions on the Actions of the Parties to a Dispute
§ 3. Summary
Bibliography

662
665
665
666
667
669
670
670

JAPAN
§ 1. Economic Background and Development
§ 2. The System in Force
Compulsory Clauses and Penalties
§ 3. Results and Opinions
§ 4. Summary
Bibliography

671
673
674
675
681
682

APPENDIX

List of LI'JOÌ in Force on 15 May 1932 in the Different Countries of
the World concerning Conciliation and Arbitration in Collective
Disputes

683

GENERAL PROBLEMS
OF

CONCILIATION AND ARBITRATION

CHAPTER 1
EVTRODUCTION

THE NATURE AND PURPOSE OF CONCILIATION AND ARBITRATION

Conciliation and arbitration, like all other phenomena in the
economic and legal spheres, have their historical antecedents.
This is, however, no place to consider the historical aspect of the
question, which is dealt with in the monographs on the various
countries in so far as is necessary for an understanding of the
situation. A few brief introductory remarks on the principles of
the matter must suffice.
Differences of opinion between employers and workers with
regard to wages and other labour conditions have in the nature
of things existed ever since the distinction arose between the
capital-holding employer and the wage learner who is more or
less dependent on capital. The community and the State, however,
did not feel called upon to intervene in the settlement of these
differences until they ceased to be confined to individual employers
and workers and developed into struggles between organised
groups.
There is no need to examine the warrant for assuming that
labour disputes of this type existed in the latter days of the Roman
Empire. It is certain, at least, that when the guilds were gradually
losing their power in the Middle Ages, such disputes occurred
between associations of masters and associations of journeymen.
Even at that early date notable efforts were made towards establishing systems of conciliation as soon as the harmful effects of these
disputes on the trade itself and on the community had been
realised. But it was only in the early nineteenth century, when
technical progress led to large-scale production in England, that
a working class capable of combining came into existence. At
a later date, the employers organised to meet the workers'
unions. Modern trade disputes, which are the expression of the
struggle between capital and labour for the distribution of the
product of industry, generally take the form of conflicts between
such trade organisations.

GENERAL PROBLEMS

I t is necessary first of all to distinguish the types of disputes
which are dealt with by conciliation and arbitration and which
are therefore considered in the present enquiry. I n order to do
so, it will be advisable, for the sake of clarity, to make a few
general remarks on the position of conciliation and arbitration
within the framework of labour law and social policy. Every
system of law is in a state of constant flux so t h a t it may be applied
to varying conditions of life and society. This is very clearly
seen in the case of labour law, many essential parts of which appear
at present, like international law, to be developing rapidly. I t is,
indeed, only gradually that the special nature of labour law is
being generally recognised. The civil law of most of the important
States of the world, often framed entirely for the individual and
his needs and thus strongly influenced by Roman law, is not
capable of dealing with new legal problems arising out of the
change in the conditions in important industrial countries with
their huge masses of workers.
Now t h a t the laissez-faire attitude to economic and political
problems has been abandoned, there are no difficulties of principle
in the way of State legislation in the field of labour protection
in the strict sense (regulation of hours of work, the Sunday rest,
shop closing, accident prevention) and in the field of social insurance. There are, however, at present grave difficulties in the
adoption of new legal forms when the State finds it necessary to
introduce regulations or rules of procedure which encroach upon
the domain of existing civil or private law. This occurs particularly
in the case of labour law, in the narrower sense of the term, the
more so since it has not yet been universally recognised as a separate
branch of law. The recognition of the peculiar legal nature of
individual and collective labour agreements, labour jurisdiction
and conciliation and arbitration procedure are cases in point.
Whereas the special law on the individual contract of service and
its counterpart in the sphere of procedure — labour jurisdiction —
can still to a great extent be connected up with civil law and the
corresponding law of procedure and can therefore find some
support in existing regulations, there are much greater difficulties
with regard t o collective labour agreements and conciliation and
arbitration. I n this case, the collective nature of the new type
of labour law is particularly clear, and as a result the older forms
and systems of law prove inadequate. While the legal system
gives the individuals concerned and their associations the means,
in the form of collective agreements, of regulating their legal

INTRODUCTION

relationships, to a great extent independently, the task of the
conciliation and arbitration system, in cases where the parties
for some reason are unable to regulate matters on their own
account, is, typically, to assist them by measures which may be
taken by the parties themselves or by the authorities. In the
effort to achieve such ordered relationships, generally by the
conclusion of collective agreements, either by common consent
or with the help of external institutions, we see in a nutshell the
origin and development of labour law. The function of conciliation
and arbitration can, therefore, be compared in some sort to the
functions of the Roman praetor, who created law by his edicts.
This position of the conciliation and arbitration system in the
wider field of labour law at once shows the difficulties and the
importance of its task. Rightly understood, it should be the
means of helping those concerned to arrive at some legal method
for regulating their economic and social life whenever difficulties
occur which prevent them from succeeding without external
assistance. The appropriate settlement of working conditions,
which constitute the main subject to be regulated, is a very important factor for the employer in the success of his undertaking, but
for the worker it means the very basis of his existence. One would,
therefore, expect that it would be the obvious desire of both
parties to regulate these conditions by peaceful means and to
avoid open conflict, the outcome of which must be uncertain
and the losses often extensive. In many countries where collective
labour law has not yet taken concrete legislative form, this function
of the conciliation and arbitration system in the maintenance of
industrial peace is specially emphasised 1.
From what has been said, the general nature of the trade
disputes which are dealt with by conciliation and arbitration
should be clear. The scope of the present work cannot be adequately defined without some further explanation of the nature
of these disputes.
The term " trade disputes " includes several different concepts
which must be clearly distinguished from each other. It includes
first of all disputes between employers and workers arising out
of the individual contract of employment. These are generally
dealt with by the normal procedure laid down in the existing
legal system. In many cases a special form of procedure, in the
shape of labour courts, has been instituted to deal with disputes
1

Cf. below, especially p p . 77 et seq..

2 *

GENERAL PROBLEMS

of this type. This group will, in principle, be ignored in the present
enquiry, which is concerned solely with so-called collective disputes,
t h a t is to say, disputes between groups of persons, generally
employers and workers' organisations, which are not conflicts
concerning legal rights like the individual disputes but rather
trials of strength (for the adjustment of conflicting interests)
arising out of the settlement of working conditions (hours, wages,
etc.). For the settlement of collective disputes of this kind it is
not a question of applying and interpreting existing law, but
rather of finding first of all the equitable basis according to which
these disputes should be regulated. The aim of each party is to
make the standard as favourable for itself as possible, as for instance when a workers' organisation endeavours to obtain the
highest possible level of wages. I n essence, this is the same distinction as is made in international law between legal disputes on
the one hand and political disputes or struggles for power on the
other.
Any procedure for the prevention or settlement of such collective disputes must therefore endeavour t o arrive at a compromise
between the reasonable claims of each party and thus lead both
parties to a voluntary agreement for the regulation of working
conditions, generally in the form of a collective agreement. This
may be done by making a formal proposal to the parties for an
agreement or by the issue of an award which it may or may not
be compulsory for the parties to accept. The German Conciliation
Order expressly refers to this as the purpose of conciliation when
it says :
Conciliation committees and conciliators shall assist in the conclusion
of collective agreements (collective contracts and works agreements) l .
I t is true t h a t collective disputes may also be " disputes on
rights ", and such disputes tend to play a more and more important
part in modern labour law. These will include first of all legal
disputes arising out of the collective agreement between the
parties with regard to the interpretation or the existence of such
an agreement. I n Sweden, for example, a special Act of 22 June
1928 2 instituted a procedure for dealing with such disputes, and
in Germany these collective disputes on rights are dealt with by
1
Section 3 of the Conciliation Order of 30 October 1923 (Legislative
Series,
1923, Ger. 6). Whether it is desirable to restrict the task of conciliation to this one
point is a question which is still being widely discussed in Germany.
2
Legislative Series, 1928, Swe. 3.

INTRODUCTION

the same labour tribunals which are competent to deal with individual disputes.
The above distinction between individual and collective disputes on rights on the one hand and disputes on collective interests
(for adjusting the balance of power between the parties) on the
other hand is by no means recognised or expressed in the legislation concerning such disputes in every country. In many cases
the same procedure is adopted for settling both types. It will
therefore be necessary in the course of this investigation to refer
occasionally to disputes on rights between individuals or groups
as well as to disputes on collective interests, which are considered
as being trade disputes in the narrower sense of the term. I t must
however be emphasised that in principle this study deals solely
with the settlement of industrial disputes between conflicting
interests. It is only in the case of such disputes that the conciliation and arbitration system shows its peculiar characteristics,
and it is just in these cases, where the battle is fought out with
extraordinary tenacity and bitterness because the vital interests
of powerful groups in the community are at stake, that the necessity for conciliation machinery makes itself urgently felt. The
initiative in creating such machinery may be taken by the parties
themselves or by the State, which intervenes in order to protect
itself, its economic system and its citizens from the dangers
involved in such disputes. In view of the close economic connection between States in the modern world, these collective disputes
and the open conflict which follows if conciliation fails, constitute
a problem of international importance. Any disturbance in the
normal production of commodities and the consequent shortage,
as well as the loss of purchasing power of the individuals concerned,
must inevitably affect not only the national economic system of the
State involved but to a greater or less extent also the world market
and all countries connected with it. That shows the international
character of the problem and makes it clear that the prevention
and settlement of trade disputes, which are nothing more or less
than a form of economic warfare between two of the parties
concerned in production, constitutes a problem which it may not
prove possible to solve by the adoption of uniform international
procedure, but which humanity must, for the sake of international
economic progress and the welfare of the workers which is dependent
on such progress, earnestly strive to solve in the national sphere.
The purpose of conciliation and arbitration, therefore, is to unite
the conflicting social groups of employers and wage earners to

GENERAL PROBLEMS

a unity of effort. This is generally attempted not through individuals but through the groups as represented in their industrial
associations.
This task combines economic policy and social policy, because
the settlement of working conditions has a double aspect. It may
be studied from the point of view of the worker who is concerned
about his social position, or from the point of view of the economic
system as a factor affecting economic conditions. Conciliation
and arbitration procedure has been described as a kind of " flying
ambulance squad " which appears wherever a collision occurs
between the interests of workers and employers which threatens
to disturb their harmonious productive activity 1 . In doing so
it covers each danger-spot where a clash of interests might occur
with a network of legal regulations and thus helps towards a
peaceful settlement. The conciliation and arbitration system, however regulated, and its ultimate aim — the collective agreement —
therefore stand side by side at the very centre of the new creative
efforts in the field of labour law. This fact in itself is sufficient
to show the difficulty inherent in this mechanism and at the
same time its very great value.
THE

MAIN

DIFFERENCES

BETWEEN

IMPORTANT

SYSTEMS :

T H E METHODS OF CONCILIATION AND ARBITRATION

A great variety of methods has been adopted in different
countries for the prevention and settlement of collective disputes
by means of conciliation and arbitration. This diversity is
indeed confusing, and at first sight it would appear impossible
to attempt any classification. At the same time the systems —
in so far as systems can be said to exist — must be to a certain
extent arranged and classified if we are to make an international
comparison between them. Such a classification, the details of
which will be explained later, is all the more necessary because
the variety in the systems is by no means the result of chance,
but has its deeper roots in political and legal conditions and in the
social psychology of each nation.
1
W E D D I G E N : " Angewandte Theorie der Schlichtung " , in Jahrbuch für
Nationalökonomie und Statistik, March 1929. A summary of various opinions as
to the nature and purpose of arbitration and conciliation, along with the authors'
own opinions, will be found in FBEYTAG : Die sozialpolitische Schlichtung, Versuch
einer systematischen Erfassung des Schlichtungsgedankens, p p . 29 et seq. (Leipzig,
1930). The same volume also contains information concerning the bibliography
of the subject. A further discussion of the principle will be found in the concluding
chapter of this study.

INTRODUCTION

I n all highly industrialised States the problem of the central
purpose of conciliation and arbitration is bound to arise in some
form or other in connection with the settlement of collective
disputes. The procedure may be used merely to give the parties
unbiased assistance in regulating their relationships and concluding collective agreements, t Imay, on the other hand, be employed
as a form of governmental — t h a t is, political —: influence in a
definite direction (e.g. to raise wages or restrict hours of work)
on the regulation of working conditions and the contents of collective agreements.
A general survey of the regulations in different countries will
show t h a t there is a difference of principle between two groups.
On the one hand, we find systems which are intended merely
t o strengthen the desire for an understanding between the parties
and help them to an agreement, either with or without State aid.
This may be called voluntary conciliation. On the other hand,
there are systems which under certain conditions, generally after
voluntary conciliation has failed, provide for compulsory State
intervention in fixing working conditions and supervising the
maintenance of industrial peace. These may be called compulsory
arbitration systems. I t will be seen later that each type exists
in many varieties with a number of intermediate forms.
I n most States, when efforts were first made to prevent and
settle trade disputes, the initial step was based on the principle of
conciliation, and there was no talk of compulsory State intervention
except in so far as such intervention was already possible in
connection with the restriction of the right of combination.
Great Britain was the first country in which conciliation on a
voluntary basis was extensively developed, being supplemented
and encouraged in many directions, although not entirely systematised, by certain State institutions. I t is probably due to
the traditional distrust which the English-speaking nations have
shown for State intervention in legal and economic questions
t h a t other important English-speaking countries, such as the
United States of America and Canada (although with certain
reservations in this latter case), have adhered strictly to the
principle of conciliation. The legislation in the Union of South
Africa, although obviously modelled on the Canadian system,
departs from this principle in several essential points, while in
Australia and New Zealand the emphasis has throughout been
laid on compulsory arbitration. Among the other countries
which have maintained the principle of conciliation mention may

GENERAL PROBLEMS

be made of Austria, Belgium (with a reservation to be referred
to later), Czechoslovakia, Denmark, France, Japan, the Netherlands, Poland, Sweden (special regulations for collective disputes
on rights) and Switzerland.
The other countries which have regulated their conciliation
and arbitration systems have to a greater or less extent applied
the system of State intervention, either as an exceptional measure
(e.g. only in public utility undertakings, or for disputes affecting
the community as a whole) or as a general rule. The chief of these
countries are Australia, with most of its separate States, Germany,
Italy, New Zealand, Rumania and Russia.
In spite of the differences between the systems, which can
only be briefly referred to here, there are certain similar stages
in the procedure in every country which arise out of the nature
of the question. As a rule two mam stages can be distinguished
in the procedure. The dispute reaches the first stage of the procedure
when it has so developed that certain special bodies, set up to
undertake conciliation negotiations, begin to deal with it. At
this stage there is as a rule no open conflict (strike or lock-out).
In countries which have conciliation and arbitration boards created
by agreement in particular industries and also State institutions
for dealing with labour disputes, conciliation proceedings which
prove unsuccessful before the private boards may be continued
by the official boards. This stage, in which the procedure is generally carried out without any compulsion and by informal negotiation, sometimes by an impartial chairman of the board, may
be described as the conciliation stage. If no success is achieved,
there is generally, but not always, another possibility of bringing
the parties to an agreement. One or more referees, either without
or with the duly prescribed collaboration of representatives or
agents of the parties or persons specially competent in the questions
involved (ex officio in the case of official procedure), propose to
the parties a formula on the basis of which it is hoped they may
be able to agree. It is sometimes decided in advance that the
parties will accept this proposal, which is generally referred to
as an award. This section of the procedure may be called the
arbitration stage. What distinguishes it from the conciliation
stage is the fact that there is a definitely expressed formula or
award which has a certain affinity to a legal judgment. It will
be seen later that systems which provide for the compulsory
enforcement of the decisions of conciliation or arbitration boards
naturally employ this form of award. There is no need to emphasise
the fact that the distinction between the two stages of the procedure

INTRODUCTION

— conciliation on the one hand and arbitration on the other —
is intended merely as a theoretical guiding line. I n practice the
procedure often moves from one stage to another without any
visible interruption, and the same bodies may be responsible in
both cases, although there is a material difference between their
two functions. I t should be noted t h a t the countries which do
not make the enforcement of conciliation proposals or arbitration
awards compulsory feel and make a clear distinction between
these two stages.
I t will a t once be obvious t h a t at both stages, and particularly
for arbitration purposes, a clear recognition of the facts, and particularly of the economic situation and the respective strength of
the parties to the dispute, must be of great importance. I n the
English-speaking countries particularly it has been realised that
in complicated cases it is difficult to obtain such a knowledge of
the facts in the course of the conciliation or arbitration procedure,
and consequently, if a thorough enquiry appears necessary, a special
procedure is applied by which the actual situation can be clearly
brought to light by unbiased observers. This enquiry procedure
may be instituted when conciliation proves fruitless. I t is also
possible, however, even after arbitration has failed and the 'parties
refuse to accept the award. The purpose of this procedure is
usually to make the facts of the case known to public opinion,
which can then decide for itself. This means t h a t a certain pressure
is brought to bear on the parties which may lead them to an
agreement or which may pave the way for fresh attempts a t
conciliation or arbitration. Such further attempts will be based
on the objective facts revealed by the enquiry ; the atmosphere
will be calmer and there will be greater chances of success.
This procedure, therefore, does not really differ in essentials
from conciliation and arbitration ; it is merely t h a t one important
question, which has always to be settled during difficult cases,
is dealt with separately so as to ensure adequate treatment. This
view is not altered by the fact that, when objective facts are revealed
by such a procedure of enquiry, conciliation or arbitration often
becomes unnecessary because the parties may come to an agreement on the basis of the revealed facts. Nevertheless in the following
pages it will be wiser to consider the system of enquiry as a separate
stage or type of procedure along with conciliation and arbitration,
since it has an importance all its own in many countries.'
The difference between the concepts conciliation, arbitration
and enquiry must be thoroughly appreciated in order to follow
the argume.it of the ensuing pages.

GENERAL PROBLEMS

The methods adopted in conciliation and arbitration systems
in order to achieve their purpose can best be studied not by a
direct comparison of all the various systems but by tracing the
development of the procedure from the institution of the conciliation and arbitration boards until its conclusion and the application of any decisions which may have been arrived at. At the
same time a comparison will be made between the methods 'adopted
in dealing with the various problems arising at different stages of
the procedure in various countries. In this way, the numerous
differences between the systems will be most clearly recognised.
I t will be found, as was already mentioned, t h a t there are many
intermediate stages, differing very slightly from each other,
between the pure conciliation method and the compulsory arbitration system (e.g. Great Britain on the one hand and Australia
on the other). I t might be said t h a t every intermediate type can
be found, from the principle of the open market to the wage board
system. In reality, therefore, the difference between the various
types is not fundamental, although at the same time there are
these wide extremes 1 .
The comparative analysis which begins in the following chapter
will therefore be appropriately subdivided as far as may be found
necessary.
I n the section dealing with the organs of conciliation and
arbitration a comparative survey will be given of the different
types of official boards and boards set up by the parties concerned,
their organisation and composition and their territorial and material
competence. Even a t this stage an interesting progression may
be observed from the mere permission granted by the State to
the parties concerned to institute conciliation boards, through
the stage of official support, to that of State initiative in setting
up and regulating in detail permanent governmental or other
authorities for the purpose. An important point in this connection
is the. way in which the relationships between official and voluntary
conciliation and arbitration boards are regulated.
The next part of the study will deal with the position of the
parties with regard to the institution of proceedings and such
questions as the right to be a party to conciliation and arbitration
proceedings, the right to be heard before conciliation or arbitration
boards, the persons entitled to apply for such proceedings in any
particular case and the right of representation of the parties. I t .
is clear t h a t the first of these points, namely, the right to make
1

On this point the reader is referred to Chapter VII, particularly pp. 130 et ssq.

INTRODUCTION

use of conciliation and arbitration machinery or to be subject to
the application of such machinery, is extremely important. The
finding of a satisfactory solution and the form of this .solution
are bound to have an influence on the nature and success of the
whole procedure. There must obviously be a great difference
in the results according to whether the persons who may make
use of the machinery are individuals, or temporary ad hoc associations of persons without responsibility, or well-disciplined
industrial associations, or again only such associations as fulfil
certain conditions, or perhaps even only monopoly associations
fas in Italy). Compared with this point the other three are relatively
unimportant and are mentioned here merely for the sake of
completeness.
This comparative survey of the machinery and the parties
will be followed by a discussion of the way in which proceedings
are instituted. This includes questions such as the method of
applying to a conciliation or arbitration board, the formalities to
be complied with, the possibility of compulsory reference and
various other conditions affeotirg the activity of the conciliation
or arbitration bodies, such as the possibility of steps being taken
ex officio even contrary to the wishes of the parties concerned.
I t will be seen t h a t even at this stage in the procedure, when the
parties are entirely free t o make use of the conciliation and arbitration machinery, there is, nevertheless, a certain compulsion on
the dissatisfied party to attempt negotiations before proceeding
to open conflict. I n this connection reference will be made to the
important question of the obligation not to stop work prior to or
pending reference to a board, for which provision is made in many
countries, sometimes under penal guarantees (e.g. Belgium 1 ,
Ganada 2, Norway 3 ). Other questions concerning the legal regulations to be observed when a dispute before a conciliation or
arbitration board is pending will also be discussed.
The description of the various stages of the proceedings and
the principles on which they are based will bring out more clearly
the diversity of the means employed and the degree to which
they are applied in different cases. A number of questions call
for discussion at this point. The examination of certain problems
with regard to the limitation of the field of activity of conciliation
and arbitration, to which brief reference was already made 4 , and
1

Order of 5 May 1926, sections 15 et seq. (Legislative Series, 1926, Bel. 5).
Act of 12 J u n e 1925,sections 56 e t seq. (ibid., 1925, Can. 1).
3
Act of 5 May 1927, section 6 (3), [ibid., 1927, Nor. 1).
4
Cf. pp. 5 et seq.
2

GENERAL PROBLEMS

in particular the limitation of their activity to the encouragement
of collective agreements, will be followed by a comparative analysis
of the formalities required, the necessity of taking notice of and
the obligation to appear before the board, to supply information,
to negotiate and to give evidence, as they are dealt with in the
legislation of different countries. A description will then be given
of the way in which and the extent to which certain basic principles
have been applied in different countries so as to further conciliation
and the issue of arbitration awards. Among those it will suffice
to refer to the following recognised principles of civil or penal
procedure : informality or formality ; proceedings conducted ex
officio or by the parties ; enquiry or negotiation ; the existence
or otherwise of rules of evidence ; whether the proceedings before
the board should be public, oral, direct or the contrary ; finally,
the question of costs.
The last point to be considered is that of the conclusion of the
proceedings and the application of any decision which may be
arrived at by the conciliation or arbitration board. Here the
differences (in the choice of method) between conciliation and
arbitration in various countries will be clearly apparent. The
description of the method by which the conciliation proposal or
the arbitration award is arrived at, its form, content and legal
character, will be followed by a discussion of the complex of
problems connected with the enforcement of the award or other
decision ; these have already been briefly touched upon in the
section of the introduction dealing with the contrast between
conciliation systems and compulsory arbitration systems. Furthermore, special attention must be paid to the acceptance or rejection
of the award, the power to declare it binding on the parties in
advance or subsequently, the civil or penal guarantees for its
observance, other forms of pressure or compulsion and the right
of appeal where such exists.
The following chapters will be devoted to a more detailed
study of the various methods of conciliation and arbitration
along the lines of the plan briefly sketched above. After a short
discussion of the principles which have led the State, employers
and workers to favour conciliation or arbitration, as the case may
be, the volume will close with certain conclusions which may be
drawn from the comparison of the various national sj-stems of
legislation.

CHAPTER n
THE SETTLEMENT OF LABOUR DISPUTES: INDEPENDENT AND OFFICIAL CONCILIATION AND ARBITRATION
MACHINERY — INSTITUTIONS FOR THE SETTLEMENT
OF DISPUTES

A. — Independent and Official Conciliation and Arbitration
Machinery
Undoubtedly the best basis for a smoothly working conciliation
and arbitration system is provided by well-organised and responsible
trade organisations which have mastered their duties. It is
therefore natural that in the oldest industrial State of the modern
type, England, many and varied arrangements for conciliation
and arbitration should have been created by the parties concerned,
in close connection with the development of a system of collective
agreements. The toleration and tacit recognition of the trade
organisations, even though due at first perhaps to indifference,
was necessary in order that such machinery could be created and
permitted to function. For the independent regulation of conditions
of employment by negotiations between the associations of the
occupational groups concerned and the creation of machinery for
the settlement of labour disputes definitely transcend private
interests, and are in fact a form of political activity which was
originally by no means universally permitted. The stage of tacit
toleration of activities of this sort and — as far as our subject is
concerned — the stage in which the State simply permitted the
interested parties to create machinery for the avoidance and
settlement of disputes have now been passed in almost every
country in which questions of conciliation and arbitration are of
any practical importance. It is true that there may be echoes
of the past in the legislation of some countries, for instance,
section 2 of the Belgian Order of 5 May 1926 on arbitration and
conciliation committees1 which permits the establishment of such
machinery by the parties concerned and yet prescribes that the
voluntary committees must be approved by the competent Minister
1

Legislative Series, 1926, Bel. 5.

GENERAL PROBLEMS

in order to be allowed to exercise certain functions. The Order
justifies itself however, by giving the machinery a quasi-official
position which will be described later and by providing that the
State shall bear the administrative costs (section 18, subsection 2).
The same is true of the independent machinery (industrial councils)
of the South African Conciliation Act of 26 March 1924 x (see
section 2). There is no need to go into further detail on this
subject; since even the English-speaking countries, whose
inhabitants as a rule much prefer private initiative to State intervention, have almost entirely adopted the system of putting
official machinery at the disposal of the parties concerned in the
dispute, at their own request, if the efforts of the parties themselves
are unsuccessful ; and therefore it is no longer a question of
mere toleration of independent machinery. On the contrary, there
is everywhere an increasing tendency to promote the official
settlement of disputes, and to deal with them by official machinery
specially framed for the purpose. It is impossible to say in general
to what extent this is a step forward ; the question must be
decided according to the prevailing conditions in each country.
A carefully constructed official conciliation and arbitration system
is, for instance, necessary in a country where the parties are so
indequately organised that collective regulation of labour conditions
would otherwise be impossible. Under such circumstances, the
official institution can also educate the population to form trade
organisations and train these to prevent and settle collective
disputes. In any case, however, it may be assumed that carefully
constructed and well-applied machinery for the independent action
of the parties concerned is particularly suitable for the purpose
of arriving at decisions by conciliation or arbitration and of settling
labour differences before they have become actual disputes or
open conflicts. It is also probably the best preliminary to an
efficient official conciliation and arbitration system, since as far as
possible it weeds out all disputes for which official intervention
is not needed and may perhaps be less suitable, being more difficult
to adapt to the particular needs of each individual industry.
Conciliation and arbitration machinery independently established
by the parties concerned does in fact continue to play an important
part despite the above-mentioned tendency towards the expansion
of the corresponding official institutions, though this importance
varies in different countries. It is easy to distinguish between
i Ibid., 1924, S.A. 1.

THE SETTLEMENT OF LABOUB DISPUTES

countries in which the weight of responsibility for the avoidance
and settlement of labour disputes lies on the independent machinery
of the parties concerned, and those in which official institutions are
the more important. Great Britain, the United States, Canada and
perhaps South Africa are the principal countries which belong to
the former group, though in the last-named this machinery is
already taking on quasi-official features. In these countries the
working of independent conciliation and arbitration machinery
takes precedence of that of the State as a matter of course — a
fact which is explicitly mentioned in section 2, subsection 4, of
the British Industrial Courts Act 1 .
The second group comprises the countries in which, though
most cases are dealt with by the official institutions, independent
machinery exists side by side with it, settles a proportion of the
differences, and is officially encouraged and supported. This
encouragement can go to the length of giving the independent
machinery certain privileges which raise it to a quasi-official status,
so that it then takes the place of official institutions. This is true,
for instance, of the approved conciliation and arbitration committees in Belgium (comités libres de conciliation et d'arbitrage
agréés far le Ministre de l'industrie). Countries such as Austria,
Denmark, Finland, Germany, the Netherlands, Sweden and
Switzerland also belong to this group. Official bodies have to
remain inactive in all cases where independent machinery exists
and the possibilities of conciliation or arbitration through it are
not yet exhausted. This is the case in Germany, where, according
to the second Order for the Administration of the Conciliation
Order of 30 October 1923 (see section 9), " the action of
independent conciliation and arbitration bodies have precedence
of conciliation committees2 and of conciliators 3. If, despite the
competence of an independent body, a conciliation committee or
a conciliator is called in, the latter must refer the dispute to the
competent body and inform the parties of such action. " A similar
procedure is provided for according to section 7 of the abovementioned Belgian Order, the Netherlands Act on labour disputes
of 4 May 1923 4 , and the Danish Act of 21 December 1921 as
amended on 25 February 1927 5 . In the corresponding Acts in
1

Legislative Series, 1920, G.B. 1.
I.e. the official conciliation institutions.
I.e. the official conciliatore.
* Legislative Series, 1923, Neth. 1, section 7.
5
Ibid., 1927, Den. 1, section 4.

2
8

GENERAL PROBLEMS

Pinland of 21 March 1925\ Sweden of 28 May 19202, and
Switzerland 3, provisions of this nature are also to be found.
Finally, a third group of States has no independent conciliation
and arbitration system whatever, or only to a minor degree. The
Australian States, Italy, New Zealand, Spain and the U.S.S.R.
belong to this group. In Italy the recognised trade associations
have become, as is well known, public bodies with a legal status
largely equivalent to that of official institutions. According to the
Act of 3 April 1926 4 on the legal regulation of collective labour
conditions, proceedings may not be instituted before the labour
tribunal unless it is established that the federation to which the
interested parties belong or the central co-ordinating body has
attempted to secure an amicable settlement of the dispute and that
this attempt has failed. This has, however, not yet led to the
creation of permanent conciliation machinery to give effect to this
provision, and in view of the legal status of the trade associations,
it would be more official than independent in character.
Besides the countries mentioned, all others in which industry
is developed even to a small extent have passed legislation on
conciliation and arbitration and created official institutions for the
necessary procedure. Neither the names of these countries nor their
legislation need be enumerated here. Their most interesting characteristics will be duly noted in the following comparative review5.

B. — Conciliation and Arbitration Machinery
GENERAL OBSERVATIONS

A comparative review of the conciliation and arbitration
machinery in the different countries may be limited in most
cases to official or quasi-official bodies, for in these all the noteworthy characteristics of independent machinery are to be found.
When it is advisable the latter will also be discussed.
A few general ideas which arise concerning the formation and.
constitution of such machinery must first be dealt with. It need
hardly be said that there is very great variety in this respect,
1

Ibid., 1925, Fin. 1, section 4, para. 3.
Ibid., 1920, Swe. 6-8, section 9.
8
Section 33 of the Federal Act of 18 J u n e 1914, respecting work in factories
(Basle Bulletin, Vol. I X , p. 269).
* Legislative Series, 1926, I t . 2, section 17, para. 2.
* See also list of Acts in the Appendix a t the end of this volume.
a

THE SETTLEMENT OF LABOUR DISPUTES

as will be sufficiently clear in the subsequent consideration of
individual cases. It is, however, possible to discover certain
representative features, and these may be remarked upon, though
an exhaustive description is neither possible nor desirable.
The first point is the separation of the body or bodies charged
with conciliation and arbitration from the ordinary judicial authorities. Although the above-mentioned distinction between the ideas
of conciliation and arbitration on the one hand and of the administration of justice on the other is not everywhere realised, most States
have nevertheless for subjective and practical reasons dealt with
the two subjects on different lines and have therefore usually
entrusted them to different authorities. Evolution has, however,
been necessary here, and is not yet everywhere complete. The special
courts set up in a large number of countries, on which employers
and workers were represented and which gave decisions on individual trade disputes, originally undertook also the prevention
and settlement of collective disputes — as, for instance, the former
industrial and commercial courts in Germany (Acts of 22 July
1890, 30 June 1901 and 6 July 1904). The German guilds, guild
courts and seamen's boards based on the Seamen's Order also
functioned in this way. The same is true of the former conditions
in Italy, where, according to the Act of 15 June 1893, conciliation
boards were attached to the industrial courts. On the other hand,
it sometimes occurs that the conciliation and arbitration institutions not only settle collective disputes but also work for friendly
conciliation in individual differences — as, for instance, under
the Austrian Act of 18 December 1919 1 on the establishment of
conciliation boards and on collective agreements, and in Great
Britain and clearly also in other English-speaking countries, so far
as an individual difference can lead to a strike or lock-out.
On the whole, however, the basic policy of separate treatment
of the aclministration of justice (application of law) on the one hand
and the settlement of disputes (creation of law) on the other is
almost everywhere either explicitly or implicitly recognised2.
Despite the fact that the conciliation and arbitration institutions
are often actually described as courts — as in Great Britain (industrial court) and Australia (arbitration court) — they are sharply
1

Legislative Series, 1920, Aus. 1922.
I t must be remembered in this connection t h a t the application and the
creation of law are n o t essentially distinct. I n Anglo-Saxon law in particular,
a judicial interpretation is a t the same time often an addition to case law. But
this question cannot be considered further here.
2

GENERAL PROBLEMS

distinguished from the ordinary courts of law. In Italy the magistratura del lavoro, which is the court of final appeal in matters of
conciliation and arbitration, is part of the ordinary legal appeal
machinery, but here too the separate nature of the dispute is
explicitly recognised in the Act of 3 April 1926 1, which runs as
follows :
The court of appeal, acting as a tribunal in labour matters, shall
issue decisions in conformity with the laws respecting the interpretation
and carrying out of contracts, and in conformity with the principles
of equity in the case of the fixing of new conditions of employment...
Another important question may be briefly referred to here,
namely, whether the conciliation and arbitration institutions are
to be independent of the administrative (political) authorities, as
in the case of the judiciary, etc., or, and to what extent, they have
to take their directions from such authorities. This question will
be referred to later on during the discussion of the choice of
chairman and members of boards and their position, and its
essential importance for conciliation and arbitration will be made
clear during the enquiry into the place of compulsion in the
procedure 2.
The principle of the separation of the settlement of disputes
from legal procedure and the appointment of different authorities
for each of the two functions is connected with that requiring the
co-operation of the parties concerned, in many cases at every stage
of the procedure. This is in itself no innovation as compared, for
instance, with industrial courts (conseils de prud'hommes). The
lay members of the board, if they may be so described in such
matters, have not only to assist the jurist chairman in explaining
and appraising the facts, but even more, with their knowledge of
the strength of each party and their expert estimates of the social
and industrial results of a settlement, they have to help him to
discover a satisfactory compromise and persuade the parties
concerned to accept it. They have often also to assist in the
drafting of the proposal for conciliation, which, according to the
legislation of some countries, is at the same time an arbitration
award or judgment (Australia, Italy) or can be made one. In
other words, the parties concerned are not, as in an individual
dispute, simply the object of a legal decision, but in some form or
other themselves take part in the creation of law.
1
2

Legislative Series, 1926, I t . 2, section 16.
Cf. Chapter V I I .

THE SETTLEMENT OF LABOUR BISPUTES

This co-operation of the parties concerned varies in the different
countries. Also, in the successive stages of the procedure which
have been differentiated above—preliminary negotiations, conciliation, arbitration, and at times (in Germany) the declaration that
the award is binding — this co-operation takes different forms.
It is possible to distinguish two types of co-operation of the
parties concerned. They can act as parties, but at the same time
as experts, who give the conciliation and arbitration body the
necessary information concerning the facts, and who work together
with it to discover a satisfactory solution ; the court or board in
question then makes its conciliation proposal, its arbitration or
other award alone, as is mostly the case in the Scandinavian
countries. On the other hand, the co-operation of the parties
can, and usually does, go so far that their participation is in some
way provided for in the composition of the conciliation or arbitration
body. In this case it is not usually the persons actually concerned
in the dispute who are called upon to co-operate, but certain
persons in some way closely connected with the industry in which
the dispute is taking place, or otherwise experienced in industrial
questions, but who may be expected to have a certain degree of
impartiality in their judgment of the case in hand. There are two
methods open. Such persons may either assist the conciliation
and arbitration institution as expert advisers without the right to
vote, or be full members of the board or court with the right to
vote on the conciliation proposal or the award. In the latter case
their rights and duties may take on a semi-official nature, and even
approach those of a judge or of the chairman of a conciliation or
arbitration institution. Under both systems the trade organisations
are often called upon to co-operate in some form or other, and
seem in fact to be very well suited to this purpose. The co-operation
of interested persons as members of the conciliation or arbitration
institution itself will naturally be most frequent in practice at the
actual arbitration stage when, after negotiations or conciliation
have been unsuccessful, it is necessary to issue a public proposal
for conciliation or an award. At such a stage it is all the more
important to ensure that the members of the institution who are
drawn from the same circles as the parties are free from connection
with or dependence upon such parties 1.
A further noteworthy measure which may be remarked in the
conciliation and arbitration systems in many countries, parti1

3 *

Cf., as t o position of assessors, p p . 36 et seq.

GENERAL PROBLEMS

cularly the United States and Great Britain (the Railways Act of
19 August 1921 x) is the participation of representatives of the
public, particularly of consumers, b u t also of public interests and
the State in the shape of t h e co-operation of t h e Public Prosecutor
or some similar official, as in the Italian magistratura del lavoro,
for instance. Arrangements of this kind spring from the idea that
the public has the right to make its views heard and to exercise
an influence in the prevention and settlement of labour disputes. I t
is perhaps not by chance t h a t such procedure is principally to be
found in countries which in general deprecate the exercise by the
public authorities of a decisive influence in collective disputes
between employers and workers. On the other hand, countries in
which the authoritative intervention of the State is in some form
or other permitted are more able t o dispense with t h e special
representation of consumers or the co-operation of the representative of the general interests ; in such countries the official
conciliation or arbitration body may be expected to bear the
interests of the public and of the State in mind. This idea is, for
instance, plainly t o be noticed in the section of t h e German Conciliation Order defining the conditions under which an arbitration
award is declared binding. I t says 2 :
If the award is not accepted by both parties, it may be declared
binding if the settlement contained therein appears just and reasonable,
with due consideration for the interests of both parties, and if its
application is desirable for economic and social reasons.
The practical result of this clause has been t h a t the award is
declared binding chiefly when the settlement it achieves seems to
be in the general interests of the economic system or of the public.
I n Italy, where the influence of the State on the regulation of
labour conditions is already so far-reaching, the law further provides
t h a t a State representative, the Public Prosecutor, shall take part
in the proceedings, which may be explained by the whole tendency
of Fascism t o emphasise the idea of the State as the most important
factor in life. I t is difficult t o decide t o what extent the efforts t o
ensure t h e co-operation of the community as a whole by means of
the representation of consumers or of the general public are successful. The fact that such methods are so far not extensively
used, and t h a t discussions of the development of conciliation and
1
a

Legislative Series, 1921, G.B. 5.
P a r t I, section 6.

THE SETTLEMENT OF LABOUR DISPUTES

arbitration procedure in different countries have practically ceased
to mention them, seems to justify the assumption that their importance and efficiency are not very highly valued.
SPECIAL FEATURES

In the foregoing a distinction is made between various stages
in the procedure : conciliation, arbitration, and in some cases an
additional stage, investigation or enquiry. A comparison of the
formation and constitution of conciliation and arbitration boards
or courts is made difficult by the fact that in many countries the
same bodies function with unchanged membership for several
or all of the stages, while in others different bodies deal with the
different stages. In general, it may perhaps be assumed that
enquiry is carried out by a special body in view of its special
character. Its purpose is a thorough elucidation of the facts of the
case ; it often requires considerable time and is therefore separated
from the ordinary procedure, which is meant to yield speedy
results. But arbitration is in many cases carried out by a different
body from that which undertakes the conciliation. The latter
is, as a rule, carried out by the same body that deals with the
preliminary proceedings.
Conciliation is certainly the type of procedure which is most
common, because, wherever machinery for the friendly settlement
of collective disputes exists, attempts are made to arrive at a
decision by means of it before other methods are used. In many
countries also, if conciliation fails, the means of achieving a settlement are exhausted.
Permanence of the Machinery and its Competence
Almost everywhere where conciliation and arbitration are
regulated by law, permanent machinery has been set up, although
the composition of the various bodies is certainly often left open,
in particular in respect of the choice of persons according to the
requirements of each particular case. In many countries, too, the
legislative provisions merely lay down general principles for the
composition, duties and powers of the board or court while their
actual formation does not take place until a case arises, and
sometimes only on special application to the competent authority,
as in Canada for the establishment of boards of conciliation and
investigation under the Industrial Disputes Investigation Act of
1907. Even in such cases, however, the procedure to be followed

GENERAL PROBLEMS

is laid down in detail. Often the chairman is permanent, while the
other members are temporary, but here too the machinery as such
may be regarded as permanent.
In a general comparison of the law affecting these bodies, the
purely practical question whether their competence is defined
according to locality or to economic considerations (by industry,
for instance) can be of little importance. There is much diversity
in this respect. Private conciliation bodies are naturally connected
as a rule with a certain industry, while permanent official bodies
are usually organised on a geographical basis. The structure of
the system of collective agreements in a country is also likely to
have some influence ; where, as in Germany, the system is centralised, that is to say, the scope of the agreements extends.to a large
number of undertakings, often not only in one but in several allied
industries, the tendency will be for the conciliation machinery to
have competence over a wider area for a specified group of industries or branches of industry classed together for the purpose of
collective agreements. This obviously happens when the conciliation body is set up by the agreement. A significant example is
that of the agreements so common in many countries which have
achieved national uniformity for a certain industry, and then created
conciliation machinery with a correspondingly wide competence
(cf. the federal collective agreement for the German chemical
industry with its conciliation machinery). It need hardly be
pointed out that each method of defining competence may have
its own advantages — the economic, in that it facilitates adaptation
to the particular needs of the industry in question, the local, in
that it facilitates a bird's-eye view of the labour conditions of all
industries in a certain district, which must itself be suitably defined.
It must also be noted that the two methods may be combined and
used to supplement one another. A local definition of competence
will for instance make due allowance for economic considerations,
and vice-versa.
The Formation and Composition of Conciliation and Arbitration
Bodies
The formation and composition of conciliation and arbitration
bodies is, on the other hand, a matter of great basic importance
both for the further development of the procedure, the direction
of which is in a certain degree dependent upon it, and naturally
also for the success of the system. The mode of formation and
composition of the court or board is often evidence of the attitude

THE SETTLEMENT OF LABOUR DISPUTES

of the country concerned to the whole question of conciliation and
arbitration — that is, it shows the comparative strength of the
ideas of State intervention in the relations between the parties on
the one hand, and of the conception of free play for the activities
and decisions of the parties on the other. If there are exact regulations in respect of the choice or the appointment of conciliators or
any other members of the bodies, and of the qualities required of
them, this denotes a tendency towards the first of these types of
organisation ; but the fewer and less decisive such regulations are,
the more certainly can a tendency towards the second type be
assumed. It is also clear that the more the State intervenes in the
regulation of disputes on collective interests, from the simple
obligation to have recourse to the competent authority and to
appear before it, up to the enforcement of its award on pain of
a penalty under criminal or civil law, the more necessary is a
careful, well-defined and detailed regulation of the procedure,
including that of the selection and appointment of members of
the institution.
(a) Personal Requirements : Age, Impartiality, Independence,
Discretion, Obligation to Serve
As regards the composition and formation of conciliation and
arbitration institutions, there are first of all a number of countries
which in principle prefer the single conciliator to the board or
committee. Among these are the Northern countries — Denmark,
Finland, Norway and Sweden. The legislation of these States,
however, permits the formation of a body of conciliators in particularly difficult cases or when the parties explicitly require it ;
this is achieved by the collaboration of several permanent conciliators in a committee or by the formation of a conciliation board
to which specially chosen and suitable persons are appointed
ad hoc1.
In other respects the same problems concerning selection,
appointment, duties and powers arise in the case of a single conciliator as in that of the chairman of a body, except that the
qualifications of a single conciliator, particularly with regard
to independence of judgment, personality, sense of responsibility,
expert knowledge and power of inspiring confidence in the hearts
of the interested parties should perhaps be even greater than
1

Sections 1 and 5 of the Danish Act, 1 and 3 of the Finnish Act, 27 and 3 1 ,
para. 3, of t h e Norwegian Act, and 1 and 12 of the Swedish Act.

GENERAL PROBLEMS

those required of the chairman of a body composed of a number
of persons.
The qualifications required of a conciliator by the legislation
of the various countries may be divided into those of a general
and those of a particular character. Civic integrity (possession
of the full rights of a citizen), attainment of a certain age and
nationality of the country in question are the principal requirements in the former group, while in the latter possession of special
experience in economic and social matters, training in the State
service, judicial qualifications, and in general an official status
may be mentioned.
Finally, the steps to be taken to ensure the independence
and impartiality of the conciliator are of importance.
In all these respects, too, there, is very great diversity in the
various countries. There may be a certain uniformity in the
general qualifications required of the conciliator or the chairman
of an institution ; for it is natural that everywhere only those
persons are considered qualified whose reputation as citizens
is blameless, whether this is expressly stipulated by law (cf. Norway 1 ) or not. It is natural, too, that a certain minimum age
is required (in Norway 30 years, in France 25, in Colombia, however,
only 21). The determination of the actual age limit is a matter
of experience and judgment. The requirements in many countries,
which are mentioned in more detail below, have the indirect
result of excluding persons of too low an age. Conciliators must
in many cases be citizens of the country in question (for instance,
in Norway under the Act cited, in France under the new Bill,
and in Colombia under the Act of 4 October 1920 on conciliation
and arbitration 2 ). This, too, is a comprehensible regulation,
particularly in countries like Norway, where conciliators or
chairmen of conciliation institutions have extensive powers and
duties, though it is hardly probable that even without such a
regulation citizens of other States would be called to such posts
in any considerable number 3.
The particular personal qualifications required of the conciliator are worthy of more detailed consideration.
It is first of all self-evident that the task of conciliation is
very largely psychological and calls for the art of handling men.
1

Sections 27, para. 1 and 10, para. 3 of the Labour Disputes Act of 5 May 1927.
Legislative Series, 1920, Col. 1, section 6.
But cf. the corresponding Act of the Canton of Basle, which explicitly provides for the appointment of foreigners, though only under certain conditions
(see monograph on Switzerland on p . 212 below).
2

THE SETTLEMENT OF LABOUR DISPUTES

A conciliator who lacks this quality will never be equal to his
task. There are certainly persons in whom it is innate ; in others
it may be latent and can be developed, though State examinations
are certainly not sufficient to discover this. But even if the
final test of capacity can be only in actual exercise of the duties,
many regulations aim at excluding in advance persons who are
unsuitable because they lack certain specific qualifications. In
some countries it is considered a good guarantee not to appoint
a conciliator until the trade organisations have been consulted
or even have given their agreement. This usually leads to the
exclusion of all persons who do not possess the confidence of the
parties, which is essential to satisfactory fulfilment of their duties.
There are regulations of this sort in Denmark 1, where the Permanent Arbitration Court, which is composed jointly of employers
and workers, makes the necessary proposals, and where it is also
provided that at least one employers' and one workers' member
of the Court must have agreed to the proposal. In Germany,
" consideration is as far as possible given to the wishes of the
industrial associations of employers and workers in the district
when appointing the chairmen of conciliation committees " 2 .
The same is true in Canada 3 , under the Industrial Disputes
Investigation Act, though here the provision refers only to
appointments for individual cases. In practice, steps of this
sort are often taken even in countries where there is no such legal
provision.
Many Acts provide that a conciliator may at any time be
relieved of his duties, even if he has a definite contract for a
number of years. The object is to be able to replace without
difficulty a person who has for any reason lost the confidence
of the parties, possibly through no fault of his own. The Austrian 4 ,
German 5 and Swedish 6 provisions may be given as examples.
Besides satisfying these requirements of law or custom as
to his personal character, the conciliator must offer more material
qualifications, that is to say, knowledge and experience of economic,
1
Act of 21 December 1921, as amended on 25 February 1927, section 1
(Legislative Series, 1927, Den. 1).
2
Section 2 of the Sacond Order for the Administration of the Conciliation
Order of 29 December 1923.
3
Legislative Series, 1925, Can. 1, section 7.
* Section 4 of the Act of 18 December 1919 respecting conciliation boards and
collective agreements (Legislative Series, 1920, Aus. 22).
6
Sections 2 and 6 of the sacond Order for the Administration of the Conciliation Order.
• Section 1 of the Royal Notification of 31 December 1920 issued in pursuance
of the Act of 28 May 1920 respecting conciliation in trade disputes (Legislative
Series, 1920, Swe. 6-8).

GENERAL PROBLEMS

social and legal matters. The conciliation and arbitration laws
of a number of countries contain special provisions on this point.
Where such provisions exist, they are as a rule to be found in
administrative regulations and the like, which are not always
available to outsiders.
The fact that according to many regulations conciliators are
appointed by public authorities who have expert knowledge of
the matters in hand, and are therefore in a position to judge the
suitability of a person for the work of conciliator, also tends
towards a satisfactory selection. For instance, the appointment
of presidents of conciliation boards in Austria is in the hands of
the Secretary of State for Justice, in consultation with the Secretary
of State for Social Affairs ; in Germany the appointment of
conciliators, who sometimes act also as arbitrators, is in the hands
of the Federal Minister of Labour ; in Denmark, in those of the
Permanent Arbitration Court, which is competent to deal with
individual and collective labour disputes on rights and therefore
possesses the necessary experience ; in other legislation (Finnish,
Norwegian and Swedish, for instance), the King, Government,
etc., nominally appoints the conciliators, but in practice the competent department for social affairs, i.e. the Ministry of Labour,
etc., undoubtedly co-operates to a decisive degree, so that there
is a similar guarantee of satisfactory selection. In many cases
it is also provided that conciliators are under the supervision of
the Ministry of Social Affairs or some other competent authority,
from which it follows, if this is not already explicitly stated, that
they are bound, if required, to report to that authority 1 . In
so far as conciliators have an official or quasi-official position,
as is the case in the Northern countries and Germany and Austria 2,
the obligation to report and supervision are generally matters
of course. Naturally, in countries where, as is usual for instance
in Australia, conciliators and arbitrators have a definitely judicial
position, such supervision and obligation to report often lapse.
It must be noted, however, that in the countries where there is
such supervision it must also tend to promote a satisfactory
choice of conciliators.
In a number of countries it is provided that conciliators shall
1
Examples are section 9 of the above-mentioned Royal Notification in
Sweden, section 1 of the Finnish Act of 21 March 1925 respecting conciliation in
collective labour disputes, section 2 of the Danish Act of 31 J a n u a r y 1927, and
section 8 of the German Conciliation Order of 30 October 1923.
2
Cf. below, p. 29.

THE SETTLEMENT OF LABOUR DISPUTES

have previous official training, and in particular have qualified
for the bench or the bar ; such a condition is regarded as the
best guarantee of a satisfactory selection. There are regulations
of this sort, for instance, in Norway 1 ; in Sweden so far as the
appointment of special arbitrators under the Act of 28 May 1920
is concerned, but not of the conciliators themselves under the
general Act of the same date ; and, above all, in Australia and
New Zealand. Mention may also be made of the Australian
Commonwealth Act on conciliation and arbitration of 22 June
1928 2, the Western Australian Act of 31 December 1925 3, the
New South Wales Act of 18 March 1926 4 and the South Australian
Act of 6 January 1926 6. According to the New Zealand Act of
1 October 1925 6, the regulation applies only to the Arbitration Court
proper and not to the separately organised conciliation councils.
In Rumania 7 an official of the Ministry of Labour is in charge
of conciliation. In practice it is, of course, very often the case,
even when there is no legal provision to that effect, that specially
suitable officials become conciliators. This practice is most common,
as mentioned above, in countries in which the selection is in the hands
of the higher labour or judicial authorities ; in Germany and
Austria, for instance, there are, among the conciliators and chairmen
of conciliation committees, many officials with administrative
or judicial training. According to German law, conciliators, even
when not officials, have the status of civil servants for the duration
of their office, a fact which has the effect not only of introducing
the obligation to make reports to superiors, but also •— which is
more important •— of giving them a more independent and respected
position in the eyes of the parties to the dispute 8.
The impartiality of the conciliator or chairman of the conciliation committee and his complete independence of the parties is a
particularly important qualification, and is in most cases regarded
as so essential that it is specifically laid down in the laws of many
countries. As mentioned above, judicial competence is often
required, and this is a provision which tends in the same direction.
It will suffice to quote from the legislation of a few countries. The
1

Section 27 (10) of the Act.
Legislative Series, 1928, Austral. 2, section 12.
3
Ibid., 1925, Austral. 12, section 43.
* Ibid., 1926, Austral. 7, section 13.
6
Ibid., 1926, Austral. 1, sections 9-12.
« Ibid.., 1925, N.Z. 1, section 64.
' Section 12 of the Act of 4 September 1920 (ibid., 1920, Rou. 4).
8
Sections 2 and 6 of the second Order for the Administration of the Conciliation
Order.
2

GENERAL PROBLEMS

British Industrial Courts Act 1 of 20 November 1919 says : " The
president of the court and the chairman of any division of the
court shall be . . . one of the independent persons aforesaid. " The corresponding provision of the Norwegian Act
prescribes that they " must not be members of the executive
committee of a trade union or an employers' association, nor
be permanent employees of such a union or association ". The
Canadian Act of 28 March 1907 on the investigation of industrial
disputes, as amended on 12 June 1925 2, in providing for ad hoc conciliation machinery lays down that " no person shall act as a member
of a board who has any direct pecuniary interest in the issue of
a dispute referred to such board ". The very useful provision,
also found elsewhere, that the chairman of the board is to be
chosen by the two other members, helps to ensure the greatest
possible impartiality on his part 3. Furthermore, both the president and the other members must affirm on oath their readiness
to act impartially 4.
The necessity of the impartiality of conciliators — that is to
say, their freedom from connection with the parties to the dispute
— is thus widely recognised, though there is not in every case a
specific regulation to this effect ; but the position of conciliators
or members of conciliation institutions in respect of independence
of the State varies greatly in the different countries. This is the
first point at which the contrast between voluntary conciliation
and compulsory arbitration, already mentioned in passing 6, makes
itself felt, a contrast that runs through the whole system of conciliation and arbitration. Should the State put at the disposal of
parties to disputes machinery for the peaceful settlement of their
differences but otherwise refrain from exerting any influence
on the progress and decision of such disputes ? This is not the place
to answer this fundamental question with the fullness it deserves.
It may be dealt with more effectively later, as part of the discussion
of the most efficient forms of compulsion, in particular the declaration that arbitration awards and similar decisions are binding
and their compulsory enforcement s . The question is mentioned
here only in order to bring out the connection between the apparently unimportant matter of the independence of the conciliator
1
2
3
4
6
8

Section 1, No. 4.
Legislative Series, 1925, Can. 1.
Sections 7 and 8 of the Act.
Section 13 ; cf. also section 32 of the Norwegian Act.
Cf. p. 9.
Cf. p. 115 concerning the termination of the proceedings, and Chapter VII.

THE SETTLEMENT OF LABOUR DISPUTES

and the most disputed point in the whole system of conciliation
and arbitration. I t is in fact comprehensible that the degree of
compulsion which, under the conciliation system, the State brings to
bear on the progress and decision of disputes, should often have
a certain effect on the position of the conciliator. The more
detailed and exact the procedure and the greater the compulsion,
ranging from the mere obligation to be a party to the proceedings
and to appear, to the declaration that the awards are binding and
their compulsory enforcement, the more probable it is t h a t the
State will control the conciliators by stricter regulation of procedure
and exert an increased influence on them and on the bodies set
up. I t must be noted, on the other hand, that in the very countries
where a particularly far-going criminal or civil sanction guarantees
the execution of awards (the Australian States, New Zealand and
Italy), it is often regarded as important to make the conciliation,
or rather in this case arbitration, institutions, and in particular
the chairman, independent of State influence, at least in cases of
appeal 1 .
I n this connection it must suffice to note t h a t evidently when
the conciliator is more dependent on State influence, there is a
greater possibility of political influence on the progress and decision
of the dispute. That this is so is often disputed or not recognised ;
sometimes, indeed, this result, which may be the outcome of actual
circumstances and legal conditions, is contrary t o intention, and
it is sought to avert it.
The question whether conciliators shall be independent of
State authority or not is hardly ever put point-blank in practice,
and there are very few clear regulations on the point. The German
Conciliation Order of 30 October 1923 is an exception, for it says 2 :
The Federal Minister of Labour may issue general guiding principles
for the proceedings of conciliation committees and conciliators. Conciliation committees and conciliators shall decide individual cases
independently, and shall not be bound by instructions.
Though these general principles, which may, for instance,
relate to the method of regulating wages or the restriction of hours
of work, are to be regarded from the legal standpoint only as
non-binding recommendations from the competent authority to
the conciliators 3, yet they are in fact respected by all conciliators
1

Cf. remarks in Chapter V I I , pp. 132-134.
» Section 7.
Cf. D E B S C H : Die neue Schlichtungsverordnung,

1925, p p . 280 e t seq.

GENERAL PROBLEMS

who do not wish to run the risk of removal from their office. This
undoubtedly implies a certain dependence on the Government
department concerned, even though the conciliator's freedom of
judgment in individual cases is explicitly reserved by law.
In countries where conciliators are under any sort of supervision
of the Ministry for Social Affairs or some other body subject to
political authority, or where they have a quasi-official position (as,
for instance, in Austria, Denmark, Finland, Germany, Norway and
Sweden)1, this in itself makes it possible for the State to influence
their general activity. It must nevertheless be noted that, as
mentioned above, in several countries which have carried compulsion as far as it can go—that is to say, to the penal enforcement
of awards — the members of the court or board, or at least the
chairman, enjoys the independent position of a judge. This is
true of the regulations in the Australian States, New Zealand
and Italy, but even here the principle of independence is not
applied on every occasion. Some of the Australian States have,
beside their arbitration or industrial courts, special conciliation
institutions, either official or set up with official assistance, before
which disputes are generally brought (either compulsorily or voluntarily) in order that conciliation may be tried before the arbitration
court decides on them, supposing the conciliation to have failed. In
New Zealand 2 this system is regulated with special rigour ; it is
also to be found in Queensland 3 and Western Australia *. The
Australian Commonwealth Conciliation and Arbitration Act,
too, as recently amended on 12 June 1928 5, again lays more stress
on conciliation. Although the parties to the dispute often have
considerable influence on the composition of these institutions
(conciliation committees or boards, conciliation officers), and in
particular on the choice of the chairman, it may happen that they
cannot agree on the chairman, and that the authorities have to
appoint him or are in any case empowered to do so by law. In
such cases, it is conceivable that the Government may influence
the proceedings, and in important disputes this almost certainly
occurs sometimes. There can be no question of the full independence of the chairmen of arbitration courts, if, despite the fact
1

Cf. above, p . 28.
Sections 39 et seq. of the Act of 1 October 1925 (Legislative Series, 1925,
N.Z. 1).
3
Ibid., 1929, Austral. 6, sections 10 and 11.
4
Sections 118 e t seq. of the Act of 31 December 1925 {ibid., 1925, Austral. 12).
6
Ibid., 1928, Austral. 2, Sections 34 et seq. Cf. FOENAUDBB in International
Labour Review, Vol. X I X , No. 2. Feb. 1929.
2

THE SETTLEMENT OF LABOUB DISPUTES

that they have the position of a judge, the court is bound to respect
the basic wage fixed by another authority — for instance, in
South Australia, the Board of Industry 1.
In Italy, finally, when a dispute arising out of collective relations
cannot be peacefully settled by negotiation between the trade
associations, federations, confederations, or central co-ordinating
bodies 2, it is brought before the labour tribunal (magistratura del
lavoro), which is the ordinary court of appeal, composed for this
purpose of three ordinary judges with the addition of two experts.
In order to ensure the authority of this body, particular import
tance was attached, as is shown by the memorandum to the
Bill, to having disputes on collective interests, and not only on
collective rights (such as those concerning interpretation of a
collective agreement), settled by the judicial decision of an impartial
court 3. There is thus no doubt that the chairman and the two
professional judges who are his colleagues are in principle independent. The State may influence the regulation of wages and
other labour conditions at an earlier stage, before the dispute
comes before the labour tribunal, acting ultimately through the
Ministry of Corporations on the various federations and confederations which undertake the preliminary conciliation. Furthermore,
the general interests of the State are represented at the proceedings
by the Public Prosecutor, who may also make proposals according
to his own judgment.
In Great Britain, the United States and Canada, countries in
which in principle conciliation and arbitration are not compulsory,
it may in general be assumed that the conciliation and similar
bodies are independent of State influence ; but in practice a
political authority may often make itself felt. This may occur
at an early stage if the parties cannot agree on a chairman or on
the composition of the body, and the matter is decided by
the authorities. It is noteworthy in this connection that the
British Ministry of Labour has at its disposal in London and
the great industrial cities a number of permanent conciliators
who have full discretion to work for a friendly settlement of any
disputes which may arise between employers and workers4.
1
Section 264 of the Act of 6 J a n u a r y 1926 (Legislative Series, 1926, Austral. 1).
Cf. also Chapter VII, p . 134, footnote 1.
• Section 17, para. 2, of the Act of 3 April 1926 (ibid., 1926, I t . 2).
3
Cf. extract from the Preamble given in Freedom of Association, Vol. IV,
p . 70.
4
Cf. B . HAMBURGER : " Aus dem englischen Arbeitsrecht : Der ständige
Schlichter " , in Soziale Praxis, 1927, p. 1202,

GENERAT, PROBLEMS

Although there are no other regulations governing the work of these
conciliators, they have to report regularly to the Minister of Labour
on their observations and activities, and are convoked by him
from time to time to general consultations, so that he is kept
constantly informed and is in a position to decide whether he
shall intervene in any particular case, especially in accordance
with the Industrial Courts Act. I t is only natural t h a t in suitable
cases the Minister should give the conciliators, if not instructions,
then at least recommendations based on the bird's-eye view which
he has obtained from the reports. In the nature of things, therefore,
these permanent unofficial, and yet at the same time official,
conciliators, though by no means dependent, are in practice liable
to a certain extent to be influenced by the views of the competent
political authority — the Minister of Labour — on more important
general questions. The right of the Minister of Labour, under the
Conciliation Act of 1896 and the Industrial Courts Act of 1919, to
appoint conciliators or arbitrators under certain conditions either
for individual cases or as permanent members of the Industrial
Court, also gives him an opportunity to make his influence felt.
Nevertheless, all the above openings for State influence do not
alter the basic fact that in countries where conciliation and arbitration are not compulsory, chairmen of conciliation institutions
and arbitrators are in principle independent, and that a consistent
political influence on decisions — for instance, on the regulation
of wages or hours of work — is either completely impossible or
practicable only to a minor degree. In the case of the British
Industrial Court, this fact is emphasised by its former President,
Sir William Mackenzie, in an article in the International Labour
Review1 : " The Court is entirely an independent tribunal, and is
not subject to any Government or departmental control or
influence. " 2
In order to complete the picture of the position of conciliators
and chairmen of conciliation and arbitration institutions, it is
only necessary to mention two further obligations usually required
. of them, official discretion and fulfilment of functions.
Official discretion is obviously a necessary condition if the
parties are to have that confidence which is essential to the
success of the proceedings. I t is not in every case specifically
1
International Labour Review, Vol. I l l , Nos. 1-2, J u l y / A u g . 1 9 2 1 : " T h e
British Industrial Court. "
2
On the principle of political influence in conciliation and arbitration, see also
Chapter VII, p p . 132-134.

THE SETTLEMENT OP LABOTJE. DISPUTES

called for in the laws and regulations governing conciliation
and arbitration. Where the conciliators or chairmen of institutions have an official or quasi-official position, the condition
is in practice satisfied 1 without the need of special regulation.
Yet owing to the importance of the matter there are in fact
many such regulations, for instance in the Netherlands 2 and
Norwegian 3 Acts. I n other cases legislation on discretion
and the means of ensuring its observance is necessary and is
to be found in various forms in almost all systems. Punishment for failure to observe this obligation is not universally
provided for (not, for instance, in Canada * and Colombia 5 ), but
in most States it is the rule, the majority prescribing fines. This
is the case in Norway, under the Act previously referred to, and
in Australia (e.g. South Australia 6 and New South Wales 7 ,
where the fine may be as much as £500). Immediate removal
from office is also explicitly provided for, though this should
be a matter of course. I n the Netherlands, so much importance
is attached to ensuring official discretion that persons infringing
it are liable to three months' imprisonment as well as to a fine,
though criminal proceedings are instituted only at the wish of
the injured party 8 . To what extent there may also be civil liability
for damages in some countries cannot be gathered from the terms
of the conciliation and arbitration laws, and must be judged
according to the civil law of each country. I t may, however, be
assumed t h a t this liability exists in many countries. I t need hardly
be said t h a t the subjects covered by the obligation to discretion
are not uniform in all laws, and it seems from the text of
relevant Acts that some States are particularly severe in this
matter and others less so. Legal practice — as far as cases of
infringement of the obligation come before the courts, which
can hardly be often — is also certain to vary.
On the other hand, it is unusual to find special regulations
imposing on conciliators or chairmen of conciliation institutions an
obligation to fulfil their functions, t h a t is to say, to serve once
they have accepted office. If they are officials or at least occupy
1

Cf. above, p. 28.
Section 58 of the Act of 4 May 1923 (Legislative Series, 1923, Neth. 1).
Section 42 (35) of the Act of 5 May 1927 (ibid., 1927, Nor. 1).
4
Section 13 of the Act of 12 J u n e 1925 (1907) (ibid., 1925, Can. 1).
6
Section 10 of the Act of 4 October 1920 (ibid., 1920, Col. 1).
6
Section 178 (industrial board) of the Act of 6 J a n u a r y 1926 (ibid., 1926,
Austral. 1).
' Section 19 of t h e Act of 18 March 1926 (ibid., 1926, Austral. 7).
s
Cf. the provision cited above.
2

GENERAL PROBLEMS

a quasi-official position, such regulations are unnecessary, for
the obligation is inherent in their general obligation as officials 1.
If they have no such official capacity, in all probabüity they
took over the position of chairman or conciliator of their own
free will at the request of the parties, and it is hardly likely that
they will withdraw from the position once they have accepted it.
Nevertheless there are occasionally provisions, for instance in the
above-mentioned Acts of South Australia (section 179), New
South Wales (section 18) and Western Australia 2 , which specify
that the chairman of an industrial board is obliged to exercise his
functions and even prescribe fines for inexcused failure to attend
meetings or refusal to vote ; he may also be deprived of his office.
The obligation to serve is not to be confused with the abovementioned obligation to exercise the office truly and impartially 3.
The whole question of the obligation to serve has its principal
practical application in the case of the other members (assessors)
of boards and courts. The reader is therefore referred to the discussions of this point in the section on their position and obligations
below.
(b) The Position of the Assessors : Connection with the Parties,
Impartiality, Independence, Discretion, Obligation to Serve
Most of the points which have just 4 been discussed in connection
with the position of conciliators and chairmen of conciliation and
arbitration bodies arise also, often in the same form, in respect
of the other members. This is to be explained by the fact
that the latter are to a great extent the conciliator's or chairman's assistants, who have to support him in his duties or even
in part to function themselves. Nevertheless, their usual appellation, assessors, indicates that their position has peculiar characteristics, which have already 5 been referred to in the remarks on
the participation of the parties and deserve mention.
The rôle of the assessor seems never to have been clearly
described and is perhaps not always fully realised. Practical
necessity, which is the mother of invention, has defined it, and
the forms vary with the needs of each country, and even within
1
Cf., for instance, the second Order for the Administration of the German
Conciliation Order of 29 December 1923, section 2, para. 3.
2
Section 111 of the Act of 31 December 1925 {Legislative Series, 1925,
Austral. 12).
8
Cf. p . 30.
4
Cf. p p . 25 e t saq.
5
Cf. p p . 21 e t saq.

THE SETTLEMENT OF LABOUR DISPUTES

a country with the characteristic features of different conciliation
and arbitration institutions.
It may be assumed that the original machinery for conciliation
and arbitration, created for the most part by the parties for each
particular case, consisted simply in the use of a mediator. The
latter had to act if and when the direct negotiations between the
parties came to a standstill, and to attempt to bring the representatives appointed by the parties to an agreement. He acted singlehanded and shouldered all responsibility. This is still in principle
the system established by law in the Northern countries (Denmark,
Finland, Norway and Sweden). ]f the functions of the mediator
are limited to those of a simple go-between, as may be generally
assumed in doubtful cases, especially under the regulations of the
English-speaking countries, and if the points at issue are not
complex and of wide import, the sole responsibility of the impartial
mediator is a satisfactory arrangement. But as soon as his powers
are extended, as soon as formal and public proposals for compromise
and even judicial awards binding on the parties are demanded
of him, and as soon as particularly difficult cases arise requiring
an intimate knowledge of the industry concerned, its technical
characteristics and its economic situation, then his need of assistance
becomes obvious. ]f he continues to depend only on h'mself, the
danger of an incorrect decision, which may have far-reaching
results, is too great.
The result is that the parties appoint representatives who
assist the conciliator or arbitrator and take part in his decisions.
These are the assessors. A body is thus created, which can take
up a definite position towards the parties. This procedure, by
which the assessors are appointed either directly by the parties
to the dispute, or by the chairman in consultation with them,
or by the competent authority, is very widely used and may be
relied upon to prove effective for the majority of cases. Regulations
of this and similar types are to be found for instance in Germany
for the appointment of members of the conciliation and arbitration
chambers, under section 7 of the second Order for the Administration of the Conciliation Order of 10 December 1923 \ in the Netherlands 2, Canada 3 , and elsewhere. Direct appointment by the
parties is naturally also usual for the members of private
independent conciliation and arbitration institutions.
1
2
3

But not for the conciliation committees (cf. below, p . 38).
Section 13, para. 3, of the Act of 4 May 1923 (Legislative Series, 1923, Neth. 1).
Section 8 of the Act of 12 J u n e 1925 (ibid., 1925, Can. 1).

GENERAL PROBLEMS

But this is not the final stage of development. Useful as representatives directly appointed by the parties are, with their expert
knowledge of the industry concerned, of the subject under dispute
and above all of the strength of the parties, they nevertheless
remain, even as assessors, disguised party men who as a rule
cannot altogether throw off their dependence on the interests of
their party and exercise a free judgment. A more or less dogged
struggle inside the institution to win over the chairman can thus
easily arise, and the latter is again alone in his decision on matters
of any real importance.
This danger can to a certain extent be avoided, usually by
providing that the members shall not be directly appointed by
the parties but selected from a list made out in consultation with
the trade organisations concerned and classified according to
industry and occupation, at the beginning of the year, for instance;
irrespective of any particular dispute. Regulations of this sort
are contained in the legislation of many countries, for instance in
the above-mentioned Administrative Order in Germany 1 , the
Austrian Act of 18 December 1919 2 and the Belgian Order of
5 May 1926 3. The appointment of assessors to the industrial
boards in many of the Australian States also usually takes place
without reference to any individual dispute, as for instance under
the Western Australian Act of 31 December 1927 4.
Such a procedure undoubtedly loosens direct connection with
the parties, but this need not be completely broken, for the members
are still often interested in the industry involved in the dispute,
and their interest may in many respects coincide with those of
the parties. Such an indirect connection may also in certain
circumstances interfere with the exercise of an honourable mediation, which is one of the functions of an assessor. It may therefore
appear advisable to appoint persons who have no relation whatever
with the industry with which the dispute is concerned, and to be
content with the fact that such assessors may be regarded as
representatives of employers or workers in general, because they
belong to either of these classes or because they are in some way
connected with them. It is always possible to proceed in this
way if, on the failure of the parties to agree on the nomination
1
Sections 4 and 5 of the second Order for the Administration of the Conciliation
Order.
2
Legislative Series, 1920, Aus. 32, section 3.
3
Ibid., 1926, Bel. 5, section 3.
4
Ibid., 1925, Austral. 12, sections 107 and 119.

THE SETTLEMENT OF LABOUR DISPUTES

of assessors, the latter may be appointed by a public authority
or by the chairman. This is the case under the above-mentioned
Belgian Order, the Canadian Act, the British Industrial Courts
Act, and of course others. A discussion on the reform of the German
conciliation and arbitration system held at the Ministry of Labour
in Berlin in October 1928 showed t h a t this question is one of no
small importance. I t was then recommended that representatives
of the central workers' and employers' federations should be
appointed as assessors 1. This would mean t h a t to a very large
extent, at least, the assessors would be free from connection with
the parties in individual cases.
To sum up, a series of types of assessors has been considered,
ranging from those openly responsible to the parties, and behaving
accordingly, t o those with no direct connection with the parties
or the dispute and simply collaborating in the work of conciliation
and arbitration as employers or workers or persons related to
them.
The partiality of the assessor decreases progressively in this
series and makes way for an increasing independence of the parties.
Though there is apparently so large a difference in the position
of assessors in the various legislative systems between the first
and the last stage, there is nevertheless something in common to
all, and t h a t is their basic function. I t must be established what
this basic function is.
First of all, assessors are not mere representatives of the parties
to the dispute. I t would indeed be objectless to appoint them
if they had simply to state the case of their party as in proceedings
before a conciliator or arbitrator — if, in other words, they had
no other functions.
But neither are they simply expert advisers. If they were,
it would suffice for the conciliator to hear their views in the presence
of the parties and himself decide whether and to what extent
he would give those views weight. That this is not the case is
obvious from the fact t h a t assessors are usually competent, to
the same extent as the conciliator or arbitrator, to vote on awards ;.
apparently, therefore, they have to play a more active part.
Nevertheless, with a remarkable exception which will be
discussed later, the assessors are not judges. A judge has first
'Cf. article by ZIMMERMANN: " Einigungswesen, Zwangsschlichtung, staatliche Lohnfestsetzung ", in the Kölner sozialpolitische Jahresschrift, Vol. V i l i ,
Nos. 1-2, p. 27.

GENERAL PROBLEMS

of all, at least according to European practice, to interpret and
apply existing law to a certain set of facts. But the question
here, as has been mentioned à propos of the nature of conciliation
and arbitration machinery, is one of creating a legal system to
regulate the relations between parties — in fact to a certain extent
a legislative function. Assessors have to second the conciliator
in this task and they can only do so efficiently under two conditions.
First, they must be able, since the parties have more or less influence
on their position, to give information on the strength of the parties
and their real aims ; and secondly, they must, by their expert
knowledge, be able to give advice on the particular nature of the
industry concerned, its economic situation and any other facts
necessary for a correct judgment of the case.
The activity of assessors therefore consists in the continuation
of three functions, which limit and supplement one another :
to establish justified party claims, to provide the chairman and
the whole conciliation and arbitration institution with the underlying facts of the case, and to support the chairman in his work
as mediator.
The regulations in the different countries vary with the degree
of emphasis which is laid on one or other of these functions, but
the principle — the combination of them all — remains the
same.
The remarks on the position and functions of assessors would
be incomplete if no mention were made of the remarkable position
which the Italian x regulations give to them in labour jurisdiction.
According to sections 13 et seq. of the Italian Act of 3 April 1926
on the legal regulation of collective relations in connection with
employment 2 , disputes on collective interests, like disputes on
rights, are to be decided by the labour tribunal 3 . In the Preamble
to the Act, the legislature expressly stated that it had tried to
go beyond the imperfect stage of arbitration to reach the more
perfect form of real judicial decision, which can be exercised only
by an impartial judge neither directly nor indirectly interested
in the result of the proceedings *.
1
The same m a y be the case in Russia and Spain, b u t it is a t present difficult
to obtain a clear idea of their regulations on these points because of the lack of
necessary documentation.
2
Legislative Series, 1926, I t . 2.
3
Cf. above, p . 33.
* For wording, see the extract from the memorandum mentioned above,
p. 33.

THE SETTLEMENT OF LABOUR DISPUTES

The two experts on economic and labour questions who sit
on the labour tribunal besides the three ordinary judges are
appointed by the president from a register drawn up in the manner
prescribed. It is specified in the A c t l that no person who is
" directly or indirectly affected by a dispute " may act as an
expert member of the tribunal dealing with it.
In this case therefore the assessors are judges on the same
footing as the professional judges and it is their duty to help
in reaching a decision by means of their expert knowledge.
In some Australian arbitration courts the assessors chosen
from among employers and workers have also in various respects
a quasi-judicial position. Although the decisions of these courts
are not judgments in the legal sense, they are nevertheless binding
on the parties and resemble judgments both in origin and in
form. The assessors are sometimes actually described as " members " of the court, are required to take the oath, and receive
like the presiding judge a fixed salary during the three years
which constitute the usual term of office 2.
The assessors of the Australian Commonwealth Conciliation and
Arbitration Court are professional lawyers and their position is
in every way that of judges 3. This is, however, not equally true
for assessors in all these States with compulsory arbitration and
conciliation systems — not, for instance, in South Australia, where
they are not described as members of the court, and where it is
specified 4 that " a person shall not be disqualified for appointment
as an assessor on the ground that he is a party to the industrial
matter or is a member of an association which is a party to the
industrial matter ".
The particular and general qualifications which are required
of conciliators and chairmen of conciliation and arbitration
bodies, and the problems connected with their appointment,
were considered at length in the discussion on their position5.
What was said of them may be applied to assessors, in so far as
their position, generally indicated above, displays no special
1

Sections 14 a n d 15.
Cf. for instance, sections 43, 49 and 57 of the Western Australian Act of 31
December 1925 and sections 65, 72 and 73 of the New Zealand Act of 1 October
1925.
8
Sections 12 e t seq. of t h e Australian Commonwealth Act of 22 J u n e 1926
concerning arbitration and conciliation.
* Cf. section 15 of the Act of 6 J a n u a r y 1926. The same is true for New Zealand,
section 4 1 , para. 7, of t h e above-mentioned Act.
6
Cf. pp. 25 e t seq.
2

GENERAL PROBLEMS

features of its own. The obligations of official discretion and of
fulfilment of functions are the only points which call for further
discussion*.
The assessor's obligation to observe official discretion is amply
provided for in the legislation of a number of countries and is
also implicitly assumed in countries where, as in Germany, it is
not prescribed 1. When expressly specified it is guaranteed in the
same way as in the case of conciliators and chairmen of conciliation
institutions 2.
When the assessors are to a large extent representatives of
the parties, the obligation to discretion is, for practical reasons,
not considered as so important (in Germany for instance) ; but
the further their position removes them, as described above,
away from connection with the interests of the parties, the more
necessary it is to require discretion towards the public and the
parties to the dispute in respect of the confidential information
which they acquire in the exercise of their functions. The obligation
is particularly important in cases where. the conciliation and
arbitration institution is given wide powers to enquire into the
facts, take evidence, and call on the parties to give information
and produce documents, as in Australia and New Zealand with
their compulsory systems and in Great Britain, Canada and other
countries which have established a special investigation procedure
for which the institution concerned is given the necessary powers.
Where, as in Italy, the assessors of the labour tribunal are actual
judges, the obligation to discretion is a matter of course.
The obligation to serve when appointed has also a special
importance for assessors, so far as their connection with the
interests of the parties may tempt them to evade responsibility for
a decision against their party by non-appearance, abstention from
voting or some other form of non-co-operation. Many Acts provide
for penalties in order to prevent this evasion of responsibility 3.
A fine is usually the penalty for the failure of an assessor to carry
out his functions, the maximum in Australian legislation being
1
Cf. D E R S C H : Die neue Schlichtungsverordnung, second edition, 1925, p . 464 ;
also FLATOW-JOACHIM : Schlichtungsverordnung,
1924, note t o section 4 of t h e
second Administrative Order of 29 December 1923.
2
Cf. pp. 34.
3
Cf. the Australian Acts, particularly concerning assessors in industrial courts
and conciliation committees : South Australia, section 178; New South Wales,
section 18 ; Western Australia, sections 54 and 111 ; Germany, section 4, para. 4,
and section 5 of the sacond Order for the Administration of the Conciliation Order ;
the Colombian Act of 4 October 1920, section 25 ; and the Austrian Act of 18
December 1919, section 3, para. 2, section 6, para. 4.

THE SETTLEMENT OF LABOUR DISPUTES

£5. I t is, however, questionable whether fines are a satisfactory
method, for successful co-operation under such compulsion is
improbable. The less the nature of the assessor's position exposes
him to the influence of the parties, the smaller is the risk t h a t
he may refuse to exercise his functions ; while in systems such
as those of the Australian industrial courts and the Italian labour
tribunals, where assessors have a judicial or quasi-judicial position,
there are naturally no regulations concerning this obligation.

CHAPTER III
THE PARTIES

It was pointed out at the end of Chapter I x that the question
of the persons who were subject to conciliation and arbitration
procedure and who were entitled to use the services of the
conciliation and arbitration boards must necessarily have an
influence on the form, character and success of the procedure.
It may therefore conveniently be discussed here between the
description of the bodies concerned and the study of the procedure,
which will be found in Chapter IV.
The various questions which arise in this connection may be
summed up in four essential points : the capacity to be a party to
proceedings ; the capacity to conduct proceedings ; capacity in
special cases ; the capacity to appear and act in proceedings.
While an attempt is made below to discuss these four points,
it must be clearly stated at the outset that the legislation on this
subject represents a comparatively new province of law, so that
there is practically no country in which all the problems have been
thoroughly worked out. In many cases, the legislator, far from
basing his regulations on such distinctions as the above, has not
or has only dimly recognised their existence. Frequently the
adoption of such fine distinctions in practice is considered valueless,
and it will be seen later that there is a certain justification for this
view. It is nevertheless desirable to compare the distinctions
which have been made in legislation or in practice.
T H E CAPACITY OF THE PARTIES

The question of the parties who may apply to conciliation or
arbitration bodies for the use of their services is undoubtedly the
most important of the four problems mentioned above. For that
reason it is the one which has been most often settled either by
implication or by definite regulations in the various countries. The
practical issue is whether and to what extent single individuals or
iCf. p . 13.

THE PARTIES

groups of persons, particularly those who are organised (such as
trade unions, the staffs of undertakings, etc.), among the employers
or workers have the capacity to be parties to proceedings.
A rapid survey of the most important systems shows at once
that great differences exist and that a comparative study must be
difficult. On some points, however, interesting comparisons can
be made. The tangible result is that the solution of this question is
related in a striking manner (even if the similarity does not extend
to every detail) to the particular task entrusted to the conciliation
and arbitration system in the various countries. It was pointed
out in the Introduction x that the ultimate aim of conciliation and
arbitration was to create and maintain a community of interests
between employers and workers. This general purpose has been
differently understood and pursued in the various States.
Originally, conciliation and arbitration had one direct purpose,
namely, to prevent and settle trade disputes, whether collective or
individual in their nature. When individual disputes led or
threatened to lead to trade disputes they were dealt with by the
conciliation and arbitration machinery in the same way as collective
disputes. No distinction was made between the two types. In
both cases the task of the conciliation and arbitration boards was
to maintain industrial peace. Later, however, the task was
extended. The central purpose remained the same, but in many
countries it has been more clearly defined and its scope widened. It
was but natural that the development of collective agreements in
certain countries and the consequent evolution of the law on that
subject should influence the work of the conciliation and arbitration
boards. More and more their special task came to be to encourage
the conclusion of collective agreements and to assist the parties
when they were unable to reach an agreement amongst themselves.
Thus, side by side with the original task of maintaining peace, the
conciliation and arbitration boards undertook to promote relationships between employers and workers on the basis of collective
agreements 2.
A further stage of development followed. Where provision
was made by law for making the conciliation or arbitration award
binding on the parties or where measures were adopted for enforcing
»Cf. p. 7.
The remarks of Mr. SINZHEIMEK a t the meeting of the Association for Social
Reform a t Mannheim in October 1929 have been of value here (cf. the publication
of the Association : Die Beform, des Schlichtungswesens,
1930, No. 83 (Jena), pp. 17
et seq.). Cf. also the article by SITZLEB, in the Neue Zeitschrift für Arbeitsrecht,
1930, No. 1.
2

GENERAL PROBLEMS

such awards, the conciliation and arbitration boards had necessarily
to undertake the further task of regulating, on behalf of the State,
conditions of labour such as wages and hours of work.
I t is instructive to observe t h a t the answer given by different
systems to the question of what persons should be entitled to use
conciliation and arbitration machinery is closely connected with, if
not clearly dependent on, the stage of development (as outlined
above) in which the system can roughly be classified.
I t will be found that, as a general rule, countries whose systems
are restricted to the maintenance of industrial peace permit the
machinery to be used not only by industrial associations b u t also
by unorganised groups of persons or by individuals on both sides.
I n systems in which the other two tasks are taken into account,
restrictions are introduced concerning the persons who may
make use of the machinery ; so t h a t finally, in systems which clearly
belong to the third group, only industrial associations of a special
type (at least as far as the workers are concerned) are allowed to
apply for conciliation or arbitration.
The first group consists mainly of the English-speaking
countries, with the exception of Australia and New Zealand. In
these countries it would seem t h a t the problem does not arise. A
typical example is the Industrial Courts Act of Great Britain 1 ,
section 8 of which defines the trade disputes which are covered by
the Act as follows :
The expression " trade dispute " means any dispute or difference
between employers and workmen, or between workmen and workmen
connected with the employment or non-employment, or the terms of
the employment or with the conditions of labour of any person.
This definition makes absolutely no [distinction between
collective and individual disputes. I t is therefore easy to understand
why no rules or restrictions have been laid down with regard to the
parties. The same conclusion can be drawn from a study of the
forms on which applications to the court must be made 2.
The position is obviously the same under the Canadian Industrial Disputes Investigation Act of 1907 as amended in 1925 3 . This
is shown by a reference to section 2 (e), which deals with the
definition of industrial disputes, and section 16 (1) (e) concerning
1

Legislative Series, 1920, G.B. 1.
Samples of these are reproduced in Sir William MACKENZIE'S book : The
Industrial Court : Practice and Procedure.
3
Legislative Series, 1925, Can. 1.
2

THE PARTIES

the representation of workers who are not members of a trade
union. Although in these countries there are no definite regulations
as to the parties who. may make use of conciliation and arbitration
machinery, it must be remembered t h a t in practice, in very many
cases and particularly in the case of important disputes, the
workers will be represented by their trade unions.
Systems of the second group, in which the work of the conciliation and arbitration boards is directed mainly towards the
conclusion of collective agreements, cannot perhaps be so clearly
defined. The majority of them represent a transition stage from
one group to another. Their function in connection with collective
agreements is still in course of development, and the preference
given to trade unions as parties in the negotiations develops along a
parallel course. In this group might be placed Austria, France
(the new Bill before the Senate), the Netherlands and Sweden.
The provisions of the Swedish Act of 28 May 1920 seem to show
that the right to use conciliation and arbitration machinery is not
restricted to any definite organised groups of persons or industrial
associations 1.
Section 111 of the French Bill clearly shows t h a t trade associations have not ipso facto rights in this matter. I t is only when the
dispute concerns an existing collective agreement t h a t the trade
unions or the groups which sign the agreement are, de jure, entitled
to make use of conciliation machinery 2 . Both France and Sweden
have legislation on the subject of collective agreements, and
it is probable t h a t in Sweden particularly, where the legislation
is of more recent date 3 and where the importance of collective
agreements is rapidly increasing, the work of the conciliation and
arbitration boards in promoting such agreements will continue to
1

Cf. section 4 of the Act (Legislative Series, 1920, Swe. 6-8).
I n this connection, the following remarks of the Raporter, Mr. CHABKUN,
Deputy, are of interest. He said : " There remains the important question of the
position of the trade unions with regard to conciliation. As Reporter, I should
like to be permitted to explain m y personal attitude to the question. I consider
t h a t if it were compulsory to invite the trade unions or the federations of employers
or workers' associations to take p a r t in the proceedings t h a t would provide an
effective guarantee for the success of the proposed measures. My committee and
the Government, however, consider t h a t trade associations have not reached a
sufficient stage of development to justify such a step.
" At the same time it has been agreed t h a t tho parties shall have the right to
be represented by agents of their associations and t h a t when the State institutes
conciliation proceedings it shall have the right to call upon the industrial associations concerned to collaborate a t a n y stage. This, however, is merely a right
which the authorities m a y exert a t their discretion.
" If the dispute arises out of a collective agreement signed by an industrial
association, then this association is necessarily a p a r t y to the proceedings. "
a
Act of 22 June 1928 (Legislative Series, 1928, Swe. 2).
2

GENERAL PROBLEMS

extend, so t h a t in practice the workers' associations will appear
more frequently as parties to conciliation proceedings.
The
regulations in the Netherlands under the Act of 4 May 1923 1 may
be considered as being at the same stage as in Sweden. There is
no definite distinction between collective and individual disputes.
When a dispute breaks out which will probably produce or has
produced a strike or lock-out by which not less than fifty workers
are affected, then conciliation and arbitration proceedings must be
taken 2. Since 1927, legislation has existed in the Netherlands with
regard to collective agreements 3 . This will probably, as in Sweden,
lead to an increase in the importance of trade associations in conciliation proceedings, although by law they have no monopoly.
The new French Bill clearly aims at preventing such a development.
The Austrian system must also be mentioned in this connection.
The preamble to the Conciliation Boards Act of 18 December 1919 4
stated 5 :
The work of the conciliation boards differs from that of the industrial
courts in that the latter have to give a dscision on concrete cases,
whereas the conciliation boards as a rule have to decide on a dispute
with regard to the future regulation of labour conditions for groups
of workers or salaried employees. Quite often, however, the decision
on a concrete case helps to determine the form of future regulations,
so that it is not desirable from the outset to restrict the competence
of conciliation boards. It should be left to the discretion of the
chairman to decline to deal with the case if it belongs to the competence
of a court, and particularly of an industrial court, and if only legal
questions are at issue. In such a case, the parties would have the
right to appeal to a court after the conciliation procedure had ended,
because the awards of the conciliation board have no legal force ; it is
undesirable for a case to be thus examined by two successive bodies.
In this case also, the right of the workers to make use of
conciliation and arbitration machinery is not restricted to organised
groups, because the distinction between individual disputes and
collective disputes is not strictly applied. In view of the extent
to which collective agreements have been adopted in Austria,
it will be found in practice t h a t the part played by workers' unions
in conciliation and arbitration procedure is very important.
The German regulations on the subject actually state expressly
t h a t the purpose of the conciliation and arbitration machinery
1

Legislative Señes, 1923, Neth. 1.
Cf. section 3 (1).
Legislative Series, 1927, Neth. 2.
4
Ibid., 1920, Aus. 22.
5
No. 401, Beilagen, Konstituierende Nationalversammlung, cited from
L B D E R E K : Grundriss des österreichischen Sozialrechtes, p . 477 (Vienna, 1929).
2
3

THE PABTEES

is to further collective agreements 1 . The conciliation and.
arbitration boards are not permitted to undertake other tasks 2 .
This clearly shows t h a t the parties allowed to make use of conciliation and arbitration machinery must be the same parties who
have the right t o enter into collective agreements, which in
German law include agreements for a whole trade and works
agreements for a single undertaking 3 . Consequently, on the
workers' side only certain groups, such as trade unions in the
case of collective agreements for a whole trade and the staff of
an undertaking in the case of works agreements, can take part
in conciliation and arbitration procedure. In practice, however,
it is only the trade union which plays such a part, because the
works agreement is much less important t h a n the collective
agreement proper. On the employers' side, it is true, the individual
employer has as much right as the federation of employers to
be a party to conciliation and arbitration procedure, and in the
case of collective disputes concerning a works agreement it is
only the individual employer who is competent.
Side by side with the German system stands the Norwegian
system, in which the encouragement of collective agreements is
definitely laid down as the chief task of the conciliation and
arbitration machinery. Since in Norway no distinction is made
between general collective agreements and works agreements,
it is only trade unions (on the workers' side) which are entitled
to be parties to arbitration and conciliation proceedings 4 .
The mention of the German system leads us to the third type
of system, in which the existence of the right to issue binding
awards and the fact t h a t criminal penalties may be applied to
enforce these awards mean t h a t the conciliation and arbitration
boards have authority to fix wages and other working conditions.
In Germany this function of the conciliation and arbitration
boards developed out of their work in connection with the
furtherance of collective agreements, because the legislation on
1
Cf. above, p . 6. Cf. also the article by Mr. W I S S E L L , Federal Minister of
Labour, on the possibility of making arbitration awards binding on the parties,
in the Magazin der Wirtschalt, 17 J a n . 1929 : " Reform des Schlichtungswesens " .
The views expressed by the Minister have, however, been subjected to severe
criticism, particularly by the employers.
2
Cf. section 8 of the second Order for the Administration of the Conciliation
Order of 29 December 1923 (Reichsgesetzblatt, 1924, p. 9).
3
Only agreements covering a whole trade are, strictly speaking, collective
agreements with the peculiar legal effects of such agreements (e.g. no possibility
of contracting out).
* Sections 6 (3) and 28 (1) of the Act of 5 May 1927 (Legislative Series, 1927,
Nor. 1).
5

GENERAL PROBLEMS

the subject provided for the possibility of making the awards
binding on the parties in certain definitely restricted and exceptional
cases 1 . In systems of the third group, however, this has become
the essential function of the conciliation and arbitration
machinery 2 . This group includes the systems in Russia, Italy,
and more especially Australia and New Zealand. I n the last two
countries the task of regulating working conditions is naturally
linked up with the minimum wage legislation on which the conciliation and arbitration machinery is in most cases built up.
This conception of the purpose of the machinery has repercussions upon the question of which parties may make use of it.
According to the legislation in New Zealand, an industrial dispute
means " any dispute arising between one or more employers or
industrial unions or associations of employers and one or more
industrial unions or associations of workers in relation to industrial
matters " 3 . Consequently, the party to a dispute referred to a
council of conciliation or a court of arbitration must logically be, on
the workers' side, an industrial union, which must, moreover, have
been registered 4 . The question is regulated in a similar manner
in New South Wales, where, it would appear, only registered unions
of workers may be parties to the proceedings 5. The rule is not
so strictly observed in the other Australian States. In Western
Australia 6, for eixample, the right is not reserved for registered
industrial unions if there are no such unions in the trade in which
the dispute occurs 7 . At the same time, the whole Act is based
on the assumption t h a t the parties to the proceedings are industrial
unions or associations, as is only natural in view of the definition
given to industrial disputes, which is practically the same as
t h a t quoted above for New Zealand 8 .
1

For details, see below, pp. 115 e t seq.
I t is a well-known fact t h a t this function of conciliation and arbitration in
regulating working conditions is the point which is most hotly discussed in Germany
and which is particularly strongly contested b y the employers. Opinions are
divided as to its effects. I n any case, it is not prescribed as the main function by
the legislation on the subject (cf., for example, Die Reform des Schlichtungswesens,
Vol. 83 of the publications of t h e Association for Social Reform, Jena, 1930).
The question is thoroughly discussed again in Chapter VII.
3
Act of 1 October 1925 (Legislative Series, 1925, N.Z. 1).
4
Cf. sections 39 (2), 77, 5 e t seq. (industrial unions), and 26 (industrial associations).
6
Cf. section 31 (2, 6) of the Act of 18 March 1926 (Legislative Series, 1926,
Austral. 7).
6
Act of 31 December 1925 (ibid., 1925, Austral. 12).
' Cf. section 59a (court of arbitration) and section 120 (3) (conciliation committees).
8
Cf. section 4, section 81 (la), and section 89, which clearly show the
predominant position of industrial associations on the workers' side.
2

THE PARTIES

In other States of Australia the situation is very similar. Such
differences as exist may be partly explained by the fact that the
definition of an industrial dispute is not always so strict as in
New Zealand or that the conception of a trade dispute originally
taken over from the legislation of Great Britain 1 may to a certain
extent still carry weight. This is the case, for example, in South
Australia, where the right to be a party to conciliation and arbitration procedure is not restricted to registered unions of workers 2.
At the same time, the general tone of the legislation emphasises
the right of registered industrial unions to be parties to the
proceedings, whereas on the employers' side, as in all the cases
previously mentioned, individual employers also enjoy that
right 3.
A very perfect example of the reciprocal relationship between
the tasks of the conciliation and arbitration system and the
determination of the parties to the proceedings is to be found
in the Italian system of labour jurisdiction (magistratura del
lavoro), contained in the Act of 3 April 1926 concerning the legal
regulation of collective relations and the Administrative Decree
of 1 July 1926*. The conciliation and arbitration system, which
in Italy in the last resort takes the form of legal proceedings
before the labour court, fulfils all the three tasks of maintaining
industrial peace, encouraging collective agreements and regulating
working conditions. Consequently, it will be found that even on
the employers' side it is only recognised associations which may
take part in the proceedings5.
In Russia only the trade unions may appear before the
chambers of conciliation or the arbitration courts in the case
of collective disputes. In Russian law there are no associations
of employers, so that on the employers' side the individual has
the right to be a party to the proceedings. It must, of course,
be remembered that in practice, in the majority of ¡cases and at
least in the most important ones, the trade unions will be opposed
by a State undertaking or an association of such undertakings.
1

Cf. above, p. 46.
Cf., for example, sections 5 (1) (definition of industrial disputes), 17 (1, 6)
a n d 176 (2, c) of the Industrial Code of 1920, as amended by the Act of 6 J a n u a r y
1926 (Legislative Series, 1926, Austral. 1).
8
Cf. also Freedom of Association, Vol. V, p p . 301 and 310 e t seq.
4
Legislative Series, 1926, I t . 2 and 5.
6
Cf. section 17 (1) of the Act which states t h a t when no recognised industrial
associations exist, a special commissioner shall be appointed by the president of
the court. I t is only in this exceptional case t h a t the intervention of individuals
is permitted.
2

GENERAL PROBLEMS

There can be no doubt t h a t such an association has the right
to be a party to conciliation or arbitration proceedings 1 .
I n conclusion, a word might be said as to the real reason for
this connection between the tasks of the various conciliation and
arbitration systems and the question of who may be a party to
the proceedings. The reason is probably as follows : the more the
task of conciliation and arbitration machinery is extended from
the simple maintenance of industrial peace to the conclusion of
collective agreements and thence to the official regulation of
working conditions, the more necessary it becomes to have as
parties to the proceedings responsible organisations which can
apply the agreements arrived at or the awards issued by the boards.
This necessity becomes particularly clear when the enforcement
of the decisions of the conciliation and arbitration authorities is
guaranteed not only by civil measures but also under criminal
penalties, as is the case in Italy and in most of the Australian
States. In such a case the legislator has to make sure t h a t on the
workers' side he is dealing with organised groups which can be
held liable for the non-observance of the decision and for the
outbreak of any illegal strikes. This is the reason why section 5
of the above-mentioned Italian Act states t h a t recognised associations of workers shall be bodies corporate. For the same reason
many of the Australian States and New Zealand provide t h a t
the industrial unions must be registered before they can take
part in conciliation and arbitration proceedings. This is also an
example of the close connection between conciliation and
arbitration and the right of combination for trade purposes. When
it is not one particular trade association which can apply for
proceedings to be instituted, as is the case in Italy, Russia and,
under the new Labour Code of 26 August 1931, in Mexico 2 , but
a theoretically unlimited number of associations, as in Germany
or the Netherlands, then doubts may arise in individual cases
as to whether one given association is entitled to be a party to the
proceedings according to the law of the land. This question is
practically the same as the question of the right to conclude
collective agreements, which has already been dealt with in the
study on freedom of association, so t h a t it willl suffice to refer the
reader to t h a t work 3.
1
Cf. the monograph on conciliation and arbitration in Russia. Cf. also ZAOOKSKI:
Wages and Regulation of Conditions of Labour in the U.S.S.R., pp. 58 et seq.
(International Labour Office, Studies and Reports, Series D , No. 19).
2
Section 43.
3
Cf. Freedom of Association, Vol. I, p p . 105 e t seq.

THE PARTIES

CAPACITY TO CONDUCT PROCEEDINGS ;
CASES ;

CAPACITY IN

SPECIAL

CAPACITY TO A P P E A R AND A C T IN COURT

I n comparison with the question just dealt with, the problem
of the representation of the parties is relatively unimportant and
may be quite briefly dismissed. I t includes the capacity to
conduct proceedings, the capacity in special cases and the capacity
to appear and act in court. I n this connection the capacity to
conduct proceedings will mean the capacity to make statements
and perform other acts with legal effect during the course of the
conciliation and arbitration proceedings. I t will generally be
found t h a t the parties which may institute proceedings have
this right. If, as is often the case on the employers' side, an
individual is a party, then it is obvious t h a t he has the capacity
to conduct proceedings. When, as on the workers' side, the
parties are generally groups of persons or associations, their elected
or constitutional representatives conduct the necessary legal
proceedings. There would be no need to mention the question
at all were it not for the fact t h a t certain States, such as Australia
and New Zealand, have special regulations concerning the right
of the associations and their constitutional representatives t o
institute and conduct conciliation and arbitration proceedings.
This right is made dependent on the fulfilment of certain definite
conditions which exceed those required by the constitution of
the association for taking ordinary decisions. As a single example
of this, section 105 of the Act of 31 December 1925 for Western
Australia may be quoted 1, which reads as follows :
(1) No industrial matter (including any application for the enforcement of any industrial agreement or award of the Court) or dispute
shall be referred to the Court by an industrial union or association,
otherwise than pursuant to a resolution of the governing body of such
industrial union or association.
(2) In the case of an industrial dispute, such resolution shall be
published in a newspaper circidating in the district in which the
registered office of the union or association is situated.
(3) If, in the case of an intended reference by an industrial union,
a request in writing signed by not less than ten per centum of the union
is made to the governing body within fourteen days after such publication to submit the matter of the intended reference to a ballot of
the members, such ballot shall be taken in the prescribed manner,
and the dispute shall not be referred to the Court unless a majority
of the members who record their votes vote in the affirmative.
1
Legislative Series, 1925, Austral. 12. Cf. also New Zealand, sections 41 and
108 of the Act of 1 October 1925 (ibid., 1925, N.Z. 1), and Rumania, section 7 (3)
of the Act of 4 September 1920 (ibid., 1920, Rum. 4).

GENERAL PROBLEMS

(4) In the case of an association, if within fourteen days after
the publication of such resolution a majority of the industrial unions
represented on the association, at special meetings to be called for the
purpose of taking such resolution into consideration, pass resolutions
forbidding the reference, the dispute shall not be referred to the Court.
I t is a noteworthy fact that such regulations exist in countries
which prohibit industrial disputes and enforce arbitration awards
under criminal penalties. This can be at least partly explained
by the fact t h a t under compulsory conciliation and arbitration
systems the institution of proceedings involves very heavy responsibilities and very serious legal consequences, so that it is important
to be certain from the outset t h a t the parties are prepared to
accept such responsibility.
The question of the person or institution possessing the capacity
in, any particular case to institute and conduct proceedings is,
as far as can be seen, a very minor one, and of little interest in
the present connection.
The problem presumably gives rise to difficulties only when
trade associations are divided by grave political or other differences
and are fighting with each other for a monopoly in the representation of the workers, so t h a t they have no united policy in
industrial disputes. I t may then happen in certain cases that
different and perhaps contradictory demands are put forward by
different organisations, each of which asserts t h a t it is the real
and perhaps the only representative of the workers in question.
The question might also arise with regard to the relationship
between a central trade union and its local section 1 . The provisions mentioned above in connection with the capacity to be
a p a r t y t o proceedings are also intended t o meet this present
difficulty -.
The question of the capacity to appear and act in court, in
so far as it is expressly mentioned, has been very simply solved
in practically every conciliation and arbitration system. I n
principle, the capacity of the parties and their representatives
to appear and act in court is subjected to the same conditions
as are required for ordinary business representation. As far as
can be ascertained, no compulsion, such as may exist in civil
cases, exists in this connection to be represented by a lawyer or
by some other person with special legal training. I n many cases
lawyers and other agents are expressly prohibited from appearing,
since the disputes submitted to conciliation and arbitration boards
1
2

Cf. K A S K E L : Arbeitsrecht, p. 358 (3rd edition).
Cf. above, p. 53.

THE PAETIES

are not disputes on rights but disputes on interests, in which
legal questions rarely, if ever, play an important part. Thus,
in the German system lawyers may not even assist the parties
unless they happen to be employees of the party in question. If
the parties do not appear themselves or are not represented by
their constitutional representative, the only other persons who
may be sent to take their place are the secretary, a confidential
agent, the manager, or some other official, and in particular the
officials of trade associations 1.
This rule is not so strictly applied in other cases. In New
Zealand barristers or solicitors may not appear before the conciliation council, but they may before the arbitration board subject
to the agreement of all the parties 2. A similar regulation exists
in the Australian Commonwealth Conciliation and Arbitration
Act 3, and in the Acts of Western Australia and South Australia,
where the restriction does not apply when the court is sitting
for the trial of an offence against the provisions of the Act, such
as failure to accept an award 4. In Norway 5 and Great Britain 8
the permission of the authorities is required in each case before
an advocate may appear. According to Canadian legislation, no
counsel or solicitor is entitled to appear or be heard except with
the consent of the parties and subject to the discretion of the
board 7.
No restrictions of this kind are imposed by the Austrian Act
of 18 December 1919 8 or by section 73 of the Italian Administrative
Order of 1 July 1926 9 concerning the procedure before the magistratura del lavoro. Sometimes the number of possible representatives and lawyers is limited. Such a provision obviously aims at
preventing the procedure from becoming unnecessarily clumsy
through the participation of a great number of persons.

1
Cf. section 15 of the second Order for the Administration of the Conciliation
Order of 29 December 1929.
2
Cf. sections 47 and 79 of the Act of 1 October 1925 (Legislative Series, 1925,
N.Z. 1).
3
Section 38 (i) of the Act of 22 J u n e 1928 (ibid., 1928, Austral. 2).
4
Cf. section 65 of the Western Australian Act of 31 December 1925 (ibid., 1925,
Austral. 12) and sections 25 to 27 of the South Australian Act of 6 J a n u a r y 1926
(ibid., 1926, Austral. 1).
6
Sections 17 and 34 of the Act of 5 May 1927 (ibid., 1927, Nor. 1).
* Section 8 of the standing orders for industrial courts.
' Sections 39 and 41 of t h e Act of 12 J u n e 1925 (ibid., 1925, Can. 1).
8
Ibid., 1920, Aus. 22.
» Ibid., 1926, I t . 5.

CHAPTER IV
THE INSTITUTION OF PROCEEDINGS

The following discussion of the proceedings themselves, to
which the remarks contained in the two foregoing chapters on
the conciliation and arbitration machinery and the parties concerned have acted as an introduction, will be arranged according
to their successive stages ; Chapters IV, V and VI will deal in turn
with the institution, the course and the conclusion of the proceedings. The characteristic principles on which such proceedings
are. based will also be discussed as occasion arises. These are
often not actually specified, and deviate considerably from those
governing the practice of civil and criminal law in most civihsed
States. It may be noted as a general rule that conciliation and
arbitration institutions do not accept the fundamental formalism
of such practice, though it must not be forgotten that the various
systems do not apply the principles of procedure uniformly. The
more use a system makes of compulsion, either in the course of
the proceedings or in the execution of the awards, the less is it
possible, as will be understood, to avoid a minimum of application
of the rules of procedure ; this will become evident in the course
of this survey.
Conciliation or arbitration proceedings can be set in motion
in three ways : an application may be made by the parties to
the dispute (either both sides in conjunction or one side only) ;
a public authority may give the necessary instructions ; or the
court or board itself may open proceedings ex officio.
APPLICATION BY THE PARTIES

The opening of the proceedings through an application to a
conciliation or arbitration institution by the parties is everywhere
the usual course, though there is practically no example of such
application being the only method. Perhaps the still valid French
regulation in the Act of 21 June 1924 l (Act of 27 December 1892
1

Legislative Series, 1924, F r . 3.

THE INSTITUTION OF PROCEEDINGS

respecting conciliation and arbitration in collective disputes,
except section 16) might be taken as an instance, but here
too an official intervention on the part of the justice of the
peace is provided for as soon as the actual conflict has broken
o u t 1 . I t is true t h a t in Canada t h e initiative of the parties is
necessary to set the machinery in motion, so far as the dispute
is covered by the Industrial Disputes Investigation Act of
12 June 1925, for according t o section 5, a conciliation and
investigation board can only be established by the competent
Minister at the request of one or both parties to the dispute ;
but it is to be noted t h a t there is other legislation on the subject,
particularly in the individual provinces 2, and t h a t this supplies
the deficiency. Canadian legislation also makes it compulsory
to a certain extent to notify disputes and apply for settlement.
The form of the application is extremely varied. In most
systems there is no prescribed form — in those of Austria, Finland
and Germany, for instance, and apparently almost all countries,
such as Great Britain and some other English-speaking States
where the proceedings are voluntary and there is no compulsion.
As will be seen from the description of the proceedings in detail,
conciliation and arbitration are in general distinguished by the
freedom and adaptability of the forms they take. Since it is
important to bring t h e parties to negotiate so far as possible of
their own free will — and this is the first object even where the
institution is armed with highly developed powers of compulsion
— they must not be hindered by formalities. This point is particularly important in respect of application to the institution
by the parties. Section 106 of the Western Australian Act of
31 December 1925 3 is characteristic of this disregard of forms.
I t runs as follows :
Proceedings in the Court shall not be impeached or held bad for
want of form, nor shall the same be removable to any court by certiorari
or otherwise ; and no award, order, or proceeding of the Court shall
be liable to be challenged, appealed against, reviewed, quashed, or called
in question by any court of judicature on any account whatsoever 4.
I t is of interest to compare this with section 89 (9) of the New
Zealand Act of 1 October 1925 :
The Court may, in its discretion, waive any technical irregularity
or omission which may have occurred in the submission or reference
1
2
3
1

Section 113.
Cf. monograph on Canada.
Legislative Series, 1925, Austral. 12.
Cf. section 65 of the Canadian Act (ibid., 1925, Can. 1).

GENERAL PROBLEMS

of a dispute to the Court, provided that the provisions of this Act
referring to the particular matter in regard to which the irregularity
or omission has occurred have been substantially complied with.
There are, however, more exact regulations on this subject.
A written application is required, for instance, by t h e Netherlands
Act of 4 May 1923, and detailed formalities are prescribed by
many of the Acts which provide for compulsion in respect of the
actual proceedings and, in particular, of the enforcement of the
award. I n the latter case the explanation lies, as has been
indicated, in the great importance to the parties of the course
and result of the proceedings, which to a great extent are independent of their wishes. These wishes, and the spirit in which the
parties enter the proceedings, are given less consideration, since
in such cases there is justification for the assumption that less
depends on their goodwill. Reference may be made in this connection to the regulations in New Zealand 1, Italy 2, and Canada 3 .
Although the Canadian Act does not make the decisions of the
conciliation and investigation boards binding, and provides no
penal sanctions for their enforcement, the powers of the boards
are so far-reaching 4 t h a t special formalities for the opening of
the proceedings — t h a t is, for the appointment of a board — seem
nevertheless justified. As the Canadian regulations may be
regarded as t o a certain extent typical of such exact formalities
for application, they are quoted at length :
For the purpose of determining the manner in which, and the
persons by whom, an application for the appointment of a board is
to be made, the following provisions shall apply :
1. The application shall be made in writing in the prescribed
form, and shall be in substance a request to the Minister to appoint
a board to which the existing dispute may be referred under the
provisions of this Act.
2.

The application shall be accompanied by :
(a) a statement setting forth :
(1) the parties to the dispute ;
(2) the nature and cause of the dispute, including any
claims or demands made by either party upon the
other, to which exception is taken ;
(3) an approximate estimate of the number of persons
affected or likely to be affected by the dispute ;

Section 41 of the Act.
Section 74 of the Order of 1 July 1926 for the Administration of the Act of
3 April 1926.
8
Section 15 of the Act of 12 J u n e 1925.
4
See, in particular, sections 30 et seq.
2

THE INSTITUTION OF PROCEEDINGS

(b)

(4) thè efforts made by the parties themselves to adjust
the dispute ; and :
a statutory declaration setting forth that, failing an
adjustment of the dispute or a reference thereof by the
Minister to a board, to the best of the knowledge and
belief of the declarant a lock-out or strike will be declared,
and (except where the application is made by an employer
in consequence of an intended change in wages or hours
proposed by the said employer) that the necessary
authority to declare such strike or lock-out has been
obtained ; or, where a dispute directly affects employees
in more than one province and such employees are members of a trade union having a general committee authorised
to carry on negotiations in disputes between employers
and employees and so recognised by the employer, a
statutory declaration by the chairman or president and
by the secretary of such committee setting forth that,
failing an adjustment of the dispute or a reference thereof
by the Minister to a board, to the best of the knowledge
and belief of the declarants a strike will be declared,
that the dispute has been the subject of negotiations
between the committee of the employees and the employer,
or that it has been impossible to secure conference or
to enter into negotiations, that all efforts to obtain a
satisfactory settlement have failed, and that there is no
reasonable hope of securing a settlement by further
effort or negotiations. (1925, c. 14.)

3. The application may mention the name of a person who is
willing and ready and desires to act as a member of the board representing
the party or parties making the application.
An application by the parties is not always enough to set the
machinery in motion. Other conditions have often to be fulfilled.
I t is provided in many systems, as an index of the importance
of the matter, t h a t a certain minimum number of workers must be
affected : fifty in the Netherlands \ twenty in South Australia 2,
ten in Canada 3 and in various Swiss Cantons 4 . Further, the institution is not always bound to act on the application. This is
particularly the case if the parties have not exhausted the possibilities of conciliation by means of other machinery at their
disposal 5 . But even when this has been done, it still often depends
on the discretion of the mediator or some other competent authority whether the institution shall intervene. This is clearly the
case in Great Britain, according to the Industrial Court Act of
1

Sections 3 and 7 (d) of the Act.
Section 17 of the Act.
Section 21 of the Act.
1
Cf. monograph on Switzerland.
5
Cf. above, pp. 16 et seq.

2
3

GENERAL PROBLEMS

20 November 1919 1 . In the Netherlands 2, too, the State conciliator is not bound to intervene unless he regards a dispute as
important enough for his mediation. H e has also competence to
set u p a conciliation council if he considers it necessary s . According
to the German regulation (section 12 of the second Order for the
Administration of the Conciliation Order), the conciliator is not
bound to act unless, in his opinion or in t h a t of the Federal
Minister of Labour, the case is of special importance. I t should
be noted t h a t in some of the Australian systems 4 and in New
Zealand 5 the arbitration court may refuse to deal with any dispute
if it appears t h a t it is trivial. These provisions may be explained
by the necessity of maintaining the efficiency of State compulsion
by ensuring t h a t it is only used in very important cases.
Nevertheless, the general rule is t h a t mediators, conciliators,
conciliation committees or other competent persons or bodies
intervene on application by the parties to a dispute. In a number
of Acts this is specified as the duty of the institution — in Germany, according to the provisions on conciliation committees
already referred to, in Finland 6 and in Canada '.
Reference may be made in this connection to a remarkable
provision in the Danish Act ; the official conciliator is here permitted to make his intervention or the continuation of his mediation depend on the condition t h a t there shall be no cessation of
work until the negotiations have been declared closed, though
this condition need only be fulfilled for one week and not more than
once in the coursé of the same dispute. The British industrial
court acts in practice on similar lines in the interests of its
prestige.
T H E O P E N I N G OP P R O C E E D I N G S AT THE R E Q U E S T
OF A P U B L I C AUTHORITY

Besides the application of the parties to the institution, many
regulations provide t h a t a public authority may request the opening
of proceedings even when it is not itself a party to the dispute.
Public authorities are often directly concerned in disputes through
1

Sections 2 and 4.
Section 5 of the Act of 4 May 1923.
Section 10 of the Act.
4
Cf. section 69 (1) of the Western Australian Act and section 38 (h) of the
Australian Commonwealth Conciliation Act.
5
Section 85.
•Section 4 of the Act of 21 March 1925.
' S e c t i o n 6 of the Act of 12 June 1925.
2
3

THE INSTITUTION OF PROCEEDINGS

State or local undertakings such as gas, water, electricity, transport, etc. ; but the more interesting point is that they may require
the opening of proceedings — or intervene during their course —
as a non-interested party or as the representative of public interests.
Special provisions on this point are often superfluous in systems
in which the conciliation and arbitration body is an administrative authority and is obliged to intervene on its own initiative
in cases in which the public interest requires it, or can act on corresponding instructions *. On the other hand, it is quite comprehensible that such provisions occur in systems in which the conciliation and arbitration institutions are of a markedly judicial
character and are at least partly independent of the administrative power. In such cases it may be necessary for the State to
require the opening of proceedings, intervene during their course
and appear beside or, in Italy, instead of the actual parties.
The Italian magistratura del lavoro2, which is undoubtedly an
independent court, and the proceedings before the arbitration
courts provided for in many Australian Acts 3 may be quoted as
examples. The Austrian Act 4 on conciliation boards and the
Rumanian Act 5 also recognise the opening of proceedings at the
request of a public authority or of the Public Prosecutor.
T H E OPENING or

PROCEEDINGS BY THE INSTITUTION
" EX OFFICIO "

The possibility that proceedings may be opened in the general
interest at the request of a public authority is a step in the direction
of giving the institution competence to intervene directly on its
own initiative. Provisions to that effect are to be found in almost
all arbitration and conciliation systems. Once the State has decided
to put at the disposal of the parties to disputes official machinery
for their settlement, the step to the ex officio intervention of the
authority as soon as public interests are affected is not great.
Regulations concerning the occasions on which such intervention
should occur naturally vary in many respects. The idea of public
interest is vague, its interpretation varies from country to country,
1

Cf. following page.
Section 68, subsection 2, of the Act of 3 April 1926.
Sections 19 (c) of the Commonwealth Act of 22 J u n e 1928, and 17, 1 (b),
of the South Australian Act of 6 J a n u a r j ' 1926, and 30 of the Nev? South Wales
Act of 18 May 1926.
4
Section 12 of the Act of 18 December 191,9.
5
Section 37.
2

GENERAL, PROBLEMS

and the application of the regulations concerning it is therefore
far from uniform ; and, in addition, several laws do not regard
it as necessary for the public interest to be directly affected by
a threatened or actual dispute. According to the Swedish A c t 1
for instance, the intervention of the conciliator is justified if the
dispute causes or threatens to cause any considerable cessation
of work ; in the Netherlands 2 the State conciliator may intervene if he regards the matter as sufficiently important ; while
the French Bill 3 provides for the intervention of the competent
Minister or prefect in every case in which the parties cannot open
proceedings or arrive a t an agreement unaided, whether the dispute is of serious proportions or not. Here, too, intervention is
only likely to occur in practice when the public interest is somehow affected.
Where the possibility of direct official intervention is provided
for in legislation, the conciliation and arbitration institution is
also usually bound to intervene in the cases in question. A provision of the Australian Commonwealth Act of 22 June 1928 goes
particularly far in this respect. I t says (section 16) :
Each judge shall be charged with the duty of endeavouring at all
times by all lawful ways and means to reconcile the parties to industrial
disputes, and to prevent and settle industrial disputes, whether or
not the court has cognisance of them, in all cases in which it appears
to him that his mediation is desirable in the public interest.
I t is to be noted t h a t the possibility of the opening of proceedings
by the institution is almost everywhere limited to the stage of
conciliation. As far as can be discovered, only in countries with
compulsory arbitration is direct intervention by the institution
or by a public authority permitted also a t the arbitration stage ;
this is the case in the two Australian Acts mentioned above, and
in the regulations on the Italian magistraturo del lavoro. The
German regulations may also, perhaps, be classed with these,
for there the stages of conciliation, on the one hand, and of
arbitration, on the other, are not sharply differentiated. I n systems which on the whole dispense with compulsion, the conciliator
or conciliation institution may invite the parties to submit to
arbitration and assist them in their choice of an arbitrator or in
other ways, but cannot open proceedings against the will of the
1

Sections 3 and 4 of the Act of 28 May 1920.
Section 5, para. 1, of the Act of 4 May 1923.
'Sections 10 e t seq. of the Bill adopted by the Chambre des Députés in 1929.

THE INSTITUTION OF PROCEEDINGS

parties. This is logical, for according to most regulations the
opening of arbitration proceedings naturally entails a readiness —
usually prearranged =— to accept such award as may be made.
The official opening of proceedings would in such cases amount
to compulsion, which is not recognised by these systems. The
regulations in Belgium 1, Finland 2, France (according to the new
Bill referred t o ) 3 , the Netherlands 4 , and Sweden s may be quoted
in evidence. I t is characteristic of the Rumanian regulation t h a t
the opening of arbitration proceedings is as a rule dependent on
the will of the parties, while arbitration in disputes in State,
departmental and communal undertakings and establishments
and in works of public utility, in which collective stoppages of
work are forbidden 6, is carried out by the court or board ex
officio.
OBLIGATION TO N O T I F Y D I S P U T E S AND TO A P P L Y FOR SETTLEMENT ;
SUSPENSIVE PROHIBITION OF STRIKES AND LOCK-OUTS

I n systems comprising permanent arbitration and conciliation
institutions or conciliators, it is naturally the duty of such bodies
or persons to keep a close watch on events within their competence
and to keep in touch with both employers and workers with whose
disputes they may have to deal. Often, as, for instance, in the
Swedish A c t 7 , this duty is expressly specified. In this way institutions and conciliators are usually informed in good time of any
dispute which is threatening. Nevertheless, many Acts specifically
require t h a t notice of threatened disputes should be given to
the competent body. The Netherlands 8 , where this duty lies
with the local authorities, and Norway 9, where it lies with the
parties in cases of " notice to cease work ", may be quoted as
examples. Certain Swiss cantons, too, require the parties to notify
differences 10.
The notice to the conciliator, court or board must a t the same
time contain sufficient information for the latter to " form an
1

Section 11 (f) of the Act of 5 May 1926.
Section 14 of the Act of 21 March 1925.
Section 113.
4
Section 22 of the Act of 4 May 1923.
5
Section 8 of the Act of 28 May 1920.
«Sections 15 and 16 of the Act of 4 September 1920.
' Section 2 of the Act of 28 May 1920.
8
Section 3 of the Act of 4 May 1923.
• Section 28 of the Act of 5 May 1927.
10
See monograph on Switzerland.
2

GENERAL PROBLEMS

opinion as to the cause, extent and probable consequences of the
dispute ", as the Netherlands Act has it. In this way it gives the
authority concerned a first means of deciding whether or not to
intervene ex officio.
I n a number of countries open disputes (lock-outs and strikes)
are explicitly forbidden and deemed to be illegal until all the
possibilities of conciliation and arbitration have been exhausted.
In countries where they are in any case completely or partially
forbidden, it is natural t h a t they should also be prohibited during
the official attempts to bring the parties to a settlement. Such
important limitations of the freedom of action of trade organisations cannot b u t have an effect on the conciliation and arbitration
proceedings — an effect which is usually expressed in an obligation
t o give notices of differences or to apply for settlement, either
specified or implicit in the law.
The most familiar regulations on the subject are those of the
Canadian Act of 12 June 1925 (amending the original Act of 1907),
which has obviously had an effect on other legislation, notably
t h a t of South Africa and New Zealand. The following 1 are extracts
from the provisions in question :
It shall be unlawful for any employer to declare or cause a lock-out,
or for any employee to go on strike, on account of any dispute prior
to or during a reference of such dispute to a board of conciliation and
investigation under the provisions of this Act, or prior to or during
a reference under the provisions concerning railway disputes in the
Conciliation and Labour Act : provided that nothing in this Act shall
prohibit the suspension or discontinuance of any industry or of the
working of any persons therein for any cause not constituting a lock-out
or strike. . . .
Employers and employees shall give at least thirty days' notice
of an intended or desired change affecting conditions of employment
with respect to wages or hours ; and in the event of such intended or
desired change resulting in a dispute, it shall be unlawful for the
employer to make effective a proposed change in wages or hours or
for the employees to go on strike, until the dispute has been finally
dealt with by a board, and a copy of its report has been delivered
through the Registrar to both the parties affected ; the application
for the appointment of a board shall be made by the employers or
employees proposing the change in wages or in hours ; neither of those
parties shall alter the conditions of employment with respect to wages
or hours, or on account of the dispute do or be concerned in doing,
directly or indirectly, anything in the nature of a lock-out or strike,
or a suspension or discontinuance of employment or work, but the
relationship of employer and employee shall continue uninterrupted
by the dispute, or anything arising out of the dispute ; but if, in the
opinion of the board, either party uses this or any other provision of
Sections 56 and 57 of the Act.

THE INSTITUTION OF PROCEEDINGS

this Act for the purpose of unjustly maintaining a given condition
of affairs through delay, and the board so reports to the Minister, such
party shall be guilty of an offence, and liable to the same penalties
as are imposed for a violation of the next preceding section.
The Act thus provides for a suspensive prohibition of open
disputes, and of changes in labour conditions, in which connection it
imposes a n obligation to give notice a t least thirty days before
the proposed changes in conditions and to apply for the appointment
of a conciliation and investigation board. The fulfilment of these
regulations is indirectly guaranteed by the provision of penalties
for the infringement of the prohibition of open disputes. Employers
may be fined from $100 to $1,000 for every day or part of a day
in which an illegal lock-out or change in labour conditions is
maintained. Workers who engage in or continue an. illegal strike
may be fined from $10 to $50. Incitement to and assistance in
such actions may also be punished with a fine of up to $1,000 1.
Similar regulations are to be found in the legislation of Belgium,
India, the Netherlands, New South Wales, New Zealand, Norway,
Queensland, Rumania, South Africa and Western Australia, and
of Germany in virtue of an Emergency Order issued by the President
on 10 November 1930 and equally valid with the actual Conciliation
Order 2. The regulations naturally vary greatly, in respect of the
disputes to which they apply, the definition of lock-outs and strikes
on which they rest, the period during which open disputes are
forbidden, and the civil, criminal and other consequences of
infringement 3 .
In Belgium, China, Norway, New South Wales, Queensland
and Western Australia, the suspensive prohibition of strikes and
lock-outs applies, irrespective of the nature and importance of
the undertakings concerned. In Rumania 4 the prohibition applies
only to undertakings which regularly employ at least ten workers,
in Canada t o important undertakings with a t least ten workers,
particularly in the transport industry 5, and in India 6 and South
Africa 7 principally to public utility undertakings. I n New Zealand
there is, besides the general prohibition, a particular obligation
to give notice before a strike or lock-out in such undertakings may
1

Sections 58-60 of the Act.
- Reichsgesetzblatt, 1920, p. 1865.
Cf. also sections 6 and 10 of the United States Act of 20 May 1926 concerning
arbitration and conciliation (railways) {Legislative Series, 1926, U.S.A. 1).
4
Section 6 of the Act.
5
Sections 2 (c) and 2 A of the amended Act.
« Section 15 of the Act of 12 April 1929 {Legislative Series, 1929, Ind. 2).
' Sections 11 and 12 of the Act.
3

6 -

GENERAL PROBLEMS

begin 1. The definition of public utility undertakings varies in
details which are from an international point of view unimportant.
The above-mentioned Order issued by the German President affects
only those undertakings which supply the public with gas, water
and electricity.
Legislators have frequently found it advisable, in this connection, to facilitate differentiation between open disputes and other
stoppages of work. The general definition of lock-outs and strikes
in many Australian Acts (New South Wales and Western Australia,
for instance) are among the most important. The Western Australian Act runs as follows, t h a t of New South Wales varying from
it in detail only :
" Lock-out " includes any closing of a place of employment or
any suspension of work or any refusal by an employer to continue to
employ any number of his workers with a view to compel his workers
or to aid another employer in compelling his workers to accept any
terms or conditions of employment, or with a view to enforce compliance
with any demands made by any employer from any worker. . .
" Strike " includes any cessation of work or refusal to work by
any number of workers acting in combination or under a common
understanding with a view to compel their employer or to aid any
other workers in compelling their employer to agree to or accept any
terms or conditions of employment or with a view to enforce compliance
with any demands made by any workers on any employer2.
The essential point here is t h a t a cessation of work is a lock-out
or strike when it is caused by the efforts of employers or workers
to obtain better conditions. The Rumanian Act adds as a further
condition t h a t the cessation (iock-out or strike is meant) must affect
a t least one-third of the workers. According to the Italian regulations a strike means the cessation of work by at least three workers
in pursuance of a previous understanding.
But legislators have not in every case been content with such
general limitation ; they have also laid down when the cessation
or interruption of work is not prohibited. The Canadian Act, for
instance, specifies t h a t 3 " nothing in this Act shall prohibit the
suspension or discontinuance of any industry or of the working
of any persons therein for any cause not constituting a lock-out
or strike " . The real meaning of such a statement may be seen from
the more clearly drafted Western Australian Act 4, which runs :
Nothing in this section shall prohibit the suspension or discontinuance
(not being in the nature of a strike or lock-out) of any industry or of
1

Section 126 ; see also section 109.
This is the t e x t of t h e West Australian Act ; t h e t e x t of the New South
Wales Act shows no essential differences.
8
Section 56.
* Section 129, subsection 2, first sentence.
2

THE INSTITUTION OP PROCEEDINGS

the working of any persons therein for good cause independent of
an industrial dispute.
According to this Act, on a prosecution for any contravention
of this section. " the onus of proof that any such suspension or
discontinuance is not in the nature of a strike or lock-out, and
that such independent good cause exists, shall lie on the defendant"1.
Another point of interest is that a simple alteration of labour
conditions by the action of one party, employers or workers, is
often regarded as equivalent to the declaration of a strike or lockout. This is the case for instance in Belgium 2 and Canada 3.
The period during which open disputes are prohibited varies.
According to the above-mentioned Acts, Belgian, Canadian,
Queensland, Rumanian, South African and Western Australian
Acts, as also in China 4 and other countries, strikes and lock-outs
are prohibited throughout the period before and during the conciliation and arbitration proceedings and until the moment when it is
recognised that the possibilities of settlement are exhausted. According to the German President's Emergency Order, they are even
prohibited for three days from the publication of the decision of
the " competent conciliation committee ". The Belgian regulations
display this difference, however, that they do not explicitly prohibit
strikes and lock-outs, but attach legal consequences to them
only when premature ; in effect, they support the opponents
of the party which began the dispute 5.
It is remarkable that the above-mentioned German Emergency
Order provides penalties, not for an illegal strike as such, but
only for incitement thereto, while in the case of lock-outs the
action as well as the incitement is punishable.
A number of countries do not prohibit open disputes for the
whole period of the negotiations, but provide only for the observance
of certain time limits before which a lock-out or strike cannot be
legally declared. This is the case for instance in India 6 , New Zealand7
and New South Wales 8 ; in the last-named State this time limit
applies to strikes only, lock-outs being completely prohibited.
The object of stipulating the observance [of such time limit —
usually from a fortnight to a month — before a strike or lock-out
1

Section 129, subsection 2, second sentence.
Sections 15 and 16.
3
Section 57 (cf. New Zealand Act, section 109 (c)).
4
Sections 33 and 34 of the Act of 17 March 1930 {Legislative Series, 1930, Chin. 1 ).
* For these consequences see below, p . 71.
* Section 15.
' Section 126.
* Section 45.
2

GENERAL PROBLEMS

is permissible, is naturally to give the competent authorities an
opportunity to intervene and to settle the dispute by friendly
means.
If no time limit is fixed for the prohibition of open disputes,
there may be a risk of procrastination, either through the remissness
of the conciliation institution or through the obstruction of one
of the parties, which may find this a means of reducing its
opponent's relative strength.
The following provision of the
Canadian Act attempts to avert this danger :
If, in the opinion of the board, either party uses this or any other
provision of this Act for the purpose of unjustly maintaining a given
condition of affairs through delay, and the board so reports to the
Minister, such party shall be guilty of an offence, and liable to the
same penalties as are imposed for a violation of the next preceding
section l .
That is to say, the same penalties as are applied to illegal
strikes and lock-outs.
The Norwegian regulations also deserve
notice, for they include a series of safeguards against procrastination
providing first of all t h a t :
A strike or lock-out shall not be declared before the expiry of the
period of notice, and not in any case until four working days have
elapsed since the date when the notice that negotiations had not been
begun, or that they had been broken off or that the notice to cease
work had been prolonged, was received by the conciliator 2 .
An open conflict is permitted after this period, though the
State or district conciliator may forbid it " i f he considers t h a t
a stoppage of work will prejudice public interests in view either
of the nature of the undertaking or of the extent of the dispute ". If
he believes this to be the case, he is obliged to forbid a stoppage 3 .
I t is also provided, as a safeguard against unconsidered a n d inexpedient prohibitions, t h a t the State conciliator can countermand
a prohibition issued by a district conciliator 4 . After such a prohibition, the competent official is bound to institute conciliation
proceedings immediately. Any party which has not failed to take
part in the proceedings — by refusal to attend or in any other way
— can demand their termination within ten days of the issue of the
prohibition. This demand must be satisfied within a further four
days, and the prohibition is naturally removed at the same time 5 .
1
2
3
4
5

Section
Section
Section
Section
Section

57.
29,
29,
31,
36,

subsection
subsection
subsection
subsection

1.
2.
1, para. 3.
1.

THE INSTITUTION OF PROCEEDINGS

In countries like Italy 1 and certain Australian States — South
Australia 2, for instance — where strikes and lock-outs are forbidden
in general and not only for the duration of the conciliation and
arbitration proceedings, the question of a time limit naturally does
not arise.
The consequences attached by the legislation of different
countries to the infringement of the conditional prohibitions
which have been described are largely of a penal nature, though
some come under the head of civil or labour law. The different
types may also exist side by side. If there are penalties, they
take the form of fines or imprisonment or both.
Penalties are provided for the infringement of the suspensive
prohibition of open disputes in the legislation of Canada, India,
New South Wales, New Zealand, Norway, Rumania, South Africa
and Western Australia and in countries with a general prohibition
of strikes (cf. Italy and South Australia). While Canada3, New
South Wales 4, New Zealand5, Queensland 6 and Western Australia7 provide only for fines, in India 8 , Italy 9 , Norway10, Rumania11,
South Africa12 and South Australia13 imprisonment is also provided
for. The penalties vary greatly in the different regulations ;
the comparatively high fines in the Canadian system have already
been mentioned 14 ; in Australian regulations the maximum fine
is usually £500 for associations and employers and £10-£25 for
workers ; in Italy it is 100,000 lire for employers and 1,000 lire for
individual workers, and in Norway 25,000 kroner for employers
and workers alike. When imprisonment is permitted it is often \ised
only to punish illegal strikes and lock-outs in public utility undertakings, or it may be particularly severe in these cases (cf. Rumania
and Italy). The imprisonment provided for in the different systems
varies from one or two months to two years 15, or even under
particularly aggravating circumstances — disputes in public
1

Section 18.
Sections 99 and 100.
Sections 58-60.
4
Sections 45 (c) and 46.
6
Section 126.
* Sections 86, subsection 2, and 87 (with other penalties).
' Section 129, subsection I.
B
Section 15.
9
Section 27.
10
Section 40.
u
Sections 18 e t seq.
u
Section 22.
u
Sections 99 e t seq.
11
Cf. p . 65.
15
South African Act, section 22.
6 *
2
3

GENERAL PROBLEMS

utility undertakings in which one or more persons are killed —
to three years (Italy). The usual maximum sentence is some
three months' imprisonment, which can — in South Australia
for instance — include hard labour ; while in certain countries
(e.g. Italy) the right to occupy official positions may be temporarily
forfeited.
As a general rule, not only the actual participants in strikes
and lock-outs but also instigators and abettors are liable to fine
and imprisonment, and many Acts (cf. Italy) provide for particularly heavy punishment for such persons. The German Emergency
Order of 10 November 1920 concerning the cessation of work in
undertakings supplying the public with gas, water and electricity
provides for the punishment of participants in illegal lock-outs
and of persons who are guilty of incitement to illegal strikes and
lock-outs1, while participants in illegal strikes are punishable only
if they are guilty of acts of sabotage.
The consequences in civil and labour law which the legislation
of many countries attaches to infringement of the suspensive
prohibition of strikes and lock-outs also deserve mention.
Under the German Civil Code persons guilty of infringing the
much-quoted Emergency Order2 are liable for damages. It may
be assumed that in other countries, too, a party to the dispute
or a third party injured by the infringement of the prohibition,
can as a rule claim damages according to general legal principles,
such injury to third parties being possible particularly in the
case of disputes in public utility undertakings such as gas, water
and electricity works and transport services. This question
cannot be considered further here, as it would call for a detailed
discussion of civil law in the different countries and go beyond
the limits of this study.
When there is civil liability for infringement of the suspensive
prohibition of strikes and lock-outs, it is based on legal principle«
outside the special regulations on conciliation and arbitration ;
but these regulations themselves sometimes provide for measures
based on labour law to guarantee the observance of the prohibition.
Belgium and New Zealand are noteworthy examples.
1

Section 1, para. 2, of the Order.
I t would be beyond the scope of this s t u d y t o enquire here who m a y claim
damages in virtue of the Order ; on this somewhat obscure and controversia!
question, cf. the article by VON H U B : " Streik in gemeinnötigen Betrieben " .
p . 163 of VON KASKKL'S Sammlung von Seminarvorträgen : " Koalitionen und
Koalitionskampfmittel ".
2

THE INSTITUTION OF PROCEEDINGS

I n New Zealand t h e measures relate t o the right of association,
which they tend to limit appreciably. I t must be emphasised t h a t
they affect workers' organisations only, and may, though they
need not, be taken in addition to the imposition of a fine. They
consist in a declaration b y the court which inflicts the fine t h a t
the registration of t h e convicted association is suspended for
such period as it thinks fit, but not for more than two years.
Such suspension has very important consequences. During the
period of suspension, the association is " incapable of instituting
or continuing or of being a party t o any conciliation or arbitration
proceedings under this Act, or of entering into any industrial
agreement, or of taking or continuing any proceedings for the
enforcement of an award or industrial agreement, or of making
any application for the cancellation of its registration ".
Further " the operation of any award or industrial agreement
in force at any time during t h a t period shall be suspended in so
far as the award or industrial agreement applies to persons who
are members of that union or association, or who were members
thereof at the time when the offence was committed in respect
of which the said judgment or conviction was given or obtained,
and also as far as t h e award or industrial agreement applies t o
the employers of any such persons " 1 .
These are very far-reaching powers in the hands of the court,
which enable it under certain circumstances to put a complete
stop to the continued existence of a workers' association. The
importance of such measures justifies the provision t h a t t h e
conviction in respect of which they are taken is subject t o appeal
to the Court of Arbitration on points of fact and of law.
As already mentioned, the Belgian Act does not explicitly
prohibit strikes and lock-outs, but simply attempts t o induce
t h e parties t o make use of all the possibilities of conciliation
provided, in that it supports the opponents of t h e party which
engages prematurely in militant action. I n the case of premature
lock-outs and of strikes, due t o the premature change of conditions
on the part of employers, the object of the regulation is attained
by treating the workers concerned as involuntarily unemployed
and — by granting unemployment benefit — placing them in
a better position to carry on the struggle forced on them by the
employer. I n the contrary case, the workers (or the association
to which they belong) who prematurely go on strike, or alter
1

Section 127 of the Act.

GENERAL PROBLEMS

conditions, lose their right to support from the unemployment
fund and the National Emergency Fund *.
The measures described above are also used as means of
coercion in other respects and will be returned to later as occasion
arises.
The obligation to give notice of proposed action and to apply to
a conciliation and arbitration institution, together with the related
problems dealt with above, called for this comparatively thorough
discussion, for in most cases it entails the first important measure
of compulsion in the proceedings — a suspensive prohibition of
strikes and lock-outs, the observance of which is secured by
penalties and other disadvantages. It need hardly be pointed
out that this is a very important measure, since it limits the
freedom of the parties to engage in militant action at the moment
they consider most favourable. The consideration on which it
is based, namely, that a settlement after the outbreak of an open
conflict is for economic and psychological reasons usually much
more difficult tham before, certainly carries weight. Nevertheless,
it is open to question whether the prohibition of open conflict,
even for a limited period only, is the most efficacious method of
dealing with the difficulty. In any case one point already touched
on must be remembered : an unwise use of the prohibition can
lead to great injustice towards one or other of the parties, which
may, by the tardiness of the proceedings, be deprived of what
would have been at a certain moment favourable chances of success.
That the danger of injustice can be completely averted by suitable
safeguards has been disputed, particularly by the workers, who
have therefore viewed such prohibitive measures with no favourable
eye and frequently opposed them.
It must nevertheless be emphasised that such temporary
prohibition of open disputes is to be sharply distinguished in
principle from a general prohibition of all open disputes combined
with compulsory enforcement of the awards of the conciliation
and arbitration institutions. The former merely serves to ensure
that the institutions will be utilised by the parties to disputes
before they begin hostilities, while the latter deprives them
completely of their freedom to engage in militant action and leads
as a rule to State regulation, of all labour conditions. While in
most countries the legislature has hesitated to engage itself in
these far-reaching consequences — to be described in detail later
1

Sections 15 and 16.

THE INSTITUTION OF PROCEEDINGS

— it has often thought it useful and important to ensure that
parties shall exhaust the possibilities of settlement through the
institutions created for the purpose of maintaining industrial
peace before they are permitted to take the law into their own
hands. It is therefore comprehensible that in the many countries
in which a reform of the conciliation and arbitration system is
now under consideration, the question of the suspensive prohibition
of open disputes as described above is being given considerable
attention. Section 55 of the German Draft Conciliation Order
of 1921, which did not become law, included an important provision
to this effect. It expressly imposed an obligation to apply to
the conciliation and arbitration authorities, and declared strikes
and lock-outs to be illegal before such application and the publication of the award. Particularly severe restrictions were provided
in the case of such action in public utility undertakings and
administrative departments, for which the additional condition
had to be satisfied, that a vote taken by secret ballot should
show a two-thirds majority of employers or workers in its favour 1.
No penalties were provided for, but the application of ordinary
civil law would have resulted in the offending party's unlimited
liability for damages. During the public discussions now in
course in Germany on the reform of the conciliation and arbitration
system, similar ideas are being defended particularly by employers,
but also by economists. The suspensive prohibition of strikes
and lock-outs is described as the " basic safeguard of peaceful
negotiation ", and the most energetic means — the payment of
heavy deposits as security, support of the opponents of the recalcitrant party by statutory prolongation of conditions under the
existing agreement — are advocated for its enforcement2.
It is self-evident that this " basic safeguard of peaceful negotiation " should be made use of where conciliation and arbitration
institutions are set up by collective agreements between employers
and workers. But in itself an infringement of any such provision
of an agreement cannot render the offender liable to punishment.
In such cases, as a rule, only a civil liability for damages arises,
provided that a collective agreement is regarded as a basis for
legal claims, and not simply a " gentlemen's agreement ", by
the law of the country concerned.
1

Cf. Reichsarbeitsblatt, 1921, p . 453.
W E D D I O E N : Einigungs- und Schiedsgrundsatz, p p . 73 and 82 (Munich and
Leipzig, 1930), and the quotation made from the Verhandlungsbericht der Mannheimer Tagung der Gesellschaft für Soziale Reform.
2

GENERAL PROBLEMS

POSITION WHILE CASES ARE PENDING ; PLEAS OF PENDENCY ;
DETERMINATION OF COMPETENCE ; AMENDMENT OF THE ISSUE

Civil law has found a special term for the situation which
arises when proceedings are instituted in a court ; the case is
described as sub judice or pending. This situation has certain effects
on procedure, in addition to which there are usually certain material
consequences under civil law. As was explained 1 above apropos
of the distinction between disputes on rights on the one hand and
on interests on the other, the function of conciliation and arbitration
proceedings is not to validate claims in law but to compromise
between conflicting interests. It follows that a decision on rights
cannot be pending on such proceedings, and therefore the provisions
in civil law connected with the period during which a claim is
pending (liability for penal interest, damages for delayed fulfilment
of contract, etc.) no longer apply. It must, however, be enquired
whether pendency in conciliation and arbitration matters does
not have certain effects on procedure. The question is not of
great significance and it will be sufficient to pass in review certain
more important points which show the difference between these
proceedings and civil lawsuits.
In civil law a plea of pendency can be brought in if during
pendency a party makes the same claim before another court.
In general, it will be necessary to admit this principle in conciliation
and arbitration procedure also. It is not practicable for two
or more cases concerning the same dispute to be pending at the
same time before several bodies. As a rule it will be in keeping
with the spirit of conciliation and arbitration if such a situation
is officially prevented from arising. In practice its occurrence
is most likely where conciliation and arbitration institutions have
been set up by agreement. These as a rule have precedence of
official institutions, which may intervene only if the private
institution has been unsuccessful2.
Certain difficulties may arise in countries like the Scandinavian
States and Germany which make a sharp distinction in their
legislation between disputes on collective interests on the one
hand, and disputes on collective rights on the other, and extend
this distinction to practice. Under such circumstances it is possible
that a dispute on rights — e.g. arising out of the interpretation
of a clause of a collective agreement — may be brought before
1
2

Cf. p . 5.
Cf. pp. 17 et seq.

THE INSTITUTION OF PROCEEDINGS

a labour court and that, while it is pending, the parties apply
for settlement to the competent conciliation and arbitration
authority. A plea of pendency cannot stay the proceedings in
either case, for the objects of the two are not the same ; in the
first case it is the decision of the court on a point of law, the
interpretation of an existing agreement, which is desired, and in
the second, a proposal for a new regulation which shall set aside
the difference of opinion by way of a compromise.
In order to avoid contradictions in the results of the two
proceedings, countries where such overlapping of conciliation
and judicial procedure is possible can easily make the opening
of the one await the close of the other.
It has already been pointed out 1 that there is in general more
flexibility in the procedure and formalities in conciliation and
arbitration then in the practice of civil law. This may also be
remarked in connection with pendency.
First of all there is not, as in civil cases, the principle of
perpetuatio fori — that is, an absolute competence on the part
of the institution before which the case is brought, a competence
which is inalienable despite an alteration in the circumstances
on which it was originally based. On the contrary it is quite
conceivable that a dispute which is pending decision by a local
conciliation committee and which assumes unexpected dimensions
during the proceedings may for this reason be taken over by an
institution with competence over a larger area or a wider range
of subjects. The German State conciliator, for instance, can
act in this way towards a conciliation committee 2. A right of
a similar sort is invested in many Australian arbitration courts,
for they may assign suitable cases to another institution (in
Western Australia the Industrial Board) instead of dealing with
them themselves 3.
Just as the institution which has undertaken a case does not
necessarily remain competent to deal with it, the point at issue
is also not absolutely fixed. In civil law an amendment in the
issue is not permüsible after it has come sub judice. But in order
to achieve a compromise between the requirements of the parties,
which is the object of conciliation and arbitration proceedings,
it is essential that the subjects dealt with may be widened or
narrowed according to the needs of the case and in the interesta
1

Cf. pp. 56 et seq.
S3ction 10, para. 3, of the second Order for the Administration of the Conciliation Order.
'Section 84.
2

GENERAL PROBLEMS

of adjustment. This necessity makes itself felt in practice and,
with one noteworthy exception, it has not been held to call
for special provision. This exception is to be found in Australian
legislation, as may be seen from the following quotations from
the Western Australian and Commonwealth Acts. The Western
Australian provision on the subject runs as follows x :
The Court may at any time before the determination of an industrial
dispute of which it has cognisance allow the amendment, on such terms
as it thinks fit, of the plaint or of any subsequent proceeding.
And the following provisions
are especially significant :

of the Commonwealth Act

The Court may, at any time before the determination of an industrial
dispute of which it has cognisance, allow the amendment, on such terms
as it thinks fit, of the plaint or of any subsequent proceeding.
In making an award or order, the Court shall not be restricted
to the specific relief claimed by the parties to the industrial dispute,
or to the demands made by the parties in the course of the dispute,
but may include in the award or order any matter or thing which the
Court thinks necessary or expedient for the purpose of preventing
or settling the dispute or of preventing further industrial disputes.
The reason for believing t h a t an explicit regulation was essential
is illuminating. I t is this : the arbitration court procedure of these
States is modelled largely on judicial procedure, and therefore
the particular requirements of conciliation and arbitration would
perhaps not have received due consideration if variation from the
rules of judicial procedure had not been expressly allowed on
important points — here, those of alteration in the charge and
limitation of the subject.
I n this connection the freedom of action which New Zealand
and Australian legislation allows to the arbitration courts with
regard to admitting parties to, or excluding them from the case,
should also be noted. The New Zealand Act is particular^
significant for it lays down t h a t " in order to enable a council
or the court the more effectually to dispose of any matter before
it according to the substantial merits and equities of the case,
it may, at any stage of the proceedings, of its own motion or on
the application of any of the parties, and upon such terms as it
thinks fit, by order . . . direct parties to be joined or struck
out . . . " 3

1
Section 71.
* Section 38, A and B .
' Section 113, subsection 1 (a).

CHAPTER V
THE PROCEEDINGS

GENERAL CONSIDERATIONS

The proceedings themselves are that part of the conciliation
and arbitration machinery which includes the hearing of the
parties or their representatives, the interrogation of witnesses
and experts, the taking of statements at the scene of the dispute,
and the examination of any other evidence concerning the facts
of the case and the relative strength of the parties, on which
the conciliation proposals or the decisions of the body dealing
with the ease may be based.
Reference has already been made to the successive stages of
the procedure, which are distinguished one from another for
practical purposes 1 . These are the stages of conciliation and
arbitration, to which a special enquiry stage is sometimes added.
It is obvious that the particular functions of each of these stages
must have an influence on the manner in which the proceedings,
and in particular the elucidation of the facts, should be carried
out. Thus, during the conciliation stage it is essential for the
court or board concerned to obtain as clear an idea as possible
of the comparative strength of the parties as a basis for the
proposals for agreement which it has to make ; no doubt exact
knowledge of the other circumstances of the case — whether,
for instance, an increase of wages in the industry in question is
economically practicable or not — may also be very important
or even indispensable 2. But since at this stage the success of
the proceedings depends very largely on the good-will of the parties
and their desire to come to an agreement, elucidation of the
1

Cf. pp. 10 e t seq.
A distinction is made between examination of the comparative strength
of the parties and of the circumstances of the case, b u t it is n o t forgotten that
these two subjects are not mutually exclusive. There is no d o u b t t h a t the strength
of the parties depends very largely on the industrial conditions of the moment,
and t h a t knowledge of the l a t t e r implies an understanding of the former, and
vice versa.
2

GENERAL PROBLEMS

circumstances must be limited very largely to what they contribute
on their own initiative 1 . This certainly does not prevent the
conciliation authorities from being empowered to call upon the
parties, to compel them to appear in person, and to impose fines
for non-compliance 2. Compulsory evidence, the examination of
books and other such methods are not usually introduced at
this stage of the proceedings.
The proceedings are influenced in the opposite direction as
soon as the stage of arbitration arrives, If the latter is based
on an agreement between the parties — that is, in reality on
their desire to arrive at a settlement — or if the award has simply
the character of a non-binding proposal to them, this influence
is not so marked. But when the proceedings may lead to a State
award without the necessity of an agreement between the parties,
and when such award is or can be declared binding, then impartial
elucidation of the circumstances is of very great importance, all
the more so when there are penal as well as civil guarantees for
enforcement ; and it is less necessary to take the comparative
strength of the parties into consideration if it is to be expected
that the award will be put into execution by the power and prestige
of the State.
In such cases the institution bears a grave responsibility.
The systems which provide for compulsory enforcement of their
awards have attempted to facilitate matters by giving the arbitration authorities considerable compulsory powers and so enabling
them to throw all possible light on the actual facts. Such powers
include the right to compel the parties to give information and
even to produce their books and documents, to proceed to inspection on the spot, to examine witnesses and experts under oath
and if necessary under the threat of punishment, and to acquire
all the relevant information by compulsion if required. The
regulations in Australia and New Zealand are typical examples,
as will be seen later, and the same may be said of those in Italy,
where the procedure of the magistratura del lavoro has completely
taken on the character of that of a court of law.
Finally, the stage of enquiry, which is subject to separate
regulations in Canada, Great Britain and other countries, shows
similar features. This is natural, for its purpose is also a complete
i WEDDIOBN : Einigungsund Schiedsgrundsatz,
pp. 31-32 (Munich and
Leipzig, 1930), very rightly calls attention to this.
2
Cf. section 16 of the German Second Order for the Administration of the
Conciliation Order.

THE PROCEEDINGS

and unbiassed elucidation of the conditions and the drafting of
a report thereupon, on the basis of which the public may form
an opinion and so exercise moral pressure on the parties.
These ideas have been touched on here in a preliminary way
eo as to bring out the connection between the separate points
discussed later, and to facilitate an understanding of the whole.
It must again be emphasised that the boundaries between conciliation and arbitration proceedings are not always sharply
defined in practice, and often merge insensibly one into the other,
as for instance in the German system ; and that the nature of
the conciliation proceedings is frequently affected by the prospect
of arbitration. If the failure of conciliation is to lead directly to
arbitration, it is inevitable that the former proceedings, in respect
of powers for the elucidation of facts, take on features which in
reality belong to the latter. This tendency is particularly marked
in systems which provide for compulsory execution of the awards *.
On the other hand, the complete separation of the regulations
governing the two stages of the proceedings 2 shows that many
systems regard conciliation and arbitration as essentially distinct
one from the other.
For the sake of completeness, mention may here be made of
the frequent distinction between preliminary proceedings, formal
proceedings and supplementary proceedings. Preliminary proceedings are the informal efforts at mediation undertaken by the
conciliator or chairman of the conciliation body ; formal proceedings
are all those which take place before all the members of the conciliation committee, adjustment board or whatever the authority
may be ; while supplementary proceedings — those which take
place after the foregoing — only exist, so far as is known, in
Germany 3. Their purpose is to allow the parties a last chance
to meet and to come to an agreement before the decision, provided
for in German legislation, whether the award is to be declared
binding.
This is a practical distinction but, except in so far as it coincides
with the distinction between conciliation and arbitration referred
to above, it raises no legal peculiarities and therefore needs no
further mention.

Cf. New Zealand Act, section 46, subsection 10.
As in Australia, Belgium, Finland, France, Great Britain, Netherlands,
New Zealand, Rumania and Sweden.
» Cf. also, however, below, p. 106 (section 77 of the Western Australian Act).
2

GENERAL PROBLEMS

PARTICULAR P R I N C I P L E S ; INFORMALITY, OFFICIAL ACTION, INVESTIGATION, THE TAKING OF EVIDENCE, PUBLICITY, ORAL P R O CEDURE, D I R E C T COMPETENCE, R A P I D I T Y

Besides the above-mentioned distinctions between t h e various
stages, the principles which govern the proceedings call for brief
treatment.
Attention was drawn above x to the principle of informality
in conciliation and arbitration systems. The remarks made there
are equally true of the actual proceedings and it is only necessary
to add t h a t conciliation and arbitration procedure is, as far as
form is concerned, much freer t h a n civil procedure, but t h a t this
freedom decreases nearly everywhere with the growth of powers
of compulsion. The most obvious example of this tendency is
the Italian magistratura del lavoro, in which the procedure has
become t h a t of a court of law. The formalities are in fact prescribed
in detail 2, though they still leave much more freedom than is
usual in criminal and civil law. There is thus a close reciprocal
connection between the degree of informality and the nature of
the proceedings ; the stronger the tendency away from conciliation
and towards arbitration — or towards judicial proceedings proper,
as in the case of the magistratura ad lavoro — the more limited
is the application of the principle of informality.
The practical reason for this informality was given above —
the need of making the proceedings as convenient as possible for
the parties, and this consideration carries additional weight in
so far as the success of the proceedings depend on their good-will.
But a more essential reason lies in the very nature of conciliation
and arbitration. As has often been pointed out, its object is not
the application of existing rules of law, but the creation of new
law for the parties. I t is clear that this law-giving function can
only be carried out satisfactorily if the procedure which leads up
to it shows great freedom from formality. This need makes itself
inevitably felt even in countries like Australia, New Zealand and
especially Italy, where the proceedings are more or less assimilated
to those of the ordinary courts, though it is significant t h a t in
these cases the fulfilment of formalities has an added importance.
In the civil law of most countries the principle of action by the
1
2

Cf. p p . 56 e t seq.
Ssctions 68 et ssq. of the Decree of 1 J u l y 1920.

THE PROCEEDINGS

parties is more or less exclusively recognised, that is to say, not
only the institution but also the maintenance of the proceedings
depend on them, there being no principle of initiative on the part
of the court. It has been explained in a former chapter x that
in the opening of conciliation and arbitration proceedings official
initiative is also permitted, and the same is true of their course
and conclusion ; in the Italian magistratura del lavoro provision
is even made for the intervention of the Public Prosecutor—
yet another expression of the principle of official action. Once
the proceedings have been opened at the request of the parties
or by official initiative, only official action can do justice to their
purpose — the maintenance and promotion of industrial peace
in the public interest. To make the steps necessary to the continuation of the proceedings (e.g. the summons of the persons
concerned, witnesses and experts) dependent on the action of the
parties would run counter to this purpose ; and the more the
regulations emphasise the interest of the State in the prevention
and settlement of labour disputes, and permit compulsion for the
attainment of this object, the more striking the contradiction
becomes.
While the principle of official action governs the external course
of the proceedings, the attitude of the conciliation and arbitration
system to the principles of pleading and of investigation determines
the method of limiting the subject of dispute and of establishing
the facts. The principle of pleading in civil law in most countries
is that a court has to base its decision exclusively on the case put
before it by the parties, while the principle of enquiry is that the
institution is not in principle bound to limit itself to what the
parties bring before it, but may investigate facts on its own initiative
and limit the subject of dispute as seems useful and necessary
for the purposes of the case 2. The object of conciliation and
arbitration could not be attained if the principle of pleading were
strictly adhered to ; on the contrary, the institution must be in
a position to go beyond the one-sided information provided by
the persons interested and obtain an independent view of the facts
before it can make the parties practical proposals for a settlement.
The principle of investigation has therefore to be adopted, and this
principle is applied the more completely the more the system
1
2

Cf. p p . 61 et s i q .
Cf., in this connection, the remarks on pendency and the amendment of

t h e ÍSSU3, p p . 7 4 e t Sjq.

GENERAL PROBLEMS

concerned comprises measures of compulsion to secure the enforcement of its awards. The logical basis for this tendency has already
been explained in the remarks on the distinction between the two
stages of the proceedings — conciliation and arbitration x.
With regard to the taking and weighing of evidence, there are
usually definite rules in civil law, some of them very strict. What
has already been said on the principles of informality and investigation makes it obvious that there can be no question of applying
such rules to conciliation and arbitration procedure. There is
usually no explicit provision on the subject in the Acts concerned,
for in view of the nature and purpose of conciliation and arbitration
such may well be considered superfluous. As far as can be discovered
there are, typically enough, provisions of this sort only in the laws
of Australia and New Zealand, for, as has already been mentioned
in a similar connection, the arbitration court procedure in these
countries very closely approaches t h a t of a court of law, in which
the rules of evidence are usually followed on the basis either
of custom or of explicit regulations. The dispositions of the
Australian Commonwealth and Western Australian Acts are the
most characteristic 2 .
They are almost identical, the former
specifying " t h a t in the hearing and determination of every
industrial dispute, the court shall not be bound by any rules
of evidence, but may inform its mind on any matter in such
manner as it thinks just ".
Besides the above-mentioned principles of informality, official
action and investigation which are so characteristic of conciliation
and arbitration proceedings, a number of other principles may be
mentioned. There is no need to discuss them at length, for they
are not so important as the others and also apply in the practice
of civil law.
The principle of publicity is not consistently applied and in
many regulations no mention whatever is made of it. Belgium 3
and Norway 4, for instance, prescribe t h a t proceedings are not to
be public.
I n Germany, only the " preliminary proceedings " — t h a t is
to say, the negotiations between the parties and the conciliator —
1
Cf. p p . 77 et S3q., and W E D D I G E N : Einigungs- und Schiedsgrundsatz, p . 63,
in which this fact is remarked on in another connection.
2
Australian Commonwealth Act, section 25 ; Western Australian Act, section
67 ; cf. also South Australian Act, sections 40, subsection 11 (b), and 41 (g) ;
New Zealand Act, section 82 (j) ; Canadian Act, section 30, subsection 2.
3
Section 13.
4
Section 35, subsection 3.

THE PROCEEDINGS

are not public, while the proceedings before the whole conciliation
committee of the conciliation court are public in principle 1, the
institution being however permitted t o exclude the public if it
regards this step as advisable. Similar regulations hold good in
Canada 2, New South Wales 3 and Western Australia 4 , where the
public may be excluded by the institution or at the request of
one party.
I n Great Britain arbitration proceedings are not usually held
in public, but there is no legislation to this effect 5 .
Though there may be certain exceptions, it is in general true
to say t h a t in systems in which the proceedings resemble or are
regarded as equivalent to those in courts of law, as in Australia
and Italy, the principle of publicity is recognised on the same
grounds as were given for official control of the proceedings, before
courts of law, particularly where measures of compulsion are used.
On the other hand, this need not be the case if the proceedings
have not an authoritative character and when all depends on the
goodwill of the parties and their readiness to come to an agreement.
This explains the customary privacy of the proceedings in Great
Britain, and of the preliminary proceedings in Germany. Such
proceedings resemble diplomatic or political negotiations, and their
success may often be endangered if the representatives of the parties
are hindered by publicity from expressing themselves freely ;
consideration for the reaction on the public would have too great
an influence on the negotiations for a settlement.
As far as can be established, all conciliation and arbitration.
systems recognise the principle of oral procedure ; the parties
set forth the subject of their dispute, their claims and their arguments orally before the institution, and the proposal or award
of the latter is based on these and not on written claims. Since
the foremost object of the proceedings is to bring the parties to
an agreement on the basis of a compromise between their respective
points of view, this principle requires no further justification.
Naturally, it must not be too severely applied to the exclusion
of all other forms of procedure, for it is often necessary for the
1
Sections 2.0 and 21 of the S3Cond Order for the Administration of the Conciliation Order. The " s u p p l e m e n t a r y proceedings" after the award, in which
i t is decided whether the l a t t e r is to be declared binding, are also secret
(section 24).
2
Section 34.
3
Section 69, V.
4
Sections 145, subsection 4, and 146, subsection 5.
5
MACKENZIE : The Industrial Court : Practice and Procedure, p. 15.

GENERAL PROBLEMS

parties, particularly in complicated cases, to tender considerable
written evidence, arguments, etc., which may of course be taken
into account without oral exposition. Even the demand for a
careful written preparation of the case (as in the Italian magistratura del lavoro x) does not run counter to this principle, but
is explained by the fact that these proceedings are organised
on the lines of a court of law and provided with compulsory
powers.
Next, almost all conciliation and arbitration systems recognise
the principle of direct competence, according to which the proceedings, including any necessary giving of evidence, take place before
the court or board itself and not before other bodies acting at
its request or under its instructions. This principle is not apparently
specified in any Act, but it is fully in keeping with the nature
of conciliation and arbitration, in which the personal or psychological influence of the institution occupied with the dispute plays
an extremely important part. This direct influence would be lost
if certain parts of the proceedings were undertaken by subordinate
bodies, but it must be admitted that the more closely the proceedings resemble those of a court of law — as, for instance, in Australia
— and the more the authoritative decision of the tribunal
takes the place of a friendly compromise of interests, the less
important is this direct psychological influence for the purpose of
an understanding between the parties. It is therefore comprehensible that according to the Australian Commonwealth2 and Western
Australian 3 Acts the treatment of a dispute may be passed on
from an arbitration court elsewhere (to the local industrial board
or to a person selected ad hoc) for investigation, taking of evidence
and the drafting of a report. It should be noted in this connection
that according to the German regulations 4, after the arbitration
award has been given the parties may be heard by a designated
body in the " supplementary proceedings " — that is, to decide
whether or not the award is to be declared binding.
The principle of rapidity, which is frequently applied in civil
law, can perhaps also be applied to conciliation and arbitration.
The success of the proceedings is in practice often dependent
on the speed with which they are carried through, and in the
1

Cf. section 74 of the Decree of 1 J u l y 1926 (Legislative Series, 1926, I t . 5),
CE. sections 36 and 37 of the Australian Commonwealth Act.
3
Sections 84 and 85 of the Western Australian Act.
4
Section 24 of the sacond Order for the Administration of the Conciliation
Order.
2

THE PROCEEDINGS

legislation of Canada 1 , Finland 2 and I n d i a 3 rapidity is specified
as one of the particular duties of the competent authority. The
regulations for proceedings before the Italian magistratura del
lavoro also plainly show a tendency in this direction*.
T H E COURSE OF THE PROCEEDINGS ; OBLIGATION OF THE PARTIES
TO A T T E N D ; EXCLUSION OR CHALLENGE OF MEMBERS OF THE
COURT OR BOARD ; MAINTENANCE OF O R D E R DURING SESSIONS ;
ELUCIDATION OF THE FACTS

If the proceedings are to be efficiently and successfully
completed, certain conditions must be fulfilled. First of all, the
parties or their representatives must attend in person ; secondly,
a necessary minimum of confidence in t h e conciliation or arbitration authority can be guaranteed only if partial or otherwise
unsuitable persons can be refused the presidency or membership
of the court or board ; next, the practical course of the proceedings
must be made secure against disturbances by orderly regulation
of the sessions ; and finally, the necessary steps must be taken
to ensure full elucidation of the facts of the case. These four points
will now be considered in turn.
The most important object of the proceedings — agreement
between the parties — cannot be attained if one of the parties
does not attend ; and in every case in which the State not only
puts conciliation and arbitration machinery at the disposal of
disputing persons but also attaches value to the use of such
machinery, even against the will of one or both of the parties,
it must be in a position to compel attendance. This is indispensable
in systems which permit the intervention of conciliation and
arbitration bodies on their own initiative or at the request of a
public authority 5 . There is a risk t h a t compulsion m a y affect
the readiness of the parties to agree, though this depends on the
measures used ; and it is therefore for experience and judgment
to decide in each case whether and to what extent such measures
of compulsion are expedient. Moderation is particularly called
for if the success of the proceedings depends on the voluntary
co-operation of the parties, which would be endangered by the
1

Section 23.
Section 11, subsection 2.
Section 7.
* Cf. in particular sections 76, 80, subsections 3-5, and 84 of the Decree
of 1 J u l y 1926.
• Cf. above, p . 61 e t seq.
7 *
2
3

GENERAL PROBLEMS

careless use of compulsion. Further, while compulsion t o attend
is conceivable, compulsion to negotiate, which is the ultimate
object, is in fact not practicable.
The obligation of the parties to attend is provided for in a
number of countries, though in many cases without penalties
for infringement (e.g. D e n m a r k 1 and Sweden 2 ). Under certain
circumstances it is very important for the parties to attend in
person and not to be represented. Regulations in Germany 3 ,
Italy 4 and the Netherlands 5 take this into account, and in these
countries (in Germany only in disputes limited to a single
undertaking) the conciliator, chairman of the conciliation or
arbitration committee, mediator, arbitrator or labour tribunal
(as the case may be) can insist on personal attendance. Noncompliance is usually punished with a fine. Whereas in Germany
and Switzerland 6 only a disciplinary fine is permitted, in
Australia 7 and C a n a d a 8 the offence is a criminal one and the
fine may be very high ($100 to $500). According to the Netherlands
Act 9 , particularly grave offences may entail a fine of not more
than 60 gulden, and also imprisonment for not more than four
months. This is all the more remarkable in t h a t this Act does
not recognise compulsory arbitration.
Besides the direct compulsion to attend, the legislation of a
number of countries provides for an indirect but very efficient
pressure in the same direction, in that the proceedings may be
carried through even in the absence of one or both of the parties.
This is the case in Italy, where the absence of both parties is no obstacle if the Public Prosecutor instructs that the case be proceeded
with 1 0 . Under German legislation, an award must be given in the
absence of one party if the other party demands i t u . In Norway 1 2 ,
the proceedings continue in t h e absence of one or both of the
1

Section 3, para. 2.
Section 4, para. 2.
Sections 15 and 16 of the second Order for the Administration of the Conciliation Order.
4
Section 23, para. 2, of the Decree of 1 J u l y 1926.
5
Sections 5, subsection 3, 14, subsection 2, 31, 33 and 57.
0
Cf. section 31 of the Federal Factory Act of 18 J u n e 1914 (Basle Bulletin,
Vol. I X , p . 269).
' Western Australian Act, sections 145, 146 (9), and Australian Commonwealth
Act, section 16.
«Section 36 of the Act of 12 J u n e 1925 (Legislative Series, 1925, Can. 1).
9
Section 57.
10
Section 86 of the Decree of 1 J u l y 1926.
11
Section 21, para. 4, of the sscond Order for the Administration of the Conciliation Order.
12
Section 35, subsection 1, para. 2.
2

THE PROCEEDINGS

parties, and in Canada x and New Zealand 2 if without good cause
one party fails to attend or be represented.
Finally, many countries require and accept the evidence of
the parties under oath, and this amounts to compulsory attendance.
More will be said later about the obligation to give evidence 3 .
I t has already been sufficiently emphasised 4 , apropos of the
position of conciliators and assessors, how important it is for
the success of the proceedings t h a t the parties shall have confidence
in the institution. I t is for this reason frequently provided t h a t
under certain conditions persons may be excluded by law from
membership of conciliation and arbitration institutions or
challenged by the parties. I n many regulations the practice of
civil law in respect of the exclusion or challenge of judges is applicable. This is particularly comprehensible in countries such as
Italy, where the proceedings are organised on the lines of a court
of law. The Decree of 1 July 1926 on this subject simply refers
to the Civil Procedure Code for the exclusion or challenge of the
judges and expert assessors 5 . The position is the same according
to the Finnish 6 and Norwegian 7 Acts, though under both t h e
proceedings are sharply distinguished from those of ordinary
courts of law ; the regulations are nevertheless comprehensible,
for they refer to conciliators, acting alone, who must be completely independent of the parties, and whose position is one of
great responsibility. A similar regulation in A u s t r i a 8 may be
explained by the fact t h a t in t h a t country the conciliation boards
also have judicial functions.
The exclusion of a judge from the exercise of his office is provided
for in codes of procedure if he is either a party to t h e dispute or
stands in close legal relation to such party (shares its rights or
obligations), if the proceedings concern a person to whom he is
closely related by blood or marriage, if he is called upon to give
evidence as witness or expert, etc. The challenging of a judge
is permitted for these reasons, as also on the ground of partiality,
i.e. " if there is any reason to justify lack of confidence in the

Section 43 of the Act of 12 June 1925 (1907).
Section 116.
Pp. 90 e t seq.
• P p . 24 et seq.
5
Section 67.
6
Section 5 of the Act of 21 March 1925 (Legislative Series, 1925, Fin. 1).
' Sections 13 and 30.
8
Cf. section 4 of the instructions of 19 May 1923 concerning the Standing
Orders of Conciliation Boards.
2

GENERAL PROBLEMS

impartiality of the judge " 1 . The Netherlands Act 2 provides
for the possibility of challenging chairmen and assessors of
arbitration courts. The provision is in general terms and is thus
widely applicable in practice. It is justified by the arbitrators'
considerable powers with regard to the elucidation of the facts
and the institution of investigations 3. In such cases it must be
possible in practice legally to replace persons who, there is reason
to believe, will not guarantee an impartial treatment of the dispute,
by others in whom confidence may be placed.
The less judicial the position of the assessors, and the more
they resemble representatives of the parties 4 , deputed or proposed
by them as members of a conciliation or arbitration institution,
the less possible it is to apply to them the reasons for challenge
which are provided in civil law in respect of judges. The value
of assessors in such cases is that they are not actual representatives of the parties, but that their duty is to judge the claims
of the parties, at whose request they are acting, in the light of
the facts and to give these claims their full value. A challenge
on the ground of partiality would thus run counter to the purpose
of the proceedings ; in the German regulations on this point it
is only in disputes affecting a single undertaking that an employer
or worker in the undertaking is not competent to act as chairman
of the conciliation and arbitration committee, conciliator in the
preliminary proceedings or assessor and even then he may so
act if the parties are in agreement on the subject. In all other
cases, the regulations do not provide for the challenging of the
assessors, but the chairman may be challenged if doubts arise
which " are based on facts connected with the individual dispute
and calculated to justify lack of confidence in his impartiality " 5 .
Taken as a whole, the examples given show that it is not always
possible to apply the principles of procedure in civil law to the
exclusion and challenging of chairmen, and above all of assessors
of conciliation and arbitration institutions. Such principles can
only be suitably and completely applied in cases where the proceedings are organised as in a court of law. In the much more numerous
countries where this is not the case, such strictness is unnecessary,
1

Sections 41 and 42 of the German Civil Procedure Code.
Section 28 of t h e Act of 4 May 1923.
3
Cf. below, p . 96.
4
Cf. remarks on the position of assessors, p p . 36 et seq.
8
Section 13 of the sscond Order for the Administration of the Conciliation
Order. The wording corresponds in part with section 42 of the German Civil
Procedure Code quoted above.
2

THE PROCEEDINGS

in particular in respect of assessors, who are in practice seldom
challenged on the ground of partiality.
The official in charge of the proceedings — as a rule the
conciliator or chairman of the conciliation or arbitration institution — needs at times certain statutory powers in order to keep
the proceedings free from disturbances and to punish or expel
unruly elements. The more authoritative the proceedings are,
the greater this need ; and consequently it is most apparent in
those regulations which provide for measures of compulsion for
the enforcement of the institution's awards or to some degree
prohibit strikes and lock-outs. On the other hand, the more
the success of the proceedings depends on the good-will of the
parties, the less necessary such regulations are. There is, for
instance, no provision of this kind for proceedings before the
Industrial Court of Great Britain, and indeed it is not even
considered necessary to establish standing orders for this body.
The German regulations 1, apart from making it possible to declare
awards binding, which will be discussed later, are built up in
principle on the voluntary co-operation of the parties ; the
president of the conciliation committee can only fine persons
who are guilty of disturbing the proceedings ; and even such
fines are subject to appeal. Fines, which are obviously simply
disciplinary penalties, are also provided for in the Norwegian
Act 2, though here it is added that in certain cases a penalty
may be imposed under the ordinary criminal code. In Canada 3
the regulations are more severe. An unruly person may be taken
into custody by any officer of the conciliation and investigation
board, expelled from the hall and detained until the end of the
session ; he may also be fined up to one hundred dollars. Similar
regulations hold good for New Zealand4 and Western Australia 5
while the Australian Commonwealth Act 6 provides for much
higher fines (up to one hundred pounds), and the South Australian
Act 7 for imprisonment up to fourteen days for insulting the
court, disturbing the proceedings or other unseemly behaviour.
It is remarkable that in many countries with compulsory arbitra1
Section
Order.
2
Section
3
Section
4
Section
» Section
• Section
' Section

17 of the second Order for the Administration of the Conciliation
41.
37 of the Act of 12 J u n e 1925 (1907).
14.
135.
83.
124.

GENERAL PROBLEMS

tion these steps against direct disturbances are not regarded as
sufficient to safeguard the smooth working of the institution.
New Zealand * and Western Australia 2 have provided for fines
of up to fifty pounds for persons who " shall write, print, or
publish anything calculated to obstruct or in any way interfere
with or prejudicially affect any matter before the Court " 3 . The
Australian Commonwealth Act even provides that " any person
creating a disturbance or taking any part in creating or continuing
a disturbance in or near any place in which the Court is sitting "
may be punished by a fine of up to one hundred pounds or imprisonment for not more than six months, or both 4.
As was explained above 5 in "detail, the function of conciliation
and arbitration is to establish a compromise between the interests
of the parties t o a dispute and create a new basis for their mutual
relations —• t h a t is to say, to make law and not, as in the judicial
settlement of a dispute on rights, to interpret it. The result is
t h a t the elucidation of the facts plays two very different parts
in the two types of procedure. I n a case in civil law the object
is to establish the facts of the case, on which the judge bases his
decision in application of the law ; but in disputes on collective
interests, knowledge of the circumstances is needed to enable
the conciliation or arbitration institution to form an opinion as
to what regulation of the dispute will first be voluntarily adopted
by the parties, or what compulsory solution is likely to be the
most just, if need be with due reference to public interests. I n
the first case, therefore, elucidation of the facts is the basis for a
settlement of the legal position by a judge ; in the second, it
is the basis for the creation of fresh law, whether in the form
of an agreement between the parties or of a solution imposed by
the court or board on its own authority or directly by the State.
This difference arises out of the nature of the two systems and
also exists, though often disguised and less marked in effect,
in cases where it is not clearly formulated in legislation, or where
conciliation and arbitration procedure closely resembles t h a t of
a court of law.
The facts may be elucidated in two ways, first by hearing the
usually contradictory statements of the parties, and then if
1

Section 115.
Section 136.
This is the t e x t of the Western Australian Act, t h a t of the New Zealand Act
being similar.
4
Section 83 A.
5
P p . 2 et seq.
2
3

THE PROCEEDINGS

necessary by interrogating witnesses and experts, examining
books, taking statements and making other investigations, e.g.
into the industrial position of the industry concerned in the dispute.
The hearing of the parties is perhaps even more important
in conciliation and arbitration proceedings t h a n in civil proceedings. As has often been pointed out, national regulations, which
differ so widely on other particulars, agree on this, t h a t the
voluntary agreement of the parties is the first object at which
to aim ; and an oral exposition of their points of view is an
indispensable condition. This is not, as in civil cases, used by
the parties to stake out their legal position, but to obtain an
estimate of the opponent's strength and so of the likelihood t h a t
it will maintain or reduce its claims. The function of the mediating
institution is to find in the expositions of the parties — in which
each will describe its position as imposingly as possible — a basis
for compromise which both may accept and to overcome psychological obstacles to their agreement. I t is noteworthy that under
certain systems this work may be done during the proceedings,
even by means of a direct consultation (by ballot) of the members
of the associations concerned 1 . The position is analogous to t h a t
of a political or commercial transaction which is to be concluded
by the mediation of an impartial third party. Each party needs
the other ; each tries to sell itself as dearly as possible and to
give the mediator and the opponent the impression t h a t the
opponent needs it more than vice versa. At this stage of the
negotiations, when the institution has simply to function as a
medium for psychological compromise, the oral exposition of the
parties is often quite sufficient to elucidate the facts of the case.
I t may then be needless, for instance, for the mediator to know
what the industry in question is actually capable of ; it is enough
for the exercise of his functions, which are purely psychological,
to hear the ideas and explanations of the parties on the subject.
The position changes as soon as the mediating institutions
are no longer limited to psychological assistance and persuasion,
but begin to exert, according to the various methods of the
particular systems, some form of pressure on the parties in the
direction of a particular settlement. As this pressure increases
so also does the part played by the conciliation or arbitration
authority in the eventual settlement and with it t h a t authority's
responsibility. I t can only bear such responsibility if, besides
1

Cf. section 56 D of the Australian Commonwealth Act.

GENERAL PROBLEMS

what it may learn of the psychological position from the exposition
of the parties, it is given means of impartially elucidating the
facts — means which correspond to the scope of its functions.
The change from the former to this latter position often passes
unnoticed and becomes evident only when the mediating institution sets in motion official enquiries on the industrial position
and the labour market, and attempts to influence the parties
by disclosing the information it has obtained. A visible turning
point is provided when a court or board is explicitly given the
function of investigating conditions in the industry, in order to
influence the parties towards agreement on a given basis by
publishing the information it obtains. Finally, there is a complete
reversal of the situation in the case of systems which, if voluntary
conciliation fails, provide for compulsory settlement by the conciliation and arbitration bodies or other competent authority, and
must, therefore, allow the latter wide powers for the exercise
of this function — for the interrogation of witnesses, the taking
of statements on the spot, etc.
Thus, the more the responsibility for the creation of the new
legal relation between the interested person passes from those
to whom it has to apply on to the shoulders of the conciliation
and arbitration bodies, the more impossible it is for the latter
to be content with a knowledge of the psychological factors
influencing the parties, and the more obviously it becomes necessary
for them to elucidate the facts. Systems which provide for
compulsory execution of the decisions arrived at during the
proceedings thus find it essential to arrange in detail for the introduction of the same principle into the preliminary stages — that
is to say, to give the conciliation and arbitration bodies the means
of establishing the facts by compulsion if need be.
If the manifold provisions of national conciliation and arbitration legislation dealing with the elucidation of the facts are
passed in review, the most frequent impression gained is that
the legislators have groped their way step by step without always
finding a satisfactory or final solution.
The difficulties begin as soon as the system permits measures
of compulsion for this purpose, and vary with the degree of
compulsion. The legislator must decide how far he may go in
the compulsory investigation of the economic or technical secrets
of an undertaking, without running counter to the principle of
.the independence of private industry, which is still nearly everywhere regarded as sacred, despite the modern development of

THE PROCEEDINGS

the capitalist system and the many limitations and obligations
it has brought with it. I t is in principle the same problem which
is raised in more general and obvious form by the question of the
compulsory imposition of awards in collective disputes, and will
therefore, be discussed once more in connection with the latter
in the final chapter on the principles of conciliation and arbitration 1.
The above general remarks make it possible to classify the
various regulations concerning the elucidation of the facts. They
may be conveniently divided into four groups.
The first group includes the regulations in which the proceedings
depend solely on the good-will of the parties, while the mediating
institution limits itself in the main to overcoming psychological
obstacles to an agreement, without intervening in an authoritative
way itself. The systems in Great Britain (the Industrial Courts
Act) — excepting the enquiry procedure, which will be mentioned
later — Denmark, Finland, Sweden and Germany belong t o this
group. In all these countries the hearing of the parties is the
principal method of elucidating the facts, other means in some
cases not even being mentioned. When mentioned, they are
obviously regarded as of less importance, and in any case depend
on the acquiescence of the parties. A guarantee, in the shape of
measures of compulsion, t h a t the parties will provide information
or that third parties will give evidence or put their expert knowledge
at the disposal of the institution, is not recognised in these systems.
The regulation in Sweden is typical and runs as follows 2 :
The negotiations . . . shall, in the first place, have the object
of bringing about an agreement in accordance with the offers or
proposals which may be made by the parties in the course of the
negotiations. . . . The parties shall make it their business, at the
request of the conciliator, to give him extracts from the accounts and
other documents together with statistical data, and other facts with
which the dispute is concerned, and also to grant him access to the
workplaces concerned, in so far as this is necessary in order that he
may have a sufficient basis for coming to a decision on the dispute.
The legislators therefore regard direct relations between the
conciliator and the parties as the most important part of the
proceedings. The elucidation of the facts in other ways is " the
business " 3 of the parties — t h a t is to say, they are subject only
» Chapter V I I , p p . 130 e t seq.
Sections 6 and 7 of the Act.
* The English translation — " i t shall be the d u t y of the parties " — in the
Legislative Series is, in this respect, not quite accurate.
2

GBNEEAL PEOBLBMS

to moral pressure, which can however be very effective, for the
conciliator may draw unfavourable conclusions from the refusal
of a party to assist him with information. Similar provisions
are in force in Finland 1, and the German regulations too belong
to this group. They specify t h a t " the points at issue and the
facts needed to judge them are to be elucidated by hearing the
parties ". Only when this seems advisable may the adjustment
board " make official enquiries, instruct the parties to submit
documents in support of their claims, and hear such witnesses
as the parties bring " 2. I t deserves emphasis t h a t the German
Act avoids any compulsion with regard to the elucidation of the
facts, although as is known, it provides under certain conditions
for a declaration that the award imposed on the parties is binding
in civil law. I t differs in this respect, as will be seen from the
subsequent discussion on the fourth group, from other systems
which recognise the compulsory imposition of decisions, though
in most of these compulsion is carried further and has penal sanctions ; and clearly it may thus be grouped with those which attempt
to keep to the principle of voluntary agreement between the parties
and which therefore have analogous provisions on the elucidation
of the facts. The latter thus remains dependent on the voluntary
co-operation of the parties.
The Swiss Factory Act makes it compulsory for all parties
called on by a conciliation institution to attend, participate in
the proceedings and give evidence, though this is guaranteed by
disciplinary fines only 3 . I n this respect the Act belongs to the
transition stage between the first and second groups, the latter
including the systems which do not recognise compulsion in the
execution of awards, but consider it advisable to give the mediating
— and in particular the arbitration — bodies wider powers with
regard to the elucidation of the facts. The principal systems
belonging to this group are those of the Netherlands and Norway,
and t h a t for the settlement of disputes on the railways in the
United States under the Act of 20 May 1926*.
According to the Norwegian Act the conciliator has the same
powers for the elucidation of the facts as the Labour Court, whose
procedure is regulated by the same Act, with the exception t h a t
1

Sections 9 to 11 of the Act.
Section 21, para. 2, of the second Order for tho Administration of the Conciliation Order.
3
Cf. footnote 6, p . 86.
* Legislative Series, 1926, U.S.A. 1.
2

THE PROCEEDINGS

he cannot put witnesses and experts on oath. Witnesses and
experts who have been regularly summoned and who, without
sufficient reason do not appear, are fined or made liable for the
costs arising out of their absence. The Act also makes it compulsory, on pain of a similar penalty, to submit original documents
and empowers the conciliator to investigate at the scene of the
dispute and to acquire information in other ways 1. The board
of arbitration under the American Act has similar powers, and
can also call on the assistance of the courts if necessary 2, but
it must not be forgotten t h a t this board is established, not by
official initiative, but by agreement between the parties, who
thus show their willingness to submit to eventual measures of
compulsion. Finally, the Netherlands Act includes detailed
provisions concerning compulsion for the elucidation of the facts 3 .
Witnesses and experts summoned to proceedings before the
conciliation board, who fail to appear without good reason, are
liable to a fine of up to sixty gulden if an interrogation under
oath is not intended ; while a considerable measure of compulsion
may be used in the proceedings before the arbitration court,
though these can only be instituted on agreement between the
parties. Persons summoned to appear, whether parties to the
dispute, witnesses or experts, who fail to do so without good
reason or refuse to give the information demanded of them, are
liable in certain circumstances to imprisonment up to four months.
Persons who withhold books, documents, etc., when required
to show them are even liable to imprisonment, up to six months,
and a fine, up to one thousand gulden. Not only witnesses and
experts but also, remarkably enough, persons concerned in the
dispute may be interrogated under oath 4.
These severe regulations, in particular the right to put even
the parties to the dispute on oath, may be explained by the fact
that as a rule arbitration is used in disputes which closely affect
public interests and are therefore no longer a purely private
issue. The provision that the Government conciliator, whose
co-operation is required for the opening of arbitration proceedings
under the Act, shall refuse such co-operation " i f he does not
consider the dispute sufficiently important ", also tends in the
? Sections 19, 21, 22, 35 and 43.
Section 7, subsection 3 (h).
Sections 14, subsection 2, and 57, subsection 1.
4
Sections 31, 33, 34, 57, subsections 2 and 3 ; cf. also p p . 96 and 98 (investigation proceedings).
2
3

GENERAL PROBLEMS

same direction 1. The power to put the parties upon oath and
the right of the parties to be so heard are also to be found in the
systems belonging to the third and fourth groups ; they a e in
fact inherent in the nature of these systems, as will be seen below.
Besides proceedings before the Government conciliator alone,
the conciliation council and the arbitration court, the Netherlands
Act also provides for separate investigation proceedings, and
thus forms the transition stage from the second to the third group
of systems, those which provide a special procedure for the elucidation of the facts. Among others, Canada, Great Britain, India
and the United States (the above-mentioned Act on labour disputes
on the railways) also provide for such procedure. It is worthy of
note that investigation proceedings also take place in many
countries which do not specifically provide for them. In Germany
— to give one example only — committees of experts have
repeatedly been set up in recent years, usually on the basis of an
agreement between the parties, and subsidised by the State ;
they have dealt with such particularly complicated matters as
the economic position of the Rhine shipping companies and the
transition from the two-shift to the three-shift system in lignite
mines 2. The importance of such investigation has already been
briefly referred to 3 ; but a few supplementary remarks will not
be out of place here.
Investigation proceedings established by law were originally
a peculiarity of the systems of Canada and Great Britain, and are
still, as far as can be discovered, most applicable to Englishspeaking countries. They are a natural outcome of the principles
of these systems, which reject State intervention in the adjustment
of labour conditions and allow the State to act only as mediator
in disputes, unless the parties call it in as arbitrator. The consequent complete dependence on the parties' will to agree must at
times cause dissatisfaction, particularly in important cases which
closely affect the public interest. In English-speaking countries
great weight is attached to public opinion, and so it is regarded
as desirable to make use of its influence in the adjustment of
disputes. A way of permitting the public to form an opinion had
therefore to be found, and the means chosen was the publication
of a report by the competent authority (conciliation institution,
1

Section 22, subsection 3 (a).
Cf. SITZLER : " Soziale und wirtschaftliche Bedeutung der staatlichen Schlich.
tung " , in Neue Zeitschrift für Arbeitsrecht, 1930, col. 15.
3
P p . 20 et s^q.
2

THE PROCEEDINGS

board of enquiry, etc.) on the causes of the dispute and the technical
and economic possibilities of a particular settlement. Naturally
the composition of such a report depended on an impartial investigation of the facts, which would ensure the enlightenment of the
public by means of trustworthy information and avoid inaccuracies
entailing injustice to one or other of the parties. This scheme
permitted the maintenance of the principle of voluntary participation in conciliation and arbitration proceedings without preventing the exertion by public opinion of a certain — sometimes
very efficient — pressure, to the general advantage.
The success of such investigation proceedings depended on
and therefore justified the introduction of certain measures of
compulsion for the elucidation of the facts ; and under the
British Industrial Courts Act and the Canadian Industrial Disputes
Investigation Act, such measures are permitted. In the British Act,
the competent Minister may make rules regulating the procedure
of any court of enquiry, including rules as to summoning of
witnesses, administration of the oath and submission of documentary evidence 1 . The Canadian Act clearly specifies the
possibility of compulsion. A board of conciliation and investigation
has, even without special investiture by the Minister, the powers
of a court of record in civil cases — that is, " it has all the powers
of summoning before it and enforcing the attendance of witnesses,
of administering oaths, and of requiring witnesses to give evidence
on oath or on solemn affirmation . . . and to produce such
books, papers or other documents or things as the board deems
requisite to the full investigation of the matters into which it is
enquiring. . . . " It has also far-reaching rights with regard
to investigation at the scene of the dispute. Non-compliance
(e.g. failure of a witness to attend or obstruction of the board
or its representatives during investigation) may be punished by
a fine of up to $100 2. It is important that, as under the Netherlands
Act, either party may give evidence and can be compelled to do
so 3. It is only logical that in matters of great general interest the
public shall at a later stage be given the opportunity of forming
an opinion ; as has been pointed out, the question is no longer
private but public, and the parties themselves must assist in its
elucidation and satisfactory settlement. The Netherlands Act

Section 4, subsections 4 and 5.
Sections 30 t o 32, 36, 38.
" Section 33.
2

GENERAL PROBLEMS

also provides for far-reaching means of compulsion in the investigation proceedings ; obstruction may be punished by a fine of
up to 1,000 gulden and even imprisonment for as long as six
months 1. Similar regulations are in force in India, where the
proceedings are in many respects expressly made to resemble
those of Indian criminal law 2. On the other hand, the corresponding provision of the above-mentioned American Federal Act
makes no reference to compulsion 3.
Investigation procedure appears to have rendered good service,
particularly in Canada 4, and will perhaps play a part in the future
development of conciliation and arbitration 5. In the intention
of the British and Canadian Acts, the procedure is to a certain
extent an end in itself, for it terminates when the report is submitted
and published 6. If the effect of the latter is that the parties come
to an agreement under the pressure of public opinion, then the
object has been fully attained ; if not, it need not be completely
useless, for it may be used as a basis for any further conciliation
or arbitration proceedings possible under the legislation of the
country concerned. Once such a report has cleared the principal
points under dispute of conflicting opinions and set them forth
impartially, the new proceedings and any award given will often
have particularly bright prospects of success and acceptance by
the parties.
The fourth and last group comprises the systems which,
because they allow compulsory imposition of the decisions of the
mediation, arbitration and other bodies and the enforcement
of such decisions by means of penalties or civil liabilities,
are logically bound to provide corresponding compulsion for the
elucidation of the facts. There is indeed a logical connection
between the use of compulsion for these two purposes. As has
often been pointed out, the responsibility for decisions in such
systems is very grave, and there is a correspondingly grave need
for awards to be based on an impartial and expert elucidation of
the facts. This becomes all the more evident when it is remembered
that if the State intervenes by authority in the settlement of
1
Cf. sections 45 to 50, particularly 47 and 49, a n d section 57, subsection 3.
Cf. also, p. 96.
2
Cf. section 9, subsection 2 (c).
8
Section 10.
4
Cf. monograph on Canada.
6

Cf. for & r m a n y SITZLER, op.

cit.

Cf. section 5, subsections 2 and 3, of the British Act (on submission to
Parliament) and section 29, subsection 1, of the Canadian Act.

THE PBOCEBDINGS

labour disputes, it acts so to speak as a law-giver, and that the
" laws " which fix binding conditions for the parties cannot be
correctly drafted and executed unless the conditions to be regulated
have been elucidated as fully and impartially as possible. The
provisions in question in most of the Australian States, New
Zealand and Italy arose indubitably out of considerations of this
sort 1 .
Frequently the right of the competent institution to do all
it considers advisable and necessary for the elucidation of the facts
is expressly specified. The right to take evidence by compulsion,
and to put witnesses on oath, far-reaching powers with regard
to investigation at the scene of the dispute and the submission
of books, accounts and other documents, are found repeatedly,
with minor variations. It is comprehensible, for the reasons
explained in the discussion on the second and third groups, that
certain Acts permit the parties to be called and put on oath, and
even that, as parties to the dispute, they have the right to be so
heard. The usual penalty for non-compliance with the regulations
on the elucidation of the facts is a fine up to £20 (or even £50) or
imprisonment up to one month. The regulations in New South
Wales, 2, New Zealand 3, South Australia 4 and Western Australia 6
are particularly characteristic of the fourth group of systems 6, and
an interesting provision of the Australian Commonwealth Act 7 also
deserves mention ; it empowers the court to " summon any person ",
whether connected or not with the industry in question, if it
considers the attendance of such person desirable.
These are very far-reaching powers, and certain States have
thought it necessary to ensure that the compulsion to give information on business and professional secrets, income, expenses,
capital, etc., will not be abused. In proceedings before the New
Zealand council of conciliation (though not before the Court of
Arbitration), " no person shall be bound at any enquiry before
the council to give evidence with regard to trade secrets, profits,
losses, receipts, or outgoings of his business, or with respect to
his financial position, or to produce the books kept by him in
1
For the regulations in Germany, cf. above, p . 93. Germany was included
in the first group.
2
Cf. sections 33 t o 35.
3
Cf. sections 46, 82 and 120.
4
Cf. section 40 (b).
6
Cf. sections 69, subsections X I to X I V , and 75.
• The Rumanian Act also permits measures of compulsion (section 31).
' Section 16 A (penalty, £500).

GENEEAL PROBLEMS

100

connection with his business " x. If any person nevertheless desires
to give evidence on these subjects, he may do so, if the conciliation
commissioner thinks fit, in the presence of the conciliation commissioner alone, sitting without assessors. In Western Australia
" no evidence relating to any trade dispute, or to the profits or
financial position of any witness or party, shall be disclosed except
to the court, or published without the consent of the person
entitled to the trade secret or non-disclosure " 2. Infringement
of this regulation may be punished with a fine of £100 or three
months' imprisonment with or without hard labour. The Commonwealth 3 and South Australian 4 Acts contains similar provisions. In the proceedings before the magistratura del lavoro in
Italy, " except with the consent of the parties, evidence of the
financial position of the undertaking and of costs of production
shall not be given otherwise than by means of documents produced
by the parties or published, or by means of the cross-examination
of the parties, an enquiry on the spot, or the evidence of expert
citizens not belonging to the undertaking " 5.
The Queensland Act contains a provision according to which
the Governor-in-Council may appoint an actuary or statistician
to assist the Court of Arbitration in its elucidation of the facts by
means of a statistical report on the economic and other circumstances
of the case, or on occasion to provide the statistical data necessary
for the elucidation of an existing dispute and, which is of particular importance, to give his opinion on the probable economic
effects of an award for the community in general and for the
industry concerned in particular 6.
That is the last important point in this chapter. Besides a
thorough understanding of the situation of the industry concerned
in the dispute, which is the object of elucidation in the actual
proceedings, reliable information on the general industrial and
social circumstances is of great importance. The matter is not
usually dealt with by legislation, but there is no doubt that in
practice it deserves the greatest consideration. In Germany,
to give one instance only, the conciliators are summoned to regular
discussions on the industrial and social situation at the Federal
1
2
3
4
8
0

Section
Section
Section
Section
Section
Section

46, subsections 11 and 12.
75 (6).
85 (penalty, £500 or six months' imprisonment).
41.
83 of the Decree of 1 J u l y 1926.
9 of the Act of 23 December 1929.

THE PROCEEDINGS

101

Ministry of Labour. The statistical treatment of economic events
is also making constant progress ; and it is clear that the facts
thus obtained must be made available for all the bodies competent
to deal with arbitration and conciliation, in order to facilitate the
execution of their very responsible functions 1.

1
Cf. the following works on the elucidation of the facts : " Fact-Finding
in Labour Disputes " , in Proceedings of the Academy of Political Science, Vol. X I I I ,
No. 1 (New York, 1928) ; GROTE : " Beweisverfahren und Schlichtungswtsf n " ,
in Neue Zeitschrift für Arbeitsrecht, 1924, cols. 527 e t seq. ; SCHICK : " Die Mittel
zur Erforschung der Wahrheit im Verfahren vor der Schlichtungskammer " , in
Arbeitsrecht und Schlichtung, 1929, cols. 41 e t seq. ; K I E I N D I E N S T : " Die F<stBtellung der wirtschaftlichen und sozialen Tatbestände im Schlichtungsverfahren",
in Soziale Praxis, 1928, cols. 984 et seq. ; NONNENMANN : Die Mittel zur Erforschung von Tatsachen im Schlichtungswesen (Berlin, 1931).

•

CHAPTER VI
THE CONCLUSION OF THE PROCEEDINGS

Only the case of disputes actually dealt with by the conciliation
or arbitration authority will be discussed here. This implies the
passing over of all cases in which the matter is not taken up —
often for formal reasons — or in which it is dismissed, sometimes
even before the proceedings have actually begun, either because
the parties are not qualified to appear 1 or, as is possible in many
States 2, because the matter lacks importance, or again because
the original application does not appear to be justified.
Once the dispute has been dealt with on its merits there are
two main possibilities for the conclusion of the proceedings. One
is that an agreement may be reached while they are still in progress
without a formal proposal for conciliation or an award having
to be made ; the other, that the institution may make such a
proposal or award, in which case three further eventualities,
emerge. The parties may submit the proposal or award in advance
or decide the question of acceptance subsequently, or again,
the award may be legally binding or can be made binding. The
first solution, that of agreement of the parties during the proceedings without the intervention of a formal proposal for conciliation or award, is naturally the first object to be aimed at. The
problems of practical importance to be discussed here arise in
the second case, with its three possibilities—that is to say, when
a formal proposal for conciliation or award is made.
First of all, the means of arriving at the proposal or award,
the voting procedure and the cost of the proceedings deserve
attention ; next come the form, grounds and period of validity
of the proposal or award ; then, the legal nature and scope of
the decisions will be examined, and the connected question of
the methods of enforcing them ; and finally, the question of the
ordinary and extraordinary legal remedies against the decisions
of conciliation and arbitration institutions will be briefly dealt
with.
1

Cf. above, pp. 44 ot seq.
Western Australia, section 69, I , Australian Commonwealth, section 38 (b),
New Zealand, section 85, Canada, section 49, and cf. above, p p . 59 e t seq.
2

THE CONCLUSION OF THE PROCEEDINGS

MEANS

OF A R R I V I N G

ARBITRATION

PROPOSALS

FOR

AWARDS ; VOTING, T I M E

CONCILIATION

103

AND

L I M I T AND COST OF

PROCEEDINGS

I t is provided in t h e systems of several countries — e.g. Australia \ Belgium 2 , Canada 3 , Germany 4 , the Netherlands 5 and
R u m a n i a 6 — t h a t the award shall be voted by simple or absolute
majority of t h e members of the institution. When no explicit
regulation is made — and this is no uncommon circumstance —
it may be assumed t h a t a simple majority is necessary and sufficient7
as is the case in Austria, Great Britain and Italy. On the other
hand, many Acts, remarkably enough, do not make it necessary
for all the members of the institution to vote in order to constitute
a quorum. For instance, the British Minister of Labour can
make rules " for enabling the Court or any division of the Court
to act notwithstanding any vacancy in their number " 8 . Similar
regulations govern the procedure of the New Zealand conciliation
councils : " the power and functions of the council " — t h a t is
to say, particularly the right to make proposals for conciliation —
" shall not be affected by any such vacancy 9 in the number of
assessors " 1 0 . I n New Zealand u and Western Australia 1 2 the judge
and at least one other member form a quorum for the holding of
a sitting of the court and the issue of an award. In order to prevent
the absence of an employers' or workers' assessor from reacting
unjustly on the prospects of one side or the other, the Queensland Act provides t h a t the assessor who is present may vote on
behalf of the one who is not 1 3 . I t is not clear on what considerations
these regulations on the constitution of a quorum are based. I t
may have seemed advisable, in view of the circumstances in the
countries concerned, to use this form of pressure, to induce
1

Commonwealth Act, section 18 A, subsection 3.
Section 14.
3
Industrial Disputes Investigation Act, section 46.
4
Section 21, para. 5, of the Sjcond Order for the Administration of the
Conciliation Order of 29 December 1923.
6
Section 37 (arbitration courts).
' Section 24, para. 1.
' But in New Zealand, for instance, unanimity of the assessors of the conciliation council is necessary for a recommendation : section 54, subsection 2.
8
Section 3, subsection 1.
8
For instance, through death, resignation, inability to act due to sickness, etc.
10
Section 45, subsection 3.
11
Section 83, subsections 1 and 2.
12
Sections 76 and 77.
11
Section 27, subsection 7.
2

104

GENERAL PROBLEMS

workers' and employers' members to co-operate actively1. In any
case, the necessity of ensuring that a decision should be made
no doubt played a part.
Certain Acts provide for the case in which no decision is supported by a majority of the court or board by empowering the
chairman to issue a decision even against the opinion of all the
other members. Such regulations are justified only if the structure
of the system concerned or the nature of the body makes a proposal
or award necessary under any circumstances. Two such cases
seem possible.
In systems in which everything depends on the voluntary
agreement of the parties, and which do not recognise compulsory
enforcement of proposals or awards ; such a regulation is apposite
only where the case has gone to arbitration, whether based on
previous agreement or on law. In such circumstances a decision is
necessarily expected and required, for usually the parties have implicitly or explicitly accepted it in advance. The British Industrial
Courts Act characteristically says 2 : " Where the members of the
industrial court are unable to agree as to their award, the matter
shall be decided by the chairman acting with the full powers of
an umpire " 3.
In systems of an authoritative sort, such " one-man awards "
seem particularly natural ; for if the system is such that the State
may, in certain circumstances, intervene forcibly in the settlement
of labour conditions, it must also ensure that the issue of an award
shall not be prevented by the employers' or workers' members of
the institution. Two examples may be given :
The Rumanian Act on collective labour disputes, according to
which arbitration is in certain cases obligatory, the enforcement
of the award being guaranteed by civil and criminal sanctions 4 ,
lays down that " in default of a majority, or in the event of both
or either of the parties refusing to send representatives to the
arbitration commission, the award shall be issued by the
president "t5.
The German regulations are particularly instructive on this
point ; as is well known, they are based on Emergency Orders,
and lay down that an award may be declared binding under certain
conditions which will be discussed later. For years it was the
1

For more detailed discussion on this question, cf. above, p p . 46 et soq.
Section 3, subsection 4.
This case has apparently never arisen in practice.
* Sections 16, 25, 32.
5
Section 24, subsection 2.

THE CONCLUSION OF THE PROCEEDINGS

105

practice " in cases where more than two opinions were held at the
vote, none of which was supported by more than half the votes",
and it was found impossible " to obtain a majority of the votes in
favour of one opinion ", for the opinion of the chairman to be
given as the award of the conciliation committee or court ; in
other words, a " one-man award " was issued. A decision by the
Federal Labour Court then declared that the provision of the
Administrative Order of the Federal Minister of Labour, on which
this custom was based1, was invalid 2, and since then no award has
been possible in these cases ; nor, therefore, can there be any
question of having it declared binding by the conciliator or the
Federal Minister of Labour. In normal times the danger that a
case may be dealt with and no decision given does not seem to
have caused much inconvenience, and may even have had the
wholesome effect of encouraging employers and workers on the
conciliation committee and court to co-operate actively and of
increasing their sense of responsibility. But during the serious
depression of 1930, which disastrously accentuated the points at
issue between the parties to disputes, it was found necessary, and
consistent with the structure of the whole system, to adopt a
regulation, in the shape of an Emergency Order, again making it
possible to issue an award against the votes of the employers' and
workers' assessors, an award which, in the conditions defined by
law, the Federal Minister of Labour may declare binding. It would
have amounted to the renunciation by the State of one of its most
important weapons, the power to declare conciliation and arbitration awards binding, if, in particularly critical cases, the very
cases for which it was invested with such powers, it had left the
parties to themselves and not guaranteed an award on which
to base a compulsory settlement of the dispute through the declaration that the award was binding. But the new Emergency Order
does not simply reintroduce the original custom ; it gives the
Federal Minister of Labour the power, under certain circumstances
and if the step is regarded by the Federal Government as urgently
necessary in the interests of the State, to instruct the conciliator
to co-opt two additional impartial assessors into the conciliation
court, besides those who already represent the employers and
workers. " If, during the proceedings of the conciliation court or
at the final vote, the president ascertains that it is neither possible
1

Section 2 1 , para. 54.
INTERNATIONAL LABOUB OFFICE : International
Labour Law, 1929, Germany, No. £4.
2

Survey of Legal Decisions on

106

GENERAL PROBLEMS

to induce all the members representing the employers and the
workers to give their opinion nor to obtain an absolute majority,
then the conciliator and the two impartial members shall give the
award . . . by majority of votes " 1. In this way an award can
always be issued in any matter of real public importance, and if
necessary the Federal Minister of Labour may declare the award
binding2.
In countries whose conciliation and arbitration systems are
definitely authoritative, such as Australia and New Zealand,
regulations of this sort are not necessary, for the arbitration courts
proceed on lines similar to those of courts of law, and unless there
is some objection to the proceedings inherent in the case, a decision
must naturally be arrived at 3. The regulations in certain countries
on the voting when members of the courts are absent 4, which
have already been mentioned, also ensure the issue of an award.
In the proceedings before the Italian magistratura del lavoro, which
is in every way similar to a court of law, difficulties of this sort
cannot arise, since the State itself can bring an action through the
Public Prosecutor 5. Western Australia has a very remarkable,
and probably under certain circumstances very valuable, regulation
on the subject. The Couit first of all records its decision in the
form of minutes, concerning which further discussions are held with
the representatives of the parties. " As the outcome of such . . .
discussion . . . it shall be open to the court in its absolute
discretion to vary, or amend, the terms of such minutes before the
same are actually issued as an award of the court. 6 "
A number of Acts provide that the minority of a conciliation,
arbitration or investigation institution may express their opinion
in a report. Such action is usually not permitted in compulsory
1
Order on the settlement of industrial disputes of public importance issued
by the Federal President on 9 J a n u a r y 1931 (Reichsgesetzblatt, I, p. 1). For
details, cf. also the monograph on Germany and the articU s by JOACHIM in Reichsarbeitsblatt, 1931, No. 3 ; FLATOW : Neue Zeitschrift für Arbeitsrecht, 1931, No. 2 ;
N Ö R P F L : " Staatlicher Lohnabbau durch Unparteiische Schlichtung " , in
Gewerkschaftszeitung, 17 J a n u a r y 1931.
2
I t was originally provided t h a t the period of validity of the Order should
end on 31 J u l y 1931, but the Order of 27 September 1931 has prolonged it
Reichsgeselzblatt, 1, p . 513).
3
I t is, nevertheless, interesting t h a t in New Zealand (section 153) the court
can refuse to issue an award if it is of opinion t h a t for some reason this is the
correct course.
4
Cf. above, p . 103.
6
Section 68, subsection 2, of the Decree of 1 J u l y 1926.
8
Section 77 ; cf. also in this connection section 57 of the New Zealand Act
and the remarks on the declaration t h a t an award is binding under the German
system, p p . 115 et seq.

THE CONCLUSION OF THE PROCEEDINGS

107

systems. The reason for this is obvious in systems where the
proceedings are based on those of a court of law (in Australia,
New Zealand and Italy), and the decisions of the competent
institutions therefore partake of the nature of legal judgments.
Part of their authority would be gone if it was made public that
only a certain number of the members of the institutions supported
them. The same is true of systems whose proceedings are not
based on those of a court of law, but whose proposals for conciliation or awards may, in certain circumstances, be declared binding
or compulsorily enforced (Germany and Rumania). Regulations for
the submission of minority proposals and reports are therefore to be
found only in systems which are based on agreement and recognise
no compulsory enforcement of awards ; they apply most frequently
to investigation proceedings1. The regulations in Canada 2 (board
of investigation), Great Britain 3 (court of enquiry), India 4 (board of
conciliation, court of enquiry), the Netherlands5 (conciliation board),
and Norway 6 (conciliation board) may be given as examples.
The possible obstacles to the issue of a proposal or an award
which have been discussed above are avoided in systems which
have no conciliation and arbitration bodies, but only independent
mediators who make proposals for conciliation or arbitration
awards on their own responsibility. Denmark, Finland and
Sweden are the principal countries with some form or other of
the system of independent mediators. The mediator may make
a proposal for settlement, or refrain from doing so, as he considers
advisable '. Since the systems mentioned are founded on the
principle of agreement, the necessity: felt in authoritative systems
for a proposal or award, on which compulsory enforcement may
be based in case of failure to agree, does not arise. This is clearly
to be seen in the case of the British conciliators, who simply act
as self-effacing mediators and only very seldom come forward
with a formal proposal for settlement. A provision in force in
Finland 8, the Netherlands 9 and Sweden10, for instance, may also
1

Cf. p p . 96 et seq. above.
Section 27.
Section 5, subsection 2.
4
Section 11.
6
Section 17, subsection 5.
8
Section 36, subsection 2, para. 3.
' Finland, section 12 ; Denmark, section 4, subsection 3.
8
Section 14, subsection 2.
9
Section 29 : the individual mediator has an important position in this country,
though not so important as in Denmark, Finland and Sweden.
10
Section 8, subsection 3.
2
3

108

GENERAL PROBLEMS

be mentioned, according to which independent conciliators may
not act as arbitrators. They are thus not permitted to make
awards, which being binding 1 might prejudice one of the parties
against them, and so lead to a loss of full confidence in their
impartiality.
Many Acts fix the period within which the competent body
must make the proposal for conciliation, award or other decision
or judgment. This is, for instance, the case in Italy 2 , New Zealand3,
and Western Australia 4 . Such provisions are comprehensible in
countries which recognise authoritative regulation of labour
disputes, for the State has a close interest in settlements which
it must perhaps put into execution by means of compulsion, and
it naturally tends to attach importance to rapid completion of
that process. The Norwegian Act 5 also lays down a certain
maximum period for the conclusion of mediation proceedings.
These regulations became necessary because the parties may be
forbidden to cease work during the proceedings, and such a prohibition, in a system otherwise based on free agreement between the
parties, can logically be imposed for a limited time only. The
Chinese 6 regulations also lay down maximum periods for the
issue of proposals for conciliation and arbitration awards.
The proceedings are usually concluded when the proposal or
award has been made. It is therefore not out of place to add a
few words here about the costs of the proceedings. In general
it must be emphasised that the same principle as was mentioned
in the discussion on formality in procedure7 applies here — namely,
that if the State decides to play a mediating or decisive role,
through its conciliation and arbitration machinery, in the settlement of labour conditions, it should not for practical purposes
permit high costs to stand in the way of their utilisation by disputing parties. There is thus, so far as is known, no case of a
charge being made for the use of official conciliation and arbitration
institutions or investigation boards. In most systems this may
1
I t m u s t again be emphasised t h a t almost all countries except Germany
m a k e a sharp distinction between conciliation (mediation) and arbitration. If
the awards of arbitration institutions are not binding by law (as in authoritative
systems), t h e y are usually rendered so by the previous explicit or implicit acceptance of the partios.
2
Decree of 1 J u l y 1926, sections 80, 81 and 84.
3
Section 87 (one month).
4
Section 79 (one month, longer if necessary).
5
Section 36, subsection 1 (fourteen days after issue of the first prohibition
of a stoppage of work).
3
Sections 26, 30 (Legislative Series, 1930, China 1).
' Cf. above p . 80.

THE CONCLUSION OF THE PROCEEDINGS

109

be assumed as tacitly intended ; in others it is expressly specified
(Germany 1 , Norway 2 and Rumania 3 ). On the other hand, almost
all Acts provide t h a t the costs and expenses of State conciliation,
arbitration and investigation machinery shall be paid out of
public funds (Austria 4 , Belgium 5 , Canada 6, Finland 7, Germany 8 ,
Great Britain 9 and the Netherlands 1 0 ). Each party usually bears
its own costs, this being specified, for instance, in the Finnish
Act ; but it is remarkable t h a t the Austrahan Commonwealth
Act 1 1 (like those of New Zealand 12 and South Australia 13 ) provides
t h a t " the court may order any party . . . to pay any other
party such costs and expenses, including expenses of witnesses,
as is thought fit, but so t h a t no costs shall be allowed for the services
of any counsel, solicitor, or agent ".

F O R M , GROUNDS AND P E R I O D OF V A L I D I T Y OF CONCILIATION
AND ARBITRATION D E C I S I O N S

I t has already been pointed out t h a t formalities are usually
less important in conciliation and arbitration 1 4 than in ordinary
judicial proceedings, but t h a t more weight is attached to them ;
indeed, they become more and more indispensable the more the
proceedings take on an authoritative character. This observation
may also be applied t o the form given to the decisions issued as
a result of these proceedings.
First of all it is a general rule t h a t the decisions must be
written ; this custom is usually respected in the case of formal
proposals for conciliation also in systems based on the principle
of agreement, though it is not in every case specified in legislation.
I t is also often the custom or regulation t h a t the decision shall
be signed by the independent conciliator, arbitrator, magistrate
or chairman of the conciliation or arbitration institution, and
1
Section 19, para. 1, of the socond Order for the Administration of the Conciliation Order.
2
Section 45, 1.
3
Section 39.
« Section 22, 3.
6
Section 18.
• Soctions 54 and 69.
' Sections 17 and 18.
8
Section 9 of the Conciliation Order.
• Industrial Courts Act, section 7.
10
Sections 52-54.
11
Section 17 A ; cf. also section 38 (i).
1!
Section 86 : of. also section 100.
13
Section 2 1 , subsection 1 (j).
14
Ct. above, pp. 56 and 80 e t seq.

110

GENERAL PROBLEMS

often by all the assessors ; provisions to this effect are to be found
in some of the systems based on the principle of conciliation
(Finland 1, Netherlands 2, and in China 3 ). They are particularly
necessary in systems which provide for the issue of a report or
considered opinion after the conciliation proceedings, when these
end without an agreement, or at the conclusion of the investigation stage 4. The Belgian 5, Canadian 6, Indian 7, Netherlands 8
and Norwegian 9 Acts may be mentioned as examples.
In countries where awards are binding on the parties, as in
the Australian States, New Zealand and Italy, or can be declared
so, as in Germany10, it is often necessary that the award should
be in writing and moreover that certain specific details should be
given — the persons and objects to which it applies, its period of
validity, etc. — by reason of the fact that serious civil or criminal
consequences may be attached to these awards. Many Acts
emphasise the duty of issuing as clear and plain an award as
possible and of avoiding unnecessary technicalities. A maximum
period of validity is often added (chiefly in Australia and New
Zealand), and this lies as a rule between one and five years. It
should be noticed that, according to these regulations, the award
remains valid after the expiration of this period until a new award
has been issued or an industrial agreement concluded. This last
regulation is comprehensible in countries with authoritative
systems, for a break in the usual State regulation of labour
conditions on collective lines would certainly have serious
consequences and resemble a sudden lapse in legislation elsewhere
— for in countries like Australia, New Zealand and Italy the
awards very closely resemble legislation u . A section in the New
South Wales Act is worthy of notice, for it provides that " a
1

Section 12.
Section 17, subsection 2.
3
Sections 27 and 31.
* See above, pp. 96 et seq.
5
Section 11 G.
6
Sections 25, 27.
7
Section 50.
8
Sections 7, subsection 2, and 11.
9
Section 36, subsection 2.
10
See bolow, p. 115, and the monograph on Germany.
11
Cf. in this connection Australian Commonwealth Act, sections 28 and 2 9 ;
Queensland Act, section 21 ; New South W a i t s Act, section 25 ; Western Australia Act, sections 78 and 80-83 ; South Australia Act, section 47, subsections
1 (a), (c) and 2 ; New Zealand Act, sections 88 and 89 ; Italy, section 16, subsection 4, of the Decree of 3 April 1926 (where not otherwise mentioned the formalities of civil procedure govern decisions) ; Rumanian Act, sections 25, 26 ; and
section 2 1 , para. 6, of the Sjcond Order for the Administration of the German
Conciliation Order.
2

THE CONCLUSION OF THE PROCEEDINGS

111

union of employees may render an award which has been in
operation for a period of at least twelve months no longer binding
on its members by the vote of a majority of its members at a
secret ballot . . . in which not less than two-thirds of the
members of such union take part " 1 .
It is seldom specified that the grounds for the decision must be
given, but this is logical in cases where the submission of a report
giving a considered opinion on the dispute is required — especially
in investigation procedure proper, e.g. in Canada (Industrial
Disputes Investigation Act) 2, Great Britain (Industrial Courts
Act, courts of enquiry) 3, India (courts of enquiry) 4, and the
Netherlands (investigation procedure) 5 . A statement of the
grounds is explicitly required, for instance, in arbitration procedure
in the Netherlands 6, on the failure of conciliation in Belgium 7,
and in proceedings before the magistratura del lavoro in Italy 8,
though in the last case a " brief statement " is sufficient. In
Australia, too, reasons are usually given 9.
At the first glance it may seem extraordinary that the obligation
to give the reasons on which awards are based is not universal,
especially in countries where they are binding or may be declared
so (Germany), and where non-compliance often has consequences
of the greatest importance for the parties and the general public.
The real reason is probably that it is difficult, if not at times
impossible, to explain a decision in a dispute arising out of a
struggle for power10 otherwise than on general grounds of equity,
an explanation which is not always convincing and may often
barely veil the fact that the award merely reflects the superior
strength of one of the parties. This is another indication of the
fundamental difference between such decisions and those given
in disputes on rights, which are in the main merely the application
of existing law to individual cases and can thus be explained on
the basis of the legal situation of the parties. In disputes on
interests a principal, though not necessarily the sole, reason given
for the decision must logically be the relative strength of the
1

Section 45 (b).
Section 25.
3
Sections 4 and 5.
4
Sections 4 and 5.
6
Sections 45-50.
• Section 40.
' Section 11 G.
8
Section 85, subsection 4, of the Decree of 1 J u n e 1926.
• Cf. article by ÖELLS : " R .gulation of Wages in Australia " , in
Labour Review, Vol. X , No. 6, Dtx. 1924.
i° Cf. i^bove, p . 6.
2

International

112

GENERAL PROBLEMS

parties. But to give this as a ground for the decision seems
inexpedient, chiefly for tactical reasons, because, especially if it
is made public, it would tend to weaken the will of the parties to
carry out the decision, a factor which is important in all cases,
though to a smaller degree in compulsory systems than in those
based on voluntary agreement *.
Provisions concerning the manner of announcing proposals
for conciliation, arbitration awards, reports or considered opinions
and of communicating them to the parties are of small importance
from an international standpoint. They are contained partly
in advisory, partly in compulsory, instructions, the latter having
to be carried out in order that the decisions to which they refer
may be valid. The question of the publication of decisions is
more important and is regulated in a great variety of ways. In
general, the more thoroughly a system treats labour disputes as
matters of public importance, the more it permits or prescribes
the publication of awards. This is the position in systems with
investigation procedure or with authoritative regulation of labour
conditions, and in fact needs no other explanation than their
nature. The awards of the Australian and New Zealand arbitration
courts and the Italian magistratura del lavoro may be instanced,
for in these countries the utility or necessity of publication is a
direct consequence of the character of the institutions and of
the fact that the awards they issue are in the nature of laws.
The reason for this is that they are by no means always binding
only on the parties to the individual dispute, but are often extended
by law to cover the whole industry or may be applied by means
of special measures to other persons than those immediately
concerned in the dispute (common rule ; in German, AllgemeinVerbindlicherklärung 2 ). In the case of investigation procedure,
the publication of the report or expert opinion should in itself
imply the attainment of the main object of the proceedings, that
is the pressure of a well-informed public opinion on the parties
with a view to agreement. Canada (Industrial Disputes Investigation Act 3 ) and Great Britain (Industrial Courts Act, court
of enquiry 4) provide the best examples. On the other hand,
in systems based on the principle of conciliation — for instance,

1
But cf. the contrary opinion given by Lord AMULBEE in his book
Arbitration in Great Britain, pp. 183 et seq.
2
See below, pp. 116 and 121 e t seq.
3
Section 29, subsection 1.
4
Section 5, subsection 2.

Industrial

THE CONCLUSION OF THE PROCEEDINGS

113

in Denmark x , Finland 2 and the Netherlands 3 (investigation
proceedings) — publication sometimes depend? on the agreement
of the parties or of the conciliator, and is sometimes only permitted
after special discussion with the parties. This too is a natural
and valuable regulation, for in these systems it is of the greatest
importance not t o weaken the parties' will to agreement, and
this might certainly occur as a result of the premature publication
of decisions.
NATURE

AND SCOPE OP CONCILIATION AND ARBITRATION

SIONS ;

METHODS

OP ENFORCING

CONCILIATION

DECI-

PROPOSALS

AND ARBITRATION AWARDS

The legal nature of the decisions arrived at in conciliation and
arbitration proceedings is clearly seen in their legal consequences.
These are first horizontal or quantitative — t h a t is to say,
they extend over a certain number of persons concerned in the
dispute — and secondly vertical or qualitative — t h a t is, they
entail, for these persons, various kinds of more or less binding
obligations and limitations in fact or in law. I t may be seen
from a glance a t a number of the most important regulations
that there is almost everywhere a certain correlation between
these two types of legal consequences ; as the qualitative consequences (i.e. limitations on the parties) increase or decrease,
so, too, do the quantitative consequences (the number of persons
affected) and vice versa. In systems founded on the principle
of conciliation, in which the State does not intervene authoritatively,
the scope of the decisions of conciliation and arbitration institutions
— in so far as the expression " decisions " in the legal sense can
be used in such cases — is limited to the actual parties to the
dispute. The parties' acceptance of a conciliation proposal,
which in these systems is never binding, or their agreement in
advance to accept an arbitration award, which only thus becomes
binding, entails obligations in fact or in law for them alone.
On the other hand, in systems under which the authoritative
regulation of the relations between the parties through the intervention of the State is permitted or customary and the decisions
arrived a t in the proceedings thus are or can be made binding
on the parties, the scope of the decisions is also correspondingly
1
2
3

9;.

Section 4, para. 3.
Section 15, para. 2.
Section 50.

114

GENERAL PROBLEMS

widened quantitatively ; either during the proceedings or by
a subsequently separate decision it is or may be extended to
comprise persons not actually parties to the dispute *.
The first group of systems comprises first of all certain Englishspeaking countries, with the exception of Australia, New Zealand
and South Africa — that is to say, Canada, Great Britain and,
as far as can be established, the United States of America ; while
India may also be included, for her Act on the subject came into
existence under British influence. According to the legislation
of t'.ies3 countries, acceptance of the proposal or award of a conciliation or arbitration institution creates no legal obligation,
but only the moral obligation of a "gentleman's agreement".
But it is otherwise in the other systems belonging to this group
— those of Austria, Belgium, Denmark, Finland, the Netherlands,
Norway and Sweden. In most of these countries collective labour
agreements are at least partly regulated by the law, which usually
has the effect that, when a conciliation proposal or arbitration
award is accepted, such an agreement with its legal consequences
comes into being. In the Norwegian Act 2, for instance, this is
expressly specified. In so far as there is no legal regulation of
collective agreements in these countries, the acceptance of proposals and awards entails at least certain obligations in accordance
with the general law of contract.
The legal nature of the " decisions " of conciliation and arbitration institutions is indicated by the fact that under the legislation
of the States in this first group, they are administrative acts of
a public authority, whose binding effects in fact or in law depend on
the will of the parties. If the latter do not previously or subsequently
accept the decision, then it remains only a suggestion, a nonbinding proposal by the authority to the parties to regulate their
conditions on the fines recommended. The obligation incurred
by acceptance is in principle of a civil nature only, as appears
plainly from the Swedish Act of 22 June 1928 3 on collective
agreements, though the Norwegian Act provides for some sort
of penal sanction too. It prohibits " recourse . . . to a
strike or lock-out in order to settle a dispute between a trade
union and an employer or an employers' association respecting
1
I t is true t h a t in a few caseB (of. below p . 122) the scope of the decision can
also be limited during the proceedings irrespective of the wishes of the parties ;
but then there is a t least an official definition of quantitative scope.
2
Section 37.
3
Section 8 (Legislative Series, 1928, Swe. 2).

THE CONCLUSION OP THE PKOCEEDINGS

115

the validity, interpretation or existence of a collective agreement " 1. This direct guarantee of the enforcement of collective agreements is at the same time an indirect guarantee
of that of conciliation proposals and arbitration awards, which
are made legally equivalent to a collective agreement if accepted
by the parties. This exception may perhaps be explained by
the fact that until 1 August 1929 Norway possessed a compulsory
arbitration system similar to, though not so highly developed
as, those of Australia and New Zealand, and so naturally could
not avoid penal sanctions of the type mentioned. The penalties
provided for in the Canadian2 and Indian 3 Acts, which lay down
minimum periods of notice before conditions of employment
may be altered, were not conceived as guarantees of the observance
of accepted proposals and awards, and therefore do not belong
here *.
The German regulations illustrate the transition stage between the
systems of the first group and those of the second. There,
the award of a conciliation institution is a proposal not binding
on the parties, who can accept or reject it as they see fit5.
If they accept it, a collective agreement comes into existence
between them, with rights and duties on either side, but these
have only civil validity and affect no one but the actual parties.
Rejection entails no obligation whatever. To this extent the
German system may be included in the first group, in which
the quantitative and qualitative scope of the decisions issued
is narrower, but further regulations make it seem to belong also
to the second group, which comprises systems with decisions
of wider scope in both respects. The following provision makes
this classification inevitable : " if the award is not accepted
by both parties, it may be declared binding if the settlement
contained therein appears just and reasonable, with due consideration for the interests of both parties, and if its application
is desirable for economic and social reasons " 6.
1

Section 6, subsection 1.
Sections 57, 58 and 59.
Section 15.
4
Nor, of course, do sections 6 of the Canadian Act, 16 and 17 of the Indian A c t ,
and 6, subsection 3, of the Norwegian Act.
5
The subsidiary points raised in sections 75 and 80 of the German Works
Councils Act are not taken into consideration here.
* Section 6, subsection 1, of the Conciliation Order. Cf. also the Emergency
Decree of 30 September 1931, which empowers the Minister of Labour t o modify
in declaring binding under certain conditions an arbitration award concerning its
duration without consant of the parties. F o r details, cf. monograph on Germany.
2

116

GENERAL PROBLEMS

The possibility of declaring awards binding is a break with
the principle of voluntary agreement as typified in the regulations
of the first group. B y such a declaration a collective agreement
between the parties is compulsorily created by State intervention,
a qualitative legal consequence which, in systems of the first
group, could only be the result of the voluntary determination
of the parties. I t must be added t h a t such a compulsory collective
agreement binds only the parties to the proceedings and thus
has the same limited quantitative scope as proposals or awards
accepted by the parties. This scope may, however, in certain
circumstances be extended by a declaration t h a t the award is
generally binding, given by the Federal Minister of Labour., on
the application of at least one of the parties to the collective
agreement, which may also be a " compulsory collective agreement ", as described above. The provision in question runs as
follows x :
The Federal Minister of Labour may declare collective contracts
generally binding if they have acquired predominant importance in
the fixing of conditions of employment for the industry in question
in the area covered by the collective contract. Such collective contracts
shall then be binding within the meaning of section 1, within the
geographical area to which they apply, in respect of contracts of employment which are covered by the collective contract owing to the nature
of the employment, even if neither the employer nor the employee,
or only one of them, was concerned in the collective contract 2 .
In brief, the following appears to be the legal nature of conciliation proposals and arbitration awards in Germany. First of
all they are, like those of the first group, administrative acts of
a public authority, and their binding effect depends in principle
on the voluntary acceptance of the parties directly concerned.
B y means of a further act on the part of the authorities, the award
m a y be declared binding and so transformed into a collective
agreement, which is valid in civil law. Finally a third act may
declare this compulsory collective agreement generally binding
and so extend its quantitative scope 3 .
1
Sections 2 and 3 of the Act of 28 February 1928 to amend the Collective
Contracts Order (Legislative Serien, 1928, Ger. 2).
2
I t is immaterial here t h a t the declaration t h a t a decision is binding covers
only the so-called " normative clauses " of the agreement. The Austrian Act
also recognises this form of action, which it calls a " determination " , but not
t h e compulsory collective agreement, so t h a t it does not belong to this group
(cf. Austrian Act, sections 16 et seq.)
3
There is great divergence of opinion in Germany on the detailed legal nature
of these declarations, but the m a t t e r cannot be further discussed here.

THE CONCLUSION OF THE PROCEEDINGS

117

It may be concluded from the above that the legal consequences
of decisions of the German institutions, though influenced by
public law, belong in essence to the domain of private law.
In the systems belonging to the second group, private law
is definitely left behind and public law takes its place. The systems
of the Australian States, New Zealand a and Italy belong to this
group, and those of South Africa and Rumania may perhaps
also be included in certain respects.
This statement is justified by an analysis of the qualitative
consequences of decisions. According to the Australian and
New Zealand Acts the awards of the arbitration courts, the final
courts of appeal in conciliation and arbitration, are binding on
the parties and their enforcement is consistently guaranteed by
penal sanctions.
The regulations contained in the Australian Commonwealth
Act provide the best illustration of this position 2. The enforcement of an award is here guaranteed in the most multifarious
manner imaginable. In order to facilitate a survey of the questioni
a distinction will be drawn between direct and indirect guarantees
of enforcement, though this implies no pretension to exclude
other systems of classification.
Among guarantees of the direct type must first of all be
mentioned the power of the court " t o fix maximum penalties
for any breach or non-observance of any term of any order or
award, not exceeding £1,000 in the case of an organisation or an
employer, not being a member of an organisation bound by the
order or award, or £10 in the case of any individual member of
an organisation " 3. Next, the Court may impose penalties in
particular cases which must not exceed the general maximum 4.
Thirdly, " the court, the high court or a justice thereof or a
county, district or local court, may, on the application of any
party to an award, make an order in the nature of a mandamus
or injunction to compel compliance with the award or to restrain
its breach or to enjoin any organisation or person from committing or continuing any contravention of this Act or of the
award under pain of fine or imprisonment. . . ." Contravention
of this injunction may be punished with a fine of £100 or three
1

For further details, cf. Freedom of Association, Vol. V, p p . 276 e t seq.
Cf. the article by FOENANDER in the International Labour Review, Vol. X I X .
No. 2, F e b . 1929.
3
Section 38 (c).
4
Section 38 (d).
9 *
2

118

GENERAL PROBLEMS

months' imprisonment 1 . I n this connection a further provision
m a y be mentioned, prescribing a fine of £20 for any person who
" shall willingly make default in compliance with any order or
award " 2. Besides the actual penalty (fine or imprisonment),
a person guilty of this offence is liable to further legal disabilities,
some or all of which the court may impose as it thinks fit :
He shall not be entitled to any rights, privileges, benefits or advantages under this Act, and this Act shall, so far as any such rights
privileges benefits or advantages are concerned, cease to apply to him :
He shall cease to be a member or officer of any organisation, or
of any association which is, or is part of, any organisation, and shall
not be qualified to become a member or officer of any organisation
or of any such association :
He shall lose all existing or accruing rights to any payment out of
the funds of any organisation, or of any association which is, or is
part of, any organisation, and the receipt by him of any such payment,
or the making of any such payment to him by any person or organisation,
or by any such association, shall be an offence under this Act 3 .
Another valuable direct guarantee of the enforcement of an
award is the security (maximum £500) which a judge may demand
of any organisation concerned in a dispute, and which may be
given in t h e form of a bond with a surety or in cash ; if the security is not given, the organisation concerned may lose the benefits
of any award which would otherwise have applied to it 4.
Measures for the indirect guarantee of the enforcement of
awards are also well developed. First of all there is a general
" prohibition of lock-outs and strikes in relation to industrial
disputes ", contravention of which may be punished with a fine
of £1,000 in the case of an organisation or employer and of £500
in t h a t of any other person, though proceedings in respect of
such contravention cannot be instituted without the leave of
the Chief Judge. If it is maintained t h a t the lock-out or strike
has arisen " for good cause independent of the industrial dispute ",
the onus of proof, characteristically enough, lies on the defendant 5 .
I t should be noted t h a t this regulation may be very widely applied.
for not only lock-outs and strikes as such, but also anything
" in the nature of a lock-out or strike " may be punished ; the
Act provides t h a t " any organisation of employers or employees
which, for the purpose of enforcing compliance with the demands
of any employers or employees, orders, encourages, advises or
1
2
3
4
5

Section
Section
Section
Section
Section

48.
49.
50 ; cf. also sections 70, 70 A and 70 B.
33.
6.

THE CONCLUSION OF THE PROCEEDINGS

119

incites its members to refuse to offer or accept employment,
shall be deemed to be guilty of doing something in the nature
of a lock-out or strike as the case m a y be ".
For the purposes of this section an organisation shall be deemed
to have ordered, encouraged, advised or incited its members to refuse
to offer or accept employment if : (a) the committee of management
of the organisation or of a branch of the organisation ; (b) a member
of the committee of management of the organisation or of the committee
of management of a branch of the organisation ; (c) any body of
persons controlling the organisation or a branch of the organisation ;
or (d) an officer of the organisation or of a branch of the organisation,
has ordered, encouraged, advised or incited members of the organisation
to refuse to offer or accept employment 1 .
The maximum penalty which may be imposed on an organisation for this offence is £100, if " the court dealing with the
matter is satisfied t h a t . . . the organisation or branch has
bona fide removed from any office or position held by them and,
where they are members of the organisation, has expelled from
the organisation the persons by reason of whose acts the organisation has been found guilty of the offence. . . " 2 A further
regulation lays down t h a t persons who have been so dismissed by
an organisation shall not be re-appointed or re-accepted as members
of it within twelve months, and provides for a fine of £1,000 —
t h a t is to say, the same as for an actual lock-out or strike 3.
Besides the general prohibition of lock-outs and strikes, there
is a special one for persons and organisations bound by an award ;
it provides for the same fines for contravention as the general
prohibition, but the institution of proceedings is in this case not
dependent upon the leave of the Chief Judge 4 . It is also provided
that the court may " suspend or cancel, for such period as it
thinks fit, all or any of the terms of any order or award in force
so far as the order or award applies to, or is in favour of, the
organisation or its members " 5 . A further indirect measure of
compulsion which is apparently very effective in certain circumstances is the provision t h a t in specified conditions a strike or
lock-out may be permitted as counterstroke to an illegal lockout or strike by the other party 6.
The enforcement of awards is also indirectly guaranteed by a
regulation intended to protect a worker from dismissal by his
1

Section
Section
Section
1
Section
5
Section
8
Section

8.
8, subsection 3.
8, subsection 4.
6 A. Cf. also the possibilities of exculpation (section 6 B).
38 D .
7.

120

GENERAL PROBLEMS

employer because he " is entitled to the benefit of an industrial
agreement or an award " 1. Infringement of this regulation is
punishable with a fine of £50. In the same way a worker " shall
not cease work in the service of his employer by reason of the
circumstance that the employer . . .
is entitled to the benefit
of an industrial agreement or an award " 2. Here too the onus
of proof that the reasons for his action were within the law lies
upon the defendant 3 . An important penal sanction for the
enforcement of awards is contained in provisions inserted in the
Act when last amended in 1928, which are intended to protect
from threats, boycott and any sort of intimidation, persons
offering or accepting employment or working in accordance with
the terms of the award, and also to protect members of an organisation against disabilities with which the latter may, for the
above reasons, threaten them. Contravention is punishable
with a fine of £20, £50 or £500 4, as the case may be. Even the
moral authority of the award may not be publicly attacked, for
" any person who prints or publishes any report or other matter
containing any order, encouragement, advice or incitement to
commit any breach or non-observance of this Act or of any order
or award. . . shall be guilty of an offence. Penalty : £100. " 5
An award is here, as elsewhere, expressly placed on a level with
the law.
These measures are supplemented by special provisions which
shorten and simplify the procedure for the collection of fines and
the forfeiting of sureties that have been given, and determine
the liability of organisations and of their members in the case
of execution of process against their property to enforce the
award 6. When, in addition, it is realised that special inspectors
may be appointed " for the purpose of securing the observance
of this Act and of awards and orders made under this Act " 7,
and that the court may appoint a special board of reference to
deal with individual cases, the truth of the contention made at
the beginning of this section becomes clear — the domain of
private law has been abandoned ; the award has the full force
of public law.
It would take too long to collect further evidence from the
1

Section 9, subsection 1 (b).
Section 9, subsection 2 (b).
Section 9, subsection 4.
4
Sections 86 A and 86 B.
6
Section 86 D.
* Cf. sections 44, 46 and 47.
' Section 50 A, particularly subsections 1, 4, 6 and 6.

THE CONCLUSION OF THE PROCEEDINGS

121

New Zealand Act and those of the other Australian States.
Though there may be differences in detail, and though many may
lack the completeness of the Commonwealth Act, the tendency
is the same in every case, as an examination of the sections
mentioned below will prove 1.
That awards in these countries partake of the nature of public
law has been proved from their qualitative effects ; it is just as
easy to complete the evidence by a consideration of their quantitative effects. As was said in the opening remarks on t h e legal
nature of conciliation and arbitration decisions, there is a certain
correlation between the qualitative and the quantitative effects,
each increasing and decreasing with the other. This is confirmed
by the legislation of Australia and New Zealand. Since, as has
been seen, the qualitative effects in these countries are as far
reaching as may be (i.e. the award is binding on pain of penalties),
the quantitative effects (i.e. the scope of the award as to person
and area) must also be particularly wide. I n the German
regulations the declaration t h a t an award is generally binding
can take place only a t the conclusion of the proceedings and a t
the request of the persons concerned 2 ; but in Australia and New
Zealand the courts may extend (or limit) the group of persons
party to the proceedings as they think fit3. The Australian
Commonwealth Act 4 says : " The court shall. . . h a v e power. . .
to direct parties to be joined or struck out ". Similar regulations
are in force in South Australia 5 , New Zealand 6 , etc. I n addition,
by the declaration t h a t it is generally binding (the " common
rule ") the award can be extended, at or after the conclusion
of the proceedings, to persons other than the actual parties 7 .
There are also provisions of this sort in the Commonwealth 8 ,
South Australian 9 . Western Australian 10 , Queensland 11 and New
1
Cf. in particular Western Australian Act, sections 96 and 97, particularly subsections (5), 98, 100, 129, subsections (1) to (4), 131 to 134; New South Wales
Act, sections 44 to 48, 48 B to 48 E , 49, 50, 52, 55, 61, 67 ; South Australian
Act, sections 99, 100, 102-109, 110, 111, 115, 120, 121, 123, 127, 128 t o 132 ;
Queensland Act, sections 88 t o 90, 93, 96 to 100, 111 : New Zealand Act, sections
8, 9, 101, subsection (6), 102 A, 109, 111, 123 to 125, 127, 129, 134, 139.
2
Certainly the possibility of official institution of proceedings m a y to a certain
extent determine the persons affected, b u t this is an exception.
3
Cf. footnote 1, p. 114.
4
Section 38 (p).
6
Section 21, subsection 1 (p).
6
Sections 92, subsections 1 (b) and (3), 94 and 113, subsection 1 (a).
7
Cf. above, p.116 (remarks on the declaration of general validity in Germany).
8
Section 38 (f) and (g).
9
Section 21, subsection 1 (g) and (h).
»° Section 82 ; cf. also section 83.
11
Section 61, subsection (1).

122

GENERAL PROBLEMS

Zealand x Acts ; the Commonwealth Act is particularly characteristic of t h e lengths to which such extension may go :
The award of the court shall be binding on : (a) all parties to
the industrial dispute who appear or are represented before the coiirt ;
(b) all parties who have been summoned or notified to appear as
parties to the dispute, or required to answer the claim, whether they
have appeared or answered or not, and unless the court is of opinion
that they were improperly made parties ; (ba) in the case of employers,
any successor, or any assignee or transmittee of the business of a party
to the dispute or of a party bound by the award, including any corporation which has acquired or taken over the business of such a party ;
(c) all organisations and persons on whom the award is at any time
declared by the court to be binding as a common rule ; and (d) all
members of organisations bound by the award 2 .
Both the qualitative and quantitative effects of awards therefore
show t h a t in these systems they have the character of public law.
A remarkable disposition of the Australian Commonwealth Act
draws the far-reaching conclusion t h a t in certain cases an award
takes precedence over an Act. I t says :
When a State law or an award, order, or determination of a State
industrial authority is inconsistent with, or deals with any matter
dealt with in an award or order lawfully made by the court, the latter
shall prevail, and the former shall, to the extent of the inconsistency,
or in relation to the matter dealt with, be invalid 3 .
The New Zealand Act contains a similar provision 4.
The legal nature of decisions under the Italian conciliation
and arbitration system is plainly to be seen from the force given
to the awards of the magistratura del lavoro. The conciliation
proceedings regularly undertaken by the trade organisations,
and on occasion by the Ministry of Corporations, before the
magistratura takes up a case, do not need special treatment here ;
they are not regulated by legislation, and the proposals made,
as in systems based on the principle of agreement, are not enforceable 5.
On the other hand, the Italian Decree of 1 July 1926 provides
that an award of the magistratura del lavoro, " with respect to
collective relations considered in connection with employment
1

Section 89, subsections 3-7, 90, 91, subsection 2 ; cf. also sections 93 and 94.
Section 29 ; cf. the corresponding provisions of the Acts of South Australia
(section 51) and Queensland (section 22).
3
Section 30.
4
Section 151, subsection 1. Cf. also section 89, subsection 8 (retroactive effects),
and South Australian Act, section 21, subsection 1 (i).
6
This is the legal position, but the extraordinary discipline of the trade
organisations makes these proposals practically binding.
2

THE CONCLUSION OF THE PROCEEDINGS

123

and fixing new conditions of employment, shall have the force
of a collective contract " 1 and is binding on the parties. Execution
is enforceable both in civil and in criminal law; the significance
of the section of the Act of 3 April 1926 which bears on this
question also justifies quotation :
Without prejudice to the application of the provisions of the ordinary
law respecting civil liability for failure to comply with a decision or
respecting the execution of legal decisions, employers or workers who
refuse to carry out the decision of tribunals for labour matters shall
be liable to detention for not less than one month nor more than one
year and to a fine of not less than 100 lire nor more than 5,000 lire.
Responsible officials of legally recognised associations who refuse
to carry out the decision of a tribunal for labour matters shall be liable
to detention for not less than six months nor more than two years
and to a fine of not less than 200 lire nor more than 10,000 lire, in
addition to removal from office.
If, in addition to failing to carry out the decision of the tribunal
for labour matters, the guilty persons have also taken part in a strike
or lock-out, the provisions of the2 Penal Code respecting concurrent
offences and penalties shall apply .
Besides the direct protection provided by legislation, the
general prohibition of strikes and lock-outs serves the same
purpose indirectly, for its contravention entails very considerable
penalties — fines from 100 t o 100,000 lire, imprisonment u p
to three, or even six, years, temporary or permanent loss of
competence for official posts, etc. — depending on the gravity
of the infringement and on the position of the guilty party
(whether employer or worker). Contraventions in public utility
undertakings and public services are treated with particular
severity.
Besides these qualitative effects, the awards of the magistratura
del lavoro have the widest possible quantitative effects. They
extend beyond the persons directly concerned ; no special
procedure is necessary, for the Act lays down t h a t collective
agreements concluded between legally recognised associations of
employers and workers are valid for all employers and workers,
whether they are members of such associations or not. And
since a decision of the magistratura del lavoro has the " force of
a collective contract ", this compulsory agreement binds not
only the actual parties concerned, but also all the persons engaged
in the occupation in question within the area covered by the
1

Section 87, para. 1.
Section 22. The penal provisions of this Act were recently incorporated in
t h e new Italian Penal Code.
s

124

GENERAL PROBLEMS

decision1. The legal consequences are thus similar to those of
the German declaration that an award is generally binding 2
and the corresponding measures of the arbitration courts in
Australia and New Zealand 3 .
It may be concluded from the above that the awards of the
magistratura del lavoro undoubtedly partake of the nature of
public law.
The same may be said of the South African and Rumanian
systems, though it must be remarked that binding arbitration
awards are obligatory only in the case of certain public utility
undertakings specified in the Acts, and are otherwise dependent
on the consent of the parties to submit to them. In both these
countries also, the qualitative and quantitative effects are wide
and secured by penal guarantees ; for details, reference may be
made to the respective Acts 4 .
An important question, of a practical rather than a legal nature,
may be briefly referred to in concluding this section — that of
the feasibility and actual use of sanctions., especially those of a
penal nature, for the enforcement of awards. Only Australia
and New Zealand have long experience on this subject, and such
reliable data as are available have been discussed in the monographs
on those countries, to which reference may be made 5. In general,
it may be assumed that penal sanctions are not in practice feasible
if large numbers of persons are determined not to respect the law ;
this has occurred several times in Australia 6. The efficiency of
this, like any other, legislation depends in the last resort on whether
public opinion desires and aids its enforcement, and whether it
is in keeping with the economic and legal systems of the State
in question 7 . In countries where the decisions of conciliation
and arbitration institutions are guaranteed by civil law only,
the matter is much simpler ; and in Germany, in the very large
majority of cases, compulsory agreements arising out of declarations
that an award is generally binding have in fact been executed.
But here too there are undoubtedly limits to the possibilities of
1

Cf. section 10, para, 1, of the Act of 3 April 1926.
Cf. above, p . 117.
Cf. above, pp. 121 ot s-.q.
4
South Africa, sections 7, 9, 11, 12 and 22 ; Kumania, sections 16, 22 and 32.
5
See monographs on Australia and on New Zealand.
6
Cf. article in International Labour Review, Vol. X I V , Nos 5-6, Vol. XV,
No. 1 : " Conciliation and Arbitration in Labour D i s p u t e s " (Vol. X I V , No. 6,
p . 857, " Enforcement " ) .
7
Cf. the general discussion of this point in the final chapter.
2
3

THE CONCLUSION OF THE PROCEEDINGS

125

enforcement, for if such a declaration were too crassly at variance
with the comparative strength of the parties or with economic and
social reason, the injured party would probably take the risk
of breaking the agreement, even though imposed by public
authority.
LEGAL REMEDIES AGAINST CONCILIATION AND ARBITRATION
DECISIONS ; THE QUESTION OP REVISION

The execution of conciliation and arbitration decisions and
measures for enforcing them have been sufficiently dealt with
in the course of the discussion on their legal nature. It remains
only to deal with legal remedies, ordinary and extraordinary.
Only remedies against decisions of the institutions on the merits
of the case will be dealt with 1 ; the very common rights of objection
against standing orders, rulings 2 , etc., will not be taken into
account, for they have little international importance.
One further limitation must be made. In cases where the
awards are not binding on the parties unless they accept them
beforehand or subsequently, and where such awards cannot be
declared binding by the State as in Germany, legal remedies
properly so called hardly arise. A conciliation proposal can
certainly have far-reaching effects, even without being formally
binding, and may, through public opinion, exert a notable
influence on the parties (cf. Canada, Great Britain). But this
is a moral influence, and cannot be set aside by judicial means
unless the decision has been made illegally, without fulfilment
of the formalities required for validity, or through fraud,
chicanery, etc. These cases, as also obvious mistakes, e.g. clerical
errors, made by the institution come under the ordinary regulations
concerning the contestation and correction of errors committed
in the course of administration or by public authorities, which
cannot be dealt with in detail here.
Thus legal remedies in the strict sense do not apply to the
decisions of systems in the first group 3 ; but there is still the very
important question of the course to be taken when conciliation
proceedings have ended in a proposal which is not accepted by
1
Cf. DEKSCH : Die neue Schlichtungsverordnung,
2nd ed., Note 7 (à) to
section 1, subsection 5.
2
Cf. section 18 of the s-eond Order for the Administration of the Conciliation Order (appeal against the chairman's rulings).
3
I.e. the first group mentioned on p p . 113 et seq. in the discussion of the
legal nature of awards.

126

GENERAL PROBLEMS

the parties. The proceedings having failed, it must be decided
whether new proceedings may or should be opened, and, if so,
under what conditions.
As far as can be ascertained, only a few countries whose
systems belong to the first group have explicitly settled the
question ; in most of them, these cases are apparently decided
as they arise on consideration of the circumstances, without a
general regulation being considered necessary. The Finnish and
Norwegian Acts are typical of those which contain an explicit
regulation, and the German Order resembles them in its treatment
of cases where the State does not intervene to declare the award
binding 1 . The latter provides as follows :
If conciliation proceedings have already taken place in respect
of a dispute, and if they have led neither to an agreement nor to a
binding award, further conciliation proceedings shall be instituted
only with the agreement of all the parties concerned, or if the public
interest requires it 2 .
Similarly, under the Finnish Act, fresh proceedings on the
same subject cannot be instituted " except at the joint request
of the parties or when an alteration occurs in the dispute itself,
or in circumstances of importance to the formation of an opinion
thereon " 3 . A joint application by the parties is also required
by the Norwegian Act 4 , but if at the end of a month the dispute
is not settled and no such application has been received, it is the
duty of the official conciliator to institute fresh proceedings 6 .
I t may be concluded from these regulations t h a t fresh proceedings cannot be instituted in a matter already dealt with unless
certain conditions are fulfilled. First of all, it is obvious t h a t if
the circumstances are unchanged, an understanding between the
parties with regard to a repetition of the proceedings is both necessary and sufficient. Systems based on the principle of agreement
aim solely at facilitating conciliation in every respect without
authoritative intervention ; and the State must welcome this
fresh opportunity to use its influence in the direction of conciliation
between the parties, with their permission. But it naturally
cannot allow a party which is not satisfied with an award to
re-open proceedings on the same subject immediately afterwards
i Cf. above, p. 115.
Section 12, para. 3, of the second Order for the Administration of the
Conciliation Order.
3
Section 16.
4
Section 38.
5
The Act also uses the expression " to reopen the proceedings " .
2

THE CONCLUSION OF THE PROCEEDINGS

127

against the will of its opponents. In such a case the proposals
of the institution would be worthless, and its prestige undermined in advance. To this extent, therefore, proposals for conciliation have to a certain extent the force of a final judgment even
in systems without compulsion1.
But, on the other hand, this force is strictly limited. If the
circumstances alter 2 , or if public interests require intervention,
there must be a possibility of a repetition of the proceedings and
of a fresh proposal for conciliation, though in theory this proposal
might well be identical with the first if the conciliation institution
came to the same opinion on the situation as before.
This characteristic limitation of a conciliation proposal's force
as a final judgment is another manifestation of the difference
between conciliation and arbitration proceedings on the one
hand and judicial proceedings on the other. The latter deal with
disputes on rights, existing law is expounded and applied, and
judgments given are of a different nature and far more final.
The settlement of disputes on collective interests by conciliation
and arbitration is in fact less a judicial than an administrative
and even a legislative function of the State, and in its performance
the principles of civil law concerning finality can be applied only
after careful adaptation to the special needs of this branch of
law 3.
If this is true of the systems which do not recognise compulsion,
it is all the more so of those which provide for enforcement, and in
particular those whose proceedings are based on or similar to those
of a court of law (the Australian States, New Zealand and Italy).
First of all — as is natural in such proceedings — these systems
often provide for ordinary legal remedies of appeal and review
(plea of nullity, plea of cassation) and reversal. The New South
Wales 4, Western Australian s , South Australian 6 and Queensland7
1
This is true of the German system too, as m a y be seen from the passage
quoted, for it belongs in principle t o the " agreement " group, though in practice
authoritative State intervention in the form of a declaration t h a t a n award is
binding plays a very important p a r t .
2
According to the Norwegian Act this is presumed after expiration of the
monthly delay.
3
Cf. also on the legal position in Germany : DEBSCH : " Rechtskraft und
Abänderlichkeit von Staatsakten der Schlichtungsbehörden " , in Nette Zeitschrift
für Arbeitsrecht, 1923, pp. 274 et seq., 360 e t seq., 409 et seq., 481 e t seq. ; and
Die neue Schlichtungsverordnung, second edition, p p . 223 et seq.
* Section 30 : appeal t o the Crown.
6
Section 86.
« Sections 54-57 and 196.
7
Sections 17 and 18.

128

GENERAL PROBLEMS

Acts provide for the right of appeal, while the Italian Act permits
revocation and review 1 .
The fact t h a t these systems are modelled on courts of law,
even in t h e matter of the right of appeal, does not, however, lead
to the full logical conclusion in respect of finality of judgment,
as would be the case in ordinary judicial proceedings. The nature
of disputes t h a t are trials of strength makes it inevitable t h a t
these systems should adopt the same attitude as those built u p on
agreement, and limit the finality of the decision taken. With
variation in detail, the systems mentioned make this limitation
by permitting variations in such decisions in accordance with an
alteration in the circumstances, which is often considered to have
occurred as soon as a certain period has expired. The countries
in question permit such alterations to be undertaken on the
initiative of the institution or on application by the parties. The
Australian Commonwealth Act, for instance, provides as follows 2 :
Notwithstanding anything contained in this Act, if the court is
satisfied that circumstances have arisen which affect the justice of
any terms of an award, the court may, in the same or another proceeding,
set aside or vary any terms so affected.
The powers conferred on the court by this subsection shall not
be construed as limiting in any manner any power conferred on the
court by any other provision of this Act.
Another provision 3 further empowers the court " to vary its
orders and awards and to re-open any question ", though an
application by the aggrieved party or by the Attorney-General
is necessary for the exercise of this power 4 . The New South
Wales 5, Western Australian 6, South Australian 7 , Queensland 8
and New Zealand 9 Acts contain similar provisions. The Italian
regulation on the subject is very interesting, for it provides t h a t
" if a considerable change in the circumstances of the case takes
place, the party concerned or the Public Prosecutor may apply
to the court which issued the award for a review thereof even
before the expiry of the time limit fixed in the award for its
1
Section 16, para. 3, of the Act of 3 April 1926 and section 88 of the Decree
of 1 J u l y 1926.
2
Section 28, subsection 3.
3
Section 38.
4
Section 39, para 2.
5
Sections 25, subsection 2, and 28 (but cf. section 58, subsection 1) and also
section 45 (b) mentioned on p. 111.
6
Sections 88, 89, 90.
7
Sections 2 1 , subsection 1, and 36, subsection 2.
8
Sections 23 and 62.
9
Section 92, subsection 1 (a).

THE CONCLUSION OF THE PROCEEDINGS

129

validity ". Apparently to prevent baseless claims calculated to
harm the prestige of the magistratura del lavoro and its awards,
the Decree continues as follows : " If the application is disallowed,
the party which applied for review shall be liable to a fine not
exceeding 10,000 lire." 1
It is remarkable that the German regulations contain no
similar legal remedy against a decision by the conciliator or the
Federal Minister of Labour declaring an award binding. But in
this case it must be remembered that in contrast to the systems
in Australia, New Zealand and Italy, an award thus made binding
in Germany is guaranteed only by civil and not by penal sanctions.
The question of a legal remedy against the decisions of conciliation
and arbitration has, however, already been raised in Germany.
As the law at present stands, a review of the objective Tightness
and efficacy of the decision is not possible, and the only possible
subject for judicial review is the observance of the regulations
for procedure 2.

Section 89 of the Decree of 1 J u l y 1926.
For details cf. B. H U E C K - N I P P E R D E Y : Lehrbuch des Arbeitsrechts, Vol. I I ,
first and second editions, pp. 402 et seq., and KASKEL : Arbeitsrecht, third edition,
pp. 370 e t seq.
The German law of contract also covers the possibility of liberation from
obligations arising out of collective agreements, which include compulsory agreements btised on declarations t h a t awards are binding ; according to this law, the
renunciation of an agreement is p ¡rmissible under exceptional curcumstances
if economic conditions change (Clausula rebus sic stantibus).
Cf. H U E C K - N I P P E B DEY : Lehrbuch des Arbeitsrechts, 1929, Vol. I I , p . 176, and K A S K E L : Arbeitsrecht,
third edition, p. 53. The provision of the New South Wales Act cited on pp. I l l
e t seq., ¡s also interesting in this connection.
2

1 0.'

CHAPTER VII
CONCILIATION AND ARBITRATION
AS CONTRASTING PRINCIPLES — CONCLUSIONS

In the previous chapters the numerous national conciliation
and arbitration systems have been compared from a legal standpoint and used as a basis for the discussion of the legal significance
of the internationally important questions raised by conciliation
and arbitration in their successive stages. As each essential point
was dealt with, it could be seen that the regulation of the whole
procedure varies from system to system with the legal consequences
attached to decisions, whether proposals for conciliation, awards
or judgments. The more authoritative the intervention of the
State in these decisions, the more markedly does the principle
of regulation and even of compulsion spread back from the conclusion of the proceedings to their every stage. In practice, the mere
creation of State conciliation and arbitration bodies entails the
exercise by the State of a certain influence on the parties in their
relations to one another — an influence which may vary from
country to country according to local conditions, but which is
undoubtedly in certain cases very tangible. In many systems this
influence grows with the proceedings, in that compulsory measures
of various sorts are prescribed — compulsory application to the
institution, compulsory participation when a plaint has been brought,
compulsory attendance, compulsion to give evidence and information, suspensive prohibition of strikes and lock-outs, etc. — ending
up in a certain number of systems with complete compulsory
arbitration with decisions binding on the parties and guaranteed
by civil or even penal sanctions. There are thus, between systems
based solely on the principle of voluntary agreement, and those
recognising compulsory arbitration, numerous transition stages
represented by systems which have provided for various sorts of
compulsion during the proceedings, but which do not enforce the
decisions reached.
There can therefore be no mutually exclusive distinction
between systems based on conciliation and those based on arbitration, which form rather the two extremes of a series. But that

CONCILIATION AND ABBITRATION AS CONTRASTING PRINCIPLES

131

this is so should not be allowed to obscure the fact that none, not
even the most stringent, of the compulsory measures for the
advancement of the proceedings, e.g. for the elucidation of the
facts — apart from the consideration that in their most highly
developed form these are to be found only in conjunction with
compulsory arbitration proper — represents an intervention by the
State in any way comparable with that entailed by the compulsory
regulation of actual conditions of employment in the guise of
binding decisions by conciliation and arbitration institutions. Such
decisions are no mere details of procedure, but important excursions
into positive law ; like voluntary agreements, they create new law
to regulate the relations between parties. And for this reason
the battle round the structure of conciliation and arbitration
systems concentrates on the question whether the State shall be
allowed to intervene in the regulation of these relations and so in
economic life, if conciliation fails.
A comparative study of all the essential points, based on the
various Acts, has already shown which States have decided in
favour of such intervention and what form it takes ; but the
question is so important that, in conclusion, a further discussion of
the principles involved is advisable.
First of all, it may be useful to recall what is in general the
object of conciliation and arbitration in trials of strength between
workers and employers concerning the regulation of labour
conditions x. The essential object is to arrive, by recourse to a
given form of procedure, at that legal regulation which is always
necessary for the maintenance of peaceful relations between
parties, i.e. without open conflicts such as are likely to interrupt
production and entail other dangers. The problem is similar to that
of the peaceful regulation of the conflicting interests of States 8,
and similar also to that before a national constitution in its widest
sense. Such a constitution must provide the legal basis for the
combination of rival groups in one unit of life and labour, the
commonwealth ; it must arrange for the adjustment of their
conflicting interests within the unit, and at the same time ensure
the legal continuity of its own existence by adapting itself to
changing needs and forces, so as to avoid subversive violence.
It is impossible to say in the abstract which is the most effective
1

F o r a discussion of t h e concept of these disputes cf. pp. . . . et seq.
SCHINDLER in his paper Werdende Rechte (Fluiner's edition) was probably
the first to remark on this connection. Cf. also HAMBURGER : Streik,
Aussperrung
und Berufsverbände im neuen englischen Arbeitsrecht, p p . 4-5.
2

132

GENERAL PROBLEMS

principle of international law and which the best constitution ;
nor can it as a rule be determined with any certainty whether the
principle of conciliation, under which decisions are not compulsory,
or that of arbitration, with its compulsory awards and even compulsory enforcement of awards, should in every case be preferred.
The question is reasonable only in respect of the conditions in a
given country, and even when so limited it is hard to answer,
witness the controversy in Germany arising out of the proposals
for reform \ It is all the harder to find an answer at once impartial
and in accordance with the facts because the persons directly
concerned on one side or the other are closely interested and the
position they take up will therefore depend on their real or imagined
interests. Furthermore, the state of trade and the balance of
political power may change and lead to a corresponding change
in interests ; supporters of compulsion may thus become its
opponents and vice versa 2.
The reasons, brought forward by employers in particular,
against authoritative intervention by the State in the regulation
of conditions of employment are principally economic. In their
relations with the workers, a large proportion of employers are
still guided — at least so far as the regulation of conditions of
employment, particularly wages, is concerned — by the idea of
free competition, as it existed in the days of individualism and
laissez-faire, i.e. by the principles of a system in which wages and
prices fix themselves automatically according to the state of the
market. From this standpoint the determination of wages by the
State, in so far as it does not follow the tendency of the market
but fixes a higher level, perhaps for social reasons, must appear as
an intolerable interference with the free play of economic forces.
Employers also declare that it is both illogical and disastrous to
lay upon their shoulders the responsibility and the risk of an
undertaking with its problems of production and marketing, and
at the same time to prescribe official rates for one of their most
important cost factors — labour.
To this, labour may reply that the free play of economic forces
has already suffered very considerable limitation through cartels
and other price-fixing arrangements, and that in many industries
it has practically ceased.
1
The principles involved have been very closely examined in the German
literature on the subject, and it is for this reason t h a t most of the references in
this connection are to German publications.
2
This has happened, for instance, in Australia.

CONCILIATION AND ARBITRATION AS CONTRASTING PRINCIPLES

133

Employers cannot deny the existence of numerous restrictions
in a system which is, in principle, free : but they reply that industry
has imposed these restrictions on itself, to a large extent
deliberately ; that they arose out of the needs of the moment and
were adapted to them ; and that the intervention of the State,
based on political motives and regardless of economic considerations, is something totally different.
Many holders of such views — and they are by no means
exclusively employers — do not, singularly enough, object so
strongly to the limitation by industry itself of the principle of the
free market, that is to say, the efforts of employers to monopolise
the regulation of the demand for labour and of workers to monopolise that of the supply. In fact, they accept the disturbance of
the mechanism of the labour market by the independent action
of their own associations, but denounce the participation of the
State in the regulation of conditions of employment as an interference with the free play of the forces of capital and labour ;
and they complain that such regulation is often based, not on
economic but on political considerations that have nothing to do
with the issue, e.g. the electioneering value of the regulation. These
opponents of authoritative intervention declare that more harm
than good will result from it, for, they say, it disguises and falsifies
the true economic position of the parties and their relative force,
postpones open conflicts, which are under certain circumstances
necessary and wholesome trials of strength, and so aggravates the
bitterness of the struggle.
The supporters of State intervention in the regulation of labour
conditions reply that State conciliation and arbitration is,
on the whole, to be regarded and organised, not as a judicial but,
from the nature of the subject, as an administrative function, which
cannot be performed without exposure to political influence 1 ;
that the State naturally acts on political grounds in other spheres
of administration — industry, tariffs, public services (railways,
gas, water, electricity), taxation and, in particular, social policy ;
and that to have a wages policy is therefore at least not illogical.
The supporters of compulsion may deprecate abuses in " political
1
Even in a country like Italy such influence is practicable, for though the
magistratura del lavoro is an authority w i t h judicial independence, the Ministry
of Corporations and the trade associations follow Government policy and make
thair influence felt in the most important disputi s, which indeed seldom reach the
magistratura del lavoro. This tendency was plainly visible during the general
reduction of wag- s a t the be ginning of December 1930. The political influence here
arose out of the State's exercise of its administrative functions.
1 0 *

134

GENERAL PROBLEMS

wage-fixing ", but hold the view that to distinguish between
admissible and inadmissible influence in individual cases is very
difficult, and that " hard cases make bad law ". In their opinion
really important labour disputes in the modern State have become
political matters and can be decided only in accordance with the
general policy of the Government, which must be consistent if it
is to be successful1 ; and they will perhaps finally declare that in
countries whose conciliation legislation does not recognise authoritative intervention by the State, the pressure of public opinion —
educated politically far more than economically — is quite or
nearly equivalent to compulsion by the State.
There is no doubt that these conflicting views raise essential
questions of State industrial and social policy. To attempt their
investigation here is impossible, and in any case they cannot be
solved by scientific methods, but must be answered in accordance
with personal views and beliefs 2.
Workers often object to conciliation and arbitration for the
reason, based on a criticism both of their technique and of their
politico-legal consequences, that they are calculated to endanger
the existence of trade organisations by taking from them and
transferring to the State one of their principal objects, the achievement of favourable conditions by their own efforts, and by depriving
1
Cf. recent discussions in Germany on the extent t o which t h e Reichstag m a y
intervene in individual cases in adjustment proceedings ; cf. RICHTER : " Parlamentsverwaltung im Schlichtungswf sen " , in Neue Zeitschrift für Arbeitsrecht,
Dec. 1930, p. 729, and FRAENKEL : " Die rechtliche Bedeutung des Beschlusses des
Reichstages im Berliner Mjtallarbeiterkampf " in Betriebsräte-Zeitschrift
der
Funktionäre der Metallindustrie, No. 22, 8 Nov. 1930, pp. 677 et seq. The arbitration
courts in Australia and New Zealand are, as far as cculd be discovered, independent
judicial authorities. A special investigation would be necessary t o decide whether
administrative and political influence might n o t be exerted here indirectly through
the minimum wage-fixing machinery.
s
For a discussion of the principles apropos of the reform of t h e German reguations, see t h e interesting polemic between G R A U E S T (employer) and TARNOW
(worker) in Magazin der Wirtschaft, 1930, No. 7, p p . 327 et seq., No. 8, pp. 373
e t seq., No. 10, pp. 467 e t seq. ; cf. also H O E N I G E R : " Schein und Wirklichkeit im
Schlichtungswesen " , in ibid., 1931, pp. 372 e t seq. ; WINSCHUH : " Autgabe u n d
Gestalt des Schlichtungswesens " , in ibid., 1929, No. 22, p p . 839 e t seq. ;
ZIMMERMANN, "Einigungswesen, Zwangsschlichtung, staatliche Lohnregt l u n g " ,
in Kölner sozialpolitische Vierteljahrsschrijt,
Vol. VTII, Nos. 1 and 2, pp. 5
e t seq. ; also theses by MARTIN : Das Schlichtungswesen
in der modernen

Wirtschaft, J e n a , 1929, and HÖNIGSCHMIDT-GROSSICH, L E I D I G and LÖHR : Zwangs-

Schiedsspruch und Schlichtungswesen, Jena, 1929, and articles by NÖRPEL and
BROECKER in Die Arbeit and Die Gewerkschaftszeitung,
particularly NÖRPEL :
" Probleme des Schlichtungswesens und des Tarif rechts " , in Die Arbeit, 1929,
No. 3, p p . 141 e t seq. (where t h e other articles are cited). F o r t h e various recent
views of workers with regard to compulsion, see the examples given in t h e INTERNATIONAL LABOUR OFFICE : Report of the Director, 1931, section on conciliation
and arbitration. Also Ludwig OPPENHEIMER : " Deutsch-französischeAussprache
über Schlichtungswesen und öffentliche Wirtschaft " , in Sozialistische
Monatshefte
Dec. 1930, p p . 1211 e t seq.

CONCILIATION AND ARBITRATION AS CONTRASTING PRINCIPLES

135

them of the right to strike. It is true that in systems with fully
developed compulsory arbitration, open labour conflicts are either
strictly limited or absolutely forbidden.
This view is logically connected with an objection, often raised
by employers and sometimes also by workers, namely that compulsory arbitration destroys the sense of responsibility of the
parties concerned. No one experienced in the psychology of
conciliation and arbitration can doubt that there is here no small
degree of truth ; and for this reason most systems which have both
institutions separate the two completely, even when arbitration
is based on an arrangement between the parties, in order that the
possibility of an award may not endanger the chances of conciliation.
The British regulation typifies this sharp distinction, for no attempts
at conciliation are made once a case has come before the Industrial
Court, but an award follows immediately after the parties have been
heard and any necessary evidence has been taken 1 . A satisfactory
transition from conciliation to arbitration is certainly one of the
most difficult practical tasks facing legislators on the subject 2.
Disputes in public utility undertakings (hospitals, railways,
gas, water, electricity, etc.) are often separately dealt with in the
national systems. It must be recognised that the public is particularly concerned in such cases, and that the authoritative intervention of the State can be justified for reasons (maintenance of
public order, supply of the necessities of life, etc.) which are less
often valid in other labour disputes. Difference of opinion on the
admissibility and value of intervention in such cases is much less
common, and employers who are otherwise definitely opposed to
authoritative intervention admit its necessity here under certain
conditions 3.
The chief reasons — whether based on economic or political
views, or on considerations of legal technique — for the positions
adopted by those directly concerned, whether for or against
the principle of arbitration, have now been given, but certain
considerations of a general nature may help to throw light on this
important subject.
It is apparent that the conciliation and arbitration systems
which now exist have been carefully adapted to and grafted on to
1
Cf. also the provision forbidding permanent mediators to act as arbitrators :
Finland, section 14, para. 2 : Ntheerlands, section 29 ; Sweden, section 8, para. 3.
1
Cf. in this connection FBEYTAO : Die sozialpolitische Schlichtung, Versuch einer
systematischen Erfassung des Schlichtungsgedankens, pp. 92 et seq.
* Cf. the proposals of the German Federation of Employers' Associations for
the amendment of the Conciliation Order of April 1929.

136

GENERAL PROBLEMS

the general legal and economic systems of the States in which they
are in force 1. Three types of function have been distinguished 2,
which conciliation and arbitration undertake in accordance with
the nature of each national system ; these are the maintenance
of industrial peace, assistance in the determination of relations
between employers and workers by means of collective agreements,
and the authoritative regulation of labour conditions.
It is plain that States whose constitution and legal system are
still based to a great extent on the laissez-faire principle possess
conciliation systems which occupy themselves largely or exclusively
with the first type of function, namely, peace-making. Great
Britain and the other English-speaking States, except AustraMa
and New Zealand, belong to this group. In these countries the
decisions, which are in reality only mediating proposals, are
never compulsory unless arbitration has been previously arranged
by the parties. It is significant that these States have no legislation on collective labour agreements.
Next, most of the industrially important States on the Continent
of Europe, such as Austria, France, the Netherlands, Norway,
Sweden, etc., have incorporated in their legal systems — originally
built up on the individualist principle — certain elements of collective
law, the chief of them, in the present connection, being concerned
with collective labour agreements. The systems of these countries
have thus assumed the second type of function, the determination
of collective relations, though this is usually implicit rather than
specified. They do not, it is true, recognise compulsory decisions,
but they go further than the States of the first group, for the
arrangements made by mediation are, as collective agreements,
binding at least in civil law in some way or other, while in the
English-speaking countries they are simply " gentlemen's
agreements ".
The determination of collective relations is thus clearly one
of the functions of conciliation and arbitration in the States of the
second group. In Germany it is a specific duty of the institutions 3.
This fact accords with the marked progress made by collective law
in Germany since the Revolution in 1918, of which the highly
developed collective labour law is an important manifestation. But
1
Cf. for this and the following, W E D D I G E N : Einigungs- und Schiedsgrund'.••alz,
already refern d to on several occasions, which describes this adaptation excellently.
2
Cf. p p . 45 et 88q., and also SITZLEB : " Soziale und wirtschaftliche Bedeutung
der staatlichen S c h l i c h t u n g " , in Neue Zeitschrift für Arbeitsrecht, 1930, No. 1.
s
Cf. above, pp. 5 and 49 et seq.

CONCILIATION AND ABBITRATION AS CONTRASTING PRINCIPLES

137

the German system has gone a step further. During the troubles
which followed the war, the State intervened—often merely following
up analogous intervention during the war — to regulate and decide
matters in important economic fields (coal, electricity, the cartel
system, etc.) and in general wherever public authorities engaged
in industry. Corresponding to this economic activity of the State
and particularly to its influence on prices, there was naturally also
State influence on wage determination. By declaring awards
binding, the arbitration institutions assumed the third function of
conciliation and arbitration — the regulation of labour conditions.
But the law confines the use of these declarations to certain specified
cases which affect the public interest ; and they entail civil consequences only. The law in fact still holds to the principle of civil
freedom of contract for parties to collective labour agreements K
The systems in which this third function of conciliation and
arbitration is fully developed and applied go further (Italy,
Russia, Australia, New Zealand). In Italy and Russia this function
— the authoritative determination of labour conditions in cases
where free negotiation has failed, or where the result of such
negotiation appears contrary to public interest — is logically in
keeping with the whole legal and constitutional system of the
two States.
In Australia and New Zealand the exercise of this function by
conciliation and arbitration institutions cannot be characterised
so simply. As has been noticed 2 it is connected with the minimum
wage legislation usual in these States, that is to say, with State
machinery, based on collective law, for the authoritative settlement
of certain of the questions dealt with by conciliation and arbitration.
In other respects, however, judicial principles and practice in these
States seem still to be inspired by the laissez-faire attitude, as in the
other English-speaking countries. This is perhaps the real reason
why the persons concerned have so severely criticised the
Australian and New Zealand compulsory arbitration systems,
especially of late, and why the systems, particularly those of Australia,
are so constantly being altered. These events appear to justify
the conclusion that the general legal and industrial systems of these
countries are not yet fully compatible with compulsory arbitration.
1
I t is also important t h a t the " compulsory agreements " arising out of
declarations t h a t awards are binding d o not create any obligation to offer or accept
employment, b u t only define the conditions t h a t m u s t be observed in the case
of employment within the scope of the agreement.
2
Cf. above, p. 151.

138

GENERAL PROBLEMS

On the whole, the above considerations tend to the conclusion
that a country's conciliation and arbitration system has the best
chance of success if it is essentially in keeping with the general
legal system of that country. In many cases where, despite such an
apparent accordance, the existing system does not seem to give
complete satisfaction, this is — apart from criticisms directed
against its working in individual cases — perhaps due to the fact
that the legal system is itself in course of transformation and has not
been able to adapt itself satisfactorily to the wide social and
economic changes which are now taking place. Individualist and
collectivist forms of economic and legal organisation are competing
in well-nigh every State which possesses developed or developing
industries, and it is inevitable that this contest should also extend
to the determination of the best form of conciliation and arbitration.
The battle is apparently still in full swing ; it is idle to make
prophecies concerning its result, and idle to conjecture which
principle will conquer, that of conciliation or that of arbitration
with its concomitant function of regulating labour conditions.
However right or wrong the reasons given by the parties
concerned for and against compulsory arbitration may be — and
this is not the place to decide the question — and however the
battle between the individualist and the collectivist form of economic organisation, and so the dispute on the arbitration principle,
may end, one fact emerges clearly from a review of the various
systems : everywhere, even in countries with fully developed
compulsory arbitration, voluntary conciliation between the parties
is regarded as the first object, while compulsion is held to be an
evil even where recourse to it is the rule. ]t should be remembered
that in all systems where such a thing is possible the creation of
voluntary conciliation and arbitration institutions is encouraged ;
that as a rule these have precedence over the State machinery x ;
and that even in countries with compulsory arbitration, such as
Australia and New Zealand, more and more importance has of
late been attached to the conciliation bodies and commissioners
appointed, many of them in the recent past, to supplement the
arbitration courts. In Italy, too, almost all disputes are in practice
settled by negotiation between the trade organisations of various
degrees or before the Ministry of Corporations, without the need of
State intervention in the form of a judgment by the magistratura
del lavoro.
1

Cf. above, p. 17.

CONCILIATION AND ARBITRATION AS CONTRASTING PRINCIPLES

139

It is immediately comprehensible that such authoritative
intervention is regarded as a necessary evil, even where it is
permitted and customary ; for, before every award, it must be
decided afresh which principles are to be followed, and so the problem which has been outlined— industrial, social, political — arises
again as difficult as ever. General considerations of social and
economic justice are not sufficient. Attempts, even those made by
way of agreement, to lay down principles for future decisions, have
so far had a limited application only x . Compulsory decisions, too,
will therefore as a rule be in accordance with the bargaining power
of the parties, otherwise they might not be obeyed, despite compulsion and the threat of penalties2 ; and they will only, as has often been
said, " anticipate the probable result of an open conflict " 3. This
too is certainly a difficult task, but for that reason all the more
worthy of consideration. The ideas developed above show that not
until the collective principle gains more ground in the legal system
of a State will systematic considerations of the general economic
interest * take their place beside and above those of the comparative
strength of the parties and this they will do to an increasing degree
as the industrial system shifts from a private to a public basis. It is
neither possible nor desirable to give an opinion here on the
comparative value of the two principles ; it is only necessary to
point out how difficult it is to make a correct compulsory award, and
how wise almost all States are in giving voluntary agreement
preference over compulsory State intervention.
In the above brief review of the position taken up by the most
important systems towards authoritative intervention by the State,
all the differences and contrasts between the manifold forms of
procedure have been focussed, so to speak, and displayed in aggravated shape. It is hardly necessary to point out that these
far-reaching differences and contrasts, which become increasingly
evident with every additional stage of the proceedings, make it
difficult to find common features. Nevertheless, there are such
features, and a short reference to them may be permitted in
bringing this study to its close.
1
Cf. " T h e Conciliation and Arbitration of Industrial Disputes " , in International
Labour Review, V d . XV, No. 1, 1927, pp. 93 e t seq., and bibliography.
2
Cf. above, p . 124.
» LUTZ-RICHTER, in Soziale Praxis, 1929, No. 40, p. 980.
4
In this connection reference m a y be made to the " O j h n h a u s e r " award in
1930. This, remarkably enough, made a wage reduction in the industry in question
dependent upon a reduction in the price of its products. (Nette Zeitschrift für
Arbeitsrecht, 1930, ccl. 486.)

140

GENERAL PROBLEMS

First of all, there is the basic fact that the creation of conciliation
and arbitration machinery is provided for by law in every State of
industrial importance. This machinery is put at the disposal of
employers and workers in the case of disputes, and in particular of
those on collective interests, which are the subject of this study.
The conciliation or arbitration bodies are usually set up, not afresh
for each individual case, but once for all, so that they are permanently at the disposal of anyone in need of them. Further, there
is wide agreement concerning the composition of these bodies.
Except where independent mediators are appointed, the members
of the court or board represent employers and workers in equal
numbers and are either proposed in individual cases by the parties
to each dispute, or over longer periods, as a rule by the trade
organisations. A chairman, independent of the two parties and
often required to prove his qualifications for such a post, usually
controls the proceedings and gives the casting vote if necessary.
Independence, impartiality and, in the case of the assessors, the obligation to serve and to maintain discretion, are often guaranteed by
law, in many cases under threat of penalty. More and more efforts
are being made to induce the trade organisations — particularly
those of the workers — to act directly as parties to the proceedings,
so as to secure that any agreements reached will be respected. The
procedure itself is usually elastic, and adaptable to the particular
needs of each case. Utilisation of the institutions by parties is made
as easy as possible, notably by absence of pecuniary charges. For
important cases affecting the public interest many systems provide
that the institution may open proceedings on its own initiative
and compel the parties to attend by threat of fines. Proposals
for conciliation, once accepted by the parties, usually entail
a legally binding collective contract or at least a " gentleman's
agreement ", respect of which is as well guaranteed by the honour
and self-respect of the parties as if it were made legally binding.
There is also apparently increasing recognition of at least a moral
obligation to postpone open conflicts until all the possibilities of
agreement provided by voluntarily or legally instituted proceedings
have been exhausted, particularly in disputes in public utility
services, where the pressure of public opinion must also be reckoned
with. As important disputes, whose causes and results are not
directly visible, increase in number, it is being generally recognised
that the facts can be more efficiently and impartially elucidated
through separate investigation proceedings. Such proceedings
call for increased efforts carefully to explore the economic circum-

CONCILIATION AND ARBITRATION AS CONTRASTING PRINCIPLES

141

stances as a basis for the regulation of conditions of employment,
and to make the results of investigation available for the conciliation bodies. Finally, if the e is a system of arbitration, whether set
up by agreement or by an Act, providing thus for authoritative
intervention by the State, side by side with the conciliation
system, a sharp distinction is usually made between the two, in
order that the parties' will to agree may not be unduly weakened
during the conciliation stage. Agreement is everywhere preferred
to compulsion, even where the latter is allowed ; and the encouragement of this will to agree is, explicitly and implicitly, everywhere
the first and foremost aim.
These are probably the most important features which, despite
the great diversity, may be regarded as common to all conciliation
and arbitration systems and at least justify the following final
remarks.
The conciliation and arbitration systems of all countries represent one consistent effort to guide employers and workers — in their
own interests and in that of society—towards peaceful methods in
their struggle for a share of the product of labour — a struggle
which is a manifestation of the life instinct in man and therefore
inevitable ; to show them that they need one another however
natural the antagonism between them, and that they must meet in
some form of productive collaboration if they are to Uve. Conciliation and arbitration are thus a symbol of that ideal of the
community of interest between workers, employers and society
which is the basis of modern labour law and also of the constitution
of the International Labour Organisation.

SUPPLEMENTARY NOTE

The first part of this volume had already been compiled and
was in the press when information was received as to the detailed
provisions of the Act of the Austrahan Commonwealth of 18 August
1930 (Act to amend the Commonwealth Conciliation and Arbitration Act, 1904-1928). This Act introduces important changes in
the previous legislation, in particular with regard to penalties
which, to a considerable extent, are removed or rendered much
less severe. It is true that important provisions in the new Act
have since been declared by the High Court to be unconstitutional ;
nevertheless, the comparative studies made in this work, in so far
as they deal with the regulation of arbitration by federal legislation,
and in particular to the penalties for the enforcement of arbitral
awards, no longer entirely hold good after the change in
legislation. The description of the previous legislation retains,
however, its value as a typical example, an example which is also
to be found in a similar form in the legislation of the individual
States of Australia.
For the detailed provisions of the new Act the reader may
refer to the text itself (Legislative Series, 1930, Austral. 11), to the
monograph on Australia and to the article in the International
Labour Review by Mr. O. de R. Foenander on " The New Commonwealth of Australia Conciliation and Arbitration Act" 1 .
The New Zealand arbitration legislation has often been referred
to in this comparative study as a typical example of compulsory
arbitration. The New Zealand Act of 27 April 1932 2 has practically
done away with this. We refer the reader to the Supplementary
Note to the monograph on New Zealand, in which the essential
content of the provisions of this Act is given.

1
2

International Labour Beview, Vol. X X I V , N o . 6, 1931, p . 699.
Legislative Series, 1932, N.Z.I.

CONCILIATION AND ARBITRATION
IN THE DIFFERENT COUNTRIES

GREAT BRITAIN

§ 1. — Economic Background and Development
The estimated population of Great Britain and Northern
Ireland in 1928 was 45,623,000, the total area being 94,600 square
miles. At the time of the last census (1921), the number of occupied
in Great Britain was 19,357,319 out of a total population of
42,919,710, the chief occupations being metal working, in which
nearly 2 million people were engaged ; commercial work (excluding
clerks and professional men) in which 1 % millions were engaged ;
transport and communication, occupying between 11/2 and 1 %
millions ; agriculture, occupying nearly 1 y2 millions ; mining
and quarrying, in which nearly 1 % millions gain their livelihood ;
and textile workers numbering over a million.
Both employers and employed have attained a high degree of
organisation. At the end of 1927 the total membership of trade
unions in GreatBritain and Northern Ireland amounted to 4,908,037,
of whom 4,115,929 were males and 792,108 females 1. In 1920 the
total membership of trade unions was as high as 8,336,000.
Among the largest and most powerful unions may be mentioned
those in the mining and quarrying industry, numbering 678,033 ;
those in the engineering, shipbuilding and similar trades, numbering
547,989 ; the general labour unions, with 448,305 members ; the
railway trade unions, with a membership of 413,319 ; the trade
unions in the cotton trade, with an aggregate membership of
354,128 ; the general transport unions, with 367,001 members ;
trade unions of people employed in the national, local and government services, aggregating 340,638 ; and teaching trade unions
with a membership of 205,490. The Trade Union Congress which,
in 1928, represented 160 organisations with a total membership
of 3,814,842, is the central trade union body 2.
1
These figures include a number of employers' trade unions with a membership
of some 44,000.
2
For further details of trade unionism in Great Britain, see INTERNATIONAL
LABODB OFFICE : Freedom of Association, Volume I I . Studies and Reports, Series
A (Industrial Relations), No. 29.

146

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

EVOLUTION OP THE PRESENT SYSTEM

The system of conciliation and arbitration of industrial disputes
in operation in Great Britain has a long history behind it 1 , but
so far as the present methods are concerned it may be regarded as
being in large part the growth of the last thirty or forty years.
This period falls conveniently into three divisions : the pre-war
position, the position during the war and the position after the war.
The Pre-War Position
In 1891 a Royal Commission was appointed to enquire into
various questions affecting the relations between employers and
workmen and to report whether legislation could with advantage
be directed to remedy any faults that might be disclosed. This
Commission found some eight methods of settling trade disputes
within an industry actually in practical working. It classified these
various types of machinery as follows :
(1) negotiations between individual employers and deputations or representatives of their own workmen ;
(2) negotiations between individual employers and trade union officials acting
on behalf of their workmen ;
(3) negotiations between officials of trade unions and officials of employers'
associations ;
(4) occasional meetings between committees of trade unions and committees
of employers' associations, with possibly a t the same time a standing joint committee to settle minor questions of a judicial nature ;
(5) more or less regular and periodical meetings between such committees ;
(6) formation of joint committees or wages boards either for a whole trade
or for the section of a trade in a particular district or for a single establishment,
with regular constitution and rules of procedure ;
(7) provision for reference of special cases t o an arbitrator approved by both
parties ;
(8) embodiment in the constitution of joint committees or other negotiatory
bodies of a provision for referring questions to arbitration in the event of
disagreement.

As an outcome of the work of this Commission, the Conciliation
Act of 1896 was passed. This Act did not attempt to introduce any
new principle, but contented itself with what amounted to little
more than codifying the methods already in operation. The chief
powers conferred by this Act (originally on the Board of Trade
and afterwards on the Ministry of Labour) in regard to conciliation
and arbitration were as follows : where a difference existed or
was apprehended the Board of Trade could enquire into the
difference ; could take steps to enable the parties to the difference
1
Industrial Arbitration in Great Britain, by Lord AMULKEE (Sir William
Mackenzie), traces the evolution of conciliation and arbitration practices in Great
Britain from the time of its earliest beginnings.

GREAT BRITAIN

147

to meet together with a view to amicable settlement of the
difference ; on the application of either party could appoint a
conciliator ; on t h e application of both parties could appoint an
arbitrator. I n 1908 the provision for arbitration under this Act
was extended, a Court of Arbitration being set up by the Board
of Trade. Panels of chairmen and of representatives of employers
and workers were constituted and courts consisting of three or
five members were selected from these panels as occasion required.
I n addition t o the statutory means of effecting conciliation
and arbitration thus provided, voluntary organisations for the
settlement of disputes increased in number throughout the period
preceding the war. The Second Report on Rules of Voluntary
Conciliation and Arbitration Board and Joint Committees, published
by the Board of Trade in 1910, gives details of the constitution and
prooedure of such organisations. Of the 252 boards and committees
investigated 153 had complete automatic machinery for the
settlement of disputes, 81 (of which 67 were in the building trades)
had complete machinery for the settlement of disputes but to be
used only by mutual consent of the parties, while the remaining
boards had no specific provisions for avoiding a deadlock. Besides
these boards, conciliatory agencies of a similar type existed as a
result of agreements in a number of industries, particularly the
engineering and shipbuilding trades.
I n 1911 an attempt was made in the shape of the Industrial
Council to improve on the existing methods of preventing and
settling labour disputes. This Council was made u p of twenty-six
prominent men nominated by the Government and drawn in
equal numbers from employers' and workers' organisations,
with a Chief Industrial Commissioner appointed by the Government
as chairman. The Industrial Council was designed t o act as a
National Conciliation Board. I n this capacity, however, it achieved
but little success. I t s main work was done on an enquiry requested
by the Government on the subject of agreements. I n this and in
other matters it did much to pave the way for the Whitley reports
some five years later, b u t otherwise it must be counted as an
experiment t h a t failed.
Position during the War
During the war a large number of extraordinary measures were
passed with the intention of maintaining and increasing production.
These among other things made provision for conciliation and
compulsory arbitration over large areas of industry.

148

CONCILIATION AND ARBITRATION I N DIFFERENT COUNTRIES

In February 1915 a Committee on Production was set up. This
Committee was later absorbed by the Ministry of Munitions, whereupon it became an arbitration body and quickly developed into the
principal arbitration tribunal for the settlement of labour disputes.
In March of the same year the Treasury Agreement on the
subject of the acceleration of output on Government work was
negotiated. By this agreement representatives of a large number of
trade unions agreed that stoppages of work on munition manufacture should not take place during the war, machinery for the
prevention of disputes that might arise under the agreement being
also devised. The Munitions of War Act, 1915, introduced compulsory arbitration at the option of the Board of Trade, together with
the legal prohibition of strikes and lock-outs in certain
circumstances and the statutory enforcement of awards. These
were further increased by the Munitions of War Act, 1916, which
extended the definition of munitions work and established new
arbitration tribunals for women and semi-skilled and unskilled men.
The scope of the war-time conciliation and arbitration machinery
was further extended by the Munitions of War Act, 1917, which,
among other things, made provision for the legal extension of
awards to the whole of a trade or industiy.
Under the procedure of the Munitions of War Acts arbitration
became the normal method for the settlement of labour disputes.
Prom the point of view of the workpeople it was more expeditious
to claim arbitration under these Acts than to endeavour to secure
a settlement by conciliation machinery or other negotiations. On
the employers'side also arbitration was often found to be the most
satisfactory procedure, for when so much work was being done for
Government purposes, the employers' financial interests in the
result of negotiations was diminished. During the four years
1915-1918 nearly 8,000 awards were issued by arbitration tribunals
under the Munitions of War Acts.
By the Wages (Temporary Regulation) Act of 1918, the sections
of the Munitions of War Act relative to the prohibition of strikes
and lock-outs were repealed, but a form of compulsory arbitration
was still retained for the time in the form of an interim Arbitration
Court. Apart from this, however, the legal status of conciliation
and arbitration was restored to its pre-war condition.
Position after the War
The evolution of the system of conciliation and arbitration in
Great Britain after the war is mainly wrapt up with the reports of

GREAT BRITAIN

149

the Committee on Relations between Employers and Employed,
usually known as the Whitley Committee. This Committee issued
a number of reports during the years 1917-1918, the net effect of
which so far as the prevention and settlement of industries disputes
is concerned, was : (1) the setting up of joint industrial councils by
many industries, together with a certain number of district councils
and works' committees, and (2) the passing of the Industrial Courts
Act, 1919 x. The nature and importance of this machinery is dealt
with in the ensuing chapter.
In addition to these two developments, statutory provision for
the prevention and settlement of labour disputes was made
immediately after the war in two major industries — by the Mining
Industry Act, 1920, and the Railways Act, 1921. The machinery
in the coal-mining industry has never been set up. The railway
machinery is in effect a voluntary agreement between the parties
concerned, to which statutory force has been given, being comparable in many ways to the national joint industrial councils
set up without legislation under the Whitley scheme.
Efforts to devise something in the nature of a standing joint
committee of national scope were made in 1918-1919 and again by
the Melchett-Turner Conferences in 1928-1929 ; but in both cases
without success. A proposal made in 1919 to set up a national
association of joint industrial councils, on the other hand, was
adopted, the object of this association being to take joint action
in making representations to the Government and of promoting
the exchange of ideas and the discussion of matters of common
interest. This Association has not dealt to any extent with specific
questions of conciliation and arbitration, but its labours may be
considered to have had the effect of contributing towards the
solution of difficulties over which disputes commonly arise.

§ 2. — The System in Force
The system of conciliation and arbitration in force in Great
Britain may be said to be dominated by two central principles :
first, that the prevention and settlement of disputes must be
essentially voluntary, both in the letter and in the spirit ; second,
that adequate organisation of both sides is to be desired. On this
1

Legislative Series, 1920, G.B. 1.

1 1 *

150

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

second point the pronouncement of the Whitley Committee is noteworthy :
The essential condition of securing a permanent improvement in the relations
between employers and employed is t h a t there should be adequate organisation
on the p a r t of both employers and workpeople. The proposals outlined for joint
co-operation throughout t h e several industries depend for their ultimate success
upon there being such organisation on both sides ; and such organisation is necessary
also to provide means whereby the arrangements and agreements made for the
industry m a y be effectively carried out.

In describing the various types of conciliation and arbitration
machinery at present in operation in Great Britain, it is convenient
to make the division into governmental and non-governmental
machinery. The governmental machinery includes the Conciliation
Act of 1896, the Industrial Courts Act of 1919 and the Railways
Act of 1921. The non-governmental machinery includes the joint
industrial councils set up in response to the recommendations of
the Whitley Committee and the machinery created by the various
industries on their own initiative.
GOVERNMENTAL SYSTEMS

The main provisions of the Conciliation Act of 1896 have
already been described. Its chief use at the present day is to enable
the Ministry of Labour to take mediatory and conciliatory action
wherever and whenever it judges such action advisable. For this
purpose a special Department in the Ministry of Labour is maintained. The work of this Department is purposely unobtrusive,
its object being to facilitate meeting and eventual agreement between
the parties at variance, and not in any way to appear in the guise of
quasi-arbitrators.
The Industrial Courts Act of 1919 provides for voluntary
arbitration and for enquiry. According as the parties concerned
desire, a dispute referred for arbitration under this Act may be
brought before the Industrial Court itself or before one or more
persons appointed by the Ministry of Labour or before a Board of
Arbitration formed ad hoc, such board consisting of one or more
persons nominated by the employers, a similar number nominated
by the workmen and an independent chairman appointed by the
Minister.
The Permanent Industrial Court consists of persons appointed
by the Ministry of Labour, of whom some are independent persons,
some represent employers and some represent workmen. For the
purpose of dealing with any matter which may be referred to it

GBEAT BRITAIN

151

the Court is constituted by such person or persons as the President
may direct. The usual procedure is for each case to be heard by a
Division Court consisting of the President or a Chairman selected
from one of the independent persons and other members representing the employers and workpeople respectively. The general
practice is for the Court to sit as a panel of three. It is within the
discretion of the President to utilise the service of assessors.
Cases are referred to the Industrial Court by the Minister of
Labour, but only in the event of the three following conditions
having been observed :
(1) a report made to the Minister of the existence of a dispute
by either of the parties concerned ;
(2) it having been shown to the satisfaction of the Minister
that no agreement exists by which the dispute can or may
be settled by conciliation or arbitration or that such means
have been tried without success ;
(3) the consent of both parties having been obtained.
The Court decides on the general form of procedure. Usually
the case for each side is put by one of the interested parties or
by an official of the employers' association or trade union as the
case may be. Occasionally one or both of the parties appear by
counsel or solicitor but the appearance of legal representatives of
the parties is in the discretion of the Court. Evidence is not taken
on oath, nor is the attendance of witnesses enforced by civil
process. Hitherto, industrial arbitrations in Great Britain have as
a rule been held in camera and the Industrial Court, in deference to
the desire of the parties, has followed this policy at its hearings,
but there is no statutory provision that this should be done.
Wherever the Court is constituted of more than one member
and the members are unable to agree as to the award the question
is decided by the Chairman. The award of the Court depends for
its observance upon the honour and civic sense of the parties.
There is no provision made for its penal enforcement.
The section of the Industrial Courts Act dealing with the powers
of enquiry conferred upon the Ministry of Labour provides that the
Minister may enquire into the causes and circumstances of a
dispute and if he thinks fit refer any matters connected with it to
a court of enquiry which, either in public or in private at its
discretion, enquires into the matter and reports to the Minister.
A court of enquiry thus constituted consists of a Chairman and
suoh other persons as the Minister may think fit to appoint. It has

152

CONCILIATION AND ABBITRATION IN DIFFERENT

COUNTBIES

compulsory powers insofar as it may require the attendance of
witnesses and the production of documents. It is not in any sense,
however, a court of arbitration and its report, even though it may
amount to a judgment upon as well as an explanation of the points
at issue, is not in any way binding upon the parties.
The machinery set up in the railway industry by the Railways
Act of 1921, although statutory in form, follows the lines of an
agreement between the parties concerned and is generally comparable with the joint machinery existing in other industries to which
no statutory expression has been given. The machinery in this
industry is considered to be one of the most developed forms of
joint negotiation in existence in Great Britain.
Under the terms of the Railways Act all questions relating
to rates of pay, hours of duty or other conditions of service are referred, in default of agreement between the railway companies and
the railway trade unions, to a Central Wages Board or on appeal
to a National Wages Board. The Central Wages Board consists
of eight representatives of the railway companies and eight representatives of the railway employees, the former being appointed by
the railway companies, the latter by the railway trade unions in an
agreed proportion. The National Wages Board is composed of six
representatives of the railway company, six representatives of the
railway employees (appointed by the railway trade unions) and four
representatives of the users of railways (to wit, One representative
appointed by the Parliamentary Committee of the Trades Union
Congress, one by the Co-operative Union, one by the Association
of British Chambers of Commerce, and one by the Federation
of British Industries), together with an independent chairman
nominated by the Minister of Labour. In addition to this machinery
it is laid down that one or more councils shall be established
for each railway company consisting of officers of the railway company and representatives of the men employed by the company
elected by the men. These railway councils deal with such questions
as the application of national agreements, suggestions as to operating, working and kindred subjects, and other matters in which
a company and its employees are mutually interested. Provision
is also made for sectional railway councils and for local departmental
committees each with a definite sphere of action.
An important feature of the scheme agreed upon between the
railway companies and the railway trade unions is that the National
Wages Board shall come to a decision on any matter referred to
it within twenty-eight days from the date of reference from the

GREAT BRITAIN

153

Central Wages Board and it is agreed that no withdrawal of labour
shall take place before the expiration of the twenty-eight days.
NON-GOVERNMENTAL MACHINERY

The non-governmental machinery for the prevention and
settlement of industrial disputes in operation in Great Britain
consists of the so-called Whitley Councils, being organisations
of the type suggested by the Committee on Relations between
Employers and Employed presided over by the R t . Hon. J. H .
Whitley in 1916-1917, and the systems set up by various industries
on their own initiative for dealing with disputes.
Whitley

Councils

As already stated, the Whitley Council machinery as originally
conceived was tripartite in form, consisting of National Joint
Industrial Councils covering the whole of an industry, District
Councils covering part of an industry, and works committees
covering a single undertaking. In the actual working out of the
proposals, attention has been given chiefly to the National Joint
Industrial Councils.
A National Joint Industrial Council consists of representatives
of the employers and representatives of the trade unions of an
industry. The purpose of these bodies is the prevention, fully
as much as the settlement, of disputes, it being held by the Whitley
Council that " regular meetings to discuss industrial questions,
apart from and prior to any differences with regard to them t h a t
may have begun to cause friction, will immediately reduce the
number of occasions on which in the view of either employers or
employed it is necessary to contemplate recourse to a stoppage
of work ". The list of questions considered as suitable to be dealt
with by these councils includes the better utilisation of the practical
knowledge and experience of the workpeople ; 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 ; the settlement of general principles governing
the conditions of employment, including the methods of fixing,
paying and re-adjusting wages ; establishment of regular methods
of negotiation for issues arising between employers and workpeople
with a view both to the prevention of differences and of their better
adjustment when they appear ; means of ensuring to the workpeople the greatest possible security of earnings and employment ;

154

CONCILIATION AND ABBITRATION IN DIFFERENT COUNTBIES

methods of fixing and adjusting earnings, piece-work prices, etc. ;
technical education and training ; industrial research ; 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 ; improvements of processes, machinery and organisation ;
and proposed legislation affecting the industry.
The following passage, taken from the Survey of Industrial
Relations made by the Committee on Industry and Trade in
1926 sums up very briefly the services performed by joint
industrial councils in the conciliation and arbitration of industrial
disputes :
In the field of conciliation and arbitration, the Councils have played an import a n t p a r t in assisting the industries t o settle their differences themselves. The
constitution of a large number of Councils provides t h a t no stoppage of work shall
take place until the m a t t e r in dispute has been considered b y the Council, and this
applies also to those Councils which do not include the settlement of wages among
their functions. I n some cases, as for example, quarrying, a definite procedure
has been instituted for the prevention and settlement of disputes. I n the case
of the Wool Council, panels of chairmen and arbitrators have been constituted
for the purposf of dealing with disputes arising in individual establishments. A later
development has been the ad hoc appointment on the initiative of the National
Councils for the Tramways, Electricity Supply and Wool Councils, in association
with the Ministry of Labour, of Tribunals to inquire into and make recommendations to the Councils on differences which had arisen. Experience has shown t h a t
the existence of a Joint Industrial Council, on which the organisations on both
sides are constantly in touch, and on which there is regular intercourse between
the employers' and workpeople's representatives, has enabled differences to be
dealt with a t an early stage, and has diminished the opportunity for disputes to
arise through lack of understanding 1 .

There are some forty National Joint Industrial Councils in
existence (of which rather less than half have district or local joint
bodies associated with them) and some dozen or more bodies
(interim industrial reconstruction committees, sectional industrial
councils and district councils) exercising similar functions.
Works Committees
The number of works committees in existence and active operation in Great Britain cannot be estimated with any assurance.
In the report on the establishment of the progress of joint industrial
councils published by the Ministry of Labour in 1923, the estimate
is hazarded that " considerably over 1,000 works committees
have been formed ". The decline in the number of works committees, however, would appear to have been fairly rapid since 1920.
1

Survey of Industrial

Relations, p p . 298-299.

GREAT BRITAIN

155

In the pottery industry, for instance, over a hundred works committees were formed. Later enquiry indicated that only twenty-four
of these committees were then working. The report of the Committee on Industry and Trade, dealing with industrial relations, states
that while " i t is impossible to give statistics of the number of
committees in existence, it is a matter of common knowledge that
a large number have survived the peculiarly difficult conditions
of the last five years, and that many of these have been successful
both in fulfilling the objects which the Whitley Committee had in
view and also in other directions ".
Systems Set Up by Particular Industries
The systems for the prevention and settlement of industrial
disputes set up in various industries other than on the Whitley
plan have in many cases a long and highly successful record. The
boot and shoe industry, the cotton industry, the iron and steel
industries and the engineering and shipbuilding industries are
among those having machinery for negotiation of long standing.
The nature of the machinery varies from industry to industry,
but may be said as a general rule to consist of a hierarchy of joint
committees (with or without neutral chairmen), local disputes
being dealt with by representatives of the parties to the dispute
and larger questions by representatives of the employers and trade
unions in the industry. In some cases provision is made for
optional arbitration in the event of conciliation proceedings failing
to effect a settlement, but conciliation of an essentially noncompulsory sort is the most prominent feature.
In view of their importance in the British system of conciliation
and arbitration some brief account of the schemes in operation
in certain industries is given here.
Boot and shoe industry. — Boot and shoe manufacture presents
one of the most interesting examples of what can be done by
means of machinery set up by an industry itself. Organisation
in this trade is long-standing and relatively simple, the manufacturers' associations being federated into one organisation, while the
workpeople are organised in a single union. Conciliation machinery
has been in existence in this industry for over thirty years. Following a dispute in 1895, an agreement was reached providing for
the formation of local boards of arbitration and conciliation composed of equal numbers of representatives of employers and workmen in the district, these boards to have full powers to settle all

156

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

questions submitted to them concerning wages, hours of labour
and conditions of employment, subject to certain restrictive
regulations. I t provided also t h a t no strike or lock-out should
be entered into by either party represented on the boards thus
set up. I n addition, a provision was made for the appointment
of an umpire to determine disputed points arising out of the
agreement.
At a Conference in 1910, this agreement was extended by the
provision of monetary penalties in the event of either party not
complying with this agreement, each side making a deposit of £1,000.
U p to 1920 there were thirteen cases in which fines were imposed
in accordance with the terms of the agreement.
Since 1895, annual conferences of the parties under a neutral
chairman have been held, a t which questions relating t o wages,
hours, overtime and conditions of service have been dealt with and
agreements entered into. At the Annual Conference held in 1914
a standing committee of the Conference, consisting of three representatives of each of the parties, was constituted to deal with
all matters arising out of the national agreements, including
any disputes t h a t might arise as to the interpretation of such agreements. I n December 1922, the agreement arrived at dealt with
wages (including a cost of living sliding scale), holidays, provisions
for the settlement of disputes, including local arbitration boards,
the regulation of boy and the classification of female labour, overtime, strikes and lock-outs (including the continuance of the
monetary penalty referred to above). This agreement has been
reviewed periodically at a Conference between the parties presided
over by an independent chairman appointed by the Minister of
Labour.
I n addition to the machinery already described, there is a
National Joint Industrial Council which was constituted in May
1919. On account of the well-established machinery already in
existence, however, this Council does not concern itself with
questions relating to wages, hours, overtime and conditions
of employment, and is not therefore in this sense negotiatory
machinery.
The system of conciliation and arbitration thus set up has for
some time past militated against any serious dispute occurring. A
few stoppages have taken place in isolated instances but such
disputes have been small.
Cotton industry. — The cotton industry affords an illustration
of joint negotiation directed especially to the settlement of disputes

GREAT BRITAIN

157

arising not only in the industry as a whole but also in the different
localities or in the individual mills. Based on the effective organisation of both parties, arrangements have been entered into for
the systematic consideration of differences arising in the industry.
In the spinning section of the trade it is provided that no local
employers' association or trade union shall countenance, encourage
or support any lock-out or strike until the matter has been submitted
to and considered by a local joint committee and, in the event
of their failure to agree, by a joint committee of the Federated Association of Employers and the operatives' trade unions. In the weaving section of the trade, agreements likewise exist providing
that notices of strike or lock-out shall not be tendered until the
matter in dispute has been considered by local and central joint
committees of the employers and operatives' organisations. Only
in the event of all efforts failing is a local official at liberty to take
a ballot vote of the members affected on the question of whether
they should cease work to enforce the claim.
In addition to this joint machinery for dealing with local differences, the trade unions in the industry, together with those
representing the dyers, bleachers, etc., are combined in a single
association which deals with the wider interests of the operatives
and acts in conjunction with the employers in various matters
of general concern to the industry. While the standing arrangements previously referred to for dealing with local and district
differences are operating constantly to remove friction and avoid
disputes, the larger issues, such as changes in wages or matters of
importance affecting the whole industry or the spinning or weaving
section as a whole are negotiated directly between the. central
authorities of the organisations concerned. There are no standing
arrangements for arbitration in case of breakdown of such
negotiations and it is well understood by the parties that failure
to arrive at a settlement may involve a general stoppage. It
is stated that the realisation of the serious consequence of failure
to agree has proved to be a potent factor making for peace on
such occasions.
Iron and steel industries. — The iron and steel industries represent what is almost a classic example of successful negotiation
within an industry resulting in the prevention of collective labour
disputes. It was claimed until recently that for over thirty years
the Iron and Steel Trades Confederation has not had an organised
strike against the Steel Ingot Makers' Association (now merged in the
Iron and Steel Trades Employers' Association). Much of this

158

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

success is to be attributed to the fact that in the iron trade a principle for the adjustment of wages, based on the selling price of iron
has been recognised by both sides.
All the branches of this industry have long followed methods
of negotiation and conciliation with much success either through
joint meetings of the parties concerned to deal with any difficulty which may have arisen or through recognised conciliation
machinery. The machinery for conciliation which has been agreed
upon by the Iron and Steel Trades Association and the Iron
and Steel Trades Confederation provides for conciliation in all
disputes or differences, whether the question arising is peculiar
to one workshop or to a particular district, or is a general question. The initial stage is that of conference between the works
management and the workmen concerned, with the assistance if
desired of the shop representative, district secretary or national
organiser of the workmen's union. Failing a settlement, a neutral
committee is appointed to decide the issue, the committee
members being chosen from an associated works neutral to the
works where the dispute exists. Should this neutral committee
not be able to reach a settlement then reference may be made
either to a Conference of representatives of the employers' and
of the workers' organisations, or to arbitration. Provision is
also made for local or district conferences on questions affecting
more than one works, for national conferences on general
questions, and for arbitration on all questions as a last resource.
Similar agreements exist between organisations in other departments of the industry. Having regard to the magnitude of the
industries covered, it may be said that the number of cases
actually referred to arbitration is few. At the same time there
appears to be a readiness on the part of all parties to go to arbitration as a last resource. There has been, however, a number of
stoppages since the war although none of these stoppages was on
anything approaching a national scale.

§ 3. — Results and Opinions
The most remarkable feature of the statistics on strikes and
lock-outs in Great Britain over the period 1893-1931 is the number
and size of the stoppages of work during the post-war years, culminating in the general strike and prolonged stoppage in the coal-

159

GREAT BRITAIN

mining industry in 1926. General coal-mining stoppages also
occurred in 1893, 1912, 1920 and 1921 and account largely for the
magnitude of the figures for those years.

Year

disputes
beginning in year

Number of workpeople
directly involved in
disputes beginning in
year

Aggregate duration in
working days of all
disputes in progress
during year

1893
1894
1895
1896
1897
1898
1899
1900
1901
1902
1903
1904
1905
1906
1907
1908
1909
1910
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931

599
903
728
906
848
695
710
633
631
432
380
346
349
479
585
389
422
521
872
834
1,459
972
672
532
730
1,165
1,352
1,607
763
576
628
710
603
323
308
302
431
422
420

597,000
254,000
205,000
142,000
166,000
199,000
137,000
132,000
111,000
115,000
93,000
56,000
67,000
158,000
100,000
221,000
168,000
384,000
824,000
1,232,000
497,000
326,000
401,000
235,000
575,000
923,000
2,401,000
1,779,000
1,770,000
512,000
343,000
558,000
401,000
2,724,000
90,000
80,000
493,000
286,000
424,000

30,440,000
9,510,000
5,700,000
3,560,000
10,330,000
15,260,000
2,500,000
3,090,000
4,130,000
3,440,000
2,320,000
1,460,000
2,370,000
3,020,000
2,150,000
10,790,000
2,690,000
9,870,000
10,160,000
40,890,000
9,800,000
9,880,000
2,950,000
2,450,000
5,650,000
5,880,000
34,970,000
26,570,000
85,870,000
19,850,000
10,670,000
8,420,000
7,950.000
162,230,000
1,170,000
1,390,000
8,290,000
4,400,000
6,980,000

Nnmtw»r nf

A special study of the period 1910-1924 yields a number of
interesting facts concerning the magnitude, causes and results of
the stoppages of work in Great Britain.
The outstanding feature in the statistics of the magnitude of
stoppages of work during this fifteen-year period is the fact

160

CONCILIATION AND ABBITRATION IN DIFFERENT COUNTRIES

that whereas only 2 per cent, of the strikes and lock-outs were
of such extent as to affect directly 5,000 or more workpeople,
this 2 per cent, of large strikes nevertheless accounted for 71
per cent, of the workpeople involved in disputes and 83 per cent.
of the working days lost. Still more remarkable is it that the
twenty-five largest disputes occurring during this period resulted
in a loss of 196 million out of a total of 283 million working
days, of which large coal strikes alone accounted for 129,489,000
days 1.
Turning to the causes of strikes and lock-outs, 66 per cent.
of the stoppages during this period concerned wages, while 4 per
cent, only were attributable to disputes concerning hours of labour.
For the rest 15 percent, of the disputes were due to "employment
of particular classes of persons ", 6 per cent, to " other working
arrangements, rules and discipline ", 7 per cent, to " trade
unionism " (i.e. questions of trade union principle) and 2 per cent.
to " miscellaneous causes ".
If the number of workpeople directly involved is taken into
account the outstanding importance of wages as a cause of industrial
disputes is yet more strongly emphasised. During the fifteen-year
period under consideration 69 per cent, of the workpeople engaged
in disputes stopped work on account of wage questions, 7 per
cent, over questions of hours of labour, 8 per cent, over employment
of particular classes of persons, 6 per cent, over other working
arrangements, rules and discipline, 8 per cent, over questions
affecting trade unionism and 2 per cent, over other miscellaneous
causes.
The results of stoppages of work during this period 1910-1924
show 44 per cent, of the cases as being eventually settled by
compromise between the two parties, 30 per cent, as settled in
favour of employers, and 26 per cent, in favour of workpeople,
the corresponding proportions as regards the number of workpeople involved being 66 per cent., 15 per cent, and 19 per cent.
respectively.
METHODS OF SETTLEMENT

The following table shows the method of settlement of the
stoppages of work occurring during the period 1910-1924, as also
1
If the 1926 coal strike were taken into consideration these figures would be
even more striking.

161

GREAT BRITAIN

the number of workpeople directly involved. The corresponding
figures for the years 1925-1931, as published annually in the
Ministry of Labour Gazette, are also given.
METHODS OF SETTLEMENT,

Year

By direct
negotiations
between the By conciparties or
liation
their representatives

1910-1924

By return to
work on
By arbiemployers' Otherwise
tration
terms without
negotiation

Total

Number ol disputes

1910
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924

357
635
620
1,129
717
408
343
461
747
1,042
1,184
573
408
478
492

33
80
65
118
54
44
48
87
138
83
128
48
54
49
75

25
21
22
24
27
58
68
112
177
108
62
20
9
22
19

66
67
69
117
108
105
47
31
56
54
122
62
59
51
64

44
69
58
71
66
57
26
39
47
65
111
60
46
28
50

521
872
834
1,459
972
672
532
730
1,165
1,352
1.607
763
576
628
700

9,594

1,104

774

1,078

833

13,383

Number ol workpeople (thousands) directly involved

1910
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924

192
278
286
361
172
95
116
167
435
1,694
1,593
1,719
476
229
314
8,127

1 2

163
513
59
95
127
248
31
114
171
62
89
14
9
38:
188 i
1,921

9
14
13
15
7
27
61
82
155
147
34
7
1
20
19

18
16
22
23
17
24
15
32
62
269
57
28
24
54
33

2
3
852
3
3
7
12
180
100
229
6
2
2
2
2

384
824
1,232
497
326
401
235
575
923
2,401
1,779
1,770
512
343
556

611

694

1,405

12,758

162

CONCILIATION AND ARBITRATION IN DIFFERENT

METHODS OF SETTLEMENT,

Year

By direct negotiations between the
By conciparties or
liation
their representatives

COUNTRIES

1925-1931

By return to
work on
By arbiemployers'
tration
terms without
negotiations

By replacement
of work- Otherwise
people

Number of disputes
1925
1926
1927
1928
1929
1930
1931

423
219
227
199
279
265
274

44
19
15
14
25
39
34

10
6
4
4
12
9
3

68
45
30
55
80
68
62

44
20
19
21
24
32
33

7
12
8
11
9
14

Number of workpeople (thousands) directly involved
1925
1926
1927
1928
1929
1930
1931

165
77
69
55
79
174
205.7

26
5
7
5
5
88
163.1

166
1
5
1
391
3
3.7

10
10
5
19
16
20
47.7

8
1
—
1
1
1
1.4

—
3
—
1
1
2.6

Prom these tables it will be seen t h a t during the fifteen-year
period 1910-1924 72 per cent, of the total number of settlements,
accounting for 65 per cent, of the total number of workpeople
involved, were made by direct arrangement between the parties.
Next in numerical importance was the method of conciliation
by which 8 per cent, of the total number of disputes were composed,
involving 15 per cent, of the total number of workpeople. Recourse
to arbitration terminated 6 per cent, of the disputes, affecting
5 per cent, of the workpeople. Return to work on the employers'
terms was recorded in the case of 8 per cent, of the disputes,
affecting 5 per cent, of the workpeople. Five per cent, of the
disputes were settled by replacement of the workpeople, but as
these were mainly small disputes the proportion of the workpeople
involved in stoppages who lost their employment in this way
was almost negligible — only about a quarter of 1 per cent. Other
methods of settlement accounted for only 1 per cent, of the total
number of disputes, but in these disputes 11 per cent, of the total
number of workpeople were involved, 7 per cent, being engaged
in one dispute, namely, the stoppage of work on the part of
850,000 coalminers in 1912, the matter at issue in which was

GREAT BKITArtT

163

ultimately settled by the passing of the Coal Mines (Minimum
Wage) Act 1912.
I t is of interest to note t h a t during the war years 1915-1918
the proportion of disputes settled by arbitration rose as high as
13 per cent, and the proportion of workpeople involved in disputes
thus settled to 15 per cent.
These figures showing the methods of settlement of disputes
do not give a full picture of the activity of the official conciliation
and arbitration machinery, inasmuch as they refer only to those
disputes which gave rise to a stoppage of work. As stated in the
following passage (extracted from the Report of the Ministry of
Labour for the year 1928) the chief work of this machinery is
done in disputes where a stoppage of work is prevented :
The work of the Department has been marked by the early association of its
officers with the discussion of questions likely to become the subject of disputes
and this work, while not susceptible of statistical measurements, has produced
useful results in directing the discussion of those questions along lines calculated
to provide a basis of agreement. I n most eases agreements have eventually been
reached by the parties themselves without the further intervention of the Department. Officers of the Department have been actively associated with over 500
differences during the year, in addition to dealing with a much larger number of
inquiries on industrial matters, and in 38 cases officers were personally associated
with the final negotiations which produced settlements. The policy of the Department is to avoid unnecessary intervention and to encourage the parties to reach
a settlement themselves. Many thousands of workers were concerned in these
differences which, in the main, were settled long before relations became strained.

The number of cases settled with the assistance of the Board
of Trade and the Ministry of Labour under the Conciliation Act,
1896, and the Industrial Courts Act, 1919, is shown in the following
table :
Year

1896
1897
1898
1899
1900
1901
1902
1903
1904
1905
1906
1907
1908
1909
1910
1911
1912

Number
ol cases
11
37
12
11
21
33
21
17
12
14
20
39
60
57
67
92
73

Year

1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929

Number
of cases
99
81
397
1,412
2,474
3,583
1,323
920
272
103
167
252
257
137
103
103
94

164

CONCILIATION AND ARBITRATION EST DIFFERENT COUNTRIES

The record of the Industrial Court and of Courts of Enquiry
is set out in the following table showing the number of cases
referred during each year to the Industrial Court itself, to single
arbitration, to ad hoc boards and to Courts of Enquiry.
Year

Industrial Court

Single
arbitration

1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929

49
540
122
37
113
143
165
104
82
52
39

385
73
19
9
14
7
8
5

20
15
7
8
6
12
8
4

—
—

—
—
—

Ad hoc Boards

Courts of
Enquiry

6
1
1
1
7
3
1

—
—

~~*

So far as non-Governmental agencies are concerned, the Report
of the Ministry of Labour for 1928 states that " it is satisfactory
to record that the activities of the councils in existence have in
no way diminished. As in the past wages and working conditions
have been the main subject of consideration by most of the councils,
but in addition many councils have accomplished much other
useful work. " Of the machinery set up by industries on thenown initiative the same report states " it is satisfactory to recall
not only a consolidation of conciliation machinery in the industries
themselves, but also a steady growth in the habit of approaching
differences with a desire to find an agreed settlement ".
OPINIONS

As regards prevailing opinion in Great Britain concerning the
prevention and settlement of industrial disputes, there can be
no question that both employers and workers are absolutely
opposed to compulsory methods of any sort, nor would there seem
any disposition on the part of the country as a whole to depart from
the voluntary principle. The theory and general working practice
is that every facility should be given to the parties concerned to
encourage and to enable them to compose their differences in their
own way. It is interesting to note however that in a Report on
Methods of Regulating Wages and Working Conditions, published by
the Scottish Trades Union Congress in 1930, the statement was

GREAT BRITAIN

165

made t h a t " the present circumstances of industrial life demand
a greater measure of compulsion by the State to ensure t h a t
when disagreements over wages and conditions occur, the parties in
disagreement be at least brought together — and t h a t before strikes
and lock-outs actually take place or are imminent ".
Next in importance to this general consensus of opinion in
favour of voluntary methods is the general acquiescence in the
practice by which trade union representatives take part in the
negotiations. I t may be considered as a cardinal precept of British
industrial practice t h a t adequate organisation on both sides is
encouraged and by many is regarded as essential. I t is true t h a t
opinions are expressed by certain employers showing a decided
anti-union tendency — as, for the matter of that, there are individuals on both sides who are not wholly averse to compulsory
arbitration — but, speaking generally, the right of the trade union
to speak for its members is recognised.
On other less vital points there is considerable diversity of
opinion. The proposal to make it possible for the Minister of
Labour to apply the principle of the " common rule " to an industry,
i.e. to make an agreement reached by a Joint Industrial Council
or other similar body binding upon the whole of an industry,
has been continually brought up, but no action has so far been
taken. The question was considered a t the Trades Union Congress
in 1912 and 1913, and also by the Labour P a r t y in 1913, but was
rejected at all of these meetings. I t was re-examined at the Trades
Union Congress in 1921, 1923 and 1924, but on each occasion was, in
one form or another, rejected. A number of Private Members' Bills
have been introduced into the House of Commons having this
object, but no action has been taken upon them.

§ 4 —

Summary

The system of conciliation and arbitration in Great Britain
thus consists of (1) governmental agencies, set up under the Conciliation Act 1896 and the Industrial Courts Act, 1919, which make
provision for conciliation, optional arbitration (whether by a
standing court, an ad hoc court or arbitrators specially appointed)
and enquiry ; and (2) non-governmental agencies, namely the Joint
Industrial Councils (" Whitley Councils ") and the various bodies
and forms of procedure developed by organisations of employers
1 2 *

166

CONCILIATION AND ARBITKATION IN DIFFERENT

COUNTRIES

and workers in particular industries. In addition there is the machinery in the railway industry, statutory in form (having been set
up under the Railways Act, 1921), but non-Governmental in fact.
Considered as a whole the system is essentially non-compulsory
and is based upon the adequate organisation of both sides. Of
the government agencies the conciliation machinery is the most
used and the court of enquiry the least used. The non-Governmental
agencies cover practically the whole of organised industry. Many
of the large and old-established industries (coal, iron and steel, cotton, etc.) have not adopted the Whitley council system, preferring
to keep the form of organisation that has been gradually developed
over the course of years.
Great Britain suffered severely from industrial unrest in the
years immediately preceding and the years following on the World
War, the movement in the latter period culminating in 1926 in
the general strike and prolonged stoppage of work in the coalmining
industry. A few large stoppages, particularly in the coalmining
industry, have been responsible for over two-thirds of the total
number of days lost owing to strikes and lock-outs. Approximately
two-thirds of the stoppages of work recorded have been over questions affecting wages. Some 15 per cent, of the actual stoppages
of work are settled by means of conciliation and/or arbitration,
but the Conciliation Department of the Ministry of Labour is instrumental in preventing many differences from reaching the stage
of strike or lock-out.

BIBLIOGRAPHY
OFFICIAI,

MINISTRY O F LABOUR. Industrial Reports :

No. 1. Industrial Councils (the Whitley Report, together with t h e letter
of t h e Minister of Labour explaining the Government's view of its
proposals).
No. 2. The Report of the Enquiry conducted by the Ministry oj Labour into Existing
Works Committees.
No. 3. Industrial Councils and Trade, Boards (Joint Memorandum of Minister
of Reconstruction and the Minister of Labour explaining the Government's
view of the proposals of the second Whitley report, together with t h e
t e x t of the report).
No. 4. Industrial Councils. (Suggestions as to the constitution and functions
of a National Joint Industrial Council, of District Councils, of National
Joint Industrial Councils, and of Works Committees in industries in which
National Joint Industrial Councils are established).
Report
1917-1922.

on the Establishment

and Progress of Joint Industriai

Councilst

167

GREAT BRITAIN

MINISTRY O F LABOUR. Twelfth Report of Proceedings under the Gomiliation
Act, 1896, and Report of Arbitration under the Munitions of War Acts, 1914-1918.
Report on Conciliation and Arbitration, 1919.
Report on Conciliation and Arbitration, 1920.
Annual Reports of the Ministry of Labour.
Decisions of the Industrial Court. Published by H.M. Stationery Office.
Reports of various Courts of Enquiry under Industrial Courts Act, 1919.
Files of the Ministry of Labour Gazette.
COMMITTEE OF INDUSTRY AND T R A D E .

Survey of Industrial

Relations.

1926.

NON-OFFICIAI

Of the various non-official publications on the question t h e following are among
the most informative :
ASKWITH, Lord. Industrial Problems and Disputes, 1920.
CLAY, Henry. The Problem of Industrial Relations and other Lectures, 1929.
MACKENZIE, Sir William (Lord Amulree). " The British Industrial Court. "
International Labour Review, Vol. I l l , Nos. 1 and 2, July-August, 1921.
The Industrial Court, Practice and Procedure, 1923.
Industrial Arbitration in Great Britain. 1929.
PLAUT, Dr. Th. Das Schlichtungswesen in England. Munich, 1930-1931.
SEYMOUR, J o h n Barton. The Whitley Councils Scheme. London, 1932.

IRISH FREE STATE
The system of conciliation and arbitration in force in the
Irish Free State is essentially similar to t h a t in operation in Great
Britain, the same two basic Acts — the Conciliation Act, 1896
and the Industrial Courts Act, 1919 — being applied, and like
methods followed.
According to the Irish Trade Journal (the official organ of the
Department of Industry and Commerce), conciliation of industrial
disputes has tended during recent years to replace arbitration.
I t is stated t h a t when a dispute occurs the Department of Industry
and Commerce rarely experiences any difficulty in arranging a
joint conference between the parties concerned.
The following tables show the number of stoppages of work,
workpeople involved and working days lost for the years 1926-1931 :
Year

Number of stoppages
of work beginning
during the year

Number
of workpeople
involved

Number of working
days lost

1926
1927
1928
1929
1930
1931

57
53
52
53
83
60

3,455
2,312
2,190
4,533
3,410
5,431

85,345
64,020
54,292
101,397
77,417
310,199

Of the total of 215 strikes and lock-outs occurring during these
four years, 124 were over wage questions. These wage disputes
led to the loss of 231,893 working days out of a total of 305,054
The method of settlement of stoppages of work during the years
in question is shown hereunder :
Numbers of disputes

Method of settlement

Direct negotiation between parties
Terminated

without

1926

1927

1928

1929

1930

1931

31
14
1

38
10

41
9
1

34
12
1

51
17

47
11

successful

Total

. . . .

169

IRISH FREE STATE

Numbers of workpeople involved

Method of settlement
1926
Di rect negotiation between parties 2,510
456
20
Terminated without successful
132
Total

. . . .

3,118

1927

1928

1929 | 1930

1931

1,152
957

1,391
593
70

1,429
2,978
62

1.410
1,726

1,760
3,603

152

101

110

2,261

2,155

4,502

3,246

5,408

The number of disputes in which the Trade and Industries
Branch of the Department of Industry and Commerce intervened
was as follows :
1926
(a) Disputes in which an actual
stoppage of work had occurred
(b) Disputes in which a stoppage
of work was averted . . . .

1927

1928

1929

1930

1931

FRANCE
§ 1. — Economic Background and Development
I n 1927, France had a population of about 40,960,000 inhabitants
spread over an area of 550,986 sq. km. The rural population
represents rather more than half the total.
According to the Census taken in 1921 x the active population
consisted a t t h a t time of 21,720,604 persons, t h a t is, about 56 per
cent, of the total population. They were distributed among the
main occupational categories as follows : agriculture (including
forestry and fishing) 42 per cent, or more than 9,000,000 persons ;
industry and transport 31 per cent., and commerce 11 per cent.
More than 250,000 workers were employed in mining in 1921
and 72,500 in fishing.
The following industries are among the most important :
cotton (over 188,600 workers in 1928) ; metallurgical (175 undertakings in 1925 employing more than 100,000 workers) ; refining
(108 undertakings in 1927-1928 employing nearly 29,000 persons),
and distilling and other branches of the wines and spirits industry.
According to statistics supplied by the Foreign Labour Department 2 97,742 foreign workers — 63 per cent, for agriculture and
37 per cent, for industry — entered France during 1928. During
the same year 53,759 foreign workers were repatriated.
Trade associations, which were prohibited by the Le Chapelier
Act of 1791, remained illegal until 1884, when an Act was passed
recognising the right of association.
The workers' unions have had their central organisation, t h e
General Confederation of Labour (Confédération générale du
travail — C.G.T.),' since 1902. The activities of this body are
carried on through the agency of permanent committees and
mainly through the National Confederal Committee (Comité
confédéral national).
1
M I N I S T È R E D U T R A V A I L : Statistique
générale de la France.
Résultats
statistiques du recensement général de la population, 1921, Vol. I, P a r t 3, p p . 7-10.
2
M I N I S T È R E D U T R A V A I L : Statistique générale de la France :
Annuaire
statistique, 1928, p. 14.

PRANCE

171

In 1922 there was a split in the C.G.T. Part of its members left
it and formed an organisation with Communist tendencies, the
Unitary General Confederation of Labour (Confédération générale,
du travail unitaire,), which in December 1928 had a membership
of 375,000, while the membership of the General Confederation
at the same date was 640,790.
Besides these two main groups, mention should be made of
the National Confederation of Christian Workers (Confédération
nationale des travailleurs chrétiens) which embraced 120,000 members.
There are also other organisations of less importance.1
The employers' organisations on their side organised themselves
during the war into a General Confederation of French Production
(Confédération générale de la 'production française), which to-day
includes more than 1,200 particularly influential organisations.
There is also a General Confederation of French Craftsmen ;
finally, the Chambers of Commerce also play an important part.
During the period of monarchy that preceded the Revolution
of 1789 the workers' right of combination was not recognised, and
the collective refusal to work was a punishable offence. These restrictions were not abolished by the Revolution. The Le Chapelier
Act of 1791 prohibited combination for the purpose of refusing to
work. Similarly, the concerted stoppage of work and every form
of combination on the part of the workers for this object remained
an offence after the introduction of the Napoleonic Penal Code,
which also prohibited combination on the part of employers for
the purpose of forcing wages down below a reasonable limit.
Penalties were provided in the form of fines and imprisonment.
In spite, however, of the penalties provided by the law, the
first half of the nineteenth century witnessed a great number of
strikes. This was due to the rapid development of large-scale
industry and the unbridled freedom of competition, which was
not then regulated by any form of social legislation and prevented
individual employers from satisfying the claims of their workers,
even when such claims were legitimate. From 1848 to 1864
proceedings were taken in 1,144 cases of combination on the part
of the workers, and heavy penalties were inflicted on 6,812
offenders.
In 1863, however, the typographical workers of Paris, who had
quite justifiably declared a strike as a protest against the sudden
withdrawal of their collective agreement, were imprisoned by
1

Freedom of Association,

Vol. I I , p p . 107-115.

172

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

virtue of the Penal Code according to which their action was
equivalent to an offence under common law. As a result of this
incident, the necessity of modifying these provisions came under
consideration.
A few months later the offence of concerted stoppage of
work was abolished by the Act of 25 May 1864, and replaced by
that of restriction of the freedom of work.
In recognising the right of combination, the legislative authorities did not intend to encourage strikes, but, on the contrary,
to provide the parties concerned with the opportunity of coming
to an agreement on conditions of labour by peaceful means.
This hope was not, however, realised ; and the period that
followed the passing of the 1864 Act and of the Act recognising
the freedom of association (1884) was, on the contrary, characterised by a new outbreak of industrial disputes and stoppages.
In order to put an end to them an attempt was made to set up
machinery intended to encourage the peaceful settlement of disputes, such as joint associations, works councils, or permanent joint
conciliation and arbitration boards. On the other hand, the
system of collective agreements rapidly assumed great importance.
But the lack of a body of generally applicable regulations to facuítate
the peaceful settlement of labour disputes was still felt. This
want was supplied when, following the introduction of a Bill
drafted by Mr. Jules Roche, an Act on conciliation and arbitration
in collective disputes between employers and wage earners or
salaried employees was passed on 27 December 1892. This Act
is still in force and its provisions will be considered in detail in
the following section.
Since 1892 a very great number of Government Bills and
parliamentary proposals have been introduced with the object
of improving the system set up by the 1892 Act. Among such
Bills that introduced in 1900 by Mr. Millerand, Minister of Commerce,
and Mr. Waldeck-Rousseau, Minister of the Interior, deserves
special mention.
The Bill covered only industrial or commercial undertakings
employing not less than fifty workers or employees, the head of
which had declared his willingness to accept the official system.
In every such establishment a permanent works or workshop
council, consisting of representatives of the staff, was to be set
up with a view to preventing labour disputes.
These representatives, whose primary function was to be
that of a conciliation committee, were to meet periodically with

TRANCE

173

the head of the undertaking himself or with his accredited representative, and to acquaint him with the demands of the staff.
In the event of dispute, the parties were to choose arbitrators.
Should the employer refuse to do this, the Bill, in a series of detailed
provisions, conferred on the workers the right to declare a strike
by a majority vote. Further, a Labour Council was to be set
up in every district ; it was to assemble ex officio immediately
on the declaration of a strike, and to make an arbitration award.
Such an arbitration award was to be binding, and to have the
force of a collective agreement between the parties for a period
of six months.
This procedure, however, concerned only the internal organisation of undertakings, and was not applicable to. disputes extending to several undertakings or to a whole industry.
After having been first rejected in 1900, this Bill was introduced
again with equal lack of success in 1902, 1906, 1910 and 1917.
During the latter year, the situation created by the war made it
necessary temporarily to adopt vigorous measures calculated to
prevent any stoppage of work.
With this object, the Decrees of 17 January and 7 September
1917 were put into force. By virtue of their provisions, permanent
conciliation and arbitration committees were set up in various
districts, ensuring the rapid operation, guaranteed by penalties,
of conciliation and arbitration machinery.
But although it was possible in wartime to eliminate strikes
and lock-outs by this means, it was not easy to pass measures for
the same purpose when peace was restored. This explains the
failure of the new Bill introduced by the Government in 1920.
This Bill provided that the delegates, freely chosen by the
workers, were no longer to be appointed permanently and in
advance as under the previous Bills, but only whenever the danger
of a dispute arose.
All collective disputes were to be submitted to conciliation
procedure, for which concihation committees might be set up by
public administrative regulations. If the conciliation proceedings
failed, the parties might have recourse to arbitration. No strike
was to be allowed until concihation or, in the event of its being
accepted, arbitration had been attempted. Compulsory arbitration
was provided for in the case of a certain number of undertakings,
mainly pubhc utility services. In the event of a collective stoppage
of work in an undertaking of this kind, the Government might
exercise a right of requisition.

174

CONCILIATION AND ABBITRATION IN DIFFERENT

COUNTRIES

The Bill provided for penalties in the form of fines and even
of imprisonment for any employer who should prevent the delegates
from performing their duties, any party who should refuse to attend
a meeting of a conciliation committee or arbitration board, and
any person who should provoke an unauthorised strike.
All arbitration awards were to be made known to the interested
parties, and might also be published.
I n 1921 an amendment to the Labour Committee's Bill was
proposed which really amounted to a counter-proposal. I t provided for the appointment of " permanent works representatives "
in every undertaking employing not less than 100 workers or
employees. District trade committees were also to be set up. In
the event of a collective dispute, recourse [to conciliation and
arbitration through these district committees was t o be compulsory. Penalties were also provided ; but, except in the case of
public utility undertakings, the normal exercise of the right to
strike was not restricted. The counter-proposal of 1921 met with
no more success than the earlier Bills.
Finally, in March 1929 the Government introduced a Bill
drafted by Mr. Loucheur, Minister of Labour, providing for compulsory conciliation in collective labour disputes.
This Bill lays down provisions for a compulsory interview
between the parties prior to any stoppage of work. From this
interview onwards, and at all their meetings, the parties may be
assisted and represented by their associations. If no settlement
is reached and a strike is declared, conciliators may be chosen
by the parties themselves, the Minister of Labour or the prefect.
When the choice rests with the Minister of Labour, he may
also instruct the parties to appear before the Superior Conciliation
Committee attached to the Ministry of Labour. This Committee
is to consist of an equal number of employers and workers, chosen
by the Minister from among the members of the Economic Council.
Finally, further measures of conciliation may be prescribed
if the stoppage continues.
In the event of failure to reach a settlement, provision is
made for arbitration procedure, recourse to which is however to
be optional.
The Bill also lays down provisions for the conclusion of collective
agreements in the event of a settlement, and if no settlement is
reached for the posting of a report t o this effect.
A fine may be imposed on any employer or worker who
refuses to submit to compulsory conciliation or who interferes

FRANCE

175

with the free choice of delegates or hinders them in the exercise
of their functions.
This Bill was passed by the Chamber of Deputies, with some
amendments, on 25 June 1929.
It has not yet been ratified by the Senate, and the Act of 1892
is therefore still in force.

§ 2. — The System in Force
CONCILIATION

The Act of 27 December 1892 concerning conciliation and
arbitration in collective disputes between employers and wageearning or salaried employees 1 provides only for temporary
conciliation committees, to be set up in the event of a dispute
and with the agreement of those concerned. They consist of
representatives of the parties concerned, and are convened by
the justice of the peace, who directs their labours in an advisorj'
capacity.
The parties are allowed free choice of their own representatives,
who must not exceed five in number for each party and must
be French citizens. Women may also be members of the committee
on condition that they are of French nationality. Under the terms
of the Act, the members of the committee are to be chosen from
among the persons concerned, but it is permissible for the latter
to be represented by members of their trade associations.
In order that conciliation proceedings may be instituted before
a stoppage occurs, both or one of the parties must submit the
matter under dispute to the justice of the peace of the " canton "
in which the dispute has arisen, in a written report setting forth
the subject of the dispute and the alleged cause and indicating
the name, occupation and address of the persons making the
application, their opponents, and the representatives chosen.
Such an application may also be made after the outbreak of
the strike or lock-out. At this stage of the dispute, the justice
of the peace may, if he considers it expedient, invite the parties
ex officio to submit their difference to conciliation procedure. If
the dispute extends to several industrial undertakings spread over
several " cantons ", this may result in several justices of the
1

Code du Travail, Book IV (Legislative Series, 1924, Fr. 3).

176

CONCILIATION AND ABBITRATION IN DIFFERENT COUNTRIES

peace being informed of the dispute simultaneously. In such an
event either the justices or the parties themselves must agree
to appoint a single justice as mediator.
The parties must in any case send a reply to the justice of the
peace within three days, informing him of their acceptance or
refusal. Failure to reply is taken to constitute a refusal. If the
parties accept, the justice of the peace sends an urgent summons
to the conciliation committee. The committee meets in his
presence, although his rôle is limited to guiding its discussions.
Any decision reached by the committee must be adopted unanimously by all the members. The terms of the settlement thus
adopted have the force of a collective agreement.
The justice of the peace makes a report on the meeting of
the committee. If an agreement is reached, this report is signed
by the parties and the decision is communicated by the justice
of the peace to the mayor of each of the communes to which the
dispute extends, and publicly announced. Application for concililiation proceedings and refusal to take part in them are also made
public by the mayor. Moreover, the Act authorises and facilitates
the publication of the decisions by means of notices posted by
the parties themselves.
Conciliation procedure is free of charge ; the application of
the law is left entirely to the goodwill of those concerned and
failure to apply it entails no penalties.
ARBITRATION

If the conciliation proceedings should be unsuccessful, the
justice of the peace must try to bring about arbitration.
The 1892 Act leaves the formation of the arbitration board,
like that of the conciliation committee, to the parties themselves.
The parties choose either a common arbitrator, or one or
several arbitrators each. Membership of the arbitration board
is open only to male French citizens, and women are therefore
ineligible. The parties must define the questions submitted to
the arbitration board in detail, and the board is bound to adopt
some decision.
If the arbitrators fail to reach agreement on the terms of
settlement of the dispute, they may choose another arbitrator to
give the casting vote. If they are equally unable to agree upon
the choice of this umpire, the latter is nominated by the president
of the civil court.

FRANCE

177

The decision is formulated and signed by the arbitrators a n d
handed over to the justice of the peace. As in concihation procedure,
it is sent t o the mayor and made .public by the posting of notices ;
and no penalties are provided under the Act.
When the arbitration award has been accepted by the parties,
it has the force of a collective agreement.
CONCILIATION AND ARBITRATION IN COLLECTIVE D I S P U T E S
BETWEEN SHIPPING COMPANIES AND CREWS

Special arbitration procedure for the settlement of collective
disputes arising between shipping companies and crews was
introduced by an Act of 22 July 1909 and a Decree of 19 March
1910 l . The Act originally provided for a Permanent Arbitration
Board (Conseil permanent d'arbitrage), but until the war this
body was never able to function, and Orders issued in 1917, 1918
and 1919 respectively replaced it by a system of superior arbitration boards (commissions supérieures d'arbitrages) consisting of
representatives of the shipowners on the one hand and of the
ships' crews on the other. The Permanent Arbitration Board was,
however, re-established by a Decree of 24 September 1925 2
(amended by a Decree of 11 March 1930 3 ). I n its present form the
Board is composed of two arbitrators, nominated by shipowners
and crews respectively from among the magistrates of the Council
of State, the Court of Cassation, or the Paris Court of Appeal.
Each acts as Chairman in turn, and they are assisted by three
assessors from the employers' and three from the workers' side,
nominated in accordance with procedure laid down by sections 2,
3 and 4 of the Decree of 1925.
Conciliation
The Decree of 1925 provides for preliminary concihation
proceedings before the superintendent of shipping registration.
This official convenes the parties either on his own initiative or a t
the request of one of them. Failure on the part of the conciliation
committee to reach agreement is immediately reported to the
Minister responsible for the mercantile marine.
If the meeting for conciliation takes place, the superintendent
1
2
3

Bulletin of the International Labour Office (B^slt), 1913, Vol. V I I I , p . 171.
Legislative Series, 1925, Fr. 12.
Ibid., 1930, Fr. 2.

1 3

178

CONCILIATION AND ARBITRATION IN DIFFERENT COITNTRIES

draws up a report of the terms of settlement agreed upon or of its
failure to reach agreement, and communicates it to the Minister
without delay.
Arbitration
Should the conciliation proceedings be unsuccessful the Minister
must, as soon as he is informed of the fact, convene the Permanent
Arbitration Board, whose decisions can only be valid if the two
arbitrators, together with two assessors for each of the parties,
are present. Any award issued by the Board must be adopted
by a majority of the members, including the two arbitrators.
When the Permanent Arbitration Board is not able to come to
a decision, an umpire may be appointed with the consent of the
parties. He may be nominated either by the parties themselves
or by the Minister responsible for the mercantile marine, and
must be chosen from among the magistrates who are eligible as
arbitrators.
The arbitration award is made public by the posting of notices,
and is inserted in the Journal officiel and in the Official Gazette
of the Mercantile Marine Department.
CONCILIATION AND ARBITRATION IN COLLECTIVE DISPUTES
BETWEEN SEA-FISHING UNDERTAKINGS AND CREWS

A Decree of 28 January 1927 1 provides special conciliation
and arbitration machinery for the settlement of collective disputes
in the sea-fishing industry, intended to function in the various
fishing ports to be indicated in a subsequent Order. There are
no penalties guaranteeing the provisions of this Decree.
Conciliation
Conciliation proceedings must take place in the presence of
the superintendent of shipping registration (administrateur de
l'inscription maritime). The latter, who intervenes in the dispute
either ex officio or at the request of one of the parties, must try to
bring the delegates of the crew and the employer's representative
together in a conciliation committee, and, if they obey his summons (
must try to bring about a settlement. If his efforts are successful,
he draws up a conciliation report signed jointly by himself and
the parties, and forwards it to the prefect.
Legislative Series, 1927, Fr. 1.

FBANCE

179

If the parties fail to appear or if the conciliation proceedings
break down, a report must similarly be drawn up, made public
by the posting of notices, and communicated to the Minister
responsible for the mercantile marine. Further, the prefect must
be informed of the dispute as soon as possible.
Arbitration
Arbitration boards consisting of five sections, corresponding
to the various ratings of the crews, must be set up every year in
the various fishing ports listed for this purpose.
Each board consists of two arbitrators, who sit in connection
with every dispute, and of an equal number of employers and
employees for each section. The decisions of the board are only
valid if the two arbitrators and at least two assessors for each
party are present. The two arbitrators must be chosen from
among the local magistrates, and each acts as chairman in turn.
Detailed regulations are laid down for the nomination both of the
arbitrators and of the various assessors by the trade organisations
of employers and workers respectively.
In the event of failure to reach a settlement by way of conciliation, recourse is had to arbitration. In each case it is the duty
of the prefect to convene the board and to summon the parties,
who are allowed to send representatives in their place. Refusal to
appear or abstention must be recorded in a report.
The arbitration board issues its award by a majority vote, after
hearing the representatives of the parties and any other persons
whom it may consider expedient.
The award is made public by the posting of notices, and is
communicated to the Minister responsible for the mercantile
marine.
§ 3. — Results and Opinions
The following table gives statistics of the strikes 1 that have
taken place in France since the passing of the 1892 Act. It shows
the number of workers affected and of working days lost 2.
1

MINISTÈRE D U TRAVAIL : " Statistique des grèves ", in Bulletin
statistique,
Lock-outs are very ra-e in France.
The figures until 1915 include t h e number of working days lost b y workers
involuntarily out of employment. Those from 1916 onward refer only to t h e
number of working days lost b y strikers proper. The corresponding figures for
1913 were 2,200,759 and for 1915 44,344.
1928.
2

180

CONCILIATION AND ARBITRATION IN DIFFERENT

Year
1893
1894
1895
1896
1897
1898
1899
1900
1901
1902
1903
1904
1905
1906
1907
1908
1909
1910
1911
1912
1913
1914
1915
1916

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

1917
1918

(a).
(b).

1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930

.
.
.
.
.
(c)
.
.
.
.
.
.

.
.
.
.
.
.
.
.
.
:
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

634
391
405
476
356
368 '
739
902
523
512
567
1,026
830
1,309
1,275
1,073
1,025
1,502
1,471
1,116
1,073
672
98
314
696
499
2,026
1,832
475
665
1,068
1,083
931
1,660
396
816
1,256
1.220

COUNTRIES

Number
oí workers
affected

Number
of working
days lost

170,123
54,576
45,801
49,851
68,875
82,065
176,772
222,714
111,414
212,704
123,151
271,097
177,666
438,466
197,961
99,042
167,492
281,425
230,646
267,627
220,448
160,566
9,361
41,409
293,810
176,187
1,150,718
1,316,559
402,377
290,326
330,954
274,865
249,198
349,309
110,458
204,116
220 944
324,316

3,174,850
1,062,480
617,469
644,168
780,944
1,216,306
3,550,734
3,760,577
1,862,050
4,675,081
2,441,944
3,934,884
. 2,746,684
9,438,594
3,562,220
1,752,025
3,559,880
4,830,041
4,096,393
2,318,459
2,223,781
2,187,272
55,278
235,907
1,481,621
979,634
15,478,318
23,112,038
7,027,070
3,935,493
4,172,398
3,863,182
2,046,000
4,072,163
1,046,019
6,376,675

—
. —

(a) 671 results known. — (b) 453 results known. — (c) The figures for 1924 onwards
include Alsace-Lorraine. — (d) Provisional figures (including lock-outs).

If the general tendency of these data is considered, it will be
found that for the period from 1893 to 1903 they indicate a yearly
average of 533 strikes affecting 119,822 workers and entailing the
loss of 2,162,418 working days. From 1904 to 1913 there was an
average of 1,170 strikes per year, affecting 235,187 workers and
entailing the loss of 3,846,296 working days. Finally, from 1919
to 1926 the annual number of strikes was 1,218, affecting an average
of 545,538 workers.
During the period as a whole, the average proportion of strikers
whose claims were conceded in their entirety was 14 per cent, of the
whole number. Forty-nine per cent, accepted a compromise, and
the remaining 37 per cent, were unsuccessful. The annual propor-

181

FRANCE

tion of strikers who met with complete failure was; however,
extremely variable. It fell to a minimum of 7 per cent, in 1917,
when out of a total of 293,810 strikers only 20,261 were completely
unsuccessful in their claims (during the same year 68 per cent
accepted a compromise and 25 per cent, were successful). The
proportion of unsuccessful claims was highest in 1922, when it
reached 74.6 per cent, (during that year only 11.3 per cent, were
successful and a compromise was accepted by 14.1 per cent.).
Finally, in Í920, the year in which the number of strikers was
largest (1,316,559) the proportion of failures was 51.6 per cent. ; 38.6
per cent, of the strikers accepted a compromise, and only 127,888
were entirely successful in their claims.
Information on the chief causes of strikes is available only for
the years 1923 and 1924 *, but it seems evident that the majority
of these disputes arose in connection with the fixing of wage rates.
In 1923, out of a total of 1,068 strikes, 786 were due to a demand
for increased wages and 28 to a reduction in wages. In 1924 out of
a total of 1,083 strikes, 893 followed on a demand for increased wages
and 35 on a reduction.
As regards occasions on which recourse was had to the 1892
Act, the following information may be given for the period from
1893 to 1920. Recourse to the statutory procedure before the
occurrence of a stoppage has been comparatively rare.. There have
been 232 such cases in all, enabling strikes to be averted on 132
occasions. The total number of disputes submitted to conciliation
procedure between 1893 and 1920, either before or after the occurrence of a stoppage, was 4,279, which represents an average of
18.53 per cent, of the strikes declared during that period. The
proportion was, however, of this order of magnitude only until 1905
(the maximum reached then was 29.64 per cent.) and declined
steadily between 1906 and 1915, when it was only 3.06 per cent.
(only three cases of recourse to the Act inali). In 1920, the proportion was 10.43 per cent. Out of 4,279 cases of recourse to the Act,
about 51 per cent, were due to the initiative of a justice of the peace
and over 43 per cent, to that of the workers. The remainder were
divided among cases submitted by the employers (2 per cent.) and
by both parties at once (4 per cent.). A conciliation committee
was formed on 2,568 occasions, and 195 disputes were settled
beforehand. Conciliation was refused by the employers 1,279
times and by the workers 81 times. In the remaining cases, both

. 1 MI&ISTÈBE D U TRAVAIL : Annuaire
13 *

statistique,

1927, p p . 129-130.

CONCILIATION AND ABBITRATION IN DIFFERENT COUNTRIES

parties refused conciliation. Finally, out of 2,568 disputes in
connection with which conciliation committees were formed
between 1893 and 1920, 1,550 were settled by the committees —
1,417 by conciliation and 133 by arbitration.
It is also interesting to note that in addition to these 1,550
disputes settled by conciliation committees, 92 disputes were
settled after the meeting of the committee. On the other hand,
195 were settled before the meeting of the committee, and 155 after
conciliation had been refused, which brings the total of the disputes
settled during this period to 1,991.
Further, a settlement was reached in a certain number of
disputes through the intervention of various agents. From 1893 to
1920, there were 1,038 cases of intervention by prefects or subprefects, 669 by mayors, 96 by the Minister of Labour and 87 by
labour inspectors.
The importance of these cases of outside intervention has
moreover tended to increase. Here again information is available
only for 1923 and 1924. During 1923 alone, the number of interventions included, among others, 66 on the part of labour inspectors,
41 on the part of prefects and sub-prefects, 25 on the part of mayors
and 14 on the part of the Minister of Labour. During the same
year, recourse was had to the 1892 Act on 70 occasions, resulting in
15 settlements by conciliation and 3 by arbitration. In 1924, the
number of occasions on which labour inspectors intervened was 88,
prefects or sub-prefects intervened 56 times, mayors 43 times and
the Minister of Labour 9 times. In addition, there were 97 cases of
recourse to the Act, leading to 31 settlements by conciliation and
3 by arbitration.
On the basis of the statistical data available it may be concluded
that the 1892 Act was never very widely applied, and that its
importance has steadily diminished during recent years. This is
attributable on the one hand to the fact that recourse to the Act
is entirely optional, and on the other to the fact that the machinery
provided is essentially local in character. Far from being adequate
to avert strikes affecting a whole district or the whole country, the
present Act is barely effective to settle even local disputes, if they
are of any importance.
It is therefore not surprising that, even after the adoption of
the 1892 Act, the question of conciliation and arbitration in labour
disputes should have continued to inspire a considerable movement
of study and opinion, and that efforts should steadily have been
made to find a better practical solution of the problem. Since

FBANCB

183

1892, about thirty Government Bills and parliamentary proposals
have been introduced, all aiming at the improvement of an Act
that has proved so ineffective.
In 1924 Mr. Charles Picquenard declared in his Report to the
Minister of Labour that the 1892 Act had always been notoriously
inadequate and incomplete, and that it no longer corresponded in
the slightest degree to the social needs of the present age.
The preamble of the 1929 Bill is drawn up in the same spirit. It
states that forty years' experience of the 1892 Act has demonstrated the extent of its inadequacy, which is particularly evident in
the cases, now becoming more and more frequent, of general
disputes extending to a number of undertakings and affecting
a wide district.
Such are the objections raised to the present system. The
improvements that should be made in it have been the subject of
much discussion on the part both of workers and employers and of
theorists.
Here is the opinion expressed in 1922 byProfessor G. Scelle
in his work on labour law 1 :
Failing t h e general introduction of compulsory arbitration, what procedure
satisfactory a t once from t h e legal and t h e social standpoints might be adopted
for the settlement of collective disputes ?
I n our opinion, t h e solution should be looked for in a logical distinction between
different functions, dictated by sound legal precepts. J u d g m e n t should be left
to judicial bodies, and regulation to regulation bodies. For all disputes capable
of a judicial solution, judicial procedure, compulsory as regards both recourse
and the observance of the decision, should be introduced. . . . Neither strike
nor lock-out should be tolerated in an organised State, so long as t h e judge is able
t o declare the law.
If, on t h e other hand, t h e dispute turns on t h e necessity or expediency of
modifying or abrogating a rule of law or an actual juridical situation, t h e parties
to the dispute have a t their disposal, first, t h e normal constitutional procedure
t h a t enables t h e m to bring their influence to bear on t h e public authorities
competent to pronounce t h e rule of law, and then t h e statutory rights t h a t t h e y
themselves possess to modify their own regulations as laid down in collective
agreements b y common consent. Failing agreement, methods of coercion —
strikes and lock-outs — would become legitimate. Here, however, permanent
institutions whose function is precisely t h a t of preventing recourse t o coercion
should intervene.
I n order to maintain social peace, a good legislative system should set u p
institutions with the function not of pronouncing judgment, b u t of laying down
regulations : mixed or joint bodies intended to persuade t h e opposing parties
t o agree on a settlement. Such bodies are, in the first place, works councils, t h e n
permanent conciliation committees, easily accessible and functioning on t h e
lines of joint participation, recourse to which might be made compulsory while
t h e adoption of their proposals remained optional.
Finally, a n d above all, such institutions are permanent research bodies, again
of a joint character, consisting of technicians a n d based on a strong t r a d e organisation, whose labours would be unconnected with a n y dispute and would consist
1
G. SCKIXE : Le droit ouvrier, P a r t I I , § 3, p p . 135 e t saq. P a ¿ s , Librairie
Armand Colin, 1922.

184

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

in working out, in relation to t h e needs of those concerned and t o t h e fluctuations
in labour and m a r k e t conditions, t h e necessary system for regulating t h e relations
between capital a n d labour.

Such is the solution proposed by jurists. As regards opinion
among the persons concerned, this has undergone certain changes
since the beginning of the twentieth century.
Until 1914, the employers' associations were definitely hostile
to any more extensive intervention of the law in labour disputes.
They strongly disapproved of any provisions for compulsory
conciliation proceedings guaranteed by penalties, and especially
of the institution of permanent bodies such as works councils.
It may be said that even to-day French employers are still opposed
to the proposed alterations. Their hostility was particularly
evident in respect of the Bill of 1929, against which many objections
were raised in employers' circles.
The workers' organisations were in their turn opposed to the
extension of legislation concerning concilation and arbitration
in collective labour disputes, because they were afraid that any
committees or boards set up by law would diminish the influence
of the trade unions, and that a more effective Act might restrict
the right to strike. Since the war, however, the opposition of
the workers' unions has diminished. Under the influence of
the General Confederation of Labour, a certain number of unions
now seem prepared to accept the introduction of permanently
elected delegations empowered to intervene in labour disputes ;
but' they are opposed to any measure that might tend to limit
the right to strike. The Christian unions for their part are much
more favourably disposed towards measures intended to facilitate
the peaceful settlement of labour disputes. The French Christian
Workers' Confederation has announced its approval of the 1929
Bill. In a statement published on 12 March 1929, it declared
that " the Government Bill would constitute a definite step
forward by making compulsory an exchange of views by means
of which disputes might be averted or stopped ' \

§ 4. — Summary
The system of conciliation and arbitration introduced by
the Act of 1892 is entirely optional and not supported by penalties.
Conciliation is effected through temporary committees, set up
only in the event of a dispute. The justice of the peace of the

FRANCE

185

" canton " in which the dispute takes place acts as Chairman
of the committee. The terms of settlement of the dispute must
be unanimously adopted. Should the conciliation proceedings
fail, arbitration may be resorted to through the medium of arbitration boards (or even òf a single arbitrator) chosen by the parties.
If the arbitrators are unable to reach agreement, an umpire is
appointed.
This system is somewhat inadequate. From 1893 to 1920
it was resorted to in only 18 per cent, of the disputes, and in less
than half of these (8.4 per cent.) was a friendly settlement reached.
This proportion has, moreover, decreased during recent years.
In 1920, recourse to the Act was had in only 10 per cent, of the
strikes that occurred.
A number of Bills have been introduced since the beginning
of the twentieth century with the object of improving the present
system. The latest is that which was ratified by the Chamber
of Deputies on 25 June 1929, but has nGt yet been passed by
the Senate. Under its termSj recourse to arbitration procedure
would be compulsory.

BIBLIOGRAPHY
PUBLICATIONS OF T H E L A B O U R DEPARTMENT

Statistiques des grèves et des recours à la conciliation et à l'arbitrage (from 1890).
Berger-Levrault, Paris.
Règlement amiable des conflits collectifs du travail. Enquêtes e t documents,
1924. Berger-Levrault, Paris.
Collection of the Bulletin du Ministère du Travail.
PUBLICATIONS OF T H E F R E N C H NATIONAL
FOR

ASSOCIATION

L A B O U R LEGISLATION

La. grève et l'organisation ouvrière. Communication of Mr. A. MILLERAND,
President of. the Association. Third Series, No. 8. F . Alean, Paris.
La conciliation dans les conflits collectifs. Report of Mr. AFTALION. F o u r t h
Series, No. 1. F . Alean, Paris.
Le règlement amiable des conflits du travail. Reports of Messrs. AFTALION,
ARQUEMBOURG and FAGNOT. Sixth Series, No. 7. F . Alean, Paris.
GENERAL WORKS

P I C , Paul. Les lois ouvrières. Sixth edition, Ì930. Lib. Rousseau. See P a r t H I
and the bibliography relating to t h e same P a r t of the book.
SCELLE, Georges. ' Le droit ouvrier. Second Part, Chapter I : Technique de
la législation ouvrière ; I H : Technique de la juridiction (2nd p a r t : Différends
collectifs). Colin, Paris, 1929.

186

CONCILIATION AND ARBITRATION I N DIFFERENT COUNTRIES

SPECIAL S T U D I E S AND ARTICLES

BEAUREGARD. " L'arbitrage facultativement obligatoire ", in Monde économique, 2 March 1901.
BERTHELEMOT. L'arbitrage obligatoire. 1901.
BoissARD. " Les grèves et leur régularisation ", in Contrat de travail et salariat,
Chapter IV. 1910.
BoissrEU, H . de. " Les institutions privées de conciliation e t d'arbitrage en
France et à l'étranger ", in Réforme sociale, 16 September 1907.
BRIFFAUT. Essai sur les types d'institutions permanentes de conciliation et
d'arbitrage. 1903.
INTERNATIONAL LABOUR O F F I C E .

Freedom of Association,

Vol. I I , " France " .

Studies and Reports, Series A, No. 29.
FROMONT DE BOUAILLE.

Conciliation

et arbitrage.

1905.

. GARNIER. L'arbitrage obligatoire. 1908.
LAROUZE. De la représentation des intérêts collectifs dans la grande industrie.
1905.
LOZE. " Les conflits du travail et le droit de grève ", in Economiste français,
3 J u n e 1905.
MATHOREZ. " Notes sur la conciliation " , in Bévue politique et parlementaire.
1908.
OUALID et PICQUENARD. " Salaires et tarifs, conventions collectives et
grèves " , in Histoire économique et sociale de la guerre. Publication of t h e Carnegie
Foundation.
P E Y . " L'obligation de la tentative de conciliation ", in Questions pratiques,
1901.
P I C , Paul. " Judicial Remedies in Recent French Legislation for t h e Enforcement of Agreements of Trade Associations " , in International Labour Review,
Vol. X I I , No. 1, J u l y 1925.
PICARD, Roger. La conciliation, l'arbitrage et la prévention des conflits ouvriers
pendant la guerre. Comité national d'études sociales, 1918.

BELGIUM

§ 1. — Economie Background and Development
Belgium is a Kingdom of 11,755 square miles area, having in
1929 a population exceeding 8 millions. During recent years
immigration has exceeded emigration by approximately 10,000
persons annually.
According to the census of 1920, 478,000 persons were employed
in agriculture, 1,470,000 in industry, and 570,000 in commerce
and transport. A large proportion of the goods produced in Belgium are for the foreign market.
Both workers and employers in Belgium are organised. The
chief trade unions are the Trade Union Committee of Belgium,
having well over half a million members, the General Federation
of Christian Trade Unions, with approximately 180,000 members,
and a number of liberal or neutral trade unions with a few thousand
members. The chief employers' association is the Central Industrial Committee, founded in 1895, which includes practically the
whole of the employing groups in Belgium.
The history of the system of conciliation and arbitration
falls into two periods. During the first period, which ended with
the Armistice, the Government confined itself to encouraging the
development of conciliation and to setting up various joint committees for facilitating it. During the second period, the State
took upon itself to exercise a certain measure of constraint upon
the parties to have recourse to conciliation, and, in addition, set
up more complete machinery than before.
Until the Armistice the Act providing for the prevention
and settlement of industrial disputes was that of 16 April 1887.
Under this Act joint committees, made up of employers and
workers in equal numbers elected for a period of three years,
were constituted by districts.
In the event of a collective
dispute occurring, these committees were convoked by the Government of the province on the request of the employers or workers
concerned. Their function was to seek means of conciliation

188

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

which would bring the dispute to an end, and, if no agreement
were reached, to draw up a report, which was made public.
After the Armistice a number of Royal Decrees and Ministerial
Decrees set up chambers of arbitration or of conciliation in a number
of different industries, or in some cases for different localities.
These committees were composed of a member appointed by the
Government, who usually acted as chairman, together with a
number of members representing employers and workers in equal
numbers,
At the same time provisions concerning the settlement of
industrial disputes were introduced into the regulations governing
employment relief. If a stoppage of work occurred, the workers
affected were held to be entitled to unemployment relief in the
event of the employers refusing to go to arbitration when the
workers were willing to accept that method. If, on the other
hand, the workers refused to go to arbitration, although the
employers were willing to take such a course, no unemployment
relief was granted. Furthermore, if an arbitration award was
given and the workers refused to accept it, again no relief was
given to the men thus without employment.
On 1 January 1921, the Unemployment Relief Regulations
were rescinded, and a National Emergency Fund was set up by
Royal Order. Under this Order emergency allocations were
suspended in the event of a strike or lock-out when the workers
concerned refused to have recourse to the joint committee competent
to deal with the matter, or any other conciliation machinery
set up by law, or to accept the proposals advanced by these
bodies.
The whole system of conciliation and arbitration was finally
set upon what may be regarded as a definitive basis by the Royal
Order of 5 May 1926 1. The regulations contained in this Order,
as amended by a further Order of 25 November 19292, constitute
the system actually in force. It is the outcome of the evolution
of the existing procedure, namely, of the institution of conciliation
bodies and the application of the provisions regarding unemployment relief as a compulsory measure to induce the parties to
have recourse to the conciliation bodies.

Legislative Series, 1926, Belg. 5.
«/bid., 1929, Bolg. 7.

BELGIUM

189

§ 2. — The System in Force
The measures in force in Belgium for dealing with the prevention
and settlement of collective disputes (Royal Order of 5 May 1926,
as amended by Royal Order of 25 November 1929) comprise
recourse to conciliation, with penalties attendant upon failure
to make use of the machinery provided for this purpose, and
optional recourse to arbitration. The penalties provided in the
event of either party proving intransigent in the matter of conciliation, based upon the payment or non-payment of unemployment
relief, constitute the most interesting and original feature of this
system.
Provision is made for the setting up of official conciliation
committees in every locality where it is shown that they will be
useful. Each committee is made up of a president, one or more
vice-presidents, and at least three members representing employers
and three members representing workers. The actual composition
of each committee is decided by the Minister of Industry, Labour
and Social Welfare, the representatives of employers and workers
being nominated by the Minister from a list submitted by associations of employers and associations of workers concerned. All
members of such committees are appointed for a period of three
years, which may be renewed. In addi Lion to the official conciliation
committees, employers and workers in an undertaking or group of
undertakings may by agreement set up special conci'iation
committees. The parties to a dispute may likewise agree to
submit the dispute to national or regional joint industrial
committees instituted by the Government.
In the event of a collective dispute occurring likely to give
rise to a strike or lock-out, the party most concerned notifies
the president of the appropriate committee. The president,
having satisfied himself of the seriousness of the dispute, calls
together the committee and invites the parties to the dispute to
appear before it. In the meanwhile, the president may proffer
his help as a mediator. The official conciliation committee,
having heard the interested parties or their representatives,
invites them to make proposals with a view to conciliation. If
no proposal is made or accepted at the first meeting, a second
meeting is called, the committee in the meanwhile having sought
a suitable formula. If no agreement is arrived at, the committee

190

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

suggests to the parties t h a t they should have recourse to arbitration,
offering its own services for this purpose, or inviting them t o
choose an arbitrator, but pointing out a t the same time t h a t
there is no compulsion upon them to accept such proposal. Finally,
in the event of no agreement being reached, a statement is sent
to the Minister of Industry, Labour and Social Welfare. Under
t h e original Order, this statement had t o allocate the responsibility
for the failure to arrive at a settlement. Under the Order of
25 November 1929, however, it is laid down t h a t , in the event
of no responsibility being allocated, such responsibility shall be
considered as being shared by the two parties.
Meetings of the conciliation committees are held privately.
All decisions are taken by a majority vote ; in the event of a
tie the president has a casting vote.
I n t h e event of the strike or lock-out having occurred before
any recourse t o conciliation and arbitration has been had, the
competent committee, on application by one of the parties,
immediately notifies the Minister of t h e strike or lock-out.
Without prejudice to the sanctions provided in sections 15
and 16 (see below) the committee proffers its help to the interested
parties with a view to settling the dispute.
The intervention of the committee, however, is justified
only if the help it offers is accepted b y the parties.
As already noted, the most interesting feature of the Belgian
system is the provision made for penalties. These, as laid down
in the original Order, read (in part) as follows :
15. If an employer causes a strike by putting into force new
conditions of employment or wages which his employees have rejected,
before the failure of the attempt at conciliation or of the proposal for
arbitration has been established by the competent committee ; if he
declares a lock-out of his employees without having previously had
recourse to the procedure for conciliation and arbitration ; if he refuses
to reply to the summons of the committee, or to carry out the agreement
arrived at or the arbitration award ; if the committee expresses its
opinion that by his attitude he has rendered conciliation impossible —
in such case, those of his employees who belong to an approved unemployment society shall be placed on the same footing as involuntarily
unemployed persons, and shall as such be entitled from the first day of
the strike to benefit from their unemployment society and grants from
the National Emergency Fund, in accordance with the Royal Orders
for the organisation of unemployment insurance.
16. If employees cause a lock-out by altering the conditions of
work before the failure of the attempt at conciliation or of the proposal
for arbitration has been established by the competent committee ; if
they declare a strike before the failure of the attempt at conciliation or
of the proposal for arbitration has been established by the competent

191

BELGIUM

committee ; if they refuse to attend when summoned by the committee
or to carry out the agreement reached by conciliation or the arbitra ion
award ; if the committee expresses its opinion that by their attitude
they have rendered conciliation impossible —in such case the organisation
representing tnem shall be excluded from the benefit of section 15 for
one year dating from the first day of the strike, unless it proves that
the strike was declared without consent or without its support.
The Royal Order of 25 November 1929 made two amendments
to these regulations of considerable practical importance. I n
the first place it laid down t h a t the benefits allocated under section
15 should not be counted in determining the maximum annual
allocation provided for by the insurance fund. I n the second
place it provided t h a t the benefits given by the Unemployment
Fund cannot be added to those given by the strike fund except,
notably, to make u p such difference as may exist between the
benefits paid to the unemployed and the benefits paid by the
strike fund.
§ 3. — Results and Opinions
The statistics of strikes and lock-outs in Belgium, including the
number of workers directly affected and the number of days lost,
is shown in the following table :
Year

1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
19-9
1930
1931

. . . . . . .

Stoppages of
work
372
617
258
172
168
188
112
140
186
192
168
93
74

Number of workers
directly involved
164,030
296,192
127,293
85,605
126,278
84,447
81,988
77,368
39,873
74,707
60,557
64 718
23,010

Time lost in
working days

—
—
—
—
—
—
—

1,658,836
2,254,424
799,117
781 646
399.037

As in most countries, wage disputes are responsible for a majority of the strikes and lock-outs recorded. I n 1929, for instance,
119 out of the 168 stoppages were accounted for by wage disputes.
The results of the system of conciliation and arbitration set
up by the Royal Order of 5 May 1926 are of particular interest.

192

CONCILIATION AND ARBITRATION IN DIFFERENT COTTNTRIES

In all, forty official committees have been appointed. These
committees up to 30 June 1929 had dealt with 652 disputes, 583
of which concerned wage questions.
Details are available concerning 522 cases. Of these 269 were
settled by conciliation, 48 previous to appearance before the
committee and 221 with the help of the committee. In 195 cases
conciliation failed, in 28 cases the matter was taken to arbitration,
in 20 cases the committee in question was declared incompetent,
and 10 disputes were classed as having no results.
As regards penalties, the application of section 15 (default on
the part of employers) was asked for in 62 cases, and the application of section 16 (default on the part of workers) in 104 cases.
In 34 disputes the benefits under section 15 were accorded, and
in 27 cases refused. In 70 cases the application of section 16 was
accorded, and in 29 cases refused.
In view of the fact that in more than half of the disputes of
which the result is on record (269 out of 522) conciliation proceedings
were successful, it would seem that the system has, on the whole,
proved its value.
Both employers and workers have expressed a number of
criticisms of the actual working of the system. The employers
have pointed out that, as matters stand, they are not treated on
an equality with the workers, since if the employer is judged
at fault the workers affected receive allocations from the National
Emergency Fund, while if the workers are at fault all that is done
is to deprive them for a year of the right to these benefits. Furthermore, it is maintained that by considering workers engaged in
a strike or lock-out as involuntarily unemployed public opinion
is prejudiced against the employers. A different line of criticism
is to the effect that the mechanism of unemployment insurance
is upset to a certain extent, since it is here used to indemnify
unemployment resultant of deliberate intention, when insurance
should only deal with matters of a fortuitous nature.
The workers, on the other hand, maintain that they are at
a disadvantage since : (a) benefits granted to persons treated as
involuntarily unemployed are usually considerably lower than
would be granted as strike benefit (a point since dealt with by
the Royal Order of 25 November 1929) ; (b) benefits granted
under section 15 are counted in determining the maximum unemployment benefit allowed per annum (this has likewise been
altered by the Royal Order of 25 November 1929) ; (c) the management of the unemployment fund is disturbed by making it bear

BELGIUM

193

the expenses resultant of certain stoppages of work ; and (d)
according to the Belgian Labour Party, the interpretation of the
term " strike ", as including not only economic strikes but also
political strikes, is detrimental to the interests of the workers.
It is interesting to note, however, that although both parties
express certain objections to the system, some of which objections
have since been dealt with but certain of which remain, both
sides are in general agreement with the principle of conciliation
and of the Government's right to encourage recourse to that
method.
§ 4. — Summary
The Belgian system is thus essentially one of conciliation, with
a certain amount of pressure brought to bear upon the parties
to have recourse to the conciliation agencies provided. It is the
outcome of an evolution extending over more than forty years,
but the most notable features date from the years immediately
following 1918. It contains a unique form of penalty, which
has the advantage of being applicable to trade unions and
employers alike. From the record of cases dealt with, and from
the opinions voiced by employers and workers, the system would
appear to have achieved a fair measure of success.

BIBLIOGRAPHY
Le Progrès social, deuxième série, No. 7, May 1928.
Files of : Moniteur belge ; Revue du Travail ; Bulletin du Comité central
industriel de Belgique ; Le Mouvement syndical belge.
La Solution pacifique des Conflits du Travail : Examen de l'arrêté du 5 mai
1925 instituant des Comités officiels de conciliation et d'arbitrage. Note presented
by Mr. TRUFFATO, member of the Committee of the " Association internationale
pour le progrès social ".
¡¡
H . VELOB. Eléments de droit industriel belge. Vol. I I , Chap. I l l , pp. 275-287.
Brussels, 1927.

1 4

LUXEMBURG

§ 1. — Economic Background and Development
The Statistical Yearbook for 1932 of the Grand Duchy of
Luxemburg gives its area as about 2,590 square kilometres. There
were some 300,000 inhabitants at the last census (31 December
1930). About 32,000 workers were employed in industry in 1931
and the number of miners and metal workers in the country
at t h a t date was 24,000. Mining and the heavy metal trades
are, next to agriculture, the most important industries in
Luxemburg.
Trade unionism in Luxemburg is still young 1. I t is true t h a t
between 1864 and 1871 several unions of skilled industrial workers
were formed, but a coherent labour movement only came into
existence, particularly among the iron and steel workers, at the
beginning of the present century, when the influence of German
trade unionism began to make itself felt. The movement did not,
however, reach notable dimensions until the war. The metal
workers' and miners' federations were then founded, and these
provided a solid nucleus for the formation of the Trade Union
Council, which was established in 1919 by their fusion with the
group of Free Unions and the Independent Federation of Railway
Employees. The Trade Union Council, which is in close touch
with the Socialist Party, is the most considerable workers'
organisation in Luxemburg ; next comes the Federation of Unions
of Salaried Employees ; the others are less important bodies. The
organisation of employers dates from the war. Large-scale industry
held aloof a t first, but, under pressure of the trade union movement,
it joined the existing employers' federation and then assumed
control of it.
There is no special Act on the adjustment of labour disputes
in Luxemburg, though a Bill on collective agreements and
1

Cf. Freedom of Association, Vol. I I , pp. 265 et seq.

LtrXEMBTJBG

195

compulsory arbitration, introduced on 14 August 1908, is still
before Parliament and has been repeatedly amended. It will be
discussed more fully later.
Isolated provisions on the prevention and settlement of
industrial disputes are to be found in different Luxemburg Acts,
but there is no regular conciliation and arbitration procedure for
collective disputes and no special conciliation and arbitration
authority. The prevention and settlement of labour disputes,
whether individual or collective, is the duty of the representatives
of the workers and the management of the undertaking concerned.
The idea of trade representation in the form of technical, advisory
and central committees and works councils is to a great extent
realised in Luxemburg ; and the part these bodies play in the
settlement of disputes justifies a brief description of them.

§ 2. — The System in Force
The representation of labour in the works is based on the
Grand Ducal Order of 8 May 1925 1 . A permanent works council
(principal council) must be instituted in every industrial establishment employing regularly at least 20 workers. These coimcils are
competent to deal with questions concerning contracts of employment, health and safety arrangements, wages and other conditions
of employment, and their work consists in furthering co-operation
between employers and workers by settling matters affecting both
parties in accordance with the law. If, for instance, a worker
is dismissed without notice, the reasons must be reported to the
works' council, which must also be informed in advance if alterations are to be introduced in the undertaking that will entail
any considerable reduction of staff. Disputes between workers
and their foremen may also be submitted to the council, but not
until they have been laid before the tribunals provided for in the
rules of employment.
Salaried employees are represented by committees. The
Act of 31 October 1919 2 provides that a committee of salaried
employees shall be established in every undertaking in which
at least 15 salaried employees are regularly employed. Its duties
1
2

Legislative Series, 1925, Lux. 1.
Ibid., 1920, Lux. 2-4.

196

CONCILIATION AND AKBITBATION IN DIFFERENT

COUNTRIES

are, among others, to protect the interests of the employees and
to settle disputes between employers and employees by way of
conciliation (section 25).
Mention should also be made in this connection of the workers'
councils set up on the Luxemburg railways in accordance with
the Grand Ducal Order of 14 May 1921, which established a system
of direct and indirect representation. Delegates are nominated
by each grade of workers in each department of the service, and
every three months these communicate to the departmental
management the proposals and wishes of the employees in respect
of the local organisation of work, hygiene, accident prevention,
and any other questions affecting the department, to the exclusion
of general questions. These departmental representatives elect a
delegation to the general management, whose principal duties are
to give advice on the rules of employment in so far as they effect
the interests of the staff, and to mediate between the staff and the
management in disputes on general questions.
Lastly, Luxemburg legislation provides for arbitration for
salaried employees and railwaymen.
Section 26 of the Act of 31 October 1919 respecting the legal
regulation of the contract of service of private employees 1 provides
that all disputes respecting relations between employers and
workers shall be settled by an arbitration court. The court is
thus competent to deal with disputes which may arise, not only
out of contractual relations of any sort, but out of any noncontractual legal relationship. I t is thus a labour tribunal set up
to give decisions on individual or collective disputes concerning
the relations of the parties in respect of employment. Section 62
of the Luxemburg Railway Staff Regulations makes the arbitration courts established under the Act of 1919 competent in the
following additional circumstances. If the time taken up by a
railwayman in performing the duties of member of a staff committee
or assessor of an arbitration court, exercising his civic rights and
duties, or carrying out the duties imposed by Acts, Orders or
Government Instructions, appears to be too long, the management
may require the matter to be submitted to an arbitration court,
which may authorise a reduction of the wages, or the dismissal,
of the employee concerned. The arbitration court is also competent
to deal with all other disputes concerning the respective obligations of the management and staff of the railways, unless the
staff regulations provide otherwise. I t thus deals with all the
1

Legislative Series, 1920, Lux. 2-4.

LUXEMBtTRG

197

above-mentioned disputes except those concerned with promotion,
disciplinary measures, and the deletion of employees from the
staff register 1 .
§ 3. — Proposed Legislation
As was mentioned above, an Act on collective agreements,
dealing also with collective labour disputes, has been under
consideration since 1908. A second draft came before Parliament
in 1917, and the most recent was discussed by the Council of State
in 1927 2. The title then proposed for the new Act was " Act
respecting collective labour agreements, occupational organisations
and arbitration in case of social dispute ". Collective labour
disputes are dealt with by the Council in Part V, sections 17-19
of its draft (heading " Conciliation Committees " ) . Here, the
principal works council retains the function of preventing and
settling collective labour disputes. Section 17 provides t h a t as
soon as a collective dispute breaks out in an undertaking, the
works council shall attempt a settlement by way of conciliation
before a strike or lock-out is declared or notice to terminate the
collective agreement is given, and with this object shall apply
in writing for an interview with the manager of the undertaking.
The latter must comply either personally or through a representative,
not more t h a n twenty-four hours after receipt of the application.
If there is no works council, the three senior workers have its
powers. If the parties cannot arrive at an agreement, either may
apply without formality to the magistrate to act as mediator.
Within 48 hours of receiving such a request, the magistrate must
summon the parties to act as a conciliation committee and fix
a place and date for the proceedings. If the parties come to
an agreement before the magistrate, he records the fact in a minute,
which the assessors sign. The minute is equivalent to a collective
agreement, and in composing it the magistrate is required to
take the regulations for the conclusion of such agreements into
1
According to sections 28 and 29 of the Grand Ducal Order of 14 May 1921
approving the Luxemburg Railway Staff Regulations, promotion is dealt with
by t h e management after consulting t h e central staff committee. Sections 34
and 35 provide t h a t the management is competent to take disciplinary measures,
punishments being proposed either b y the immediate superior of t h e employee
concerned or, in cases of particular gravity, b y a committee of enquiry. The
management is also competent t o delete employees from t h e staff register (section
35).
2
The Council of State, which has 15 members, is nominated by t h e Crown ;
it is required to give its opinion on every draft Bill, and m a y return to Parliament
for further deliberation Bills which the latter has adopted.

1 A *

198

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

account. If the parties do not come to an agreement before
the magistrate, the magistrate may either adjourn the sitting
or instruct the parties to nominate either one joint arbitrator,
or one or more arbitrators each. If the latter course is taken
and the arbitrators do not agree on the settlement of the dispute,
they may nominate an umpire ; if they cannot agree on his identity,
he is appointed without formality, on joint application by the
parties, by the president of the civil court of the district. Decisions
are made by a majority vote, and are not subject to appeal. If
neither an agreement by conciliation nor by arbitration can be
arrived at, the magistrate records the fact in a minute and posts
it on the door of the court. If inaction by the parties leads to
a strike, the magistrate summons the employer or his representative
and the works council to sit as a conciliation committee, in
which the procedure is as above described.
The clause of the 1917 draft, by which a collective agreement
could be brought into existence even though only one party
accepted its stipulations, did not appear in the Council of State's
draft, which also omitted the provision that collective agreements,
in order to be valid, must empower an arbitration court to issue
decisions binding on the parties. This would have meant the
introduction of compulsory collective agreements and compulsory
arbitration. The Council of State declared in its reports on
the drafts of 1908, 1917 and 1927 that it could not accept these
otherwise praiseworthy attempts to prevent industrial disputes
at any cost ; a collective agreement could help to improve relations
between employers and workers only if concluded by them as
free contracting parties in full realisation of their economic strength
and moral responsibility. Apart from a few unforeseen cases,
breaches of collective agreements were very rare ; but if the
parties refused to submit their dispute to conciliation, neither a
mediating factory inspector nor a compulsorily formed arbitration
court was capable of finding a just and permanent settlement.
Time will show whether and in what form the Bill will be
adopted.
§ 4. — Statistics
The following table gives information concerning the labour
conflicts (strikes and lock-outs) which occurred between 1918
and 1930. Only between 1918 and 1920, à time of particularly

199

LUXEMBURG

unsettled political conditions, was the number large. From
1924 to 1930 no strike, and from 1921 to 1930 no lock-out, was
notified to the competent authority.
STRIKES AND LOCK-OUTS
Number
Strikes
Striking
or
or lockedlock-outs out workers

Year

Results
Working
days lost
(a)

1918
1919
1920
1921
1923

.
.
.
.
.

8
14
12
2
1

668
1,623
908
17,038
20

115

1920 . .

300

Compro-

5
1
7

1
9
1

—

—
—

Success
for
employers

Strikes

30
150
165
19
13
(b)

1918 . .

Success
for
workers

2
4
4
2

—

Lock-outs

5 months
from 18 Dec.
3 months
from 14 August

1
1

NETHERLANDS

§ l. — Economic Background and Development
The Netherlands have an area of 34,225 square kilometres and
had some 7,920,000 inhabitants on 31 December 1930, the rural
population amounting to about 53 per cent, of this total.
The principal national interests are connected with commerce
and shipping, but there is also an export trade in agricultural
products, particularly butter and cheese.
At the census of 1920 some 35 per cent, of the total population
(that is, more than 2,720,000 persons) was described as active,
and this number was distributed over the principal occupational
groups as follows : industry, 36 per cent. ; agriculture, 25 per
cent. ; commerce and communications, 18 per cent. Less than
1 per cent, of the active population (that is, some 18,000) was
engaged in the fishing trade.
In 1927 the number of undertakings in the various industries
was as follows : 3,152 tobacco factories, 295 distilleries, 190
breweries and a certain number of beet sugar factories and refineries.
The textile, wood, rubber, heavy metal, shipbuilding and engineering industries are also of some importance.
There are in the Netherlands several types of occupational
organisations, both of employers and of workers, professing various
shades of political and religious opinion.
The workers' unions are organised either in local groups or
in national federations, the most important of which are the
Netherlands Federation of Trade Unions (Nederlandsch Verbond
van Vakvereenigingen), which counted 217,400 members on
1 January 1929, and the Roman Catholic Workers' Federation
(Roomsch-Katholiek Werkliedenverbond in Nederland), whose membership at the same date was 110,400 1. Local groups and
1
Cf. Maandschrift van het Central Bureau voor de Statistiek,
p . 1780. Cf. also Freedom of Association, Vol. I I , p. 291.

31 Dec. 1929,

NETHERLANDS

201

national federations are composed both of local and of national
unions.
The principal employers' associations are the Federation of
Netherlands' Employers (Verbond van Nederlandsche Werkgevers),
founded as long ago as 1899, the Central Council of Employers'
Unions for Labour Questions (Gentraal Overleg in Arbeidszaheu
voor Werkgeversbonden),
the General Association of Catholic
Employers (Algemeene Roomsch-Katholiek
Werkgeversvereeniging)
and the Roman Catholic Federation of Employers' Associations
(Roomsch-Katholiek Verbond van Werkgeversvakvereenigingen), the
two last named, as their titles imply, being Catholic organisations.
The example given by other countries, in particular Great
Britain, and the desire to improve the relations between employers
and workers induced certain prominent persons in the Netherlands
to draw attention about 1880 to the necessity of facilitating the
peaceful settlement of labour disputes.
I n 1887 a private conciliation and arbitration committee,
comprising employers, workers and an impartial chairman, was
set up to deal with any disputes which might arise in three factories
in Delft.
Interest in the question increased when the first great strike
broke out in the Netherlands in 1888 and the efforts to submit
the dispute to arbitration broke down.
The need for a Government institution for the settlement of
labour disputes then began to make itself felt. The question
was discussed at a Social Congress held in Amsterdam in 1891,
and there was a unanimous decision in favour of the creation
of regional Labour Courts composed of representatives of employers
and workers and required to keep the Government informed of
events, to attempt conciliation in disputes and to arbitrate at
the request of the parties.
During the next year (1892) two Bills providing for the creation
of bodies of this sort were introduced into the Lower House of
the States-General ; both were rejected, but the Government then
came forward with a Bill which, though not without amendment,
became the Labour Courts Act of 2 May 1897 1. This empowered
the Government to set up labour courts in such districts and for
such industries as seemed to require them ; the courts were to
collect evidence on disputes, give both the competent authorities
and the parties the benefit of its advice and ensure the settlement
1

Staatsblad,

1897, No. 141.

202

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

of disputes either by intervening themselves, or by nominating
conciliation committees comprising an equal number of employers
and workers, or again by submitting cases to arbitration with
the consent of the parties.
The courts were composed of an equal number of employers'
and workers' representatives, chosen by them, and each court
nominated a committee, comprising a chairman, chosen alternatively from among the employers and the workers, and two
other members.
The first courts were set up in April 1898, and 112 in all were
subsequently established, of which 12 were at Amsterdam, 11 at
Rotterdam, 7 at The Hague and 6 at Utrecht.
Principally owing to their restricted local competence, the
courts were not as successful as had been hoped. Very few
disputes were brought before them, and their efforts to combine
in a federation failed through lack of Government support. Further,
having no right either to make enquiries or to enforce their decisions,
they were almost powerless ; and when the Act of 14 December
1922 abolished them, they disappeared almost unnoticed and
quite unregretted.
However, the increase in the number of collective labour
conflicts made it obvious that a new body capable of settling
them must be created. To this end a Government Bill on " the
peaceful settlement of disputes respecting the conditions of
employment and the prevention of such disputes " was introduced
into the Lower House in 1920. It was adopted after amendment,
and, having also survived vigorous opposition in the Upper House,
it became law on 4 May 1923 *.

§ 2. — The System in Force
The Labour Disputes Act of 4 May 1923 introduced into the
country not only a system of State conciliation and arbitration,
but also a special enquiry procedure for particularly important
cases.
Besides this voluntary official machinery, permanent or ad hoc
arbitration committees may be set up by collective agreements ;
and in 1929 stipulations to this effect were contained in some
1

Legislative

Series, 1923, Neth. 1.

NETHERLANDS

203

80 per cent, of all collective agreements concluded, permanent
committees being provided for in more than one-third of these.
When such procedure has been provided for in an agreement, it
has precedence over the official machinery.
CONCILIATION

The principal characteristic of the Labour Disputes Act is the
creation of permanent Government conciliators to carry on
operations, with the aid of the necessary staff, in every district
in the kingdom and in every specified industry. If a dispute
covers more than one district or industry, it is the duty of the
Minister responsible for the administration of the Act to designate
the Government conciliator to intervene in the dispute.
Government conciliators are appointed, suspended and dismissed
by the Crown. A report of their operations is presented annually
to the States-General.
The duty of Government conciliators is to further the peaceful
settlement of disputes respecting conditions of employment and
to prevent such disputes. With these objects in view, they may
either assist employers and workers in the conclusion of agreements
relating to employment, or recommend the parties to a dispute
to apply for the intervention of a conciliation board, or of a special
conciliator, or for arbitration.
A conciliation board is nominated by the Government conciliator
in agreement with the parties, and consists of a chairman and
two or more members. The Government conciliator may act as
chairman of this board or as special conciliator if so requested by
the parties.
A secretary is attached to the conciliation board or special
conciliator.
The Government conciliator may intervene in a dispute in the
following conditions : first of all, if in any commune a dispute
breaks out which will probably produce or has produced a strike
or lock-out by which not less than fifty workers are affected, the
mayor should notify the Government conciliator thereof as quickly
as possible, and at the same time furnish such useful information
as he can. Secondly, the intervention of the Government conciliator
may be claimed by the parties to a dispute which has produced
or will probably produce a strike or lock-out ; and if the Government conciliator is informed by these or any other means of the
existence of such a dispute, and considers it of sufficient impor-

204

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

tance for his intervention, he should open communications with
the parties.
On the other hand, he should refrain from intervention or
from continued intervention in certain cases enumerated by the
Act, particularly if he considers that the dispute is not within
his competence.
Having decided to intervene in a dispute, the Government
conciliator may require the parties to appear before him and give
information respecting it ; every person so summoned is bound,
on pain of a fine, to appear in person or to be represented unless
prevented by legitimate causes.
The Government conciliator may also, if he considers it desirable,
recommend the parties to apply for the intervention of a conciliation
board or of a special conciliator as provided by the Act. He
then sets up such a board or appoints such a conciliator in accordance with their reply.
Records of any agreement arrived at between the Government
conciliator and the parties in connection either with procedure
ór with the settlement of the dispute by the conciliation board
or special conciliator are kept in the form of minutes.
The conciliation board once set up, or the special conciliator
when designated, may, with the approval of the Government
conciliator, require the appearance before it of either party, of
officials of trade associations belonging to either party, and of
witnesses and experts ; such persons are also bound t o appear on
pain of a fine, unless prevented by legitimate causes.
The persons who appear are then examined, after which each
of the parties is given facilities for making a further statement
concerning the dispute.
Further, the conciliation board or special conciliator may,
with the approval of t h e Government conciliator, require experts
to institute an enquiry, which forms part of the conciliation
procedure and should not be confused with the special enquiry
procedure instituted by the Act. The latter will be dealt with
subsequently.
When the circumstances of a dispute have been elucidated,
an attempt at conciliation between the parties is made. If a
settlement is arrived at, a minute to t h a t effect is drawn up. If
the conciliation proceedings are unsuccessful, and if the parties
do not undertake to submit the dispute to an arbitration court,
an absolute majority of the conciliation board, or the special
conciliator, may give its opinion respecting all the points in the

NETHEBLANDS

205

dispute and all the means of settling the dispute, which is then
communicated to the parties. If they accept it, a minute to t h a t
effect is drawn up ; if not, the board or special conciliator may
publish part or all of its " opinion ".
ARBITRATION

The Act lays down t h a t the settlement of labour disputes may
also be entrusted to arbitration courts or arbitrators. The Government conciliator may not act as arbitrator or member of an
arbitration court, but his co-operation is required throughout the
proceedings. A secretary appointed by the Government conciliator
in agreement with the arbitration court or arbitrator shall be
attached to the latter. A person designated as arbitrator or
member of an arbitration court may refuse such duties. He
may also be challenged on the application of either party. The
Act lays down procedure for challenge and the appointment of
new arbitrators.
The arbitration court meets as often as its chairman considers
necessary, and its awards may not be formulated unless all the
members are present. All decisions are adopted by an absolute
majority of t h e votes cast, t h e chairman having the casting vote.
No abstention from voting is permitted.
Arbitration proceedings may be instituted either directly or
after the failure of an attempt at conciliation. In either case,
parties desiring to submit a dispute to arbitration are required to
apply in writing to the Government conciliator. The latter
should refuse t o co-operate if the dispute is not within his competence, if it is not important enough t o justify arbitration, if the
application is not made by or on behalf of a sufficiently large
proportion of the persons concerned in the dispute, or if proceedings
in the case have been opened before a conciliation board and each
time that the proceedings have been successful.
I n all other eases the conciliator draws up a minute, to be signed
by the parties, containing their pledge to submit the dispute to
arbitration a n d certain essential particulars concerning themselves
or their representatives, the nomination of the arbitrator or chairman and members of the arbitration court, and the duration
and validity of the award.
The arbitration court when constituted, or the arbitrator
when designated may, with the approval of the Government
conciliator, require the appearance before it of the representatives

206

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

of the parties, as given in the minute mentioned, and of witnesses
and experts. As far as the summoning and examination of these
persons and the hearing of t h e parties are concerned, the provisions
of t h e Act are identical with those governing the conciliation
procedure. The same right to make enquiries is provided for, but
there is an added regulation permitting the state conciliator to
proceed, in the presence of the arbitration court or arbitrator,
to a further examination of such persons, on oath if need be, if
he considers it necessary for the information of the court. On the
application of the arbitration court or arbitrator, the Government
conciliator may also require the submission of books and all
other requisite documents.
Government conciliators, arbitrators and the chairmen and
other members of the various bodies set up by the Act are bound, on
pain of imprisonment or fines, to keep secret all matters which
become known to them from such books and documents or through
other exercise of their functions.
The secretary keeps minutes of all proceedings of the arbitration
court or arbitrator ; they are signed by the chairman or arbitrator
and by the secretary.
When the circumstances of the case have been fully elucidated,
the arbitration court or arbitrator issues an award in conformity
with the Act, and this, together with the minutes of the proceedings,
is forwarded to the Government conciliator by the secretary within
three days of the award.
The Minister responsible for the administration of the Act may,
if advisable, cancel an arbitration award and order the court or
arbitrator to issue another. He may also require a court arbitrator
to revise an arbitration award. Neither cancellation nor revision
has retroactive force.
Arbitration awards are considered as equivalent to collective
agreements. The members of the occupational organisations in
whose names the minutes drawn up with a view to arbitration
were signed have the same legal status as the parties.
ENQUIRIES

The Act provides for a third and separate type of procedure.
If a dispute seriously affecting public interests will probably cause
or has caused a strike or lock-out, and if not less than 300 workers
are affected by it, the competent Minister may appoint a committee
to institute an enquiry upon the dispute in question. The Minister

207

NETHERLANDS

nominates its chairman and secretary, and may lay down rules of
procedure if he considers it necessary to do so.
All decisions are published by the Nederlandsche Staatscourant.
The enquiry covers the circumstances of the dispute and the
extent to which the claims of either party can be granted. The
committee has power to summon as witnesses or experts any
persons whom it considers it necessary to hear for its information ;
it may also require the submission, within a specified time limit,
of the books and other documents required.
The committee subsequently reports to the competent Minister
on the enquiry made by it ; the latter may then publish the conclusions, but the report itself may not be published without the
agreement of the persons concerned or their occupational organisations.
§ 3. — Results and Opinions
The following were the numbers of labour conflicts (strikes and
lock-outs), workers affected, and working days lost dtiring the
years 1920-1930 1 :
Years
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930

Strikes and
lock-outs

Workers
affected

Working
days lost

481
299
325
289
239
262
212
230
205
226
212

G6,464
47,729
43,982
56,394
27,091
31,695
9,051
12,190
13,630
17,170
9,760

2,354,870
1,281,750
1,223,920
1,216,400
3,156,010
780,860
281,270
203,900
637,600
984,100
273,000

Information on the results of the strikes, the principal demands
made by the strikers, and the means by which the conflicts were
settled are also available. These data, however, do not cover all
the conflicts tabulated above, for neither lock-outs nor certain
strikes for which the corresponding information could not be
obtained are dealt with.
1

NETHEBLAÌÌDS CENTRAI, STATISTICS OFFICE

1924-1930.

Strike and Lock-out

Statistics,

208

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

The ratio between failure, success and compromise, calculated
on the basis of the number of strikes and on the number of
strikers, was as follows : in 1924, 29 per cent, of the strikes ended
in success, and 29 per cent, in failure ; 12 per cent, of the strikers
took part in the successful strikes, and 24 per cent, in those which
failed. Only 43 per cent, of the strikes ended in compromise,
but these strikes affected 64 per cent, of the strikers. The results
for the following years show a similar divergence between the
percentages based on the number of strikes and those based on
the number of strikers ; in 1929, for instance, 20 per cent, of
the strikes, affecting 11 per cent, only of the strikers, ended in
failure, while 29 per cent, of the strikes, affecting 6 per cent
of the strikers, were successful ; compromises were arrived at
in some 50 per cent, of the strikes, but these affected as many
as 82 per cent, of the strikers.
The principal demands of the strikers appear to have been
connected with wages ; in fact this question played a part in
more than 50 per cent, of the strikes in each of the years dealt
with, and a demand for higher wages was the sole cause of dispute
in some 25 or 30 per cent. The other claims were concerned
chiefly with contracts of employment (10-15 per cent.) and
hours of work (5-10 per cent.).
A review of the means by which the strikes were terminated
shows that the occupational organisations were the most efficient
mediators ; the minimum number of strikes settled by them
was 47 per cent. (1928), and the maximum 57 per cent. (1929)
the number of strikers affected being even larger (from 49 per cent.
in 1926 to 77 per cent, in 1929) ; the proportion settled by direct
negotiation between the parties ranged from 14 per cent.. in
1925 and 1927 to 8 per cent, in 1929, but these conflicts affected
as a rule a small number of strikers only (4 per cent, in 1929).
The mediation of third parties was successful in only 4 per cent.
of the strikes (affecting 2 per cent, of the strikers) in 1925, but
seems to have increased somewhat in importance, for in 1928
the corresponding figures were 7 per cent, of the strikes and 25 per
cent, of the strikers. Arbitration plays a very minor part. I t
brought about the settlement of 4 per cent, of the strikes (1 per
cent, of the strikers) in 1924, y2 per cent, of the strikes (% P e r
cent, of the strikers) in 1926, and % P e r cent, of the strikes (1 per
cent, of the strikers) in 1929.
The Government conciliators were responsible for the termination of only 3 to 4 per cent, of the strikes during the years

NETHEBLANDS

209

1924-1929 ; but they seem to have had more success in the later
years, for the number of strikers concerned in conciliation brought
about by them increased from 3 per cent, in 1925 to 35 per cent.
in 1929.
In all, Government conciliators had notice of some 400 disputes
during the five years 1924-1928 inclusive 1 ; they attempted
conciliation in 184 cases, and may claim that their intervention
was successful in 67. In 31 cases the effect of this intervention
on the termination of the conflict was doubtful, while in the
85 others the ofBcial attempt at conciliation must be described
as unsuccessful.
Mr. A. C. Josephus Jitta, Secretary to the Government
Conciliation Committee at The Hague, has published a study
on the Working of the Labour Disputes Act, which gives some
interesting information on the subject.
The Act prescribes that Government conciliators may be
appealed to for the prevention and the settlement of labour disputes.
The exercise of the former function, which consists in aiding
parties, at their request, in the drafting of collective agreements
before any question of a strike or lock-out has arisen, was only
called for on eight occasions in five years ; but the author considers
that such appeals may grow more frequent when the Act is better
known and its utilisation has become habitual.
With regard to mediation proper, there had, up to 1928, been
only one case of an enquiry which included an examination of
books, and the author believes that for practical reasons this
facility will not be frequently used. The possibihty of industrial
secrets being revealed is an obstacle, and, further, books can
only supply information on the past, while the settlement of
conflicts depends on future developments.
There have been only two cases of arbitration during the
five years.
Conciliation has thus been the only common procedure, though
a conciliation board such as the Act prescribes has never yet
been set up ; in most cases the Government conciliator has acted
as special conciliator at the request of the parties.
Mr. Jitta explains the system introduced into the Netherlands
by the Act, and emphasises its fundamentally optional character.
With a few exceptions, the working of the Act is based on the
1
A. C. Josephus J I T T A : " De Practijk van de Arbeitsgeschillen-wet ", summarised in the Royal Belgian Labour Review for Dec. 1929, p p . 1796 et s t q .

1 5

210

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

voluntary collaboration of t h e parties. Compulsory provisions
(prohibition of strikes before the Government conciliator has
dealt with a dispute, the obligation to accept the latter's decision,
etc.), such as appear in the systems of other countries, would
not be in harmony with t h a t of the Netherlands.
On the other hand, the author mentions on several occasions
the necessity for preventing labour conflicts and the efficacy
of the Act in this respect ; the following of his observations may
be noted.
The average annual loss of working time, which amounted
to more than a million days from 1919 to 1925, has fallen since
the latter date to several hundred thousand ; this progress is
due partly to the improvement in economic conditions, but also
in all probability to the influence of the Labour Disputes Act.
The figures quoted in the annual reports tend at least to show
t h a t in about one-third of the conflicts in which the Government
conciliator intervened a comparatively rapid termination was
the result.
I t is true t h a t in a large number of cases such intervention
has been unsuccessful, but in any case the annual expenditure
of 11,000 to 16,000 florins entailed by the administration of the
Act up to 1928 is fully justified by the results obtained ; a single
conflict — the biggest, it is true, which has arisen since the introduction of the Act — cost more than 100,000 florins per day ;
and if such waste can be diminished, even for the shortest period,
the annual cost of the State machinery will be paid for over and
over again.
§ 4. — Summary
The procedure instituted by t h e Netherlands Labour Disputes
Act is essentially optional. When the Government conciliator
is informed of a dispute, he can do no more than collect information
concerning it, and suggest t o the parties its submission to
conciliation or arbitration.
I n order to deal with a case, a board or special conciliator
has to be nominated, and the decision then arrived at can in
no way be imposed on the parties ; if the effort a t conciliation
fails and the parties do not agree to submit the dispute to arbitration, the publication o f the decision is the only step which can
be taken.

NETHERLANDS

211

Arbitration proceedings take place before an arbitration
court or an arbitrator ; the period of validity of the award is
decided by the parties.
Lastly, provision is made for a special enquiry procedure
in the case of disputes which affect the public interest to a large
degree and which cannot be settled by conciliation or arbitration.
The competent Minister may give instructions ex ofßcio t h a t this
procedure be opened and appoint a special committee for the
purpose. After the enquiry has been carried out, the committee
reports on it to the Minister, who may publish the conclusions
made.
BIBLIOGRAPHY
JITTA, A. C. Josephus. Secretary to the Government Committee on Conciliation at The Hague. " De Practijk van de Arbeitsgeschillenwet ". Summary
in the Royal Belgian Labour Review, 31 Dec. 1929, pp. 1796 et seq.
NETHERLANDS CENTRAL STATISTICS OÏTICE. Statistics of Strikes and Lock-out*
in the Netherlands, 1924 to 1930.
MINISTERIE VAN ARBEID, HANDEL EN NiJVERHEiD. Vorslag van de werkzaamkeden van de rijksbemidelaars. The Hague, 1925.

SWITZERLAND '
§ 1. —• Introduction
GENERAL MACHINERY OE GOVERNMENT

Switzerland as a Federal State exhibits the characteristic
features of all federal systems of government. The functions of
government are divided between a central authority and a number
of autonomous State Governments (22 Cantons, of which three are
subdivided into demi-Cantons). In other words, the central
authority and the State authorities exist side by side within the
same area of government. The respective powers of the Federal
and cantonal authorities are denned by the Federal Constitution.
The underlying principle is that any matter not placed by the
Federal Constitution within the jurisdiction of the Confederation
falls within that of the Cantons. Moreover, the jurisdiction of
the Cantons normally extends also to matters which, in virtue of
the Constitution, fall within that of the Confederation if the latter
has not yet exercised its authority.
In virtue of the provisions of existing constitutional law relating
to the distribution of sovereignty, three spheres of Government
may be distinguished.
As regards a certain number of subjects the Confederation is
alone competent, both to enact the substantive rules and to carry
them out and apply them. Such subjects are, for example, foreign
relations, customs regulations, etc.
.^ith regard to other subjects the Confederation enacts the
whole or part of substantive law, but leaves the Cantons to take
any administrative action needed. This class of subject includes
the Factory Acts since 1874 and industrial legislation since 1908.
In a third sphere of government the Cantons have virtually retained
their sovereignty both over legislation and over administration,
for example in the matter, of taxation.
1
This contribution h&s been compiled by the Swiss Federal Office of Industry,
Commerce and Labour.

SWITZERLAND

213

As already mentioned, industrial and factory legislation, and
therefore provisions regarding conciliation and arbitration, fall
at present under the second heading, in other words, the substantive
law is enacted by the Confederation and applied by the Cantons.
It should be noted, however, that so far the Confederation has made
only a limited use of its legislative powers, confining itself to the
partial regulation of conciliation and arbitration procedure in
factories, so that to-day the Cantons are still to a large extent
competent in the matter of conciliation and arbitration.
HISTORY OF CONCILIATION AND ARBITRATION.

During the last ten years of the nineteenth century the need
arose in Switzerland, as in most other industrial States, for Government intervention in regard to one aspect of the struggle between
employers and workers, namely, collective labour disputes. A first
discussion on this matter took place in the Federal Parliament in
1891. In the debates the Federal Council took the view that
mediation procedure should be regulated by cantonal legislation.
At the same time it approved the guiding principle that, while
Government intervention in disputes between the two sides might
be necessary, the authorities should not intervene with binding
effect in the controversy, their task being rather to facilitate a
mutual understanding by acting as mediators.
The first Cantons which during the ensuing period took up the
question of the regulation of conciliation and arbitration procedure, believed that a feasible way of organising official mediation
was to confer these functions upon the industrial courts, or, as
they were generally called, the industrial arbitration courts. These
are judicial organs composed of experts, whose principal duty is
the settlement of civil disputes arising out of the provisions of contracts of employment, by means of a prompt, straightforward and
inexpensive judicial procedure. The first Canton to adopt this
system of official mediation was Lucerne and its example was
followed during the next few years by Berne, Geneva, Fribourg,
and Aargau. In this connection it should be noted that Geneva
even then made it compulsory for the parties to notify disputes,
appear before the Courts and take part in the proceedings, while
Aargau enacted that the conciliation boards should intervene
ex officio.
The policy of investing one body with the double function of
pronouncing judicial decisions based on objective legal principles
1 5 *

214

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

and mediating in collective labour disputes did not, however, prove
successful. No doubt the idea underlying this policy, that a
thorough knowledge of labour law is a necessary preliminary
condition for successful mediation, was sound in itself. But the
nature of the two functions and the procedure which has to be
adopted are so essentially different that before long, in spite of
some favourable results, the experience gained caused the method
to be abandoned.
The first endeavour to set up an independent conciliation board
was made in Zurich in 1892. The authorities brought forward a
Bill for the voluntary establishment of trade union chambers.
These chambers were to set up mediation boards which, at the
request of both parties, were to institute conciliation proceedings.
The Bill, however, failed to be carried by Parliament and was
dropped. But in the industrial centres of Zurich and Winterthur,
the need for conciliation machinery was so pressing that the two
towns endeavoured to solve the problem without having recourse
to cantonal legislation and set up municipal conciliation boards.
Thus the Zürich municipality established in 1895 a permanent joint
conciliation board, which, however, did not prove generally satisfactory and was therefore replaced in 1906 by an entirely neutral but
again permanent board. The main features of the procedure
established were : compulsory notification of disputes by the parties,
separate conciliation and arbitration procedure, and publication
of the grounds on which a party failed to appear before the Board
or to accept an arbitration award.
Several other Cantons followed the example of the Zurich
municipality in separating the official conciliation and arbitration
machinery from the industrial courts. The first was Basle-Town,
which in 1897 enacted legislation providing for a conciliation
board, not, however, as a permanent body, but as one set up
ad hoc by the State Council1. In 1911 Basle-Town amended
this Act by one still in force, which re-organised the existing
conciliation machinery and established a permanent official conciliation board. Other Cantons to be mentioned in this connection
are St. Gallen, which imitated the Basle Act of 1897, and Neuchâtel, Vaud and Berne. The Berne Act of 1908, with some modifications necessitated by the introduction of the Federal Factory
Act, is still in force. The Cantons of Schaffhausen and Graubünden
1
The State of Council (Regierungsrat,
highest executive cantonal authority.

Staatsrat

or Kleiner

Rat) is the

SWITZERLAND

215

decided against the establishment of independent conciliation and
arbitration machinery, the latter Canton entrusting the conciliation of disputes to the State Council, and the former to the
industrial board, a committee of experts set up to assist the
authorities in investigating and recommending on important
industrial questions.
A measure passed by the Canton of Geneva in 1900-1904
deserves special mention. This is the Loi fixant le mode d'établissement des tarifs d'usage entre ouvriers et patrons et réglant les conjliU
relatifs aux conditions de leurs engagements, which entrusts conciliation
to the State Council and arbitration to a central board composed
of members of the industrial courts. The distinctive feature of
the Geneva Act is t h a t it not only related to disputes which had
already arisen, but endeavoured in the first place to prevent
them from arising. The method adopted to achieve this end was
to enunciate the principle t h a t wages and other working conditions
were determined by contract, or failing this in accordance with
custom. For the purposes of the Act, the term custom included
collective agreements concluded before the conciliation board
or made binding by an award of the arbitration board. I n case
of failure to reach an agreement between the parties by conciliation
therefore, the arbitration board was competent to fix working conditions t h a t were binding on the parties. This example was not,
however, followed elsewhere, partly because the results of the
system proved to be disappointing, and also because it was open
to doubt whether the Geneva Act was in conformity with Federal
law.
Generally speaking, before the war official conciliation and
arbitration machinery had not yet emerged from the experimental
stage, and in 1914 its organisation in the Cantons illustrated the
various stages of development through which have passed State
conciliation and arbitration generally. Some of the Cantons, in
which the need for such machinery was not particularly urgent, had
enacted no special regulations respecting conciliation, a n d as in
consequence no special bodies had been established for the purpose,
the cantonal Government had to act as mediator in the more
important disputes. When the need for the establishment of
conciliation and arbitration machinery was recognised, the first
step taken in this direction was to confer mediatory functions on
the industrial courts. I n some cases the courts were simply instructed t o carry out these functions, in others provisions were
enacted laying down special conciliation procedure. When sub-

216

CONCILIATION AND AEBITEATION IN DIFFERENT

COUNTRIES

sequent experience proved that the industrial courts were not
equal to carrying out the new duties, the method was tried of
entrusting mediation to existing administrative authorities, and
finally of creating special conciliation boards, which were sometimes ad hoc and sometimes permanent bodies.
Moreover, in the course of this process a tendency can be
discerned towards State mediation in the form of arbitration as
well as conciliation, the Canton of Geneva proceeding furthest in
this direction by separating its conciliation machinery entirely
from its arbitration board and making the decisions of the latter
body binding.
The present stage in the evolution of conciliation machinery
was reached with the passing of the Federal Factory Act of 1914,
which provided a basis for and reorganised the official system of
conciliation and arbitration.

§ 2. — The System in Force
Conciliation and arbitration procedure in Switzerland is regulated partly by Federal law, i.e. by sections 30-35 of the Federal
Act respecting work in factories of 18 June 1914 (hereinafter referred
to as the Factory Act) and partly by cantonal law. A twofold
distinction may be drawn between the spheres of Federal and of
cantonal legislation respectively. In the first place, the Factory Act
applies only to industrial undertakings as denned by it, while in
all other fields (trade, handicrafts, etc.) the regulation of conciliation
and arbitration procedure is left entirely to the Cantons. Secondly,
Federal legislation does not establish detailed regulations for the
settlement of so-called factory disputes, but merely prescribes that
the Cantons are to establish permanent conciliation boards, and
lays down a few guiding principles which constitute the minimum
provisions to be enacted by the Cantons. All other matters, such
as the organisation of the conciliation boards, the detailed rules
concerning procedure, etc., lie within the competence of the Cantons
which regulate them as they see fit in accordance with their special
requirements.
Sections 30-35 of the Factory Act came into force on 1 April
1918, and are worded as follows :
30. For the amicable settlement of collective disputes between
factory owners and workers concerning conditions of employment or
concerning the interpretation and execution of collective or normal

SWITZERLAND

217

contracts of employment 1 , the Cantons shall establish permanent
conciliation boards, bearing in mir.d the requirements of the various
industries.
The organisation of the cantonal conciliation boards shall be subject
to the approval of the Federal Council.
31. The conciliation boards shall intervene ex officio or upon
request of a public authority or of the interested partie?.
Any person subpoenaed by a board shall be compelled, under penalty
of a fine, to appear, to take part in the proceedings, and to give all
necessary information.
The procedure shall be free of charge.
32. Should a dispute extend beyond the limits of the Canton, the
Fiderai Council shall nominate the conciliation board. The Federal
Council shall also be entitled to appoint a cantonal board to intervene.
33. Should a number of factory owners in the same industry and
their workers voluntarily appoint a conciliation board, the latter
shall, as far as they are concerned, replace the official board.
34. The parties shall have the right in every case to empower the
conciliation board to settle their differences by the issue of a binding
arbitral award. Should the board have been established voluntarily,
the parties may extend such power to all their differences.
35. The Cantons shall have the right to confer more extensive
powers on their conciliation boards than those provided for in the
present Act.j
The principal difference between the activity of the courts
and t h a t of the conciliation boards established under the Factory
Act is t h a t the latter bodies draw u p fresh regulations, in other
words, they standardise new working conditions, whereas the
function of the judicial organs is to expound and apply existing
legislative provisions. The conciliation boards are not competent
to deliver judicial decisions, their function is not to settle legal
issues by decisions based on existing law, b u t rather to act as
mediators, to conciliate the opposing interests of the two parties
and endeavour to end the dispute by bringing about a mutual
agreement.
The methods of official mediation mentioned in the Factory
Act are conciliation (section 30-33) and voluntary arbitration
(section 34). Both of these are based entirely on the principle of freedom of contract, and with either form of procedure, any settlement
of the dispute reached takes the form of the voluntary conclusion
of an agreement. The only difference between the two methods
1
A normal contract is a model contract drawn u p by the Federal Council or
cantonal authorities for certain contracts of employment and the contract of
apprenticeship, which creates positive legal rights in the absence of provisions t o
the contrary, in the sense t h a t its contents are taken to express a contractual
intention, if nothing to the contrary is agreed in writing (section 324, Swiss Code
of Obligations).

218

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

is t h a t in conciliation proceedings, the parties themselves, with
the assistance of the conciliation board acting as mediator, decide
all points of the agreement, whereas in arbitration, those points
on which they cannot agree are by common consent left to be
decided by a third party : the arbitration board. Swiss law does
not recognise " binding arbitral awards ", in the sense of German
law, under which an award can be • " declared binding ", thus
compelling a party to comply with a proposed agreement that
it had rejected.
CONCILIATION PROCEDURE

The Different Kinds of Conciliation

Boards

The Factory Act establishes the following boards :
(a) Inter-Cantonal Conciliation Boards. There is no Federal
conciliation board with jurisdiction over the whole of Switzerland.
But in disputes extending beyond the limits of a Canton, the Federal
Council or the Federal Department of National Economy, to
which this d u t y has been delegated, appoints an inter-cantonal
conciliation board. A special ad hoc board may be constituted
or the dispute may be referred to a cantonal conciliation board.
I n such cases, which are very unusual, the practice so far has
been to adopt the latter procedure, and ad hoc boards have been
constituted only in exceptional cases.
(b) Cantonal Conciliation Boards are permanent boards set
u p in all Cantons under section 30 of the Factory Act ; they have
to conform to the minimum requirements specified in the Act.
They are usually known as Einigungsämter - Offices de conciliation.
With one exception no Canton has set up more than one conciliation
board within the meaning of the Factory Act in its areas. The
exception is the Canton of Berne which has established one board
for each of five different districts, i.e. five boards in all.
(c) Voluntary Conciliation Boards are bodies for mediation set
up by mutual agreement between the employers' and workers'
organisations, whose activity is as a rule confined to one industry.
By formal agreement between the two sides they frequently
exercise arbitral functions as well, having been empowered in
advance to act as arbitration boards in all disputes on points
of civil law arising out of collective agreements.
I n virtue of section 33 of the Factory Act, such private conciliation boards, if they are appointed by a number of factory
owners in the same industry and their workers are officially re-

219

SWITZERLAND

cognised, to the extent t h a t they may, for the parties concerned,
replace the official conciliation board.
Besides these conciliation boards established under the Factory
Act, several Cantons possess other boards, which in some cases
date back to before 1918 and for some reason were not abolished
when cantonal conciliation machinery was adapted to the system
established under the Factory Act. For example, Article 37 of the
Constitution of the Canton of Appenzell (Outer Rhodes) provides
for the nomination of ad hoc conciliation boards by the State
Council in addition to the boards set up under the Federal Act.
I n the Canton of Ticino mediatory functions are exercised not
only by the cantonal conciliation board but also by the industrial
courts, to which for this purpose two employers and two workers
are added. As in both Cantons the regulations respecting the
cantonal conciliation board extends its competence also to disputes
not covered by the Factory Act, these additional mediative bodies
are not, however, important in actual practice.
I n the Canton of Graubünden, oh the contrary, the competence
of the conciliation board set up under the Factory Act is confined
to disputes covered by the Act, and the cantonal Act respecting
strikes prescribes t h a t all other disputes are to be referred to a
special conciliation board set up by the State Council. Similarly,
in the Canton of Fribourg, besides the cantonal conciliation board,
which settles disputes affecting industry, trade and handicrafts,
another board has been set up to deal specially with disputes
between the management and the employees of State undertakings
or undertakings holding concessions. I n the Canton of Zurich too
there is a certain duplication of functions, the towns of Zurich and
Winterthur still possessing their own municipal conciliation
boards, though since the cantonal board was established the
importance of these bodies has materially declined. They take
action only when the parties in disputes not covered by the Factory
Act have recourse to them instead of to the cantonal conciliation
board.
The Cantonal Conciliation

Boards

Composition
The Factory Act contains no provisions relating to the composition of cantonal conciliation boards, but the Federal Council
reserves the right to approve the organisation of the board established. The composition of the boards varies in the different Cantons,
but they have one feature in common : the person selected as

220

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

chairman is impartial in the sense that he may not be an employer
or worker. Further, all Cantons, except the two Appenzells,
appoint assessors in addition to the chairman and all of them
appoint a secretary, who usually attends its meetings in an advisory
capacity, unless he is not a member of the board.
As regards their composition the boards may be divided into
three main groups :
(1) Joint conciliation boards, consisting of a chairman and
one or more representatives each of the employers' and workers'
organisations. These include the boards set up by the Cantons
of Berne, Basle-Country, Lucerne, etc.
(2) Entirely neutral conciliation boards, whose members do not
represent either employers or workers, and are therefore not in
any way connected with the dispute. When in the course of the
proceedings such boards have to consider technical questions,
persons with expert knowledge of the industry may be added in
a consultative capacity. Basle Town and Appenzell (Outer Rhodes),
are examples ; in the latter the board consists of a chairman only.
(3) Mixed conciliation boards represent a combination of the
two preceding systems ; in addition to the chairman and from
two to four independent members they include equal numbers of
assessors representing employers and workers respectively. This
system has been introduced by the Cantons of St. Gallen, Fribourg,
Obwalden, Nidwalden, etc.
In a few Cantons, as for example, Zurich, Zug and Appenzell
(Inner Rhodes), the conciliation board may be either a neutral
or a mixed body, as it is optional whether employers' and workers'
representatives shall be added.
As regards the selection of the members of conciliation boards,
in several Cantons the office of chairman, and in Obwalden and
Nidwalden also that of independent assessor, is held ex officio by
certain public officials. Thus in Geneva, Obwalden and Nidwalden
the chairman, and in the two last-mentioned Cantons the independent assessors, are selected from among the judges, and in the
Cantons of Zug, Schwyz, Graubünden, Ticino and Valais from
among the administrative officials. In Appenzell (Outer Rhodes),
a State Councillor may be appointed to act as chairman of
the board. In all the other Cantons the chairman and the independent assessors, who in every case are permanent members of
the board, are selected by the cantonal authorities, usually the
State Council. The representative members are in some cases

SWTTZEELAiTD

221

permanent members of the board and in others are appointed
as each case arises. Again, a number of these assessors may be
permanently appointed while the other non-permanent assessors,
who must belong to the trade concerned and are called technical
assessors, may be added to the boards when their presence is
required. The representative assessors are normally appointed
by the same authorities as the chairman and the neutral members,
the trade associations concerned being usually entitled to propose
the candidates. In the Cantons of Berne, Fribourg and a few
others the non-permanent assessors are designated by the parties
to the dispute.
In many cases, especially in the more industrial Cantons, a large
number of representative assessors (about thirty to forty), are
chosen beforehand from among the various occupational groups,
and the conciliation board is appointed in every case from among
the representatives of the group affected by the dispute. Almost
invariably the assessors are under a legal obligation to carry out
their duties.
In the Canton of Graubünden a special feature of the board
is that the assessors exercise only consultative functions, as do
also the technical assessors appointed in the Cantons of Zurich
and Zug.
As a rule two or four assessors are appointed, but in many
cases further assessors may be added if important disputes are
under consideration. For example, the legislation of the Canton of
St. Gallen prescribes that in disputes affecting from five to twenty
workers the conciliation board is to be composed of the chairman
and two assessors ; when over fifty workers or several undertakings
are affected two additional assessors are to be appointed, and in
more important disputes involving questions of principle the
number of assessors may be further increased.
Generally speaking, only persons who are of age, reside in the
Canton and possess full civil rights and Swiss citizenship are
eligible as members of the conciliation board. In a few Cantons
women are also eligible, at any rate as technical assessors (Zurich,
Solothurn, Schaff hausen), and in the Canton of Basle-Town even
foreigners are admitted.
The term of office of the permanent members is the same
as that of public officials generally : i.e. from three to four years.
As the cantonal conciliation boards are public bodies, they are
placed under the supervision of the State Council, to which they
must submit a yearly report. In all other respects they are entirely

222

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

independent both of the executive and of the judicial authorities
of the State. In several Cantons the conditions governing discharge
are regulated by the laws respecting cantonal conciliation boards.
Where this is not the case, the State Council in its capacity as supervising authority has the power of dismissing members of the board
on the grounds of neglect of duty, inefficiency or unsatisfactory
behaviour. In Berne such cases fall under the Act concerning
the dismissal of public authorities and officials.
Like all other public officials, the members of conciliation
boards may be disqualified, i.e. in certain circumstances (e.g.
when several of the assessors are closely related to each other)
they are not permitted to take part in the proceedings. In the
Canton of Zug provisions relating to disqualification are contained
in the Act concerning conciliation boards, while in other Cantons,
such as Lucerne, Solothurn, Zurich and Ticino, they are embodied
in the rules of procedure.
Competence
(1) Nature of the disputes to which it extends. According to
section 30 of the Factory Act, the main duty of the conciliation
boards — apart from their arbitral functions, which will be
considered elsewhere — is to mediate in collective disputes between
factory owners and workers in regard to conditions of employment
or the interpretation and execution of collective or normal contracts/. Even in disputes arising out of the interpretation fo
contracts the functions of the boards are purely mediatory and in
no case do they pronounce a decision or a legal verdict, this
function being reserved for the ordinary courts. The conciliation
board, further, intervenes in such disputes only if they are collective disputes.
As the Factory Act leaves open the question of the definition
of collective disputes, it is for the Cantons to draw up detailed
regulations in the matter. Most cantonal Orders define the term
" collective dispute " as one which on the workers' side affects
several persons. Other Cantons stipulate a minimum number of
workers ; thus the Cantons of Berne, Geneva, Ticino, Glarus,
Appenzell (Inner Rhodes), Neuchâtel, St. Gallen and Schaffhausen
lay down five, and Aargau and Graubünden six as the minimum
number of workers. Basle-Town fixes the number as high as ten,
but stipulates that at the request of the parties the board shall
also be competent to intervene if the dispute affects only three
i Cf. footnote p . 217.

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workers, or the State Council considers its intervention to be in
the public interest. Fribourg defines collective disputes as differences in regard to conditions of employment that interfere with
the normal working of an industry or business. Similar definitions
have been laid down by Solothurn and Appenzell (Outer Rhodes)
where collective disputes are held to be differences resulting from
the opposing interests of the owner of an undertaking and his
workers in the matter of conditions of employment or the interpretation and execution of collective and normal contracts, which
may result in strikes, boycotts and lock-outs. The decision
rests to some extent with the conciliation board itself. Often,
indeed, the board is empowered to exercise mediatory or arbitral
functions even in disputes which are not collective disputes within
the meaning of the Factory Act. This is the principle recognised
in the Act passed by Appenzell (Outer Rhodes) which empowers
the State Council to entrust the cantonal conciliation board by
resolution with the settlement of other disputes relating to conditions of employment between the owners of undertakings and
their workers or salaried employees.
By specifying that the function of the conciliation boards is
the settlement of collective disputes between factory owners and
workers, section 30 of the Factory Act limits the matters within
their competence to disputes in undertakings covered by the Act.
Under sections 1 and 2 of the Act the Federal Council may define
as factories undertakings in which several workers are employed
away from their homes, either on the premises of the undertaking
and in workplaces belonging thereto, or elsewhere on work connected with the industrial working of the undertaking. This definition is further elaborated in the Regulations for the application
of the Act, according to which factories, within the meaning of
the Federal Factory Act, are industrial undertakings using mechanical power and employing six or more workers, undertakings not
using mechanical power and employing six or more workers, if these
workers include at least one young person (below the age of eighteen years), undertakings employing eleven or more workers and
finally, regardless of the number of workers employed, specially
dangerous undertakings or undertakings which are obviously in
the nature of factories. Besides these, the principal railway
workshops are also held to be factories.
In virtue of section 35 of the Factory Act, which authorises
the Cantons to extend the competence of the conciliation boards
also to differences not covered by the Act, the majority of the
Cantons have empowered the boards to intervene also in disputes

224

CONCILIATION AND ABBITRATION TN DIFFERENT

COUNTRIES

affecting undertakings not covered by the Factory Act. Unterwalden, Graubünden, Glarus and Valais are the only Cantons
which expressly limit official conciliation and arbitration to
disputes in factories, while Schwyz empowers the State Council
to extend the competence of the board by special Order. In the
Canton of Zug the conciliation board, besides intervening in
factory disputes, is also competent to deal with construction
undertakings engaged in bricklaying, stone-cutting, carpentry
and ferro-concrete construction, while by an Order of the State
Council its competence may be extended to other classes of undertakings. The Orders issued by all the other Cantons, too, empower
the boards to intervene in disputes not covered by the Factory
Act, those of five Cantons even including agricultural disputes
(Lucerne, Solothurn, Basle-Town, Appenzell (Outer Rhodes) and
Appenzell (Inner Rhodes)). Some Orders expressly extend the
jurisdiction of the boards to commercial undertakings as well
(St. Gallen, Aargau, Ticino), while the text of other Orders implies
that such undertakings are included. The same is true also as
regards home-work, which is specially mentioned in the Order
of Basle-Country. A few Cantons further empower the boards to
intervene in disputes not within their competence, at the request
of the parties.
Most of the Cantons do not make separate provisions concerning
the competence of the conciliation boards in disputes in public
undertakings. Uri is the only Canton that provides for the settlement of «,11 such disputes without exception by the conciliation
board. In Solothurn the board intervenes only in disputes in public
and municipal undertakings that fall under the provisions of the
Federal Factory Act, the cantonal Act for the Protection of
Female Workers, or the Compulsory Insurance Act and are not
primarily public utility undertakings. A similar distinction is
made in Neuchâtel as regards municipal undertakings. Basle Town has set up special committees for the settlement of disputes
in public undertakings and the Canton of Fribourg a special
conciliation board for State undertakings and undertakings
holding State concessions. Where no such special provisions have
been enacted, the competence of the conciliation boards extends
to any public undertaking subject to the Factory Act, whose
staff is appointed on a contract concluded in accordance with
private law.
Under section 6 of the Factory Act, disputes in Federal
workshops, except Federal Railway workshops, are settled by the
Federal Workshops Board which the Federal Council must appoint

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to investigate workers' complaints respecting general conditions
of employment.
Other cases are dealt with under the relevant provisions of the
legislation respecting public servants.
(2) The area of jurisdiction.
Several cantonal Orders do
not mention the area of jurisdiction of the conciliation boards,
and those t h a t refer to the subject differ substantially in their
definitions. A usual distinction is between undertakings within
and those outside the limits of a Canton, but some Cantons do not
stop there. For example, Basle-Town lays down t h a t the conciliation
board may intervene in collective disputes between the owners
of undertakings established in the Canton, or undertakings outside
its boundaries employing workers within the Canton, and their
workers employed within the limits of Basle-Town. Here the
decisive factor as regards competence is the locality in which the
dispute arises or in which its economic and social effects are
experienced.
Disputes extending beyond the limits of a Canton are referred
to the inter-cantonal conciliation board, which has been mentioned elsewhere.
(3) Other duties of the conciliation boards. Mention has
already been made of the fact t h a t under the provisions of the
Federal Factory Act the duties of the conciliation boards are
confined to the settlement of disputes in factories by means of
conciliation and, if necessary, arbitration. I t was further noted
that the Cantons, in virtue of section 35 of the Factory Act, have
generally extended the jurisdiction of the conciliation boards to
undertakings not covered by the Act. To these functions some
Cantons have, however, added duties which can hardly be described
as lying within the sphere of conciliation and arbitration.
Thus, the St. Gallen conciliation board has the duty of advising
the State Council on questions of social policy and of investigating
the workers' conditions of employment, remuneration and living.
In some Cantons, moreover, the conciliation boards are entrusted
with the duty of securing the observance of the settlements reached
through their agency and of their arbitral decisions, and some
boards centralise collective contracts of employment and collective
agreements relating t o conditions of employment generally.
The Parties
As parties to a dispute either a single owner of an undertaking
or several owners, i.e. a trade association, may appear before
1 &

226

CONCILIATION AND ARBITRATION IN BIFFERENT COUNTRIES

the conciliation board on the employers' side, but on the workers'
side more than one worker must appear in every case.
The representation of the parties is usually the subject of special
regulations. In all Cantons the right of the parties to send representatives is formally recognised or understood, but in most of
them professional representation by counsel is excluded. Appenzell
(Outer Rhodes), while accepting the principle of representation,
requires the parties to appear in person.
In some cases the number of representatives is limited, while
various Orders lay down that only persons fulfilling certain specified conditions may represent the parties, e.g. they must have legal
power to assume obligations and acquire rights (persönliche Handlungsfähigkeit) , be directly concerned in the dispute, reside in Switzerland or even within the Canton, and possess Swiss citizenship. A
few Cantons expressly declare women to be eligible. Normally the
secretaries of associations are allowed to act as representatives, but
sometimes they may do so only subject to certain conditions, for
example, if the association in question represents a substantia]
proportion of the workers affected by the dispute.
Procedure
Generally speaking, if the competence of the conciliation
board extends to differences not falling under the Factory Act,
the same procedure is adopted as for disputes in factories. There
are a few unimportant exceptions to this rule, e.g. according to
the Zurich regulations in differences not falling under the Factory
Act the parties are not bound to appear before the board and
participate in the proceedings.
The Federal Act stipulates that the conciliation boards have to
intervene ex officio or upon request of the authorities or of the
interested parties. This stipulation is binding upon the Cantons
and is generally reproduced as it stands in their Orders.
The boards can intervene on their own initiative in all cases in
which a dispute has arisen, but the Orders issued by some Cantons
empower them to do so also in order to prevent a threatened
conflict. Very frequently the board initiates conciliation proceedings if the parties hesitate to refer the dispute to it for fear that
such action may be interpreted as a sign of weakness. In such
cases the board is generally informed of the existence of the dispute
through the press, indeed it is not at all unusual to find that such
announcements are communicated to the press with the sole
object of drawing the attention of the board to the dispute and so
avoiding the necessity of direct notification.

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The authorities empowered to demand the initiation of conciliation proceedings are, in the first place, the cantonal and, in
the second place, the local authorities. In practice they intervene
most frequently to bring about the resumption of negotiations
which have broken down, at a stage when for tactical reasons
the opposing parties do not wish to renew their request for the
institution of conciliation proceedings.
As a rule, the parties are required to address their request
to the board in writing and to give information relating to the
character of the strike or lock-out and the demands of the two
sides. Often the parties are not only entitled but obliged to request
the intervention of the board, the notification of disputes being
compulsory. Such notification has to be given by the executives
of the employers' and workers' organisations affected by the
dispute, or in the absence of such organisations, by strike or
lock-out committees, workers' committees, wages committees, or
again, if none of these bodies exists, by any employer or worker
affected by the dispute. Further, disputes have to be notified
by various public authorities such as municipal councils and
labour offices, and if disputes have been referred to private conciliation boards, by these. Many cantonal Orders specify the
circumstances in which disputes are to be notified. Such conditions
are, for example : the occurrence of a stoppage of work, strike,
lock-out, boycott or other form of industrial strife, and the breakdown of private negotiations or conciliation proceedings before
a private conciliation board. Some Cantons stipulate that the
dispute must be notified within a specified time limit. A few
Cantons also lay down detailed provisions in regard to the form
of the notification. The notice has generally to be given in writing
and indicate clearly the parties to the dispute, their representatives
and the question at issue. Zurich and Solothurn go even further
and require information respecting the date on which the dispute
has arisen and the number of undertakings and persons affected ;
the parties must further formulate their demands, indicate the
grounds on which they are brought forward and state whether
the dispute has been referred to a private conciliation board
and whether the board has initiated proceedings.
In the nature of things, conciliation proceedings are conducted
orally. The provisions of cantonal orders differ widely in regard
to the publicity of proceedings. Some Orders make no ruling
on this subject, others definitely state that the proceedings are
to be public and others again that they are to be private. Finally,
some Cantons solve the problem by stipulating that a« a general

228

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

rule the proceedings are to be private, but that in exceptional
cases permission may be granted to admit the public. Grenerally
speaking, however, the discussions, both of conciliation proposals
and of arbitral awards, are private.
Section 31, paragraph 2, of the Federal Factory Act provides
that any person subpoenaed by a board, (i.e. both the parties and
the witnesses) shall be compelled, under penalty of a fine, to appear,
to take part in the proceedings and to give all necessary information.
This, therefore, is the general principle laid down by Federal law,
but the detailed regulations enacted by the Cantons show considerable variations. Thus, the laws of some Cantons provide that if
one of the parties fails to appear, the board, after hearing the party
present at once draws up a conciliation proposal. This proposal is
submitted to the parties for their approval or rejection, which has
to be communicated in writing within a specified time limit. Other
Cantons provide for a second summons, while a third group interpret
a party's failure to appear as a formal refusal to accept mediation
and therefore consider conciliation to have failed.
As a rule, the provisions concerning the establishment of the
facts and in particular the taking of evidence and the nature of
the evidence to be submitted, are similar to those governing
procedure in the civil courts. But some Cantons that admit
oaths and pledges in civil law suits expressly exclude them from
the settlement of disputes. Attention should also be drawn to a
provision enacted by several Cantons, to the effect that if one of
the parties submits information respecting business secrets or the
internal situation of an undertaking, this may be disclosed to the
chairman and, if need be, the independent assessors, but not to
the representative members of the board or the opposing party.
Contrary to the provisions governing ordinary procedure in
the civil courts, some cantonal regulations permit private discussion
between the conciliation board and one of the parties, while other
Orders are silent on the subject.
The proceedings are terminated if the parties reach an agreement
in the course of the proceedings — which is unusual — or if the board
draws up a conciliation proposal. Under the legislation of several
Cantons, the board, in drawing up this proposal is not bound by the
opinions of the parties, but has full liberty to act as it sees fit. As a
rule the conciliation proposal, which in some Cantons, but not in
others, must be supported by a statement of the grounds on which
it is brought forward, takes the form of an oral communication, but
may also be notified to the parties in writing. The latter must

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229

signify their approval or disapproval, generally within a stated
period. In some Cantons failure to do so within the specified time
limit is interpreted as signifying acceptance, in others the parties
have to make a formal statement of acceptance which must be
recorded in the minutes ; the absence of such a declaration is
deemed to be equivalent to rejection. Finally, some Cantons require
the parties to sign a statement of acceptance.
If the conciliation proposal is rejected by either or both of
the parties, and neither of them is willing to have recourse to arbitration, the conciliation proceedings are deemed to have failed,
for the time being at any rate. As a rule this result has to be
recorded in the minutes, with a statement of the grounds on which
the proposal was rejected. But most Cantons require the conciliation board to take steps to bring about a resumption of the
negotiations immediately or within a stated time limit, or else
to notify the Government of the failure to reach a settlement,
which can then order the proceedings to be re-opened. A very
usual practice is to require the proceedings to be made public,
especially the board's conciliation proposal and, sometimes also,
its reasons for bringing it forward and the reasons advanced by
the parties for its rejection. The object is to influence the parties
to some extent through the pressure of public opinion.
No legal action is possible against a conciliation proposal,
but in nearly every case an appeal may be made to the Government
in connection, with the formal proceedings, or particular provisions,
especially penal clauses. Moreover, a few Cantons, such as BasleTown, expressly allow an appeal against intervention by a board
or a refusal to intervene, if such action is contrary to law (appeals
relating to competence).
An interesting provision, apparently unique of its kind, is
that of the Geneva Act which in a sense introduces a right of
appeal by empowering the parties to apply to the State Council
for a further and final attempt at conciliation in cases where
the conciliation board has failed to reach a settlement.
Legal Effects of Conciliation Agreements
The board's conciliation proposal as such has no legal force, but
if it is accepted by the two parties, it is binding as a contract. Sometimes it may also be given the force of a judicial verdict (e.g. in the
Canton of Appenzell, Outer Rhodes). The same is true of an agreement concluded by the parties in the course of the proceedings,
without waiting for the board to draw up a conciliation proposal.
1 6 *

230

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

In order to secure the observance of agreements, it is in several
cases provided that, at the request of the State Council or of
one of the parties, the conciliation board may investigate and
make public any contravention of an agreement concluded before
it. Moreover, some cantonal Orders empower the conciliation
board to secure the fulfilment of the obligations assumed by
requiring both parties to deposit a security, which is forfeited if
the board declares that they have failed to carry out the
agreement. Again, some Cantons empower the board to issue
a final decision on differences connected with the interpretation
of the conciliation agreement.
The Obligation to Resort to Peaceful Means of ¡Settlement
A large number of cantonal Orders contain a provision which
is intended to further the main purpose of the conciliation boards :
the prevention of industrial strife. This provision establishes
an obligation to have recourse to peaceful means of settlement
and usually takes the form of prohibiting resort to force, while
in some cases even open propaganda in favour of strikes, boycotts
or lock-outs is prohibited. In the Cantons of Aargau, Fribourg,
Ticino, Vaud, Valais, Neuchâtel and Geneva, the obligation to
use peaceful means of settlement is present only while conciliation
or arbitration proceedings are in progress. Here its main object
is to prevent the tension between the parties to the dispute from
being increased and the chances of an amicable settlement thus
prejudiced. In other Cantons (Zurich, Solothurn and Appenzell
(Outer Rhodes), the obligation extends over the whole period
during which the agreement or arbitral award is enforceable and
is thus intended as a guarantee of its observance. Finally, in
Lucerne, Schaff hausen and St. Gallen, the obligation extends
over both the period of negotiations and the period during which
the agreement or arbitral award is enforceable.
Penalties
Section 31, paragraph 2, of the Federal Factory Act provides
that any person subpoenaed by a board shall be compelled, under
penalty of a fine, to appear, to take part in the proceedings and
to give all necessary information.
In order to secure the enforcement of this provision and the
orderly conduct of the proceedings, all cantonal Orders contain
penal clauses. The provisions in question vary widely, both in
the définition of the offence and in the penalties imposed. Some

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231

Cantons confine themselves to reproducing the text of the Federal
provision in question, others go further and impose penalties also
on persons who, without sufficient cause, fail to appoint representatives or submit documents when called upon to do so. Various
cantonal laws also impose penalties for failure to notify a dispute,
the making of frivolous claims, disturbance of the proceedings,
refusal to serve as a member of the board, disclosure of confidential
information by members of the board, etc.
The fines imposed usually vary from 10 to 100 francs and can as
a rule be doubled when the offence is repeated. Higher penalties are
imposed for a refusal on the part of members of the board to carry
out their duties or for a breach of confidence. In the last-mentioned
case the Canton of Vaud imposes a maximum fine of 2,000 francs or
a month's imprisonment. Various other offences are also punished
in some Cantons with imprisonment as well as with fines.
As regards the obligation to have recourse to peaceful means
of settlement, some Cantons merely establish the obligation without
imposing penalties for its non-observance. But where such
penalties are imposed they are usually much more severe. For
example, under the regulations issued by St. Gallen a fine of 50
to 1,000 francs may be imposed, and in Vaud the penalty is a
maximum fine of 10,000 francs or up to three month's imprisonment. The Canton of Fribourg punishes even the act of inciting
others to strike.
If it is shown from the facts that a serious offence or crime has
been committed, the provisions of the ordinary Penal Code apply.
The power of enforcing the penal regulations rests with the
chairman, the board or, in some Cantons, the State Council. If
it is exercised by the chairman or the board, an appeal usually
lies with the State Council, which is competent to give a final
decision.
ARBITRATION PROCEEDINGS

Section 34 of the Federal Factory Act stipulates that the
parties have the right in every case to empower the conciliation
board to settle their difference by means of an arbitral award.
They may extend such power to all their differences if the board
has been established by mutual consent.
Here too it is for the Cantons to draw up the necessary detailed
regulations, and as a rule they establish procedure closely resembling
conciliation procedure.
As regards organisation, it will be found that in almost every

232

CONCILIATION AND ARBITRATION TN DIFFERENT COUNTRIES

case the conciliation boards, as constituted for purposes of mediation, act as arbitration boards. Occasionally, however, additional
assessors are appointed (e.g. in Zurich and Berne), who generally
represent the two sides. The Canton of Fribourg constitutes an
exception ; here the State Council may at the request of the parties
set up a special arbitration commission. In the absence of regulations on the subject the composition of this body is necessarily
decided by the authorities responsible for its appointment.
Recourse to arbitration is generally had if no settlement is
reached by conciliation ; but in the Canton of Schwyz the parties
may refer a dispute to the conciliation board for arbitration even
if no previous attempt has been made to settle it by conciliation.
Failing an agreement by conciliation, the board usually invites the
parties to state, within a given time limit, whether they are willing
to submit the dispute to it for arbitration. If both parties agree
to do so, arbitration proceedings are begun. In several Cantons
the parties are expressly required to give their assent in writing.
Several Cantons go beyond the provisions of the Federal
Factory Act and also provide for the institution of arbitration
proceedings at the request of only one of the parties or of
the Government. In the Cantons of Zurich and Graubünden the
chairman, without being requested by the parties or the Government to initiate proceedings, may do so ex officio if he considers that
such action may facilitate a settlement.
The procedure is generally the same as for conciliation. In
a few Cantons such as Schwyz, Fribourg and Vaud the conciliation
board or the chairman is left free to determine the procedure.
Fribourg expressly stipulates that a simple and expeditious procedure is to be established.
The arbitration proceedings are terminated by the delivery of
an arbitral award, which as a rule is immediately communicated
to the parties orally, and subsequently forwarded to them in
writing, together with a statement of the grounds for the decision.
An arbitral award, like a conciliation proposal, may often be
published in the official gazette at the request of the parties or if
the conciliation board considers its publication to be in the public
interest. In the Canton of Vaud a refusal of either party or both
parties to submit the dispute for arbitration is published as well.
In principle an arbitral award has the same legal force as a
conciliation proposal. If both parties have previously agreed to
accept an award or subsequently agree to do so, it is binding as a
contract, while in addition many cantonal Orders give an award the

233

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force of a judicial decision more frequently than they do a conciliation
proposal. On the other hand, arbitral awards delivered at the
request of an authority or of only one of the parties, and not
subsequently accepted by both parties, are not enforceable or
binding upon the parties. Such rejected awards therefore have a
purely moral force which is strengthened by their publication.
As in the case of amicable settlement, the laws of several
Cantons empower the conciliation board at the request of either
party to secure fulfilment of the obligations imposed upon the parties by an arbitral decision, by requiring them to deposit a security.
Under the Ticino regulations a refusal to deposit such a security
must be published in the official gazette.
The provisions concerning the obligation to have recourse to
peaceful means of settlement generally apply to arbitration as
well as to conciliation procedure.
The same is true of the provisions relating to legal means of
redress. No legal action is permitted against the contents, either
of an arbitral decision, or of a conciliation proposal. The Zurich
regulations constitute the only exception : they allow an appeal
from an arbitral decision to the State Council on the ground of an
infringement of the law or a decision contrary to the evidence. If
the appeal is successful, the State Council sets aside the decision
in question and refers the dispute back to the conciliation board
for reconsideration. In nearly every Canton the parties have a
right of appeal in the matter of formal procedure.

§ 3. — Results Achieved by Conciliation and Arbitration
in the Cantons
The following table, based on enquiries undertaken by the
Federal Office of Industry and Labour, gives the number of collective disputes considered by the cantonal conciliation boards over
a period of thirteen years :
Year

Number ol
disputes
considered

1919
1920
1921
1922
1923

526
426
268
317
142

Year

Number of
disputes
considered

Year

1924
1925
1926
1927

159
130
103
125

1928
1929
1930
1931

Number of
disputes
considered
140
162
176
159

234

CONCILIATION AND ABBITEATION IN DIFFERENT COUNTRIES

Probably the decline in the number of disputes referred to the
official conciliation boards is mainly due to the fact that the
change over from conditions of war to those of peace naturally
raised a number of difficulties that are absent in normal times.
Another reason for the decline is the increasing practice of regulating
conditions of employment by the conclusion of collective agreements
and the development of private conciliation and arbitration boards,
as a result of which recourse to the official conciliation boards is
less frequent.
Another point which merits attention is that the collective
disputes enumerated above include many of slight industrial
importance. Federal statistics throw no light on this point, but the
position is to some extent illustrated by the data collected by the
Zurich conciliation board. As is shown by the following table,
from 1927 to 1931 this board dealt with almost a quarter of the cases
covered by the Federal statistics. According to these figures,
out of a total of 38 disputes in 1928, 5 affected less than 10, and
16 less than 30 workers. In 1929, 41 conflicts were dealt with,
and of these 7 affected less than 10, and 20 less than 30 workers.
The table below shows the number of disputes referred to the
different conciliation boards in 1927 to 1931 :
Disputes dealt with in
Canton
Zurich
Berne
Lucerne
Uri
Schwyz
Obwalden
Nidwalden
Glarus
Zug
Fribourg
Solothurn
Basle-Town
Basle-Country
Sehaffhausen
Appenzell (Outer Rhodes)
Appenzell (Inner Rhodes)
St. Gallen
Graubünden
Aargau
Thurgau
Ticino
Vaud
Valais
Neuchâtel
Geneva
Total

1927

1928

1929

1930

1931

33
21
6

38
24
5
1

41
33
3

44
48
4

36
37
3

1
1
3
9
19
5
1
1

1
2
2
7
13
3
1
2
1
12

2
4

7
4
7
6
1
5
7

10
2
9
13
2
2
3

125

140

162

2
6
12
4
1
2

4
1
4
15

1
2
4
10
4
2
1

12
1
7
10
8
6
1
4
2
176

159

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SWITZERLAND

The table shows that in nine Cantons the conciliation boards,
during one or more of the years under consideration, were not
called upon to intervene at all, while only three to five boards
regularly dealt with more than ten disputes a year.
The results of the intervention of the cantonal conciliation
boards were as follows :
Year

Number
of disputes
settled

Number
of disputes
not settled

Proportion
of disputes
settled
per cent.

1927
1928
1929
1930
1931

90
92
125
129
110

Proportion
of disputes
not settled

Total
number of
disputes

per cent.

72
06
77
73
69

35
48
37
47
49

28
34
23
27
31

125
140
162
176
159

A point worth mentioning in this connection is that failure to
settle a dispute is not necessarily followed by open strife. In
almost every case conciliation may bring about a more or less
substantial measure of agreement, so that, even if no definite
understanding is reached, the remaining differences may be so
slight that the parties no longer consider it worth while to resort
to force. In such cases the two sides usually rest content with the
fact that the dispute has failed to be settled. It is even by no
means unusual that the mere exhibition, in the course of the
proceedings, of the economic strength of the parties causes the
struggle to be abandoned.
It is difficult to make an exact estimate of these partial successes
of the official conciliation boards, but by way of illustration it
may be noted that in the Canton of Zurich in 1928 no agreement
was reached in 8 out of 38 disputes and that of these 8 disputes only
4 were followed by strikes. In 1929 out of 41 cases 9 failed to
be settled and of these only 2 resulted in strikes.
The number of persons affected by the disputes in 1929 and
1930 was as follows :
1930

1929
Employers
(a) Disputes settled byconciliation. . . .
(b) Disputes not settled
by conciliation . .
Total

Workers

Employers

Workers

1,189 (66 %) 11,094(60%) 1,114(75%) 26,415 (67 %)
620 (34 %)
1,809

7,431 (40%)
18,525

371 (25 %) 13,288(33%)
1,485

39,703

236

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

Considered from this point of view the results attained are much
less favourable, as the disputes which failed to be settled (23 per
cent, of the total) affected 34 per cent, of the employers and 40 per
cent, of the workers. I t follows, therefore, t h a t an amicable settlement was most frequently reached in disputes of less industrial
importance.
The statistics do not clearly indicate in how many of the above
collective disputes the persons affected fell under the provisions
of the Federal Factory Act. As in the case of disputes involving a
whole industry it may happen t h a t the Factory Act applies to some
of the undertakings affected but not to others. I t is difficult t o
draw a distinction of this kind. I t may definitely be assumed,
however, t h a t the number of disputes t h a t cannot be classed as
so-called factory disputes is fairly large. This is proved by the
fact t h a t in the Federal statistics the building industry, which is
only partly covered by the Factory Act, heads the list of industrial
groups in the table showing the distribution of disputes b y industries. In 1927 48 out of 125, in 1928 52 out of 140, and in 1929
46 out of 162 disputes occurred in the building industry. To
these should be added disputes in various other occupations
not subject or only partly subject to the Factory Act, such as
commerce, transport and communications, and gardening.
So far the activity of the conciliation boards in the field of
voluntary arbitration does not appear to be very important.
The number of arbitration awards delivered by the boards was as
follows :
1927
1928
1929
1930
1931

8 awards, of which 6 were binding and 2 not binding
5
,.
„ 1
was
,,
,, 4 „
„
9
„
,,
5 were
,,
„ 4 „
,,
10
,,
,,
4 were
,,
„ 6 ,,
,,
9
',
„ 1
was
„
„ 8 ,,

I n disputes involving the determination of new conditions of
employment it happens only in exceptional cases and on minor
points, if at all, t h a t a conciliation board is asked to deliver a
binding award. I t may therefore be assumed t h a t the arbitral
activity of the boards has so far been confined chiefly to differences
connected with the interpretation of existing agreements.
I t should be noted, however, t h a t in recent years there has been
a growing practice of submitting disputes to an official conciliation
board for arbitration, if for any reason the parties to a collective
labour agreement or other collective agreement relating to conditions of employment have refused or failed to settle their differences

237

SWITZERLAND

before a private arbitration board. The activity of the boards in
this sphere is therefore likely to be more important in future.
The number of cases in Switzerland in which conciliation boards
have been designated to act as arbitration boards has not yet been
established. In the Canton of Zurich, the conciliation board is
at present so empowered under sixteen collective labour agreements, of which one is a national agreement.
Finally, to complete the above survey of existing conditions,
some indication should be given of the present position in regard to
the prevalence, in spite of official mediation, of the most important
forms of industrial strife : strikes and lock-outs. The Federal
statistics, which refer only to the past five years and do not take
account of stoppages of work lasting for only one day, give the
following figures :
Year

Number
of strikes
and lock-outs

1927
1928
1929
1930
1931

26
45
39
31
25

Maximum
Estimated
Number
of undertakings number of workers number of working
affected
affected
days lost
328
283
551
322
161

2,058
5,474
4,661
6 397
4,796

34,160
98,015
99,608
265,695
73,975

It should be observed that the increase in the number of disputes
in 1928 and 1929 is almost entirely due to increased unrest in the
building industry. Whereas in 1927 that industry accounted for
only 1,478 of the working days lost, in 1928 this number rose to
39,007 and in 1929 to 48,479.
It should further be noted that of the strikes enumerated above
a considerable proportion were of short duration and were ended by
the intervention of the conciliation boards. On this point no
exact information is available ; but it may be estimated that most
of the stoppages of less than 10 days' duration (16 in 1927, 26 in
1928, 20 in 1929 and 15 in 1931) were ended as a result of
official mediation.
BIBLIOGRAPHY
BORN,

Hans.

Einigungsämter

und

Schiedsgerichte

der

Schweiz.

Berne, 1925.
BTJCHER, M. Die Gewerbegerichte der Schweiz.
FRÖHLICH, Roman. 10 Jahre Einigungsamt.

Diss. jur. Zurich, 1911.
Berne, 1930.

238

CONCILIATION AND ARBITRATION IN DOTERENT COUNTRIES

GAUTHIER, Emile. Contribution à l'étude de la conciliation et de l'arbitrage. Lausanne, 1923.
GISI, Max. Einigungsamt und Schiedsgericht zur Lösung von Kollektivkonfiikten zwischen Arbeitgebern und Arbeitnehmern. Basle, 1907.
HTJBEB, Eugen. Das Friedensrichteramt und die gewerblichen Schiedsgerichte im schweizerischen Recht. Basle, 1886.
Jóos, Albert. Das Einigungsamt 1907.
K Ö P K E , Fritz. Ueber gewerbliche Schiedsgerichte mit besonderer Berücksichtigung der Schweizerischen Verhältnisse. Zurich, 1895.
KREBS, Werner. Organisation und Wirksamkeit der gewerblichen Schiedsgerichte im Auslande und in den schweizerischen Kantonen.
Collection
Gewerbliche Zeitfragen, Nos. 2 and 3. Zurich, 1887.
LAKDMANN, Julius. Die Arbeiterschutzgesetzgebung der Schweiz. Basle,
1904.
LAGEER. Des moyens de résoudre les différents qui s'élèvent entre patrons
et ouvriers. 1873.
LORENZ, Jakob. Arbeitsämter und Kollektivstreitigkeiten.
1907.
LÜCHINOER, A. Das gewerbliche Schiedsgericht Zürich. Zurich, 1923.
MASSNAHMEN. Gesetzliche Massnahmen zur Einschränkung der Arbeitskämpfe. Zurich, 1914. (Schriften des Zentralverbandes Schweizer. Arbeitgeberorganisationen, No. 3).
Mitteilungen.
Wirtschaftliche und Sozialstatistische Mitteilungen. Published by the Federal Department of National Economy. Vol. 1928, etc.
("Die Tätigkeit der kantonalen Einigungsämter").
Supplements Nos. 2, 6 and 8 of Wirtschaftliche und Sozialstatistiscìie
Mitteilungen.
("Die schweizerische Gesetzgebung auf dem Gebiete des
Arbeitsrechts und der Sozialversicherung vom 1. Oktober 1924 bis
31. Dezember 1929").
Volkswirtschaft, Arbeitsrecht und Sozialversicherung der Schweiz. Published by the Federal Department of National Economy, Vol. I, pp. 589
et seq. Einsiedeln, 1925.
Vorschriften des Bundes über die Arbeit in den Fabriken. Published by
the Swiss Federal Government Office.
W E B E R , Leo. "Recht und Unrecht bei Arbeiterausständen. Gutachten
1906". Schweiz. Zeitschrift für Strafrecht, Vol. 19.
ZÜRCHER, E. "Einigungsämter", in Handwörterbuch der schweizerischen
Volkswirtschaft, Sozialpolitik
und Verwaltung.
Vol. II, p . 303, etc.
Published by M. Reichesberg.
ZÜRCHER, E. und SCHERZ, S. Zur Frage der Errichtung von Einigungsämtern. (Schriften der Schweiz. Vereinigung zur Förderung des internationalen Arbeiterschutzes, No. 15.) Berne, 1906.

GERMANY
§ 1. — Introduction 1
Germany has possessed a legally regulated system for the settlement of labour disputes by means of conciliation and arbitration
for a comparatively short time only. Before the war, the judicial
authorities responsible for the settlement of labour differences
— industrial courts, commercial courts, etc. — also carried out
the duties of conciliation boards, but were not in this respect of
much practical value. A more important factor was the inclusion
in big collective agreements of clauses concerning machinery for
the prevention and settlement of disputes between the parties,
of which more will be said later. But it was not until the war
that conciliation and arbitration attained general importance as
an independent legal system. The Auxiliary Service Act of
5 December 1916 created a system for the settlement of labour
disputes for war purposes, with which indeed it was primarily
concerned. This system comprised conciliation committees,
composed of equal numbers of employers and workers, under
the chairmanship of a person appointed by the War Board
(military authority created during the war). They dealt with all
sorts of disputes on wages and other conditions of employment,
collective and individual. If both parties had not already applied
to one of the other existing bodies (commercial courts, etc.), it
was sufficient for one of them to apply to a conciliation committee,
and proceedings were opened. Awards were to be given even if
one party did not attend or did not take part in the negotiations ;
they were not directly binding, but as the committees were
dependent on the War Board, they were not without military
authority.
This legal innovation is important not only for the improvement
of machinery as compared with that previously in existence,
but still more in virtue of its consequences ; for it was on the
1
For the economic facts which give conciliation and arbitration such a great
importance for Germany see Statistisches Jahrbuch des deutschen Reichs.

240

CONCILIATION AND ARBITRATION IN D I F F E R E N T

COUNTRIES

Auxiliary Service Act t h a t the further development of concihation
and arbitration was based. The events which followed the war,
— revolution, demobilisation, the danger of strikes, etc. — made
it essential to have as complete a system as possible for settling
disputes, and though the Auxiliary Service Act was repealed, it was
necessary to retain, if only temporarily, its clauses on concihation
and arbitration. Once the rest of the Act was out of force, these
clauses needed a fresh legal basis, which was provided by the Order
of the Council of People's Commissioners' of 23 December 1918.
Since a completely new system could not be prepared with
sufficient speed, the Order contented itself with taking over and
expanding the arrangements set up by the Auxihary Service Act.
The decentralised system was retained, but the formation and
composition of the committees were altered, and their competence
extended. A series of other Orders and Acts (the Works
Councils Act, for instance) turned other duties over to the conciliation committees ; and the system was completed by the Orders
of 4 and 24 J a n u a r y 1919, and finally by the consolidating Order
of 12 February 1920, in which it was provided t h a t awards could
be declared binding by the demobilisation authorities or by the
Federal Ministry of Labour. This was the first real adjustment
legislation ; but it was far from perfect, and contained much
t h a t was obscure.
The regulations of 1918 were regarded as temporary, and were
to remain in force only until further legislation should be passed.
Such legislation was actually undertaken, and a draft Concihation
Order was prepared by the Ministry of Labour in March 1920.
I t was, however, frequently altered, and was finally submitted
to the Reichstag in a completely recast state as a draft Concihation
Order with Preamble on 21 March 1922 *. The Reichstag discussed
it and referred it to the Committee on Social Affairs. The draft
Order was never voted, but it was not withdrawn by the Government.
I t was much discussed, as a whole and in detail, in economic and
political circles, particular attention being paid to the provisions
introducing a certain degree of compulsory arbitration 2 . The
extraordinary circumstances of the inflation (1923) did not permit
of any further delay, and certain very pressing reforms were
forced through as quickly as possible — in particular, the re-organisation of the official concihation machinery, and the removal
1
2

Reichstag Records, No. 3760, first electoral period, 1921-1922.
Cf. below, p . 257.

GERMANY

241

from the committees' competence of disputes which are not considered by German law as capable of settlement by conciliation or
arbitration — that is to say, the limitation of the latter to collective
disputes. Finally, the Federal Government issued a Conciliation
Order on 30 October 1923, in pursuance of the Emergency Powers
Act of the same year. This was supplemented by two administrative Orders issued by the Federal Minister of Labour on 10 and
29 December 1923. The first of these, which does not concern
this study, since it was repealed by the Labour Courts Act of
23 December 1926, dealt in detail with the labour court procedure,
the other with that of conciliation and arbitration 1. The Orders
came into force on 1 January 1924. The existing German arbitration and conciliation system is based on this legislation.

§ 2. — The System in Force
NATURE OF CONCILIATION AND ARBITRATION IN

GERMAN LAW

The German arbitration and conciliation system derives its
legal force from the above-mentioned Order of 30 October 1923
(abbreviated CO.) 2, supplemented by the Administrative Order
of 29 December 1923 (abbreviated A.O.). Section 3 of the CO,
describes conciliation and arbitration as " assistance in the
conclusion of collective agreements (collective contracts, works
agreements) ". This indicates that only collective labour disputes
may be dealt with by such machinery. Individual disputes —
that is to say disputes between the parties to an individual contract
of service — are thus excluded from the competence of conciliation and arbitration institutions, and come under the Labour
Courts Act of 23 December 1926 3, according to which they are
to be settled by labour courts or an agreed arbitration court.
Not every collective dispute, but only those concerning the conclusions of a collective agreement, may be dealt with by conciliation
and arbitration machinery. Political or sympathetic strikes, etc.,
are thus excluded, as are disputes arising out of the interpretation
1
B y section 3, subsection 1, of t h e Conciliation Order, t h e Federal Minister of
Labour is empowered to issue further orders for its administration. These m a y
not exceed the bounds set b y the original Order, and are invalid if they do so.
In virtue of this provision, t h e Federal Labour Court has declared section 21,
subsection 5, para. 4, of the Administrative Order invalid. See below, p . 250.
2
Legislative Series, 1923, Ger. 6.
3
Ibid., 1926. Ger. 8.

1 7

242

CONCILIATION AND ABBITRATION IN DIFFERENT

COUNTRIES

of existing collective agreements 1. This latter type of dispute
may be termed " disputes on rights " (as opposed to disputes
on the regulation of collective relations) and as such comes like
individual labour disputes under the Labour Courts Act, which
lays down that the use of conciliation and arbitration machinery
for the alteration of an existing collective agreement against
the will of one of the parties to it, is not permissible, for it would
" entail a breach in the principle of the sanctity of contracts,
on which the value of collective agreements, in common with
that of the whole of contract law, depends. " 2.
The Orders distinguish between two types of collective agreement : collective contracts and works agreements. This differentiation accords with the double structure of the German labour
system, as described in Article 165 of the Federal Constitution.
It is, says this Article, the duty of workers and salaried employees
to co-operate on an equal footing with employers in the regulation
of wages and other conditions of employment, as well as in the
whole economic development of the forces of production. The
organisations on either side and their agreements are recognised.
" By the use of the word ' co-operate ', the Article gives a constitutional basis to the idea of the autonomy and self-determination
of the two parties to the fundamental labour contract ' ' 3. The
system of workers' and industrial councils gives labour its double
structure, based on the undertaking and on the occupation ;
and this dualism is given practical effect, on the one hand by the
representation of the workers in each undertaking under the
Works Councils Act, and on the other by the trade unions, agreements being known as " works agreements " or " collective
contracts " according as they are concluded by the one or by
the other. These agreements give self-determination concrete
form by setting up standards for the regulation of wages and
other conditions of employment, which are then generally regarded
as having the force of law. " The relation between collective
contracts and works agreements is that the normative parts
of the former express occupational autonomy, those of the latter
autonomy within an undertaking. 4.
1
Informal mediation can, however, be a t t e m p t e d if the public interest demands
it (section 8, para. 2, A. O.).
2
Judgment of the Federal Labour Court of 22 January, 1929 (North-West
German iron dispute). INTERNATIONAL LABOUR OFFICE : International
Survey
of Legal Decisions on Labour Law, 1929, Germany, No. 24.
3
DERSCH : Kommentar zur Schlichtlingsverordnung, p. 146.
• Ibid, p. 150.

GERMANY

243

A collective contract is, according to section 1 of the Order
of 23 December 1918, a written contract between an employer
or an association of employers on the one hand, and associations
of workers on the other hand, concerning the conditions in which
individual labour contracts shall be concluded. The normative
parts of a collective contract are all those which may be incorporated in the individual labour contracts — concerning wages
hours of work, holidays, etc. — while the remaining clauses
determine the legal rights and duties of the parties to the collective
but not to the individual contracts ; they prohibit militant action,
disciplinary measures, etc.
A labour contract between individuals is invalid in so far as
it is at variance with the normative parts of a collective contract
to which they are parties, unless the variation is permitted in the
collective contract itself or entails more favourable conditions
for the worker. The corresponding clauses of the collective
contract come automatically into force in place of the invalid
clauses (section 1 of the Collective Contracts Order).
Works agreements are collective agreements concluded between
employers and workers in one undertaking, the latter being
represented by a legally constituted works council (sections 75
and 80 of the Works Councils Act). They usually take the form
of " rules of employment ", which may, according to sections 134
et seq of the Industrial Code, be obligatory for certain undertakings
and which regulate the beginning and the end of working time,
the mode of payment, etc. 1 . They are usually regarded as constituting legal standards, but clauses concerning obligations under
the law of contract are not usually to be found in works agreements.
The latter do not, like collective contracts, preclude less favourable
individual agreements and are therefore less effective.
According to the Order, conciliation and arbitration are " assistance in the conclusion of collective agreements ". The present
German legislation thus makes no distinction between conciliation
and arbitration ; the wording of section 3 might even lead the
reader to believe that the German system is based simply on conciliation ; but the declaration that an award is binding, which
will be discussed later, introduces a strong element of arbitration.
There are obstacles in the way of the classification of conciliation
and arbitration among the existing legal categories, and their
place in jurisprudence is contested. Conciliation and arbitration
1
Cf. the decision of the Federal Minister of Labour (Neue Zeüsckrift für Arbeitsrecht, 10 June 1924, col. 628) on provisions concerning hours of work.

244

CONCILIATION AND ABBITEATION IN DIFFERENT COUNTRIES

are not regarded as a judicial function by the theorists of the
moment, since they do not interpret law, but create it. They
are, therefore, generally included under " Administration " x.
VOLUNTARY AND OFFICIAL CONCILIATION AND ARBITRATION

German labour law attempts to leave the regulation of conditions of employment as far as possible to the great associations
of employers and workers themselves, even when there are obstacles
in the way of such regulation. Before the war a system of previous
arrangement for conciliation and arbitration in collective contracts
had begun to develop, and its best results were the general or
national agreement. The printers' agreement, which has often
served as a model, is the most famous of these and arranged for
the formation of local joint conciliation boards, against whose
judgments the " conditions of employment board " (Tarifamt)
was the court of supreme appeal. Its decisions were usually
binding. This board had not only to settle disputes which had
arisen, but also to consider and decide questions such as the
extension, revision and alteration of contracts on their expiry, and
to regulate such matters as had been left open by contracts (overtime for instance).
This development was held up by the war and its consequences,
and permanently lost its force. As the law now stands, voluntary
conciliation is recognised and even has precedence over official
proceedings, for the State can only intervene if a voluntary conciliation body has not been agreed on, or, if agreed on, has not
functioned or has come to no definite decision within a given
period (CO, section 3 ; A.O., section 9).
The legal consequences of voluntary conciliation are the same
as those of official proceedings, in particular with regard to the
declaration that an award is binding 2 . It must, however, be
remembered, firstly that the parties can make the awards binding
in advance by adding a clause to that effect in their collective
agreement, and secondly that the institutions to be appealed
to in acccrdance with sut h collective agreements are usually both
conciliation bodies and arbitration courts, and so can give decisions
on ^disputes on rights or on interests, individual or collective 3.
1

For the declaration t h a t an award is binding see below, p . 264.
See below, p . 264.
See on the meaning of these notions above p . 242, a n d judgment of the Federal
Labour Court of 19 June 1929 (Kartenauskunftei dea Arbeitsrechts, No. 319 of
6 June 1930).
2

GEBMANY

245

I n so far as these institutions perform the function of arbitration
the consequences of their awards are regulated by the Labour
Courts Act ; in so far as they are conciliation bodies, they
come under the Conciliation Order, and the above applies to them.
These is much less voluntary than official conciliation, despite
the fact t h a t many collective contracts provide for the adjustment
of disputes 1.
T H E CONCILIATION AND ARBITRATION AUTHORITIES

These comprise conciliation committees, conciliators, and the
Federal Minister of Labour.
Conciliation

Committees

These are public authorities, as the title t o section 1 of the
Administrative Order shows, and, as they are set up by the States
and not by the Central Government, they are State authorities.
They are instituted by the supreme State authority in agreement
with the Federal Minister of Labour (CO., section 1, subsection 8,
para. 3).
Conciliation committees function either through the chairman
alone (in the preliminary proceedings ; see below) or as a court in
which assessors assist the chairman (in the main proceedings).
I t is provided in section 1, subsection 1, of the Order of 30 October
1923 t h a t the'headquarters and areas of the conciliation committees
shall be fixed as far as possible with due regard to economic conditions. Since they are State authorities, the determination of their
local competence is based on the political organisation of Germany
as a federation of States. The latter have also to give consideration
to economic conditions in defining the areas of committees within
their own frontiers. I n order t h a t the institutions may be efficiently distributed without the number of committees actually
increasing, it is provided in section 1, para. 1, of the Administrative
Order t h a t the supreme State authority may set up subcommittees
for parts of their territory if the great distance from the headquarters of the committees or any other reason seems to justify
such a step. In view of joint economic interests, exceptions may
1
There is no dependable statistical evidence for this. Cf. MARTIN : Schlichtungswesen, pp. 107 et seq. According to Adolf WBBBB : Der Kampf zwischen Kapital
und Arbeit, 5th dition, 1930, p. 492, it is rep rted that a. the beginning of 1925
69.5 per cent and in 1926, 72.7 per cent of the collective) agreements contained
provisions on conciliation machinery.

1 7 *

246

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

be made to organisations on the basis of State frontiers, and section 1 of the Administrative Order permits the formation of
common conciliation committees for several States or parts of
States x . The new definition of areas need not be permanent,
alterations being at any moment possible if the supreme State
authority and the Federal Minister of Labour are in agreement
on the subject ; special committees can be created for particular
branches of industry (e.g. agriculture).
Conciliation committees " consist of an independent chairman
or chairmen and a number of assessors representative of employers
and an equal number representative of employees " (CO., section 1, subsection 1, para. 2). Every committee must have an
independent chairman 2. According to section 22 of the Administrative Order, the supreme State authority appoints one or more
impartial chairmen and the necessary deputies for an indefinite
period, the numbers depending on the amount of business with
which the committee has to deal ; it should make these appointments after hearing the economic associations of employers and
employees of the district, but is not bound to accept their proposals. Nevertheless, if the associations are in agreement, their
nominees are refused only for administrative reasons 3.
The only personal qualification required by the law of the
chairman is that he shall be independent. He may therefore
belong neither to employers' nor to workers' circles, nor may he
be a representative of one of their industrial organisations *. As
the chairman has an official position, he must possess the qualities
necessary for its exercise, without an explicit provision to that
effect being necessary. In any case, the competent authority
uses its judgment in making appointments. The latter usually
take the form of a private contract of employment for an indefinite
period (A.O., section 2, subsection 2, para. 2). " The nature of
conciliation and arbitration makes an appointment for an indefinite
period advisable. The success of the proceedings depends so
completely on the confidence of the parties, and the wage-fixing
functions of an independent chairman are so important to the
1

Little use has been m a d e of this privilege.
According to the Collective Contracts Orders of 1918, the appointment of a
chairman was left to the assessors ; b u t even under the old legal conditions there
was actually no conciliation committee without a chairman.
3
Cf. DERSCH, op. cit., p . 447, and the Federal Minister of Labour's circular
there cited (Reichaarbeitsblatt, 1924, p . 260).
4
The parties are specially protected from the danger of the chairman supporting
one of them in the proceedings by the provisions concerning the exclusion or
rejection of chairman on the ground of partiality. See below, p p . 259 et seq.
2

GERMANY

247

Government, that the existence of a non-removable official would
have a detrimental effect on the system 1 . "
The effect of appointments is that the chairmen and the deputychairmen enjoy the position of public servants during their term
of office. While carrying out their duties, chairmen are also
equivalent to officials in pubhc law, though in private law they
rank as employees only. They have all an official's rights (including
the use of the official seal) and all his duties (personal responsibility).
Notwithstanding the rights and duties attached to chairmen
in virtue of their office, the supreme State authority can at any
moment remove chairmen or deputies, after hearing the opinion
of the industrial associations of employers and employees (A.O.,
section 2). Such an order has, in pubhc law, the immediate effect
of suspending the official's exercise of his functions, while in private
law it is equivalent to a notice to terminate his contract.
The other members of the conciliation committees are assessors
representing either employers or workers. There is no limit to
the number of assessors, on condition that employers and workers
are equally represented. The determination of the number is left
to the judgment of the supreme State authority, or to the body
to which it has delegated the formation of the committee 2. All
assessors have the same right to vote (A.O., section 5, subsection 2).
While there are practically no limits to the choice of chairmen
for conciliation committees, there are hard and fast rules for the
nomination of assessors (A.O., sections 3 to 5). Firstly, they
must all be German nationals, have completed their twenty-fourth
year, and have their place of business, or, failing that, their residence or place of occupation, in the committee's area. They may
be men or women. Naturally they must also be qualified to hold
official positions.
Employers' assessors must be themselves employers, or persons
whom the law regards as equivalent — members of boards of
directors or legal representatives of corporate bodies (share companies, pubhc companies, limited companies, registered companies), or of pubhc or private associations (pubhc commercial
associations, " commandites ", etc.), members of supervisory
boards (with the exception of the nominees of works councils, who
are themselves workers), pubhc officials as approved by the
1
FIJATOW-JOACHIM : Die Schlichtungsverordnung
Berlin, 1924.
2

D E B S C H : op. cit., p .

113.

vom 30. Oktober 1923. p . 101.

24:8

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

competent central authority, managing directors or managers
empowered to engage workers for an undertaking or part of an
undertaking, or who have power of attorney, etc., and duly
empowered representatives or employees of industrial associations
of employers.
There are corresponding regulations for the nomination of
workers' assessors. These may only be workers or duly empowered
representatives or employees of industrial associations of workers ;
public officials are not included. On the other hand, a worker
does not lose his right to act as assessor because he is on holiday
or temporarily unemployed. The law distinguishes between
workers and salaried employees and provides that only workers
shall act as assessors in disputes affecting workers, the same
applying mutatis mutandis to salaried employees.
Assessors may be nominated by ordinary or extraordinary
procedure *. In accordance with the former, the industrial associations in the committee's area send in lists of proposed assessors
to the supreme State authority. There is no legal limitation of
the number of names which may appear on such lists ; but the
various districts and the principal industries, occupations and
types of undertaking in the area should be represented. The
choice of the authority responsible for appointment is confined
to these lists of candidates, if they fulfil the legal requirements.
In making its choice the supreme State authority has also to observe
the principles governing the preparation of the lists.
If the latter are sent in too late or not at all, the law provides
for an extraordinary procedure. The assessors may then be
simply appointed by the supreme State authority. A circular
issued by the Federal Minister of Labour 2 instructs that this
method is, in the interests of efficiency, to be utilised only after
all the means of obtaining proposals have been exhausted, and in
particular after due notice has been given to dilatory associations.
The supreme State authority appoints the assessors. Any
person so appointed who refuses to serve without good reason
may be fined.
The position of assessor is honorary, no fee being paid 3. They
do not, like the chairmen, enjoy an official position. The
principal characteristics of their position are the right and duty
to be present at and to take part in the conciliation proceedings.
1

D E R S C H , op. cit.,

Reichsarbeitsblatt, 1924, Official Part, p. 261.
Nevertheless their out-of-pocket expenses, fares, etc. are refunded.

p p . 460 et

seq.

GERMANY

249

Official discretion is not specifically laid down 1. Non-compliance
with requirements may lead to a fine or to loss of office. The
supreme State authority may at any time remove an assessor
from his office, but should first give him the opportunity to defend
himself. There is no legal provision for objections, but an ordinary
complaint against the administration or other appeal is allowable
if in accordance with the State legislation. Assessors usually
exercise their functions over a period of three years.
The procedure to be observed by the assessors, once appointed,
is also laid down in the Orders ; they are enrolled in lists by the
chairman, separate lists being drawn up for employers and employed
workers and salaried employees and expert and branch committees.
The chairman has then to select assessors from these lists for each
sitting of the committee. He calls on two employers' and two
workers' assessors according to his own judgment, irrespective of
any order of precedence or other similar consideration ; but as
far as possible he must take the characteristics of the individual
dispute and the wishes of the parties into consideration. The
assessors are bound to attend the sittings and to carry out their
duties ; absence without justification or attempts to evade obligations may be punished with a fine.
Conciliators
These were introduced by the Order of 1923. In contrast
to the committees, which are State authorities, the conciliators
are Federal officials and are appointed by the Federal Minister
of Labour after consultation with the supreme State authority
concerned (CO., section 2), either permanently for large industrial
areas, or non-permanently for individual cases.
The conciliator alone is the authority (Behörde). The permanent
conciliator may be a full-time or a part-time official. The nonpermanent conciliator reserves instructions to act in individual
cases. The position of the permanent conciliator is similar to
that of the chairman of a conciliation committee.
Like the latter, the conciliator officiates either alone (preliminary
proceedings) or in a conciliation court (main proceedings). For
the formation of such a court, he calls as a rule on two employers'
and two workers' assessors ; but he may also form a larger court.
The assessors are not, as in the case of the committees, selected
1
The obligation to discretion is inferred from the fact t h a t assessors have an
official position — decision of the Federal Minister of Labour of 23 February 1924
(IVa, 11103).

250

CONCILIATION AND ABBITRATION IN DIFFERENT COUNTRIES

from lists, but are chosen at the discretion of the conciliator,
though the circumstances of the case and the wishes of the parties
have as far as possible to be taken into consideration. The same
qualifications are required of them as of assessors on conciliation
committees (A.O., section 7, para. 2) 1 .
The Federal Minister of Labour
The Federal Minister of Labour is the third conciliation authority. He himself does not actually function in this respect, but
may appoint special conciliators for individual cases 2. As will
be seen, his special powers enable him to exert his guiding influence
in the practical administration of conciliation and arbitration
more especially in the direction of uniformity.
The Relations between the Conciliation Authorities
The Federal Minister of Labour supervises the administrative
activity of the conciliators and the supreme State authority that
of the committees, the chairmen being responsible for the latter.
But while under supervision and responsible in respect of the institution of proceedings, both conciliators and committees are
independent and not bound to act on instructions in the actual
adjustment of disputes and the making of awards. Yet this
freedom is limited. Efforts should be made to ensure that decisions
do not vary one from another more than the difference in circumstances justifies, but that they follow the same principles and tend
in the same direction all over the country. The Federal Minister
of Labour is required to keep this consideration in view in selecting
conciliators, in supervising their activity and in using his power
to terminate their appointments. This practical influence is
legally justified by section 7 of the Conciliation Order, which
provides that he " may issue general guiding principles for the
proceedings of conciliation committees and conciliators ". But
these, be it noted, are only guiding principles and in no way
binding instructions 3 . The conciliation institutions are free
with regard to their decisions and free to accept or reject these
principles, and rejection does not deprive their awards of validity.
Nevertheless, conciliators and chairmen of committees may not
1
On the peculiarities concerning the creation of conciliation courts b y a special
conciliator in a new conciliation procedure according to a Decree of the President
of t h e Reich of 9 January 1931, see below, p . 263.
2
On the subject of the competence of conciliators and of the Federal Minister
of Labour to declare awards binding, see below, p . 267.
3

D E B S C H , op. cit., p .

280.

GERMANY

251

deliberately ignore them, and the Federal Minister of Labour
possesses, in his power of immediate removal from office, a practical
means of ensuring that his principles shall be applied to conciliation.
On the other hand, he may not intervene in the course of proceedings
and so cannot give instructions with regard to the settlement of
an individual case.
These guiding principles may deal with procedure or with the
subject matter of disputes, but they cannot decide what has already
been settled by Act or Order ; they can only supplement, explain,
recommend. It is also in accordance with the law for conciliation
authorities — the conciliators and committees of one or more
neighbouring areas, for instance, — to meet and agree on guiding
lines in order to ensure similar treatment in similar cases within
a limited area.
Conciliation committees and conciliators have the same material
competence, but while the latter usually deal with collective
disputes which effect large industrial areas, or are of particular
importance for the economic system, the former deal with local
and less serious disputes. The conciliator may however undertake
any case in person, even when it is already pending before a
committee, as long as the latter has not given an award. The conciliator can thus prevent the committee from functioning 1.
Neither committees nor conciliators may intervene in a dispute
for the settlement of which an institution has previously been
agreed upon ; and if applied to in such a case, they must refer
it to the competent body, any decision they may make being
otherwise invalid 2.
Finally, conciliation institutions may exercise only the functions
appertaining to them and no others 3.
Conciliation committees and conciliators are competent to deal
with disputes if the workers concerned are employed in their area.
If more than one committee or conciliator is thus competent, the
authority which first began to deal with the case has precedence..
The parties may by agreement appeal to an authority which is
not properly competent, and such an agreement is deemed to
exist if the parties negotiate before an authority without raising
the question of non-competence.
1
Conciliators alone are competent to give binding awards on overtime
(section 6a of t h e Hours of Work Order).
2
See below, p . 270.
3
This does not prevent conciliators or chairmen from functioning in cases in
which they are not normally competent, if the public interest demands it. (A.O.,
section 8, para. 2.)

252

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

THE PARTIES

Qualifications
The purpose of conciliation and arbitration being to create a
collective agreement (collective contract or works' agreement),
the parties to the proceedings must be competent to conclude
such agreements. The question of competence must be answered
in accordance with the legislation on collective contracts and
works' agreements.
The question of competence to conclude collective contracts
has already been discussed in another publication of the International Labour Office 1. It was then established that on the
employers' side employers and associations of employers, on the
workers' side only "pure" associations of workers are competent
to conclude such agreements ; "pure" associations mean those
composed solely of workers, which have as object the protection
of the economic interests of workers and which are independent
of employers. In recent years the question whether non-militant
associations and associations of workers in one undertaking only
— " works' associations " — are competent to conclude collective
contracts. The Federal Labour Court has not given a definite
negative answer to this question, to which jurisprudence can find
no clear solution, but has made its reply dependent on whether
the association concerned is in fact autonomous or not 2 .
Syndicalist and anarchist trade unions are not competent to
conclude a contract, since their principle of " direct action " is
inconsistent with respect for a collective contract 3.
The loss of such competence can be of very great importance.
In practice there has arisen one much disputed question, namely,
whether an employers' association can withdraw from proceedings
and so escape a binding award by forbidding the conclusion of a
collective contract through an alteration in its constitution or a
vote at a general meeting. At first there was much doubt on this
point, but recently theory and practice have agreed that an asso1

Freedom of Association, Vol. I l l , Germany, pp. 60 et seq.
Judgments of the Federal Labour Court of 29 September 1928, 10 October
1928, 10 April 1929 (Reichsarbeitsgericht 372/28, 648/28). See also SITZLEB : Die
Frage der Tariffähigkeit im künftigen Tarifvertragsgesetz, Neue Zeitschrift für
Arbeitsrecht, 1930, cols. 77 et seq.
3
See the case of the " Free Workers' Union of Germany ". Federal Labour
Court, judgment of 31 May 1930 (508/29).
2

GERMANY

253

ciation can no more withdraw from conciliation proceedings than
from the possibility of being sued — that is to say, it can only
do so by ceasing absolutely to be an association.
This raises a further question — whether an association can
evade conciliation proceedings by dissolution. This depends on
whether a collective contract has already existed between the
parties to the dispute ; if not, and a completely new agreement
is to be made, in the present state of law no conciliation proceedings
can be instituted against the dissolving association, if the dissolution is not purely nominal, for there can then be no second party
to make the contract possible. This is also assumed, failing
regulations to the contrary, if the dissolution occurs while a case
is pending. Proceedings might also be initiated against individual
employers if their associations were dissolved, though it is disputed
whether a party to a collective contract can legally dissolve,
as it thereby commits breach of contract. The majority of theorists deny this, but the Federal Labour Court confirmed it in a
recent decision and declared invalid a contrary award permitting
the extension and alteration of an existing contract 1 .
In the conclusion of works' agreements, on the one (the
employers') side, a single employer and not an association is party,
while on the other (the workers') side, section 16 of the Administrative Order lays down that the whole of the workers (or salaried
employees) of an undertaking, represented by the duly elected
members of the workers' (or salaried employees') council constitute
the other party. The Order thus assumes that the ensemble of
workers or salaried employees, and not their representatives, is the
party. Industrial associations are also incapable of being parties
to proceedings for the conclusion of a works agreement.
If one party to the proceedings is not competent to be a party
to a contract, no award may be made, or if made it cannot be
carried out, for no valid collective contract can be concluded.
This is, however; not the case if the lack of competence is made
good before the award is given — that is, if an association subsequently becomes qualified to conclude a collective contract. If
the parties are competent to engage in conciliation and arbitration
proceedings, either may require that negotiations for the conclusion
of a collective agreement be opened before the institution once
the formal conditions have been fulfilled. This is an inherent
1
J u d g m e n t o f t h e Federal Labour Court of 26 October 1929 (Amtliche
Vol. V, p . 1.).

Sammlung,

254

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

right, independent of the consent of any person, in particular of
that of the other party 1. It is also unaffected by any dispute
which may exist between individual employers and workers who
would be affected by the collective agreement to be made 2 ; it is
thus independent of the wishes of individual workers, and still
more of the number of members of the association. The conciliation body may therefore not ask for information concerning
such number, nor make its activity depend on it 2. The number
of contracts of employment affected by the agreement to be made
is indifferent 3, as is the existence of works collective contracts
between works associations and individual employers 4.
Representation of the Parties
It goes without saying that parties can only appear before the
adjustment institution if they are actual persons. The only parties
who fulfil this condition are individual employers, while associations and other corporate bodies must be legally represented.
Section 15 of the Administrative Order lays down that industrial
associations of employers or workers must be represented by the
persons designated in their constitutions. The workers (or salaried
employees) of an undertaking are thus legally represented by the
works council or salaried employees' council, or (though not specified) by the works' delegate, who undertakes the representation
of smaller undertakings. In undertakings where there is no permanent works representation the workers or salaried employers
are legally represented by persons elected ad hoc by a majority
of votes. A works council is represented (according to sections 28
and 38 of the Works' Councils Act) by its chairman or his deputy.
If a conciliation institution is appealed to by a party which is
not represented in accordance with the regulations, the appeal is
not valid and the institution may not take it up. If it does so,
the proceedings have no validity ; but in this case also validity
may be acquired subsequently.
Other persons may also be given legal powers of representation ;
but the tendency of the law is to induce the parties themselves
to participate as much as possible in the proceedings. In cases
1
Decision of the Prussian Minister of Commerce a n d Industry of 10 March
1923, Schlichtungswesen, 1923, p . 92.
2
Decision of the Prussian Minister of Commerce and Industry of 8 May, 1923,
ibid. p . 127.
8
Ditto, 17 May 1923, ibid., p . 127.
4
Federal Court judgment of 25 J a n u a r y 1929 (Entscheidungen des Reichsgerichts in Zivilsachen, Vol. 123, p . 174 et seq.).

GERMANY

255

where representation is inevitable, the representatives should be
persons so well versed in the industrial and social circumstances
that the proceedings may be completed as quickly and satisfactorily as possible. To this end, an industrial association may well
be represented by its duly empowered employees and an employer
by his manager or other official with power of attorney, or by an
industrial association of employers. Works delegations, or, where
they do not exist, the ensemble of workers or salaried employees
of an undertaking, may be represented by industrial associations
of workers. These associations, once empowered, can then be
represented in their turn according to the above regulations.
Persons other than those mentioned in the appropriate legislation
are not permitted to represent parties to conciliation proceedings ;
barristers as such are excluded 1.
Experience has shown that the best course is for the parties to
negotiate themselves. In disputes limited to one undertaking, the
chairman of the committee or the conciliator can require, under
pain of fines, the personal attendance of the employer and of the
persons representing the workers according to the Works Councils
Act (A. 0., section 15, para. 5, and section 16, para. 4). In the
case of collective disputes which include more than one undertaking, the appearance of the parties or of their legal or constitutional representatives can be called for, but no power of enforcement is provided.
CONCILIATION AND ARBITRATION PROCEDURE

General Principles
The final object of conciliation and arbitration, according to
the Conciliation Order, is assistance in the conclusion of collective
agreements, and the procedure is adopted to this end.
Since the first object is to induce the parties to agree without
pressure, the procedure must be as informal and elastic as possible.
The methods of negotiation adopted by the conciliation body and
the hearing of the parties are bound by no hard and fast rules.
Free agreement between the parties must be constantly aimed at,
from the opening of the proceedings until the announcement of the
award, and even after it if the award is to be declared binding.
The general interest is also considerably concerned in the
proceedings, which are therefore, for its and the parties' sake,
Unless employees of an association.

256

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

public and direct 1 . There are however certain limitations. That
proceedings are direct does not mean t h a t only oral claims by
the parties are accepted ; on the contrary, the awards must take
account of all documentary evidence ; publicity is only provided
for in the case of the Court proceedings immediately before the
award, and even then the public may be excluded ; the preliminary
proceedings, which are still to be discussed, are never pubhc.
But the general interest is more concerned t h a t conciliation
proceedings should lead to a settlement than in the case of a private
dispute before a Civil Court. The completion of the proceedings
can not, therefore, be left to the whim of the parties, but must be
officially guaranteed and they can under certain conditions even
be instituted ex officio. In these circumstances, the conciliation
body cannot limit its attention to the parties' version, but must use
its judgment in elucidating all the facts bearing on the case, and
in extending or limiting the subject-matter as it thinks fit. In this
respect, the authority has complete liberty, but, as will be seen 2
its power to collect evidence is limited.
The proceedings are free of costs and duties.
The Institution of Proceedings
The Conciliation Order (section 5, para. 1) lays down t h a t
concihation bodies may act at the request of one party or on their
own initiative. Proceedings may thus be opened in two ways,
an application by a party being regarded as the normal method,
while the institution should intervene on its own initiative only
in exceptional cases — that is to say, when pubhc interest demands
such intervention (A. 0., section 12, para. 2). The institution
has to decide when this is the case, and to act accordingly.
An apphcation has not to be in any particular form, nor is
any minimum content laid down for it. The Works Councils Act
(section 29, para. 3) provides t h a t the works councils concerned
must have dealt, or at least have tried to deal, with a dispute
confined to one undertaking before it may come before a concihation committee. I n general, however, as the law now stands,
parties are not obliged to engage in preliminary negotiations,
though in practice an apphcation to the concihation body is only
resorted to when all other possibilities have been exhausted.
The right to apply is limited if one such application has already
1
For the special proceedings when an award is declared binding see below,
p p . 264 et s q.
2
Cf. below, p p . 261 et seq.

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257

been made and withdrawn ; if the proceedings have led to a binding
award (by arrangement or through arbitration) the case may
not be dealt with a second time ; and if the award is not binding,
the case may only be taken up again under exceptional circumstances, if all the parties are agreed or if the public interest requires
it (A.O., section 12, para. 3). This limitation lapses if a new
dispute arises *.
The parties have the right to apply to the conciliation authorities, b u t are not, in general, bound to do so. A Presidential
Order of 10 November 1920 made an exception in the case of
cessation of work in undertakings supplying the public with gas,
water and electricity ; lock-outs and strikes are now permissible
in such undertakings only when the competent conciliation
committee has made an award, and three days have passed since
its announcement. This* Order is enforceable under penalty, any
person who incites to an illegal lock-out or strike, or who causes
an interruption in the activity of machinery, plant or works for
such purposes being liable to imprisonment or a fine. A person
undertaking an illegal lock-out is similarly liable (section 1 of the
above mentioned Decree).
Further, it must be mentioned t h a t section 55 of the draft
Order of 1922 planned what was to a certain extent compulsory
conciliation. I t provided t h a t the competent conciliation body
must be called in before any lock-out, strike or other open conflict
began, and proposed to make compulsory by law the principle
of voting before strikes and lock-outs may be begun, which had
previously been included in the constitution of the industrial
associations. The reasons given in the preamble to this draft
are still interesting, although it did not become law : " If the
conciliation and arbitration system is to carry out its important
function, the maintenance of industrial peace, it is necessary
that the parties shall make use of the conciliation and arbitration
institutions before they proceed to open conflict. I t is not to
be denied that the resort to such trials of strength is justifiable,
and t h a t they cannot be avoided in every case, even by the best
conciliation institutions ; but it is just as certain t h a t the interests
of the public and of the parties themselves demand the use a n d
the exhaustion of all the possibihties of peaceful settlement before
recourse is had to open conflicts. This demand is by no means
1
On the details concerning the creation of t h e conciliation courts and t h e award
in this case according to the Decree of 9th J a n u a r y 1931, see below, p . 163.

1 8

258

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

new. On the contrary, provisions of the same sort may be found
in the articles of association of the overwhelming majority of
employers' federations, still more markedly in those of workers'
trade unions of all types and in a very large number of collective
contracts. . . . General recognition should be accorded to
these voluntarily assumed duties ; the extension to all employers
and workers of the legal obligations deliberately undertaken in
so many collective contracts is justified b y conditions and urgently
necessary for the safeguarding of the economic system. " 1 This
draft caused much discussion, and was freely criticised from various
quarters 2.
The chairman of the conciliation committee, or the conciliator,
has the deciding voice in the institution of proceedings. The chairman must institute them if the necessary conditions have been
fulfilled, the conciliator only if the case is particularly important.
A date is then fixed, the parties are summoned, and the proceedings
begin. The case is then described as pending.
Further conciliation proceedings may not then be instituted
in respect of the same case ; and two other provisions serve the
same purpose. Section 14, para. 2 of the Administrative Order
lays down t h a t the chairman of a committee or the conciliator
may combine several pending cases concerning one dispute, if
he considers t h a t joint treatment is advisable. There are so many
workers' associations that it may happen t h a t several of them
act on their own initiative for the purpose of achieving a collective
settlement. An association has no actual right to be admitted to
an already pending case to which another association of the same
nature is party, but the desire to be so may be deemed an application to the institution, and the new proceedings may then be
combined with the old. The Administrative Order goes even
further, and attempts to avoid altogether the danger of several
proceedings with the same object being instituted by prescribing
(section 14, para. 1) that if several industrial associations are
parties to a dispute on the employers' or workers' side, and one
of them applies to a conciliation institution while direct negotiations are still going on between the others, the proceedings may
be postponed at the request of one of the parties to them until
t h e negotiations between the other associations have been completed, if immediate proceedings are not desirable.
1
Entwurf einer Schlichtungsordnung,
Begründung, p p . 51 and 52. Reichstag
Records, No. 3760, first electoral period, 1921-1922.
2
Cf. Jahrbuch des Arbeitsrechts, I I , p p . 298 e t seq., I l l , p . 255.

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259

Combination entails joint proceedings and a single award.
The parties face each other independently and the actions of either
party are not binding upon and give no right t o t h e other party,
but may influence the award which is to be issued.
Postponement is determined by the conciliation authorities
and is subject to appeal ; the proceedings must recommence as
soon as the voluntary negotiations are completed, and the chairman has ex officio to see t h a t they then continue.
The Course of the Proceedings
General Considerations
Proceedings before a conciliation committee or a conciliator
are divided into preliminary and main proceedings. The preliminary proceedings take place before the conciliator or chairman
of the committee alone, the main proceedings before the whole
court, including assessors (Kammerverfahren).
Before the
peculiarities of each type of proceeding are dealt with, certain
regulations common to both should be mentioned.
The chairman fixes the date, and summons the parties, no
particular formalities being required. The parties are obliged
to attend and may be fined by the chairman for unexcused
absence 1 . The chairman opens and closes the proceedings, calls
on the parties to speak, and sees t h a t the case is fully and completely discussed. He should bring clarity to disputed points,
by means of interrogation, hear witnesses and experts, adjourn
sessions and/or announce the award — in short, control the whole
proceedings within the limits laid down by the law.
Reporting is not provided for, nor is the keeping of minutes
of the sessions. The chairman is required to maintain order
during the proceedings, and may fine any person who causes
disturbance (A.O., section 17). H e is, however, not permitted
to have such persons removed.
All these powers are included under the " measures for the
control of the proceedings " as laid down under the Administrative
Order (section 18). They, and the fines mentioned, are subject
t o appeal.
I t is a principle of civil and criminal law t h a t no man may judge
1
There is no judgment b y default, as in civil law. If both parties fail to
attend, the proceedings cannot be opened, and m u s t be adjourned or declared a t
an end, unless the case appears already sufficiently elucidated.

260

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

his own case. Persons who are not independent of a certain case
are, therefore, not competent to judge it, and may be challenged
by the parties on the ground of partiality. On the other hand, it
is " very doubtful whether it is contrary to the nature of conciliation and arbitration proceedings to permit persons concerned in
a dispute to act as chairman or assessors, for it often serves the
purpose of such proceedings if persons not unconnected with a
case co-operate in its settlement " 1. The Administrative Order
provides (section 13, para. 2) that employers and workers in an
undertaking may not act as conciKators, chairmen, or assessors
in disputes limited to that undertaking, if the parties do not
expressly agree to such action. This disqualification works
directly in virtue of the Order, without the parties having to
insist upon it. Persons so disqualified may not partake in any
official proceedings ; should they do so, the proceedings are presumably not thereby rendered invalid, the parties having the
right to object to their presence 2.
The parties may thus challenge persons if they are disqualified
by the law, or on the ground of partiality, though only chairmen
of conciliation courts (i.e. conciliators or chairmen of committees 3)
may be challenged for the latter reason ; it is regarded as no
objection for the assessors in a dispute on a collective agreement
to be members of the associations which are parties to such agreement, and in any case, the chairman is free to select them as he
thinks fit in accordance with their qualifications.
Challenge on the ground of partiality may not be based on
general considerations, but only on facts connected with the
individual dispute and calculated to justify lack of confidence
in the impartiality of a person, such as financial participation in
the undertakings concerned, relationship with the employer, etc.
(A.O., section 13, para. 2). A challenge may, however, not be
based on events which occurred in the preliminary proceedings.
The Preliminary Proceedings
The Conciliation Order lays down (section 1, subsection 5,
para. 2) that the conciliator or the chairman of the conciliation
committee has first of all to attempt alone to bring about
the conclusion of a collective agreement. The case is not to be
1
DEBSCH, op. cit. : note 1 t o section 13 of the Administrative Order, p p . 492
et seq.
2

D E R S C H , op. cit.,

Not in the preliminary proceedings, when they function alone.

495.

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261

brought before the court until he has made such an attempt and
failed, for " experience in the adjustment of disputes at home and
abroad has shown t h a t it is best for an impartial person first of
all to attempt m e d i a t i o n . . . The form in which his mediation
takes place must be dictated by the circumstances of the case ; it
is for instance possible that the disputing parties will not accept the
informal proposals of the mediator, but may ask for the settlement
of the dispute by means of a binding award. If the impartial
person's attempts at mediation are not successful, he has then to
call in assessors. . . . " * The object of the preliminary proceedings
is the conclusion of an agreement between the parties ; no award
may be made ; the parties are obliged to take part ; the proceedings
are informal ; and the only regulations are directness and privacy
(A. 0 . section 20 para. 1). If the parties come to an agreement.
this has to be put in writing and signed by them or their representatives. I n this way a collective agreement (collective contract
or works agreement) is concluded. If on the other hand t h e preliminary proceedings do not lead to the desired agreement, a date
should be fixed for the court proceedings, Avhich may follow
immediately if this is convenient.
The Court Proceeding

(Kammerverfahren)

These can only be instituted after the preliminary proceedings
have been unsuccessful. If the chairman discovers beforehand
t h a t one of the necessary formal conditions has not been fulfilled 2,
he cannot allow the case to come before the court, but must declare
the application invalid. H e may also refuse the application on
practical grounds, if there is in his opinion no sufficient reason for
the conclusion of a collective agreement. B u t " the more doubtful
the justification for the rejection of a case, and the more contestable
the refusal of assistance in concluding an agreement, which is the
whole function of conciliation and arbitration, the more advisable
it is for the chairman not to reject the application himself, but to
leave the decision to the court, after attempting mediation in the
preliminary proceedings. 3
If the conditions necessary for the holding of court proceedings
are fulfilled, the chairman or conciliator has to select representatives
of employers and workers as assessors in the manner already
1
Grundsätze des Reichsarbeitsministers,
p. 737.
2
Cf. above, p . 258.
3

F L A T O W - J O A C H I I I , op. cit.,

1 8 *

pp.

44 e t

Reichsarbeitsblatt,

seq.

1923, Official p a r t ,

262

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

described, and so form the court. The parties are then heard, the
subject matter of the dispute is determined, and negotiations with
the parties begin.
The parties cannot be compelled to negotiate, but it is as a
rule in their own interests to do so, for even if one p a r t y refuses,
an award may still be given as if t h a t party were not present
(A.O., section 21, para. 4).
Since an award must be just and therefore acceptable by both
parties, the facts, from which a just award may be deducted,
must be examined and explained. Both the chairman and the
assessors may attempt to clear up doubtful points by means of
questions. The court should make official investigation as far as
is necessary, and it may instruct the parties to supply evidence or
p u t well informed persons at its disposal for examination (A.O.,
section 21, para. 2) 1. If the parties do not follow these instructions,
the court has no means of compulsion. Such persons are neither
witnesses nor experts in the usual legal sense, cannot be put on
oath and have no claim to remuneration. The giving of evidence
is free of all formality, and through it the court attempts to
elucidate the t r u t h in accordance with the principles mentioned.
Rules of evidence, etc., are not admitted.

THE

CONCLUSION

The

OF THE

PROCEEDINGS

Award

If the parties come to a voluntary settlement, which is the
first object of conciliation authorities, a collective agreement is
concluded, put in writing and signed by the representatives of
the parties; if not, a decision must be made. If it is found t h a t
certain of the legal conditions have not been fulfilled 2, the
proceedings must be suspended. If they are fulfilled an award
must be made.
The award is the expression of a decision of the conciliation
body. If not unanimous, it must be based on a majority of votes.
Every member must vote under pain of a fine. If there are more
than two opinions, none of which is supported by more than half
the votes, an effort should be made to induce a majority to
agree on one opinion. If this cannot be done the chairman alone
1

Sometimes commissions of enquiry have been created.
If for instance one party is not competent, or loses its competence, to conclude
a collective agreement, or if a contract already exists.
2

.GERMANY

263

may decide (A.O., section 21, para. 5). In the earlier practice
of conciliation and arbitration the chairman's vote was regarded
as decisive in such cases, though at variance with t h a t of the
majority or even of all the assessors ; but the Federal Labour
Court decided in its judgment of 22 January 1929, which ended
the Ruhr iron dispute, t h a t this provision of the Administrative
Order was contrary to the principle of majority voting contained
in the Conciliation Order and was therefore invalid *. If therefore there is no majority in favour of any one opinion, an award
cannot be given and the proceedings must be dropped 2 .
Events provoked by the economic depression in 1930, however,
pointed to the advisability of amending the law in force in certain
respects, and on 9 J a n u a r y 1931 the Federal President, in virtue of
Article 48, para. 2, of the Federal Constitution, issued an Order
respecting the settlement of disputes of public interest by arbitration 3 , the provisions of which are given below.
If, in the cases specified in Section 12, subsection 3, of the
.Administrative Regulations, the Federal Minister of Labour appoints
a special arbitrator to conduct fresh arbitration proceedings which
he considers necessary in the public interest, the arbitrator must,
on the instructions of the Federal Minister of Labour, appoint two
independent assessors in addition to the employers' and workers'
representatives to form an arbitration board. If during the proceedings
or at the voting the Chairman of the board finds it impossible either
to obtain the co-operation of all the employers' and workers' representa^
tives or to secure a majority vote, the arbitrator and the two independent assessors must issue an arbitration award by a majority vote
in accordance with the provisions of the basic Order.
The second subsection of the Order lays down the reservation
that the issue of the instructions mentioned above by the Federal
Minister of Labour is subject to their being recognised as urgently
necessary in the national interests and to the confirmation of this
necessity by a decision of the Federal Government.
The Order was to remain in force only until 31 July 1931.
The award should be p u t in writing, signed by the chairman
and announced. I t is not provided t h a t reasons for the award
shall also be given, though it need hardly be pointed out t h a t
such a course is often valuable. The announcement is made
orally in a session of the court whether the parties are present or
not. I t is then sent to the parties, usually with a notice as to the
time limit for acceptance or the reverse.
The award consists in a proposal for the conclusion of a collective
1
2
3

International Survey of Legal Decisions on Labour Law, 1929, Germany, No. 24.
Legal theory is, however, inclined to contest this.
Legislative Series, 1931, Ger. 1.

264

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

agreement, and is equivalent to a written collective agreement if
accepted by both parties or if it is binding in virtue of legal provisions (Works Councils Act, sections 75 and 80), or by previous
arrangement between the parties (CO., section 1, subsection 5,
para. 4) An award is thus as a general rule not binding but
requires the explicit acceptance of both parties within the determined period. If rejected, or if the period ends without further
developments, it loses all legal force.
I n any case an award must contain a complete draft collective
agreement, so that, if it is not binding, it only requires the acceptance of both parties to become one. If it is not drawn up in this
form, it can only be regarded as a recommendation such as is not
even provided for in the Orders, and is equivalent simply to an
adjournment of the proceedings.
An award may be a draft collective contract or a draft works
agreement and may therefore contain anything which could form
p a r t of such agreements.
An award is not subject to appeal or other legal remedy 1 .
B I N D I N G AWARDS

The period of demobilisation (1918-1919) necessitated a rapid
and efficient development of the conciliation and arbitration
system ; and the difficult conditions of t h a t time of transition
also made it advisable to guarantee the execution of awards by
State action, t o substitute compulsory enforcement for voluntary
acceptance by parties, and so to avoid dangerous conflicts. " Though
it is obvious t h a t the true object of conciKation is to bring about
voluntary agreement between the parties and t h a t compulsory
conciliation and binding awards are contrary to its nature, without
this compulsion the system will often, in consequence of human
imperfection, and particularly in times of industrial and social
unrest, prove a completely unserviceable weapon in the hands of
the State and of the disputing parties 2.
These considerations led to the inclusion of a declaration of the
validity of awards in an Order of 4 January 1919 (R.G.B. p. 8).
concerning the engagement, dismissal and remuneration of industrial workers during the period of economic demobilisation. This
Order, and a similar one for salaried employees issued on 24 Janu1

F o r examination of the legal validity of awards by the courts, see below, p . 269.
Federal Court Judgment of 8 July 1924, Juristische Wochenschrift, 1924, p p .
1594 et seq.
2

GERMANY

265

ary 1919 (R.G.B. p . 100), were combined in an Order of 3 September 1919 (R.G.B. p . 500) and this in its t u r n was drafted into
an Order of 12 November 1920 (R.G.B. p . 218) on the engagement
and dismissal of workers and salaried employees during the period
of economic demobilisation. This provided first of all for the
possibility of making awards binding in individual disputes (concerning engagement and dismissal) in which arbitration was then
possible. Declarations t h a t awards in collective disputes were
binding were recognised as permissible by the majority of jurists
and allowed in practice, b u t were the object of heated argument x .
The Demobilisation Commissioners were competent t o issue such
declarations.
The draft Order, too, provided for a declaration t h a t an award
is binding, for its authors considered that, in the light of experience,
the existing machinery should not be abolished, but rendered
more exact and reliable. Such a provision was not expected to
endanger conciliation : on the contrary, it was imagined that the
very possibility of such a declaration would make the parties all
the more ready to utilise the chances of conciliation offered them.
Nevertheless, great restraint was to be used in its application ;
an award was only to be declared binding if it seemed, after due
consideration of the claims of each side, to be just, and if its
enforcement was indicated by the needs of the general economic
system 2.
The possibility of issuing binding awards was retained in the
Order at present in force. " This method and its efficiency have
been the subject of no little argument during recent years ; but
there is probably general agreement t h a t for the immediate present
— the Order is not intended to be permanent — this, the economic
and social system's last line of defence, cannot be surrendered.
But, as hitherto, the State should only use such extensive means
of compulsion if an award is just, and if its enforcement will be to
the economic and social advantage of the undertaking or occupation " 3.
The Order accords with these principles, and lays down (CO.,
section 1, subsection 6) t h a t a declaration t h a t an award is binding
shall only be given if these conditions have been fulfilled. One
1
Entscheidungen des Reichsgerichts in Zivilsachen, Vol. 104, p . 171, and t h e
decision in t h e Reichsarbeitsblatt, 1924, Official Part, p p . 359 et seq.
2
Preamble to t h e draft Order, p . 65.
3
Principles issued by the Federal Minister of Labour, Reichsarbeitsblatt, 1923,
p p . 737 et seq.

266

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

or both parties must have rejected a valid award given either b y
an official or voluntarily accepted conciliation body (specified in a
collective agreement or other undertaking between the parties) ;
the content of the award may be a draft collective contract or
works agreement, and may deal with conditions of employment
or with the legal relations between the parties. There is of course
no occasion for a " declaration " if both parties accept the award,
nor can one be made until the award has been explicitly rejected
or the statutory interval has elapsed without answer (A. O.,
section 22). Further, all the former conditions mentioned above in
respect of the procedure before the award must also be fulfilled,
and in particular the parties must still have full competence
as such at the time of the " declaration ".
The use of this means of compulsion was contemplated in
exceptional cases only. I n principle, parties have complete freedom
of contract (cf. Article 152 of the Federal Constitution) ; the first
object of conciliation is agreement, and the State is only to intervene
if the public interest requires it to do so — i.e. if the award is
just and its enforcement economically and socially necessary. I t
was formerly the practice to regard such interests as implicated
only if the general industrial system was in danger of suffering
from the continuation of a strike or lock-out 1 . Under the present
system, pubhc interest is defined more widely, and extends to both
the economic and the social sphere ; the general economic system
need no longer be affected ; it is enough for the interests of a single
industry to be endangered 2. However, such danger must be established without a shadow of doubt, and, as the Federal Minister
of Labour has often pointed out, such " declarations " can therefore
be made only in certain very special conditions. " The introduction
of declarations t h a t awards are binding can only be as successful
as is hoped if such State compulsion is the rare exception ; and
industrial circles must grow accustomed to regard it as such . . ." 3
They have nevertheless been frequently used in practice.
A " declaration " may be limited t o certain disputed points if
1
Federal Minister of Labour's Guiding Principles for Conciliation Procedure,
I I , No. 1, Reichsarbeitsblatt, 1920, p . 182.
2
Federal Minister of Labour's decision of 3 March 1924, Reichsarbeitsblatt, 1924,

p . 107. Cf. also DEESCH, op. cit., p . 265.

3
Circular issued b y the Federal Minister of Labour to conciliators on 30 J a n u a r y
1924. Reichsarbeitsblatt, 1924, Official Part, p . 127. The Minister then expressed
his disapproval of the fact t h a t it had in his experience become almost a rule for
one party to claim t h a t the award should be declared binding if the other rejected
it, even in cases where not even t h e parties could imagine t h a t the public interest
required State intervention and enforcement.

GERMANY

267

these are not logically connected with the others. If they are so
connected, previous agreement by the parties is required before
such limitation may be made. The same applies to the alteration
of an award in the process of declaring it binding (A.O., section 25).
A conciliator is competent to declare binding the awards of
conciliation committees within his district or only slightly exceeding it ; other awards of the conciliation committees and those
of the conciliators can be made binding only by the Federal
Minister of Labour. Both Minister and conciliators perform this
duty without assessors.
Proceedings should be instituted only by a public authority
ex officio if the general interest demands it (A.O., section 23). As
a rule, therefore, proceedings are opened and a " declaration "
made on the initiative of a party which has accepted the award
and is thus itself prepared for conciliation. If both parties reject
the award, proceedings can only be opened by the State in the
conditions described above. No special form or time limit is provided
for an application for such a proceeding.
The first object of this procedure is once again to induce the
parties t o agree. The competent authority has to hear the parties
with this object in view, or may delegate the function to some
other body. This expression of views should be oral, circumstances
permitting, but need not be so (A.O., section 24). If desirable,
the competent authority may undertake further investigation into
the facts of the case, and has the same powers to this end as
the institution in the original conciliation proceedings. If the
negotiations are unsuccessful, and all the necessary conditions
are fulfilled, the award is declared binding. The declaration should
be made in writing and sent to the parties (A.O., section 25) ;
the Decree does not contain any provision as to the obligation
to give reasons for the decisions ; it is not subject to appeal. If
the competent authority refuses to issue such a declaration, the
proceedings are closed. The only resort is then to open new
proceedings, b u t the limitations mentioned above (A.O., section 12,
subsection 3) also apply here.
The declaration that the award is binding replaces its acceptance
by the parties (CO., section 1, subsection 6, para. 3). I t is, like
the award itself, an administrative measure taken by the State,
and creates a new legal position in a form binding on the parties 1.
1

I t s legal nature is disputed.

268

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

I t therefore amounts to a compulsory agreement (either collective
contract or works agreement) which has the same force and legal
validity as a freely concluded agreement. I t lays down the conditions
of employment to be included in any individual contracts made
under it. The parties are not, however, bound to conclude such
individual contracts of employment if they prefer not to do so.
T H E ENFORCEMENT OF THE AWARD

Once the proceedings are finished and a collective agreement
has been concluded, the dispute is over as far as legal theory is
concerned ; but experience has shown that this is not always the
case in practice, for the dissatisfied party frequently attempts to
have its way by other means. Various questions are thus raised —
whether new conciliation proceedings may be opened, whether
the case may be brought before the courts of law, and what powers
the party which desires to see the award enforced has against the
recalcitrant party 1.
As has been said, there is no legal remedy against awards, the
right of complaint open to parties during the proceedings not
applying to the contents of decisions. A further question of the
same nature concerns the power of the authority itself to alter
these decisions apart from any claim made by a party. Clerical,
mathematical and similar obvious errors may be corrected at any
time, but in other cases the following distinctions are made :
A non-binding decision may be altered if fresh proceedings are
instituted ; but the possibility is limited by the fact that, as has
.been mentioned, such proceedings may not be instituted without
the consent of all the parties, or unless public interest demands
it (A.O., section 12, subsection 3). If the circumstances of the
case have changed, the parties have a n unlimited right t o fresh
proceedings. But if one party has already p u t in a claim for a
declaration t h a t an award is binding, the conciliation authority
cannot act further without infringing the rights of t h a t party ; in
such circumstances, therefore, the award cannot be altered.
Awards which, through acceptance, legal provision (Works
Councils Act, sections 75 and 80) or " declaration ", are binding,
cannot be altered, for they create direct rights, and it is a recognised
principle of public law t h a t an administrative decision cannot be
1

Cf. DERSCH : Kommentar, p p . 223 et seq., and Neue Zeitschrift für
1923, pp. 273 et seq., 409 et seq., 481 et seq.

Arbeitsrecht,

GERMANY

269

altered by the authority which uttered it if rights have already been
created by it.
The above covers the power of a conciliation authority to alter
decisions which it has itself issued ; the distinction between this
and the extent to which other conciliation authorities are bound
by such decisions must not be forgotten. Awards which are
binding, or have been declared so, and which create concrete
rights, must be respected by other conciliation bodies in exactly
the same way as all other existing collective agreements or contracts.
A further question concerns the extent to which other public
authorities, and in particular the courts of law, are bound by
awards and " declarations ".
The civil and labour courts have often to answer these questions.
In doing so, they must remember that binding awards create
rights by which the courts themselves are bound. For this reason,
they may question neither the accuracy and justice of the award
nor the accuracy and necessity of the " declaration ". To this
extent the courts, like other authorities, must respect these administrative decisions. But it is not as easy to decide whether such
decisions have any legal force. Only if the answer is in the affirmative can the courts be bound by them ; if not, they have as
little force as a voluntary collective agreement which is legally
invalid. The courts may thus, in the absence of definite legislative
provisions on the subject, enquire into the legal validity of awards
and of declarations that they are binding.
An award or " declaration " is rendered null and void by
contravention of important regulations concerning the conditions
to be fulfilled before proceedings should be opened, the rules of
procedure and the contents of the decision itself.
In the first case, decisions are invalid if for instance, the dispute
was not legally adjustable because no collective agreement was to
be concluded ; if neither of the parties was present or correctly
represented ; or if a party withdrew between the award and the
" declaration ". Cases have also arisen in which successful pleas
of non-competence have been made — for instance, when a conciliation body has been named in a collective agreement and the
official institution has nevertheless intervened, or when the latter
was not competent, because of the nature of the dispute or the
locality in which it took place 1 .
1

D E B S C H , op. cit., p . 238 ; FLATOW- JOACHIM, op. cit., p . 146 ; t h e Federal Court

decisions of 8 July 1924 (Reichsarbeitsblatt,
{Juristische Wochenschrift, 1925, p . 225).

1924, p p . 358 et seq.) and 10 Oct. 1924

270

CONCILIATION AND ARBITRATION EST DIFFERENT

COUNTRIES

Again, the decisions are invalid if the procedure has not been
correct — for instance, if a decision is made before one of the
parties has been heard or if a party does not attend or is not
summoned and an award is given 1 ; if the conciliation court was
wrongly constituted, has no independent chairman, or was not
composed of equal numbers of employers' and workers' assessors ;
if more or less than two assessors (from each side) sat on the conciliation committee without the parties' consent ; or if the chairman
gave an award against the opinion of the assessors 2 . On the
other hand, decisions made with the assistance of disqualified or
challenged assessors, or b y a conciliation court which is not competent according to the internal organisation of the system, are not
invalid.
Finally, a decision is invalid if its content is not in accordance
with the law — for instance, if it infringes an existing collective
agreement 3.
A regulation which concerns " declarations " only is that they
must be based on valid awards, for they merely take the place of
acceptance by the parties. If a decision is null and void, so is a
declaration t h a t it is binding 4.
If the court rules t h a t a decision is invalid, the position is the
same as if no proceedings had taken place, and there is no obstacle
to the institution of fresh proceedings.
If one party accepts an award and the other refuses to carry
it out, the means of enforcement at the disposal of the former
belong to collective contract law and cannot be considered here.
I t need only be mentioned t h a t the recalcitrant party is guilty of
breach of contract and can be sued before the labour court for
damages, and that an employer or worker can, by application to
the same court, obtain enforcement of the terms of a contract of
employment based on a binding award (and therefore on a collective
agreement).

Cf. FLATOW-JOACHIM, op. cit.,

146.

Cf. also p. 262. The Federal Labour Court, however, has laid down t h a t this is
to be understood from the award itself. Cf. also t h e Federal Labour Court's judgment of 24 April 1929 (Amtliche Sammlung, Vol. 4, p . 81) ; International
Survey
of Legal Decisions on Labour Law, 1929, Germany, No. 24.
3
Cf. above p . 251 and the Federal Labour Court's judgment of 2 Feb. 1929
(Amtliche Sammlung, Vol. 3, p. 231) ; International Survey of Legal Decisions on
Labour Law, 1929, Germany, No. 16.
4
Cf. the Federal Court's judgment of 7 March 1922 (Juristische
Wochenschrift,
1922, pp. 1719 et seq.), and the judgment of 8 July 1924 cited above.

§ 3. — Statistics
DEVELOPMENT OE CONCILIATION AND ARBITRATION DURING TH

Year

By the
conciliation
boards
Í

1924

1925

1926

1927

1928

1929

1930

Total number of disputes settled by means
of conciliation procedure

Number of
disputes settled
by means
of conciliation
procedure

Number of
disputes settled
during preliminary procedure
etc., or otherwise

Number of
disputes settled
by agreement

Before Before Before Before
By the the
the
conthe conthe
conci- ciliation
conci- ciliation conciliators boards liators
liators
boards

16,480
12,360

2,095
1,058

4,947
2,743

590
255

1,211
1,162

4,653

390

1,275

7,792

644

1,812

7,548

489

6,683
3,760

Number of
Number of
disputes decided awards accepted
by
the parties
by awards
Before Before Before Befor
the
the con- the
the conciliation conci- ciliation conci
liator
liators
boards
boards
8

449
123

9,460
7,686

1,102
666

4,492
3,177

275

488

2,544

263

'919

112

107

951

118

4,499

411

1,782

160

1,768

120

786

4,365

301

1,603

110

426

1,874

133

582

3,705

222

1,119

257

1,136

334

1,957

147

520

Cf. Reichsarbeitsblatt,

1930 (II), pp. 46, 47 ; 1931 (II), pp. 372, 373 ; 1932 (II), p. 138.

272

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

DEVELOPMENT

OF CONCILIATION AND ARBITRATION
THE YEARS 1 9 2 4 TO 1 9 3 0

DURING

II
Number of requests
to declare binding
the awards settled
Year

Total number of requests
to declare binding the awards

By
permanent
conciliators

By the
minister
of the
Reich

For which
an award
was
arrived at

Which
were
declared
binding

Which
were
rejected

3,193
2,965
1,022
1,722
1,656
1,385

366
241
116
183
158
96
81

1,365
1,372

839
707
315
540
434
274
205

1,070
1,127

1924
1925
1926
1927
1928
1929
1930

745

480
936
901
814
385

INDUSTRIAL DISPUTES IN GERMANY

343
429
479
393
236

I
Number of
Year

Industrial
disputes

Undertakings

Maximum
number
of workers
simultanously
affected by
strikes and
lock-outs '

Number
of working
days lost
by workers
affected by
strikes and
lock-outs '

Exclusive of industrial movements of a political carácter
1920
1921
1922
1923 s
1924
1925
1926
1927
1928
1929
1930
1931 3

4,392
4,788
5,201
(2,162)
2,012
1,766
383
871
763
441
366
497

48,288
57,758
52,783
(28,105)
29,218
25,214
2,949
10,480
8,082
8,606
3,507
4,994

1,561,735
1,540,351
1,969,263
(1,769,386)
1,634,317
758,071
99,227
493,680
723,415
223,878
213,931
177,643

17,702,800
26,316,390
28,894,434
(14,138,821)
36,023,143
16,855,856
1,271,884
5,936,006
19,481,258
4,372,907
3,816,971
1,990,000

Average
number of
working days
lost through
each worker
affected by
strikes and
lock-outs
11
17
15
(8)
22
22
13
12
27
20
18

1
a

Exclusive of forced unemployed.
Incomplete figures (figures for the Rhinelands and Westphalia are missing as a result
of occupation of the Ruhr district).
' Provisional figures, cf. Reichsarbeitsblatt, 1932 (II), p. 138.

1
2

Cf. Reichsarbeitsblatt, 1931 (II, p p . 372, 373).
Reichsarbeitsblatt, 1930 (II), pp. 178, 179 ; 1931 (II), p . 179 ; 1932 (II), pp. 78, 79.

273

GERMANY

II
Numher nf

Number
of industrial
disputes

Workmen
affected
Under- Disputes by
strikes
takings
or
lock-outs

J1926 .
1927 .
1928 .
1929 .
§1930 .
"1931/

339
759
691
431
345

1926 .
1927 .
1928 .
Lock-outs
1929 .
1930 .
1931 3

44
112
72
19
29

Strikes 2

—

•

2,160
8,144
5,672
7,879
3,241

—
789
2,336
2,410
928
269

—

60,369
232,704
328,529
150,745
208,444
135,983

Days
ot work
lost '
869,297
2,945,815
8,519,713
1,852,370
3,602,222
1,558,817

44,342
456,012
270,513 3,097,883
451,862 11,768,498
84,798 2,637,500
16,539
333,955
41,660
4S0,190

1
Inclusive of forced of unemployed.
*s Account is not taken of political strikes.
Provisional figures, cf. Reichsarbeitsblatl,

Number
Number
ot working of workers
days lost affected by
by each strikes or
worker lock-outs in
affected by the interesstrikes or ted underlock-outs
takings
14
13
26
12
17

28
29
58
19
64

—

10
11
26
31
20

56
116
187
90
61

—

1932 (II), p . 138.

§ 4. — Summary
I t is characteristic of the German system, first that conciliation and arbitration proceedings are combined, and secondly
t h a t these proceedings are distinct from declarations t h a t awards
are binding. The German system is not one of compulsory conciliation in the sense t h a t every collective dispute is subject to it.
A party is free to decide whether it will bring a dispute before the
conciliation authorities or have recourse to an open conflict. But
once a dispute has been brought before an authority, there can be
no Avithdrawal. Strikes and lock-outs are not prohibited during
the proceedings, but there are certain restrictions, which have
been described above. I t is, therefore, possible for conciliation
proceedings to be instituted ex officio against the will of the parties,
and this State intervention is required in the case of disputes in
pubhc utility undertakings. As a rule, however, a strike or lock-out
begun during proceedings is not an infringement of the law until
an award has been accepted by the parties or declared binding.
Such action is then equivalent to breach of contract.
The German system thus hinges on the declaration t h a t an
award is binding, which has therefore borne the brunt of discussion
1-9

274

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

and criticism. The most important charges brought against it are
t h a t the parties rely upon it and so evade responsibility for their
actions, while the State, on whose shoulders this responsibihty
falls, cannot be sufficiently informed of economic conditions and is
guided mainly by political considerations. I t is not surprising
t h a t the principal opponents of the " declaration " are to be found
among the employers ; they do not, in their official expressions of
opinion, attack either conciliation itself or the possibility of a
declaration, in particularly important cases, t h a t an award is
binding ; they limit their hostility t o the too common use of such
declarations. A proposal for an amendment of the Conciliation
Order, published by the Federation of German Employers' Associations in April 1929, gives this point of view its clearest expression.
I t describes conciliation simply as the maintenance of industrial
peace by assistance in the settlement of collective disputes concerning conditions of employment, and emphasises the predominant
importance of voluntary conciliation between the parties. Its
proposals run as follows :
State institutions should be able to intervene only on the
application of both parties, if no other institution has previously
been agreed on by them, or ex officio if the interests of the country
require it.
Awards should be made by simple majority of votes, and be
accompanied by a written statement of the considerations which
led to it.
A declaration that an award is binding should be possible, but
only in certain narrowly defined cases, namely : (1) in collective
disputes in undertakings of vital importance, (2) in collective
disputes which have such a serious effect on German national
economic life t h a t the existence of the general public is in danger.
" Undertakings of vital importance " should be more clearly defined
in a Federal order, to be issued in agreement with the Federal
Council and the industrial associations of employers and workers
concerned. I n particular, necessary work connected with agriculture
(sowing, cultivation, harvest and cattle-rearing) should be so
described.
A Federal arbitration body should be competent to declare
awards binding, and should deal with cases on application by the
parties or on instructions from the Federal Government. I t should
comprise a chairman, armed with judicial independence and the
rights of a public official, several impartial persons without the
right to vote, and employers ' and workers ' assessors in equal

GEBMANY

275

numbers. A two-thirds majority should be necessary for all its
decisions.
On the workers' side, the free trade unions expressed disapproval
of compulsory conciliation, in particular as part of any definitive
settlement, when the Conciliation Order was introduced, for they
were not prepared t o surrender the right to strike as a final
weapon 1 ; but the existing system is now accepted by all trade
unions of every type, if only for the m o m e n t 2 .
I n 1929 the Federal Minister of Labour summoned the representatives of employers' and workers' associations to discuss a new
conciliation system, but the meeting did not lead to any practical
results. Since t h a t time the whole question has fallen into the
background in face of the more urgent problem of unemployment.

SUPPLEMENTARY NOTE
After the expiry on 31 July 1931 of the Order mentioned
above 3 for the settlement of disputes of public importance submitted t o conciliation and arbitration procedure, the Federal
Government was compelled, for the purpose of settling the next
serious dispute in the Ruhr coal mines, to issue on 27 September
1931 4 a new Order embodying the same provisions and valid
until 10 October 1931.
I n the same connection another Order was issued on 30 September 1931, 5 which includes the important provision t h a t in
confirming the binding force of arbitration awards issued in virtue
of the Order of 27 September 1931 the Federal Minister of Labour
may, contrary to the law in force, alter the period of validity
of the settlement proposed by the arbitration award without
the consent of the parties concerned. Since this last Order applies
only to arbitration awards issued in virtue of the Order of 27
September 1931, which is not at present in force, the Order of
30 September is also without validity for the time being. Both
Orders make it evident t h a t in a particularly serious case it was

1
Decision of the General Federat
iopp.n of92German
Tradep. Uni333.ons of 18 March
1924,23CfOewerkschaftszeitung,
1924,
et
seq.
and
by NORPEL,
OTTE,
ROESSI
GER,for BROST,
SCHWEI
TZEB, SCHUCKERT
at t4he See.Elspeeches
eventabove,h Congres
s
of
t
h
e
Associ
a
t
i
o
n
Soci
a
l
Ref
o
rm.
p. 263.

*Legislative
Ibid., 1931,Series,
Ger. 8B.1931, Ger. 8A.

276

CONCILIATION AND ABBITBATION IN DIFFERENT COUNTRIES

considered necessary in the interests of the community to go
beyond the possibilities of State intervention provided under the
general conciliation and arbitration regulations of 30 October
1923.
Finally, new and very responsible tasks have devolved on
the German conciliation and arbitration authorities as a result
of the labour clauses of the fourth Emergency Decree issued by
the Federal President on 8 December 1 9 3 1 1 for the safeguarding
of industry and the national finances and the preservation of
civil peace. This Decree aimed at reducing all wage rates fixed.
by collective agreement from the level current on the day on which
the Decree was published (9 December 1931) to the level of 10
J a n u a r y 1927, with effect from 1 January 1932.
The parties to the agreement were to fix the new wage or
salary rates prescribed by the Decree in a written annex to the
collective agreement before 19 December 1931. In the event
of failure to reach agreement, they must inform the competent
conciliation officer for the district, or, if the collective agreement
extended beyond the jurisdiction of one conciliation officer, the
Federal Minister of Labour, who in this case would appoint a
special conciliator. Unless the parties agreed upon a settlement
in the meanwhile, the conciliator would then fix the wage or salary
scales with binding force, in accordance with the principles mentioned above. In so doing, he might make suitable allowance
for any alterations in the wage or salary system t h a t had taken
place since the conclusion of the agreements current on 10 January
1927 ; and he was also empowered, where no collective agreements
existed on 10 January 1927, to increase or decrease the standard
rate of reduction of 10 or 15 per cent, if he considered this to be
unavoidable on social and economic grounds in view of the general
level of wages and salaries on 10 January 1927. Finally, he also
had the right to alter any of the clauses of collective agreements
between the parties (wage agreements, covering agreements and
others) t h a t in his opinion were connected with wages and salaries,
in the same way as the parties themselves. In order to secuie
a period of tranquillity, the Emergency Decree prescribed t h a t
the validity of the collective agreements with the reduced wage
and salary rates should be prolonged until 30 April 1932. The
conciliator might at his own discretion prolong their validity
for any further period up to 30 September 1932.
1

Legislative Series, 1931, Ger. 9.

277

GEBMANY

BIBLIOGRAPHY
There is a n abundance of literature relating t o conciliation a n d arbitration law.
Only t h e most important publications can be mentioned here, b u t particulars of
other works will be found in the systematic surveys listed below.
I.

SYSTEMATIC SURVEYS AND G E N E R A L T R E A T I S E S

BIELSOHOWSKY, Ernst. Die sozialen und ökonomischen Grundlagen des modernen
gewerblichen Schlichtungswesens und seine Bedeutung für die Lösung der sozialen
Frage. Berlin, 1921.
FLATOW. Grundzüge des Schlichtungswesens. Berlin, 1923.
FREYTAG. Die sozialpolitische Schlichtung. Leipzig, 1930.
GROH. Deutsches Arbeitsrecht, p p . 107 e t seq. Breslau, 1924.
HERSCHEL. Grundfragen der Schlichtung im Lichte der Rechtswissenschaft.
Berlin, 1931.
HOENIGSCHMID-GROSSICH, L E I D I G and L Ö H R . Zwangsschiedsspruch

und

Schlich-

tungswesen. Fischer, Jena, 1929.
H U E C K - N I P P E R D E Y . Lehrbuch des Arbeitsrechts. 1st and 2nd editions, Vol. I I ,
pp. 362 e t seq. Bensheimer, Mannheim.
KASKEL-DERSCH. Arbeitsrecht. 4th edition, p p . 399 e t seq. Berlin, 1932.
LUTZ-RICHTER. Grundverhältnisse des Arbeitsrechts, p p . 104 e t seq. Berlin,
1928.
MARTIN. Das Schlichtungswesen in der modernen Wirtschaft. Fischer, Jena,
1929.
NONNENMANN. Die Mittel zur Erforschung von Tatsachen im Schlichtungswesen.
Berlin, 1931.
SCHINDLER. Werdende Rechte. Betrachtung über Streitigkeiten und Streiterledigung im Völkerrecht und Arbeitsrecht, in Festgabe für Fleiner. Mohr, Tübingen,
1927.
SINZHEIMER. Grundzüge des Arbeitsrechts. 2nd edition, p p . 299 e t seq. Fischer,
J e n a , 1927.
VOIGT, Andreas. Das Schlichtungswesen
als volkswirtschaftliches
Problem.
Beyer, Langensalza, 1928.
W E D D I G E N . Einigungsund Schiedsgrundsatz.
Schriften des Vereins für
Sozialpolitik, Vol. 179.
Die Reform des Schlichtungswesens : Bericht über die Verhandlungen der
11. Hauptversammlung der Gesellschaft für Soziale Reform, 1930.
I I . COMMENTARIES ON T H E CONCILIATION AND ARBITRATION O R D E R

DERSCH. 2nd edition. Bensheimer, Mannheim, 1925.
FLATOW-JOACHIM. Springer, Berlin, 1924.
MEHLICH.

1924.

PICK-WEIGERT.

1924.

SITZLER-GASSNER.

1924.

WÖLBLING-RlESE. 1 9 2 4 .
III.

E S S A Y S ON CONCILIATION AND ARBITRATION L A W

B R A U W E I L E R . I n Der Arbeitgeber,
E R D M A N N . Ibid., p p . 58 e t seq.

GRATTERT. I n Magazin
1 9 *

1929, pp. 55 e t seq.

der Wirtschaft,

1930, Nos. 7, 9.

278

CONCILIATION AND ARBITRATION IN D O T E R E N T

COUNTRIES

NöBPEL. " Zur Kritik des Schlichtungswesens " in Arbeitsrecht und Schlichtung,
Nos. 10, 11.
POTTHOFF. " Die Zukunft des Schlichtungswesens " in Arbeitsrecht, 1929,
column 1.
SiTZLER. I n Neue Zeitschrift für Arbeitsrecht, 1930, p p . 1 e t seq.
TABNOW. I n Magazin der Wirtschaft, 1930, No. 8.
WISSELL.

Ibid.,

ZIMMERMANN.
and I I I .

1929, Vol.

I n Kölner

III.

sozialpolitische

Vierteljahresschrift,

1922, Nos. I I

Articles on conciliation and arbitration law and related problems appear in
the principal German periodicals dealing with social affairs and labour law,
including t h e following :
Das Arbeitsrecht, Arbeitsrecht und Schlichtung, Reichsarbeitsblatt, Soziale Praxis
Kölner sozial-politische
Vierteljahresschrift,
die Arbeit, Oewerkschaftsarckiv,
der
Arbeitgeber, der Kaufmann in Wirtschaft und Recht, Materialblätter für Wirtschaft
und
Sozialpolitik.

FREE CITY OF DANZIG

In accordance with Article 104 of the Treaty of Versailles,
the Free City of Danzig with adjacent territory forms a Customs
Union with Poland. Moreover, a treaty concluded in 1921 includes
the territory of Danzig within the Polish system of economic
administration. The Free City of Danzig is placed under the
supervision of a High Commissioner appointed by the League
of Nations. It has a Diet (Volkstag) and a Senate elected for
four years.
At the beginning of 1928 the total population of the Free
City was 390,000, and that of the capital 280,000. The territory
has 320 communes, most of them rural.
The voluntary settlement of collective labour disputes forms
the subject of a Conciliation Act of 4 February 19301 and an Order
of 4 March 1930 2. The more important provisions of the Act
are taken from the German Conciliation Order of 30 October 1923 3
with some minor alterations necessitated by the special economic
and administrative conditions of the Danzig territory.
In the first place the Act provides for the institution of a
Conciliation Committee with its headquarters at Danzig, consisting of an impartial chairman (unparteiischer Vorsitzende),
a number of assessors representing employers and an equal number
representing workers. They are appointed for three years. The
members of the Committee are appointed by the Senate, after
consultation with the economic associations of employers and
workers. The choice of assessors must provide for equitable
representation of the different districts and trades. The Senate
may even set up special boards for trades in which, by reason
of special conditions or the frequent occurrence of disputes, such
action may seem advisable. Detailed provisions define the procedure governing the appointment of assessors, who must be
citizens of Danzig and have attained the age of twenty-five years.
1
2
3

Legislative Series, 1930, Danz. 1.
Gesetzblatt für die Freie Stadt Danzig, 1930, No. 5 and No. 8.
Legislative Series, 1923, Ger. 6.

280

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

Persons who refuse without sufficient reason to serve are hable
to a fine.
Under the Act the Senate must appoint special conciliators
if so requested by the parties.
Conciliation committees and conciliators take action at the
request of one of the parties or on their own initiative. They
endeavour to bring about the conclusion of a collective agreement,
and if they fail the matter is discussed before the Arbitration
Board. The Act, moreover, sets up a higher body for mediation,
the Arbitration Board (Schlichtungskammer), consisting, according
to circumstances, of the chairman of the Conciliation Committee,
together with two assessors representing employers and two
representing workers, or of the conciliator with an equal number
of assessors for employers and workers. The Board in its t u r n
endeavours to bring about an agreement between the parties ;
if it succeeds, a report is drawn up and signed by the parties.
If no agreement between the parties is reached before the Arbitration Board, it takes a decision by. an ordinary majority vote
and delivers an award, which must be signed by the chairman
and communicated t o the parties for their acceptance.
Under certain conditions, when a dispute involves important economic and social interests, an arbitration award t h a t has
not been accepted by the two parties may be declared binding
under the Act.

AUSTRIA

§ 1. — Economie Background and Development
The territory of the Austrian Federal Republic, as fixed by
the Treaty of St. Germain-en-Laye of 10 September 1919, covers
an area of 83,833 square kilometres and has a population of six
and a half million (97 per cent.) Germans and 200,000 (3 per cent.)
Slovenes, Czechs, Croats and Hungarians.
Austria is a highly industrialised country. According to the
census of 1920, about 900,000 (13 per cent.) of its inhabitants
were employed in subordinate positions in trade and industry.
If, as experience justifies, it is calculated t h a t on an average
every subordinate worker has to support two dependants, it is
evident that the provisions of labour legislation governing economic,
health, and social conditions are of vital importance to 40 per
cent, of the total population of Austria.
Since the war, the trade union movement in Austria has made
tremendous progress. At the end of 1928, the membership of the
" f r e e " (Social Democratic) trade unions was 766,168 (598,699 men
and 167,469 women), t h a t of the Christian trade unions 100,087 and
that of the Nationalist trade unions (1927) 47,877. The membership
of the latter is largely recruited from among salaried employees ;
the employees in transport and communication services, for instance, belong for the most part to these unions (51 per cent.).
The conditions of employment of nearly all Austrian workers
and salaried employees, with the exception of agricultural workers,
are regulated by collective agreements.
This is unreservedly
the case in all the more important branches of industry. The
number of workers and employees covered by collective agreements
exceeds the membership of the trade unions.
This fact is primarily attributable to the existence of what
are called " general rules " (Satzungen).
This term signifies
a collective agreement which the conciliation board, at the request
of a trade association or a public authority, has declared binding
in respect of all conditions of employment substantially the same
as those regulated by the collective agreement concerned.

282

CONCILIATION AND AEBITRATION IN DIFFERENT COUNTRIES

According t o the amendments to the Act of 18 December
1919, on the establishment of conciliation boards and on collective
agreements, contained in the so-called " Anti-Terror " Act of
5 April 1930 1 , all workers employed in the undertaking of an
employer who is a party to a collective agreement are subject
to the provisions of this agreement even if they themselves are
not parties to it. The works council, however, has the right to
raise an objection to this extension of the scope of the agreement.
Before the war, all disputes arising between employers and
workers out of conditions of employment were settled by the
courts, primarily by the industrial courts 2 . I n the case of agricultural and forestry workers, the administrative authorities
were also competent under certain circumstances. There was no
machinery for conciliation and arbitration. As, however, conditions
were progressively altered in favour of the workers by the immense
transformation wrought in Austrian economic life by the war,
and as the progressive increase of military dictatorship in industry
transformed the free contract of employment more and more into
a compulsory relationship, demands were put forward more and
more insistently in labour circles for the establishment of a body
competent t o hear complaints. As early as March 1915, the
Austrian Metal Workers' Federation had submitted a petition
to the Ministry of War demanding the institution of such a body.
At the end of July in the same year, an appeal committee for
Lower Austria was set up in Vienna with the consent of the
Minister of War. But this was quite inadequate sensibly to improve
conditions which were already becoming intolerable, since the
territorial jurisdiction of the committee was too limited.
I n November 1916, the first German-Austrian Labour Conference was held in Vienna. The most important point in the unanimously adopted resolution was a demand for the institution of
appeal committees and wage boards. After lengthy negotiations,
these were finally set up by the Imperial Decree of 18 March
1917 " respecting the regulation of wages and conditions of
employment in undertakings of military importance ". The
greatest and, in consideration of war-time circumstances, the
most important respect in which this Decree marked an advance
on t h e appeal committees mentioned above was t h a t the boards
1

Legislative Series, 1930, Aust. 1.
Industrial courts have existed since 1869 and were originally more in t h e
n a t u r e of arbitration courts. Recourse t o t h e m was voluntary. Since 1884,
however, t h e jurisdiction of t h e industrial courts has been compulsory.
2

AUSTBIA

283

were entitled to issue binding decisions, applicable to both parties,
employers and workers alike. I n practice, although the appeal
committees frequently issued decisions favourable to the workers,
their activity naturally often gave rise to disappointment, and
they never succeeded in obtaining the workers' confidence.
At the beginning of November 1918, the German-Austrian
National Assembly, on the proposal of its Executive Committee,
adopted a programme worked out by a committee consisting
of three workers' and three employers' representatives, which
included a demand for the establishment of conciliation boards
to replace the appeal committees, which were to lapse at the end
of the war. By an Administrative Instruction of 4 November
1918, the German-Austrian National Council provided t h a t during
the period of transition to normal industrial conditions the appeal
committees should assume the functions of conciliation committees.
Their competence was extended considerably beyond that of
the original appeal committees, which had dealt only with workers
covered by the war Emergency Act. I n principle, it extended
to all industries, t r a d e s 1 , undertakings under State monopoly,
mines, railways and shipping undertakings, the periodical press
and home work. The military chairmen of the appeal committees
were replaced by judges nominated by the Minister of Justice.
Although, on the one hand, the sphere of action of the conciliation boards was much wider than t h a t of the appeal committees,
their efficacy was limited by the fact t h a t they lacked all powers
of coercion. Acceptance of their awards by the parties was voluntary, and there were no means of compelling them to submit to
the decision.
The Order issued for the transition period was replaced by
the Act of 18 December 1919 respecting collective agreements
and conciliation boards 2 mentioned above, which established the
conciliation boards t h a t h a d evolved out of the military appeal
committees on a new basis. The scope of their jurisdiction was
extended. During the transition period the conciliation boards
had been set up only for the settlement of disputes arising out
of conditions of employment 3 . They were now invested with
1
I n Austrian parlance t h e term " trade " (Gewerbe) is used to describe small
industries, while " industry " (Industrie)
signifies the large-scale transforming
industries.
2
Legislative Series, 1920, Aust. 22.
s
By these collective disputes arising out of conditions of employment was
meant disputes about interests, and, in particular, disputes arising in connection
with the conclusion or renewal of collective agreements.

284

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

judicial powers as well, and are therefore competent to settle
disputes arising in connection with the functions of works councils ;
to act as wage boards, since at the request of a public authority
or of one of the parties they have to assist in the conclusion or
alteration of wage agreements (section 12), or to initiate proceedings in disputes arising out of the interpretation of a collective
agreement (section 15, subsection 1). In the two latter cases,
therefore, the chairman may not intervene ex officio at his own
discretion, as he may for the settlement of collective labour
disputes (Part II of the Act). Further, it is the duty of the conciliation boards to register collective agreements and issue the
so-called general rules, i.e. declare binding, in whole or in part,
for all conditions of employment substantially the same as those
governed by the agreement, any collective agreement which has
acquired predominant importance.

§ 2. — The System in Force
STATUTORY CONCILIATION AND ARBITRATION MACHINERY

Conciliation Boards
The function of the conciliation boards is, in the first place,
purely that of mediation and conciliation, similar to the function
of a justice of the peace. They are administrative and not judicial
bodies.
The parties are in no way bound to enter into negotiations
before the conciliation authorities. At the request of one of the
parties only, the dispute may at once be submitted to the competent
court (usually the industrial court) or to an arbitration body,
in so far as one exists or has been provided for under a collective
agreement, which takes precedence of the conciliation board in
every case.
(a) Competence and Organisation of Conciliation Boards
There are in Austria twelve conciliation boards, set up by
Administrative Instructions of the Ministry of Social Affairs.
The conciliation boards are under the supervision of a Supreme
Conciliation Board attached to the Federal Ministry of Justice.
The conciliation boards are competent to settle disputes arising
out of the conditions of employment and were primarily intended

AUSTRIA

285

for the settlement of collective disputes. The distinction between
collective and individual disputes is, however, less sharply drawn
than in Germany, for instance, in that, as was pointed out in the
Preamble with which the Government introduced the Conciliation
Boards Bill, a particular dispute may raise points of principle of
importance for the future regulation of labour conditions.
Conditions of employment for the purposes of this Act are as
follows :
(1) conditions of employment of assistant workers in accordance with section 73 of the Industrial Code, i.e. without
distinction of sex or age, assistants (commercial assistants,
journeymen, waiters, drivers, etc.), factory workers,
apprentices and workers employed as subordinate assistants
in trades ;
(2) conditions of employment in undertakings under State
monopoly (salt, tobacco, fire-arms and explosives), undertakings for the printing and sale of the periodical press,
undertakings for public entertainments, and exhibitions,
and health and curative institutions ;
(3) conditions of employment in undertakings which are
excepted from the provisions of the Industrial Code
because they are not carried on for profit x ;
(4) conditions of employment and service in undertakings
covered by the Salaried Employees Act of 11 May 1921 ;
(5) conditions of employment and service in mining, including
the works ;
(6) conditions of employment and service in industries subsidiary to agriculture ;
(7) conditions of employment of drivers of private vehicles
(Act of 20 December 1928) ;
(8) conditions of service in undertakings the occupier of
which is a public corporation, unless they are governed by
service regulations ;
(9) conditions of employment of home workers for whom no
central home Avork commission exists 2.
1

E.g. undertakings run by local authorities b u t not with a view to profit.
There are a t present seven central home work commissions for the following
occupations : manufacture of underclothing, clothing, shoes, artificial flowers
and ornamental feathers, knitted goods, and home weaving, in Vienna, and a
central home work commission for the knitting industry in Bregenz.
2

286

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

In contrast, however t o the provisions of the Administrative
Instruction of 4 November 1918 for the transition period, the
conciliation boards are not competent to deal with conditions of
employment in railway and shipping undertakings 1.
The members of t h e conciliation boards are appointed by the
Minister of Social Affairs. They must comprise an equal number of
employers' and workers' representatives. The trade associations
concerned are entitled to nominate candidates for appointment
and must submit their lists within a time limit t o be fixed for
each case.
The term of office of members and substitute members is three
years. Refusal to accept office or resignation is allowed only for
serious reasons 2 . Before taking up office, the members of the board
must solemnly pledge themselves to perform their duties conscientiously and impartially. A member or substitute may be dismissed
from office if such a change takes place in his occupation t h a t he is
no longer qualified to protect the interests of the trade group he
represents. He may also be dismissed if circumstances arise or
become known which disqualify him for appointment to judicial
office or if he is guilty of gross misconduct or persistent neglect of
his official duties. The chairman and vice-chairman of the conciliation board are nominated by the Minister of Justice, in agreement
with the Minister of Social Affairs, without limit of time and
subject to recall. Although this is not expressly specified in the
Act, the person appointed as chairman is always a judge or some
other legally trained person.
The conciliation board acts through committees, the number of
which is fixed by the chairman, who must also nominate the
chairman of the committee, usually his deputy. Each committee
must contain an equal number of members and substitutes from
the employers' and workers' panels respectively. The committees
are set up for particular groups of labour conditions or special questions under consideration. The chairman may, at his discretion,
set up special committees elsewhere than at the seat of the conciliation board, which must adopt the same procedure and enjoy
the same official powers as the conciliation board itself.
The members and substitutes must belong t o the same trade
group as the parties, or at least to a kindred group. If the number
1
Under section 1 (d) of the Industrial Courts Act of 1922, such disputes must
be submitted to t h e industrial courts.
2
A disciplinary fine of u p to 200 schillings m a y be inflicted by the chairman
on members who neglect their official duties.

AUSTRIA

287

of employers' and workers' representatives on a committee is
unequal, the extra members of the larger group, in order of age
beginning with t h e youngest, are not entitled to vote. The chairman
votes last. Decisions are taken by an absolute majority.
(b) Procedure of the Conciliation

Boards

Application for the opening of concihation proceedings in a
dispute arising out of conditions of employment may be made by :
(1) one of the parties concerned (employers or workers).
If the dispute has arisen for instance, out of the interpretation of a collective agreement, the trade association
t h a t concluded the agreement is a party ; if, on the other
hand, the dispute turns on claims under private law of
individual persons bound by a collective agreement, the
trade association may demand the initiation of concihation
proceedings, but the party is only the person whose
national interests are affected by the award, and the
arbitration award can become binding only if it is accepted
by the person concerned ;
(2) an authority (e.g. local authorities, police
political district authorities, etc.) ;

authorities,

(3) the chairman may, at his own discretion, intervene ex
officio, notably in strikes and lock-outs of considerable
magnitude, and particularly if, through his own observation or by some other means (e.g. notification by a
trade association or announcement in the daily press),
facts are brought to his notice which make it evident t h a t
a settlement of wages and conditions of employment is
desirable or necessary.
Besides being able to open concihation procedure on his own
initiative, the chairman also has the right to refuse his intervention if the dispute is justiciable. This right of refusal lapses,
however, if both parties declare before opening negotiations that
they are prepared to accept the award of the concihation board 1.
1
The right of t h e chairman to refuse to open proceedings is n o t affected by
any clause in a collective agreement designating the conciliation board as the
competent body to settle by award any disputes arising out of the agreement,
since, according to practice, the parties cannot renounce the right to refuse the
arbitration award b y such an agreement. T h a t is t o ' s a y , a preliminary undertaking t h a t the award will be accepted can be given only for each particular case
and not in general a t the conclusion of the collective agreement.

288

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

The conciliation board must attempt, in the first place, to bring
about an amicable settlement between the parties by means of a
compromise. With this object, the chairman of the committee
may himself institute conciliation proceedings at once, without
summoning the committee, provided that the parties concerned
appear before him without a special summons. H e may also
summon the parties to appear before him by means of an informal
invitation. If no settlement is reached before the chairman, or if
one or both parties fail to attend, proceedings must be opened
before a committee of the conciliation board. The proceedings are
held in private. Ether party may attend in company with authorised representatives or may, at his own expense, be represented
by relations, managers or salaried employees, members of the same
trade, or authorised representatives of his trade association 1.
If the proceedings take place before a committee, the chairman
may also request the assistance of any other persons " whose
participation is likely to promote agreement " 2. If a party, which
has in principle recognised the competence of the conciliation board
for the settlement of a dispute, fails to attend without valid reason,
the proceedings must be carried through in his absence, i.e. the
board must give a decision. If both parties fail to appear, the
proceedings are suspended.
The conciliation boards may demand the assistance of the
Federal administrative authorities and officials and of the communes. They are also empowered to hear witnesses and experts,
but may not require anyone to take an oath. If a witness wishes
to give evidence on oath or refuses to give evidence, or if any person
has to be examined elsewhere than at the seat of the conciliation
board, the competent law court may be required to give legal
assistance.
The right to raise an objection to the chairman or to one of
the members of the conciliation board is governed by the principles
laid down in the rules of judicial procedure.
If conciliation, which should in the first place be attempted,
fails, or if only one of the parties attends the proceedings, an
arbitration award must be issued. The award must be published
as soon as possible after the close of the proceedings, and the parties
are required to declare within a time limit, which may be extended,
1

Barristers m a y also act as representatives of the parties.
Section 9, subsection (2), of the standing orders mentions as examples of
such persons the industrial inspector, t h e district industrial committee, and
representatives or officials of the trade associations of both parties.
2

289

AUSTRIA

up to 14 days whether they accept the award or not. An agreement
reached before the chairman or a conciliation committee is judicially enforceable, the same applies to an arbitration award to
which the parties have submitted. The conciliation board may
decide to pubhsh its award and the statements of the parties. If
only one of the parties rejects the award, the dispute must be
submitted to the competent law court, provided, of course, t h a t
the dispute is justiciable. As the awards issued b y the conciliation boards are not binding, no appeal may be made against
them to the ordinary courts or to the administrative court.
All documents, supplements, minutes of proceedings, and the
correspondence and other official communications of the conciliation boards are free from stamp duty and taxation.
Other Statutory Conciliation and Arbitration

Machinery

As already stated in discussing the competence of the conciliation boards, Austrian law, in contrast to German law, deliberately
does not draw a sharp distinction between collective and individual
disputes, particularly in view of the fact t h a t in certain circumstances decisions given on individual disputes may have great
importance as precedents for the future regulation of conditions of
employment. This applies, even more t h a n to the conciliation
boards, to the other statutory conciliation and arbitration bodies,
which are primarily concerned with t h e settlement of individual
disputes, although naturally it is quite possible for these bodies
also to deal with collective disputes arising out of conditions of
employment, and in most cases the law provides t h a t the workers
within their jurisdiction shall be bound by a collective agreement.
(a) Arbitration committees of industrial guilds. — The industrial
guilds (Gewerbegenossenschaften). a form of organisation peculiar
t o Austrian law, are compulsory associations which stand in
historical relation to the mediaeval guilds. Under section 106
and the following sections of the Industrial Code, all persons
practising t h e same or kindred trades independently or as contractors in the same commune or district, together with their journeymen, are bound together in a corporate association, the object
of which is t o further a corporate spirit, maintain the honour of the
trade, and promote the interests of its members. Anyone practising
a given trade as á master becomes ipso facto a member of the
competent guild, while journeymen similarly become associates.
Membership is optional for persons practising their trade in a
factory.
20

290

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

Section 122 of the Industrial Code provides for the setting up
of arbitration committees to settle all disputes arising between
members and associates of the guilds out of wage, employment and
apprenticeship conditions. These committees are competent if
both parties to the dispute accept their jurisdiction in writing or if,
after the committee has been convened by one of the parties, the
other party appears before it on incitation and accepts its jurisdiction. The political authorities of the State determine the size of
the committee, on which masters and journeymen must be equally
represented. The members of the committee elect a chairman and
deputy chairman from among themselves by a majority vote. The
dispute may be settled by an amicable agreement or by an arbitration award. In order to be legally enforceable, a settlement must be
concluded before the chairman or his deputy and two members of
the committee, one masters' and one journeymen's representative.
In order to issue an arbitration award, for which an absolute
majority is necessary, the committee must be composed of four
members and the chairman. The agreements and decisions
reached by the committee are enforceable by administrative
procedure ; this is in fact the fundamental difference between these
committees and the conciliation boards, which have no power to
enforce their decisions. Appeal against the committee's decisions
may be lodged within eight days with the competent judicial
authority, but without suspensive effect. In practice the part
played by the arbitration committees is insignificant. In most
cases the parties prefer to lay the dispute before the competent
court of law immediately in order to secure a more rapid settlement.
(b) The Federal Act of 26 September 1923 respecting the contract
of employment of salaried employees in agriculture and forestry
(Estate Employees Act) x makes provision for arbitration boards for
procedure in disputes arising out of conditions of employment, to
be set up by Order after hearing the trade associations concerned.
So far however no such Order has been issued, and the ordinary
courts are therefore competent to deal with disputes arising out of
the conditions of employment of these groups of employees. Such
disputes cannot be submitted to the conciliation boards since their
jurisdiction extends only to conditions of employment in industries
subsidiary to agriculture.
(c) All the Agricultural Labour Codes provide for the possibility
of setting up machinery to deal with disputes arising out of
1

Legislative

Series, 1923, Aust. 2.

291

AUSTRIA

conditions of employment in agriculture by means of Orders issued
by the head of the State. So far such machinery has been set up in
three States only. I n Carinthia an Order of 3 March 1922 set u p
joint conciliation boards in all communes for the purpose of
facilitating the conclusion [of settlements out of court. They
are not, however, empowered to take decisions. The State
Government of Lower Austria also set up conciliation boards in
all communes by an Order of 18 November 1921. Settlements
reached before these boards are legally enforceable. Finally, in
Styria, section 23 of the Agricultural Labour Code and the Order
of 23 June 1923 provide that disputes arising between agricultural
employers and workers shall within thirty days be brought before
an arbitration board to be set up in each commune and to consist
of two employers and two workers together with a chairman to
be chosen by them. If the board is unable to bring about an
amicable settlement it must issue an arbitration award by a
majority vote. The chairman has only a casting vote. Settlements
and awards t o which the parties have agreed are legally enforceable. Any p a r t y who rejects the award m a y have recourse t o t h e
ordinary court of law.
(d) Under the Domestic Servants Act, conciliation boards may
be set up in virtue of administrative instructions. As no such
instructions have yet been issued, the competent body is the industrial court or, where none exists, the ordinary court of law.
CONCILIATION AND ARBITRATION MACHINERY

PROVIDED

UNDER

COLLECTIVE AGREEMENTS

1. A collective agreement concerning conciliation and arbitration procedure has recently been concluded between t h e Association
of Employers in Insurance Institutions and the Insurance
Employees' Union. The Insurance Employees' Union undertakes
t o appeal to the arbitration committee provided under the collective
agreement before resorting t o organised militant action. One of
the members of this committee is appointed by the employers'
association and the other by the employees' union. The chairman
is chosen by lot from a panel drawn up by both organisations.
If a dispute arises, the employees' association notifies the
employers' association t h a t the arbitration committee has been
convened and indicates the member it has chosen. The employers'
association must then reply and nominate its own member. The
chairman must first attempt to bring about an amicable settlement

292

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

between the parties. If conciliation is unsuccessful, the arbitration
committee issues a decision, which is, however, like the awards of the
public conciliation authorities, binding on neither party. The
parties must inform the chairman in writing within eight days
whether they accept the award or not. If no intimation is
received or if the award is rejected, a further attempt at conciliation
must be made by a representative of the Chamber of Commerce and
Trade and a representative of the Chamber of Workers and Salaried
Employees, both in Vienna.
A certain guarantee for the conclusion of a settlement is afforded
by the provision binding the employees' organisation not t o resort
to organised militant action until five weeks after the date on
which the arbitration committee was convened.
2. The collective agreement for the Austrian book-printing trade
concluded in 1925, the only collective agreement covering the whole
of Austria, unites all the Austrian book-printing presses and their
workers in a common alliance (Tarifgemeinschaft)
with the object
of maintaining peace between employers and workers. The organs
of this alliance, in addition to the joint employment exchange which
is compulsory for both employers and workers, are the arbitration
boards and the joint board
((Tarifamt).
The arbitration boards are competent to decide disputes arising
out of conditions of employment regulated b y the collective
agreement. Disputes of this kind may not be brought before any
other court. The boards, which are set up in each of the Federal
States, must be composed of from three to five employers and an
equal number of workers, together with at least two substitutes for
each group. Both members and substitute members are appointed
for the duration of the agreement.
Complaints must be submitted to the board within four weeks
of the beginning of the dispute and must be handed in to the chairman of the group making the complaint. The proceedings of the
board are oral. Unanimous awards are binding on the parties. If
no unanimous award can be adopted, the case may be submitted
to the joint board. In practice the jurisdiction of the arbitration
covers individual as well as collective disputes.
I n addition to its function as a judicial body, the arbitration
board has to t r y to promote an amicable settlement in any dispute
arising out of the collective agreement. At the request of one of
the parties it must issue an award.
The joint board, which has its seat in Vienna, is composed
of four employers and four workers, all appointed for the duration

AUSTRIA

293

of the agreement. The board appoints an impartial chairman and
deputy chairman. If it is unable to agree on the choice of a chairman, the appointment is made by the Federal Ministry of Social
Affairs.
In addition to the discussion and fixing of conditions of
employment, the functions of the joint board include conciliation
between employers and workers in disputes arising out of the
agreement in which the arbitration board has been unable to
bring about a settlement, particularly if the arbitration board
has come to the conclusion that the dispute can be decided only
by means of a supplementary interpretation of the agreement.
In such cases the arbitration board itself must refer the dispute
to the joint board. Appeals against arbitration awards that have
not been unanimously adopted are also dealt with by the joint
board.
Decisions taken by the arbitration board which are in contradiction with the express provisions of the agreement may be
quashed or altered by the joint board or referred back to the
arbitration board.
All the decisions of the joint board are final and binding. No
appeal against them may be made to the ordinary courts.

§ 3. — Results and Opinions
ACHIEVEMENTS
OF THE CONCILIATION BOARDS AND
SUGGESTED REFORM OF THE AUSTRIAN CONCILIATION AND
ARBITRATION SYSTEM

As already stated, the Austrian conciliation boards have three
separate functions : they act as wage boards, judicial authorities in
matters arising out of the functions of works councils, and conciliation and arbitration boards. Although they are generally
considered to have fulfilled their functions successfully as judicial
bodies and in connection with the observance of collective agreements, it is objected against them that they have more or less failed
in the sphere of conciliation and arbitration. This is, in the opinion
of the interested circles, due to the fact that the custom of appointing a judge as chairman of the board, which qualifies it exceptionally well for its judicial functions, acts, on the other hand, as a
handicap so far as conciliation and arbitration procedure is concerned. It is pointed out on both employers' and workers' sides that
2 0 *

294

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

the chairman is naturally unfamiliar with economic questions ; that
though he is competent in the legal sphere, he is unable to appreciate the economic considerations which play the most important
part in conciliation and arbitration ; and that his professional bias
inclines him to set legal considerations in the foreground instead of
approaching the case primarily from an economic standpoint. He
is not sufficiently in touch with the parties and lacks the specialised
trade knowledge and the authority necessary to enable him to work
successfully for a settlement between the parties, with the result
that the more important wage disputes are very rarely submitted
to the conciliation board but rather to the mediation of experts,
who enjoy the confidence of both employers and workers.
Preference is therefore expressed for the German system, under
which the persons appointed as arbitrators are not merely formally
acquainted with the question under consideration but possess
comprehensive specialised knowledge and can therefore intervene
very much more influentially than can a judicial chairman in spite
of all his good-will. This criticism of the Austrian conciliation
and arbitration system is undoubtedly well-founded, and will have
to be taken into account when any reform of the system is
attempted.
A further shortcoming of the conciliation boards in their
capacity of conciliation bodies is the overlapping of their jurisdiction
with that of the industrial courts in respect of the settlement of
individual disputes. The Act should limit the jurisdiction of the
conciliation boards to collective disputes and reserve the handling
of individual disputes to the industrial courts. This would of
course depend on the existence of industrial courts throughout the
country and not merely in the industrial districts, since so long as
individual disputes based on labour law are dealt with by the
ordinary courts, as is the case where there is no industrial court
— that is, exclusively by legally trained judges without the cooperation of laymen—the parties will still prefer to submit them
to the conciliation boards for settlement.
The fact that so little prestige attaches to awards issued by
the conciliation boards in collective disputes, which is partly due
to the faulty organisation mentioned above, is alleged by the
workers' organisations as a pretext for demanding that a reform
of the Austrian conciliation and arbitration system on the German
model shall also include the introduction of compulsory arbitration,
that is, the power to declare binding awards issued by the arbitrator.
This proposal is supported mainly by workers of the German

AUSTRIA

295

Nationalist groups, who have repeatedly demanded that the
Supreme Conciliation Board should be empowered to declare
awards binding if expressly requested to do so by one of the parties.
A Bill intended to introduce the German system of compulsory
arbitration has been submitted to the National Assembly by the
pan-German groups, and will no doubt have to be considered by
the new Assembly.
The general opinion in Austria, however, is by no means favourable to this proposal. The employers are entirely opposed to it.
They point out that the success of the system in Germany has
often been very questionable and that it has been instrumental
in imposing almost intolerable burdens on industry ; on the other
hand, there have also been cases in which arbitration awards
declared binding, but imposing too heavy a burden on one or other
of the parties, have never been carried out at all, a proceeding
which weakens the authority of the State in a most undesirable
manner. Above all it is accused of undermining the sense of
responsibility of both parties. Moreover, compulsory arbitration is
said not to have been as favourable to the workers as many of them
maintain, since it can equally well be turned against them. In
regard to the attitude of the Austrian workers towards compulsory
arbitration, those of the Social Democratic trade unions that do not
comprise salaried employees are opposed to its introduction ;
they prefer to maintain intact the absolute freedom of decision of
the parties in this respect also, and are afraid of the intervention of
political considerations in filling the post of arbitrator. Salaried
employees have in the main adopted a different standpoint. They
are in favour of the fixing of minimum wage rates by the authorities,
since experience has shown them that there is little inclination
among their employers to conclude collective agreements During
parliamentary debates on the subject the Government has also
expressed its opinion, and has made no secret of the fact that in its
view there are very serious objections to the introduction of compulsory arbitration in Austria.

§ 4. — Statistics
In the absence of other statistical data relating to the Austrian
conciliation boards, the table on page 296 gives some information
on the number and results of labour disputes in Austria.

STRIKES AND
1922

1923

1924

LOCK-OUTS
1925

1926

420

320

447

325

204

381
39

268
52

401
46

287
38

186
18

6,426

2,113

7,559

1,932

737

5,846
580

1,793
320

6,960
599

1,647
285

653
84

325,524

177,932

316,986

89,551

29,241

228,425

155,068

296,878

66,948

21,943

Strikers
211,429
268,696
46,743
116,669
28,182
Workers affected by lock-outs . .
16,996
38,399
20,205
Total number of working days lost as
t h e result of labour disputes . . 1,835,086 1,614,156 2,816,109 1,166,217

18,624
3,319

Total number of labour disputes . .

Undertakings affected by labour disUndertakings affected by strikes .
Undertakings affected by lock-outs
Total number of workers employed
in the undertakings affected by
Total number of workers affected by

297,684

Working days lost as the result of
1,635,443 1,074,377 2,295,493

666,373

232,944

Working days lost as t h e result of

Completely successful strikes
P a r t l y successful strikes
Unsuccessful strikes

. . . .

200,643

539,779

520,616

500,444

64,740

112
198
71

71
152
45

82
229
90

57
164
66

43
98
45

297

ATJSTBIA

BIBLIOGRAPHY
ADLER, Emmanuel. Das Arbeitsrecht im Krieg (Die Regelung der Arbeitsverhältnisse im Kriege). Carnegie-Stiftung für internationalen Frieden. Vienna, 1927.
Angestellten- und Arbeiterrecht. Vienna, 1930.
BREYER. Leitfaden durch das österreichische Arbeitsrecht. Vienna, 1923.
DECHANT. Der Kollektivvertrag nach österreichischem und deutschem Bechi.
Vienna, 1923.
KASKEL. Dos neue Arbeitsrecht. Berlin, 1920.
LEDERER. Grundriss des österreichischen Sozialrechts. Vienna, 1929.
and SUCHANEK. Arbeitsrecht und Arbeiterschutz.
Vienna, 1925.
Die Gewerkschaft, 1918, 1919, 1920, 1921, 1922.
Statistische Nachrichten, published b y t h e Federal Statistical Office, 1923-1930.
Wirtschaftsstatistisches Jahrbuch, published b y the Vienna Chamber of Workers
a n d Employees, 1924-1928.
D E U T S C H E R H A N D E L S - U N D INDUSTRIEANGESTELLTENVERBAND.

für einen zeitgemässen
Vienna, 1929.
HAUPTVERBAND

Arbeitnehmer.

Ausbau

unserer Einigungsämter

D E R INDUSTRIE

DEUTSCHÖSTERREICHS.

Arbeitgeber

und

Vienna, 1920.

INTERNATIONAL LABOUR OFFICE. Freedom of Association,

Geneva, 1928.

Denkschrift

Schlichtungsstellen.

Vol. I l l : Austria.

HUNGARY

§ 1. — Economie Background and Development
Hungary to-day extends over an area of 93,010 square kilometres and has a population of about 8,662,000. In 1910 the State
of Hungary had an area of 325,411 square kilometres with a
population of about 20,686,000. According to the occupational
distribution of its population, Hungary was definitely an agrarian
country before the war, 64.5 per cent, of the whole population
being employed in agriculture and 23.5 per cent, in industry. Here
too the Treaty of Trianon brought about a change. The new
Hungary had an agrarian population of only 55.8 per cent, while
the proportion of industrial workers rose to 30.1 per cent. Since
the war this proportion has shifted still further to the disadvantage
of the agricultural population. Whereas in 1920 Hungary had
about 220,000 industrial workers, at the beginning of 1931 their
number had risen to about 700,000.
The most important industries of the country are concentrated
in Budapest, where the organisation of the workers is also most
highly developed. In 1928 almost three-quarters (71.5 per cent.)
of the members of the " free " (social democratic) trade unions
lived in the capital, while only just over one-quarter (28.5 per cent.)
came from all the rest of the country. The membership of the free
trade unions, whose central organisation is the General Council of
the Hungarian Federation of Trade Unions (Magyarországi
Szakszervezeti Tanâcs) was 124,378 in 1928, 110,704 in 1929,
and 96,000 in 1930.
Next in importance to the free trade unions are the Christian
workers' unions. The cental organisation is the Federation of
Christian Trade Unions (Kéresztényjszocialista Országos Szaìcs.
zervezetek Kôzpontja) and on 1 January 1930 included unions with
a total membership of 52,100 1.
1

For further details cf. Freedom of Association, Vol. I l l , p. 165.

HUNGABY

299

In the year 1848 a movement started among workers in the
Budapest book-printing trade, which aimed at obtaining improved
conditions of work and in particular the introduction of a tenhour working day. The Government of the time instructed the
authorities to mediate between the representatives of the two
parties, and thanks to its intervention peace was restored by
the conclusion of a collective agreement corresponding to the
workers' demands 1. This procedure was not, however, followed
on subsequent occasions, and the strong repression of combination
led more and more often to police intervention in the workers'
fight for higher wages.
The Industrial Act of 1884 was intended finally to remedy
this state of affairs, which had already been slightly improved
by the first Hungarian Industrial Code of 1872-. Section 163
of this Act provides that if an industrial dispute arises, a conciliation committee is to be set up consisting of six representatives of each of the parties concerned. The committee sits
under the chairmanship of the president of the industrial authority of first instance. If the dispute arises in a craft, the
members of the committee are chosen from among the members
of the industrial corporation's committee. In framing the Act,
it was not intended also to empower the committees to take
decisions.
The provisions of section 163 of the Industrial Act of 1884 were
supplemented in 1893 by an amendment empowering the Minister
of Commerce, should the conciliation committee fail to reach an
agreement, to instruct the industrial inspector to try to effect a
settlement. A statutory basis was thus given to the already longestablished practice of calling in the industrial inspector for the
settlement of collective labour disputes.
These legislative measures did not, however, produce the
desired results. The conciliation committees became important
only in minor industries ; in large-scale manufacturing industries
not a single conciliation committee was set up during the first
ten years following the coming into force of the new Act.
The Minister of Commerce therefore decided, after preparations
extending over several years, to include a revision of conciliation
procedure in a new industrial Act. The parliamentary discussion
of the Bill worked out for this purpose was interrupted by the
outbreak of the Great War.
1

IMRE FERBNOZI : Das

Koalitionsrecht in Ungarn, p. 183.

300

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

After the war the preliminary legislative work for the development of conciliation and arbitration procedure was again taken
up and bore fruit in the Bill introduced in the National Assembly
by the Government in the spring of 1923 on thè right to work,
conciliation and arbitration, and trade associations. Although
this Bill did not become law, it nevertheless deserves a place in
this study because of its influence on the legislation at present
in force.
The Bill divided all the industries of the country into three
groups :
(1) State, municipal and communal undertakings ;
(2) Railway and shipping undertakings and other undertakings of direct public utility as specified in a list made up
and periodically revised by the Ministry of Commerce ;
(3) All other industrial undertakings.
Under the terms of the Bill, stoppages of work were in principle
forbidden in the first two groups, and all disputes were to be
settled by the higher authorities concerned. If the authorities
failed to bring about an agreement, the Bill provided for an arbitration award, except in disputes in the postal, telegraph or telephone services and public railway services, in which the case was
to be finally settled by the decision of the authorities.
In the third group, which includes much more than half the
undertakings in the country, conciliation and arbitration procedure
was only to be resorted to at the request of both parties. There
was no compulsion for either party to have recourse to the machinery for conciliation and arbitration.
This Bill raised violent opposition, due particularly to the
sections dealing with trade associations. As, however, owing to
the failure of the 1884 Act, the lack of State machinery for conciliation was being increasingly felt, the National Assembly, although
it did not pass the Bill, authorised the Government in the same
year " in consideration of the abnormal economic conditions and
with a view to the peaceful settlement of wage disputes to set up
joint conciliation committees ". The Government took advantage
of this authorisation to issue the Order of 4 September 1923 1. As
this Order lies at the root of the Hungarian legislation at present
in force for the settlement of collective labour disputes by State
machinery, its provisions will be discussed in detail.
1

Legislative

Series, 1923, Hung. 5.

301

HUNGARY

I t is worth noting t h a t as a result of the dilatory procedure
of the legislative authorities, a vague system of conciliation with
no statutory basis has grown u p in a number of industries ; other
industries, again, have solved the conciliation problem on the
model of foreign countries, by way of collective agreements.

§ 2. — The System in Force
CONCILIATION ON THE BASIS OF THE ORDER
OF 4 SEPTEMBER

1923

The Order of 4 September 1923 aims, in its own opening
words, at regulating conciliation procedure. For this purpose
it sets up State machinery in accordance with the following
provisions :
The Minister of Commerce nominates for an indefinite period
three conciliators for the chief industrial inspector, and also for
every industrial inspector with the exception of the Budapest
inspector, and publishes a list of the names of the conciliators so
appointed. If conciliation proceedings should be required, the
conciliator whose name is first on t h e list invites the parties to
attend the proceedings. Employers and workers are then each
entitled to send representatives, not exceeding five in number,
who together with the conciliator form the conciliation committee
for the case, with the conciliator as its chairman. Acceptance of
the office of member of the conciliation committee is compulsory.
The disputes for which the conciliation committees have jurisdiction are those " concerning wages between an industrial
employer and industrial workers ". For conciliation proceedings
to be instituted the dispute must be " o f so serious a character
t h a t the peaceful continuance of work is thereby endangered ".
The provisions concerning the territorial jurisdiction of the
committees apply only to the conciliator, since the members of
the committee are nominated by the parties themselves. The
conciliator's jurisdiction covers the district of the industrial
inspector for whom he was appointed, except in the case of the
conciliators appointed for the chief industrial inspector ; their
jurisdiction covers the district of the Budapest inspector, and they
may also act when the dispute between employers and workers
has arisen in establishments in two or more industrial inspection

302

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

districts. The Minister of Commerce may also entrust conciliation
proceedings to the Budapest conciliators in the case of a dispute
which has arisen outside their district but obviously extends to the
whole country.
The first step in the proceedings is the notification of the
dispute to the competent industrial inspector who in his turn
informs the conciliators. Each party haß the right to raise an
objection once only to one of the conciliators only. When these
preliminaries have been disposed of, the committee is formed in
the manner described above, and an early date is fixed for its
negotiations to take place. Failure on the part of a member to
appear at the negotiations may be punished by a fine.
The chairman opens the proceedings by establishing the facts
of the case, and a statement of these facts is recorded in the minutes
and forms the basis of the subsequent negotiations, unless the
parties at once raise objections to it. There are no further regulations dealing with the hearing of evidence.
The object of conciliation proceedings under the Order of
4 September 1923 is to bring about agreement between the parties.
If they are successful, the agreement concluded is binding on
the employers of all undertakings affected by it for the period
laid down in the agreement. If no definite period is fixed by the
agreement, an attempt should be made to fix a time limit for
giving notice to terminate it. These provisions do not apply to
wage disputes that arise in State, municipal or communal public
utility undertakings, or to railway and shipping undertakings
intended for purposes of public transport. Here we have an echo
of the provisions of the Bill of 1923 (see above, § 1).
CONCILIATION

THROUGH INDUSTRIAL INSPECTORS AND
AUTHORITIES

MINING

Even before the promulgation of the Industrial and Factory
Workers' Protection Act of 1893 (see above, § 1), the industrial
inspectors had intervened as mediators in collective disputes
in cases of emergency. The Act did not regulate this procedure,
however, and the settlements brought about by the industrial
inspectors are not legally enforceable. The same is true of the
informal conciliation procedure of the mining authorities, which
has no legal basis. This too is only an emergency measure, intended
to fill the gap due to the lack of any State machinery for conciliation applicable to the whole country.

HUNGARY

303

CONCILIATION ON THE BASIS OF WAGE AGREEMENTS

In almost all the industries in which conditions of employment
are governed by collective agreements, these agreements also
provide machinery for conciliation and arbitration in collective
labour disputes. The names given to such institutions are not
always the same, but the terms conciliation committee, appeal
committee, wage protection committee, and labour regulation
committee, are those most usually found.
The structure and working of the unofficial conciliation and
arbitration machinery present the following special features.
The conciliation committees provided for by collective agreements may be permanent or temporary. They are permanent,
for instance, in the carrying and transport trades, the intaglio
printing and Budapest book-printing trades, the book-binding
trade, the fur trade, the artificial stone trade, and other industries.
An example of a non-permanent conciliation committee, formed
only on the outbreak of a dispute, is given by the provisions for
conciliation in the collective agreement for inside and outside
plasterers. This agreement is also peculiar in that it draws a
definite distinction between conciliation and arbitration, and sets
up separate machinery for each of these two forms of procedure.
Non-permanent conciliation committees are less frequent than
permanent ones. In many agreements it is expressly stipulated
that the arbitration committees are to be set up for the whole
period of validity of the agreement itself. The committees are
composed as a rule of an equal number of employers and workers.
Under some agreements the employers and workers directly
concerned in the dispute are not allowed to belong to the committee.
The appointment of the chairman is a question settled in different
ways. As a rule, employers and workers take the chair in turn,
but a frequently recurring provision lays down that the party
who has opposed the proposal under dispute shall appoint the
chairman. This ensures that an employer takes the chair when
the proceedings have been instituted by the workers, and vice
versa.
Appeal to the committees in all cases of dispute is compulsory.
With the exception already mentioned, no definite distinction
is, as a rule, drawn between conciliation and arbitration. Certain
agreements allow a refusal to take part in conciliation proceedings
on the ground of sabotage. Regulations for further procedure

304

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

are for the most part laid down in standing orders drawn up by
the committee itself, and sometimes incorporated in the collective
agreement.
According to an almost universal practice, a simple majority
is enough for the adoption of a decision. Both parties undertake
to accept it beforehand, and failure on either side to observe the
terms of the settlement may be punished by a fine, the amount
of which is usually left to the discretion of the committee.

§ 3.

Results and Opinions

The results achieved by State conciliation have not been
remarkable. As official statistics of strikes have been kept only
since 1926, information on the number of labour disputes during
earlier years has to be taken from the approximate data of the
Trade Union Council, which relate only to factories. The figures
for 1923 and 1924 are as follows :

Number of workers
affected

Number
of strikes

Year

306
187

1923
1924

153
41

Number of workers
employed by
the undertakings
affected at
the outbreak
66,779
38,458

For later years there are official strike statistics, from which
the following figures are taken :
Year

1926
1927
1928
1929
1930

.
.
.
.
.

Number
of disputes

Number
of undertakings
affected

Number
of workers
affected

Number
of working
days lost

56
84
31
63
35

91
147
77
164
39

9,580
24,803
10,289
15,065
1,250

51,965
294,941
131,174
149,204
79,596

I n estimating the importance of these results it should be
borne in mind that of the conciliators provided for by the 1923
Order only those for the industrial inspectors in Budapest were
appointed, and none for the other industrial inspectors.
Hungarian employers have on the whole adopted a hostile

305

HUNGARY

attitude towards the development of t h e conciliation system.
As early as 1917 the annual report of the Hungarian Iron and
Engineering Industries noted t h a t in most cases the employers
preferred to dispense with the official machinery and to deal
directly with the workers. The employers have since consistently
maintained this attitude. I t was also owing to the opposition
of the employers t h a t the 1923 Bill on the right t o work, conciliation and arbitration, and trade associations failed t o become
law.
The workers, on the other hand, complain of the low level
of their w a g e s 1 and of the absence of suitable machinery for
the establishment of labour demands.
The late Under-Secretary to the Minister of Commerce, Desiderius P a p , a man with a wide knowledge of Hungarian labour
conditions, expressed his opinion of the conciliation system in
his country as follows : " Machinery for conciliation should be
set up in the form of permanent institutions, and wherever possible
each separate industry should have its own conciliation committee,
consisting of employers and workers in t h a t industry under the
chairmanship of a legal and economic expert. These conditions
are far from being realised in Hungary. . . . The efficient
organisation of the employers leaves them with no interest in
the establishment of an effective conciliation system. Such an
interest is to be found only on the side of the workers who, however,
are still waiting in vain for the official conciliation procedure
already sanctioned by law to be applied in fact. "

§ 4. — Conclusion
Conciliation and arbitration procedure in Hungary has not
kept pace with the development t h a t has taken place in many
other countries during the past ten years. The Order of 1923,
which was intended to provide uniform conciliation machinery
for the whole country, was applied only in the Budapest district.
The provinces still lack conciliation machinery capable of functioning on the lines laid down by the Order. The slow development
of State conciliation has favoured the growth of a complex
unofficial system of conciliation and arbitration, which has established itself in all the more important national industries.
1

2.1

Cf. Szarkservezeti

Értésitô — Qewerkschaßsanzeiger,

1930, No. 2.

306

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

BIBLIOGRAPHY
FEBENCZI, Imre. Das Koalitionsrecht in Ungarn.
P A P , D . Das Einigungsund ¡Schlichtungswesen in Ungarn.
Manuscript.
Budapest, 1925.
MANDELLO, Jules. Conciliation et arbitrage industriels en Hongrie (Congrès
International d'Anvers sur la législation douanière et la réglementation du travail).
1894.
Kösgazdasdgi
Enciklopédia.
Annuaire statistique Hongrois.

CZECHOSLOVAKIA
§ 1. — Economic Background and Development
The lack of uniformity in the machinery for the settlement of
labour disputes in t h e Czechoslovak Republic can be attributed
to historical causes. The Government, faced by t h e host of
administrative problems involved in t h e consoUdation of t h e
newly constituted State which emerged from the political revolution, left t h e employers and workers considerable freedom t o
devise their own machinery for conciliation and arbitration.
The obstacles in t h e way of uniform methods of settlement
may b e briefly described. These can be traced partly t o national
and social differences in t h e composition of t h e workers' organisations 1 and partly t o variations in the economic structure of t h e
different parts of t h e Republic. Thus t h e Provinces of t h e Old
Kingdom (Bohemia, Moravia a n d Silesia) are predominantly
or t o a large extent industrial, while Slovakia and Sub-Carpathian
Russia are almost exclusively agricultural. I n 1921 41 per cent.
of the population in Bohemia was employed in industry (29.7 per
cent, in agriculture), in Moravia 35.8 per cent. (38 per cent, in
agriculture), a n d in Silesia 50.7 per cent. (21.9 per cent, in agriculture), while in Slovakia 60.6 per cent, of the population was
employed in agriculture and only 17.7 per cent, in industry. In
Sub-Carpathian Russia 67.7 per cent, of t h e population was
dependent on agriculture and 7.7 per cent, on industry.
In some branches of industry machinery for conciliation
and arbitration was devised under t h e supervision of the local
autonomous public bodies, with t h e result that here again there
is a lack of territorial and functional uniformity in the organisation
of t h e machinery.
Despite the fact t h a t a t one time t h e territory of the Czechoslovak Republic, with t h e exception of t h e little Province of
Hultschinen 2, which is negligible on account of its small area and
1

Cf.

INTERNATIONAL

LABOUR

OFFICE :

Freedom

of Association,

Vol.

Ill,

pp. 187 e t seq.
2
Formerly p a r t of t h e German Empire, b u t ceded t o Czechoslovakia by
the Treaty of Versailles, Article 83.

308

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

population (50,000 in an area of 340 square kilometres as against
a population of 14,730,000 and an area of 140,400 square kilometres
in the Republic), formed part of the old Dual Monarchy of AustriaHungary, the history of conciliation and arbitration in Czechoslovakia is not exhausted by a reference to the situation in Austria,
since the social evolution of the territory that now constitutes
the Czechoslovak Republic differs in some respects from that of
other parts of the former Dual Monarchy.
It was in Brunn (Brno), Bohemian Leipa (Ceska-Lipa) and
Reichenberg (Libérée) that the first serious labour disputes in
Central Europe arose, in 1843 and 1844. Although at the time the
Government, with the aid of the military, succeeded in quelling
the disturbances, which were caused by the introduction of
mechanical methods of production, it was compelled to appoint
a commission of enquiry into the conditions of work in the industries
involved. In view of the state of opinion there could not yet
be any question of setting up a joint commission ; some decades
had to pass before the principle that the workers and employers
should participate in the settlement of collective labour disputes
came to be generally accepted.
This principle first found concrete expression in the collective
agreement of 1900 in the printing trade. An earlier agreement
in that trade (1895) had already provided for the setting up of an
arbitration board, but this body was competent to deal only with
individual disputes, whereas the 1900 agreement also referred
to the settlement of collective disputes. Later agreements further
extended the functions of the arbitration board. Agreements
concluded in 1905 and 1913 made recourse to arbitration compulsory, but such provisions were still the exception, and in 1914
only one-fifth of the total agreements concluded (18.8 per cent, in
1913) contained clauses on arbitration.
Legislation for the settling of collective labour disputes was
passed only in the mining industry. The executive committees
of the associations set up in the mining industry by the Act |of
14 August 1896 were authorised to act as conciliation boards in
the event of labour disputes affecting " all the workers, or large
groups of workers, in one or more undertakings belonging to the
association " . A s these boards did not, however, inspire the workers
with confidence, they were still of little importance when the
Act was repealed on 25 February 1920.
On the other hand the activities of the industrial inspectorate,
instituted in 1883 (Act of 17 June 1883, Reichsgesetzblatt, p. 117),

CZECHOSLOVAKIA

309

were of the utmost importance for industry generally. Under
section 12 of that Act the industrial inspectors were charged with
" the equitable settlement " of disputes between employers and
workers. Acceptance of the inspectors' proposals for settlement
was not made compulsory.
The industrial courts already functioning under the Dual
Monarchy dealt only with judicial disputes between individuals,
and may therefore be left out of account in a survey of conciliation
and arbitration machinery in the Czechoslovak Republic.
The war gave a new impetus to the movement for the peaceful
settlement of labour disputes. The militaryx control of undertakings
left the workers without defence against contraventions of the
provisions of collective agreements by employers. A protest was
made by the workers as early as 1914, but without success. In
1915 the Federation of Czechoslovak Trade Unions requested the
Government to establish a joint arbitration court for the settlement
of labour disputes, and in 1916 it repeated its request. In 1917 the
demands of the unions received more attention on account of the
news concerning the Russian Revolution. As in other parts of
the Dual Monarchy, " committees for the investigation of complaints were appointed to give decisions in regard to requests
brought forward by individuals or groups and to take official
action ". Their decisions were final and enforceable by the public
authorities. These bodies were abolished at the end of the war,
so that at the beginning of 1919, when a serious dispute arose in
the metal industry, no means of peaceful settlement were available.
This situation led to the passing of legislation for the setting up
of a wages arbitration court for the metal industry (Act of 5 December 1919, No. 655). Although this Act applied only to the dispute
in question, section 14 empowered the Minister for Social Welfare
to extend its provisions also from time to time to other disputes
arising in the metal industry.
This partial solution was not however considered satisfactory.
Despite their deficiencies, the wartime committees for the investigation of complaints had led to a widespread demand for a general
and uniform solution of the problem. Thus in 1921 the Social
Pohcy Committee of the Chamber of Deputies adopted the following
resolution : " The Committee requests the Government to present
at the earliest possible moment a Bill for compulsory arbitration
between employers and workers in case of a strike or lock-out ".
1

Cf. the monographs on Austria (p. 281) a n d H u n g a r y (p. 298).

2 1 *

310

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

I n the same year the provisions of section 12 of the Industrial
Inspection Act of 1883 were extended to Slovakia and SubCarpathian Russia.
In spite of these preparatory suggestions, the legislation drafted
with a view to establishing a general system of compulsory arbitration was not put into force. I t should be noted however t h a t
in the meantime legislation concerning conciliation and arbitration
was passed or existing provisions modified in certain important
branches of industry. Thus the incomplete regulations governing
home work and mining were replaced by more satisfactory provisions, and in the building industry legislation on the subject
was also passed.
The Act of 4 July 1931 concerning labour courts introduced
uniform conciliation regulations in all occupations, since the
special conciliation laws t h a t have been passed cover only a
certain number of occupations. For example, in agriculture and
forestry the organisation of conciliation and arbitration machinery
has so far been left to the autonomous public bodies.
Collective agreements also paid increased attention to the
problem of the settlement of disputes, so t h a t in 1919 39.7 per cent.
of the collective agreements in force contained arbitration clauses.
As a result of this development there are at present, if the activities
of the factory inspectors are excluded, three kinds of bodies for
the settlement of labour disputes in Czechoslovakia : (1) conciliation and arbitration boards appointed under the legislation on
the subject ; (2) conciliation and arbitration boards set up by
autonomous public bodies ; (3) non-Covernmental conciliation
and arbitration boards, which are usually set u p under the terms
of collective agreements.

§ 2. — The System in Force
T H E SETTLEMENT OF D I S P U T E S IN V I R T U E OF LEGISLATION

Home Work
The Act of 12 December 1919 respecting the regulation of
conditions of work and wages in home w o r k 1 constitutes the
first systematic attempt to deal with the problem of conciliation
and arbitration in a specific branch of industry. In the event
1

Legislative

Series, 1920, Cz. 2.

CZECHOSLOVAKIA

311

of disputes concerning conditions of work and wages " between
particular groups of workers and employers and between individual
employers and their workers ", district committees are to prepare
the way for a good understanding, or to settle disputes by awards
(section 24). Until recently, therefore, the district committees have
been competent as regards the settlement of both individual and
collective labour disputes, but this competence has now been restricted by t h e Labour Courts Act of 4 July 1931 1 , section 44 of
which repeals the Home Work Act so far as concerns jurisdiction
in the settlement of disputes between employers and individual
workers. These are now subject to the jurisdiction of the labour
courts. The district committees remain competent, on the other
hand, for t h e settlement of collective labour disputes.
These committees are public bodies, but special trade boards
are sometimes appointed for separate branches of home industry.
The committees consist of nine members, designated by the
political authority of second instance for a period of four years.
A third of the members are appointed from representatives of the
employers, a third from representatives of the workers, and a
third consists of persons acquainted with the problems of the
industry but not belonging to either the employers' or t h e worker's
groups.
If either of t h e parties concerned refers a dispute of the kind
mentioned above to the district committee, the chairman, who
is designated by the political authority of second instance from
among the neutral members, first endeavours personally to bring
about a settlement of the dispute. If he fails t o settle t h e difference
he must call a private meeting of the committee to discuss the
matter. The standing orders of the committee are governed
by the provisions of the Code of Civil Procedure (section 5 of the
Administrative Order). According t o these provisions t h e membersof the committee, in issuing their decision, are not bound by
previous instructions, so t h a t t o some extent they exercise judicial
functions. The taking of evidence is also regulated by the Code
of Civil Procedure ; witnesses may be called and examined upon
oath. When the proceedings are concluded the committee issues
an award.
As the proceedings of these committees are to some extent
in the nature of judicial action, provision is made for appeal.
Within a period of fourteen days from the issue of the award
1

Ibid., 1931, Cz. 3.

312

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

of the district committee an objection thereto may be lodged
with the competent central committee for the trade concerned
(section 28).
Central committees are appointed in the same manner as
district committees, with this difference that their members are
not nominated by the political authority of second instance (i.e.
the intermediate authority) but by the Minister for Social Welfare
(i.e. the central authority) (sections 9-13). In the investigation
of complaints no evidence is heard, the decisions of the central
committee being based largely on documentary evidence (section
14). Their enforcement is subject to the approval of the Ministry
of Social Welfare. The Ministry in withholding or granting its
approval must base itself exclusively on the provisions of the
law (section 17).
The arbitration awards of a district committee have the force
of law. If their provisions are infringed the injured party is
entitled to damages (section 33). Although contraventions of
the provisions of collective agreements between the parties are
punished by fines or imprisonment, no penalties are imposed for
contraventions of the awards of a district or central committee
(section 34 (2)).
Mining Arbitration Courts
The Act of 14 August 1896 already mentioned contains provisions for the settlement of collective labour disputes in the mining
industry ; the results achieved under these clauses have however
been of slight importance. A change in this respect was brought
about by the Act of 3 July 1924 1, which replaced the Mining
Arbitration Courts Act of 25 February 1920 2. The competence
of the mining arbitration courts is still strictly limited by the
new Act ; for example, the Act does not empower them to settle
disputes between the parties to a collective agreement with regard
to the future collective regulation of conditions of employment.
But the courts have considerable influence in preventing collective
labour disputes, since under section 2 (a) of the Act of 3 July
1924 3 they are competent to hear appeals against the decisions
of district councils under section 19 (4) of the Act respecting
works and district councils in the mining industry of 25 February
1920 4. Such decisions may concern the part played by the district
1

Legislative Series, 1924, Cz. 2.
Ibid., 1920, Cz. 2.
Ibid., 1924, Cz. 2.
*Ibid., 1920, Cz. 3.

2
3

313

CZECHOSLOVAKIA

councils in concluding collective agreements respecting wages
and working conditions and in securing the observance of such
agreements.
The mining arbitration courts are official bodies. They consist
of five members ; two representatives of the employers, two
workers' representatives and a chairman, who is a professional
judge. A representative of the district mining authority acts
as technical adviser. An appeal from the decision of the mining
arbitration court lies with the Superior Mining Arbitration Court,
whose members, in addition to the representatives of the parties
to the dispute, include three professional judges. As these courts
are only indirectly concerned with the settlement of collective
labour disputes, it is not necessary to enter into the question
of the procedure adopted.
On the other hand the wages committees set up under section
2 of the Administrative Order under the Act respecting works
and district councils 1 are of direct importance for the settlement
of collective labour disputes. The function of these committees
is to mediate in disputes concerning job and day rates of wages
t h a t affect " individual workers or groups of workers " and, if
necessary, to issue a decision. They consist of four members,
two of whom are members of the works council and two delegates
of the management. An appeal from the decision of the wages
committee may be made to the Mining Arbitration Board.
Act for the Encouragement

Building

The efforts made to relieve the housing shortage in Czechoslovakia after the war led to the passing of an Act for the encouragement of building. For the success of this Act it was essential
that building operations should proceed without interruption.
For this purpose machinery for the settlement of disputes had
to be established, which to-day takes the form of wages arbitration
courts, governed by the Act of 10 April 1930 (sections 12 et seq.).
These wages arbitration courts are official bodies, and are
entitled to the support of the public authorities and courts in
carrying out their decisions. The chairman of t h e court is a professional judge nominated by the Ministry of Social Welfare,
in agreement with the Ministry of Justice. The assessors are
nominated b y the organisations of the employers and workers
concerned (section 14). The court may be convened by the Ministry
1

Ibid., 1920, Cz. 4.

314

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

of Social Welfare as often as it may consider necessary, or by
the chairman of the court on the application of the organisations
of employers and workers (section 16).
The wages arbitration court is competent, in any undertaking
in the building industry :
(1)

to prescribe conditions of employment and wages in so
far as a collective agreement fails to provide for the
same ;
(2) to decide in collective disputes arising out of collective
agreements ;
(3) to interpret collective agreements (section 12 (1) ).
The parties are bound to refer collective disputes to the wages
arbitration courts if they have exhausted all the means provided
by the collective agreement for the settlement of disputes ; in
other words, disputes must be referred to non-governmental
conciliation and arbitration boards before they are brought before
the official wages arbitration court (section 13 (2) ).
I t is not compulsory for the parties to refer a collective
dispute to the arbitration court if one of them is engaged in
a strike or lock-out. I n this case the court may not decide the
dispute unless both parties agree in writing t o submit to its jurisdiction (section 13 (3) ).
As regards the procedure of the wages arbitration court, the
following facts may be noted. The proceedings are conducted
by a court of five, consisting of a chairman and two assessors
each from the employers' and workers' groups (section 17). The
parties may be represented by authorised agents, who may not,
however, be barristers (section 21).
For the whole of the Czechoslovak Republic, four wages
arbitration courts have been set up ; one in Prague for Bohemia,
one in Brunn (Brno) for Moravia and Silesia, one in Pressburg
(Bratislava) for Slovakia and one in Uzhorod for Sub-Carpathian
Russia.
(4) Among the bodies for the settlement of collective labour
disputes established under existing legislation mention should be
made of the General Joint Committee for Wages Disputes and
Complaints in Slovakia at Pressburg (Bratislava). As this body
exercises functions t h a t in other parts of the Republic belong
to bodies set u p not by legislation, but by agreement between
the employers' and workers' organisations concerned, reference
will be made to it elsewhere.

CZECHOSLOVAKIA

315

T H E LABOUR COURT AS CONCILIATION AUTHORITY

On 5 December 1930 the Government decided to submit t o
the Senate a Bill concerning labour courts. The Bill as originally
drafted provided for compulsory arbitration in collective disputes
by the labour courts, but during the discussion in the Cabinet
this provision was dropped, owing to the opposition of employers.
On the other hand, a provision empowering the labour courts
to institute conciliation proceedings by agreement between the
parties was retained.
According to section 39 of the Labour Courts Act of 4 J u l y
1931 1 , collective labour disputes between one or more employers
or one or more of their trade associations and one or more trade
associations of workers can a t the request of either party be submitted to the labour court in whose district the dispute arose
for the purpose of settlement by agreement. An agreement
concluded before the labour court in such disputes is binding
on both parties for a period of six months, unless the agreement
itself fixes some other period. During this period the conditions
of employment of the members of the association concluding
the agreement are governed by its provisions.
This provision is the first step towards uniform legislative
regulation of conciliation in Czechoslovakia on the basis of the
voluntary collaboration of the parties concerned.
I t contains
moreover, the first germ of the legal recognition of collective
agreements, since it makes an agreement concluded before the
labour court legally binding for the period fixed therein and
a standard for the conditions of employment of the members
of the associations concluding the agreement.
The composition of the labour court for conciliation in collective
disputes is the same as for individual and justiciable disputes.
The court is composed of a chairman chosen by the Minister of
Justice among the professional judges in the place where the
labour court is situated — with due reference to their knowledge
of labour law and of social conditions — and of one assessor each
for employers and workers, both of whom are also appointed by
the Minister of Justice on the recommendation of the central
associations (sections 5, 6 and 16 of the Act).

Legislative

Series, 1931, Cz. 3.

316

CONCILIATION AND ARBITRATION EST DIFFERENT

CONCILIATION

AND ARBITRATION

MACHINERY

COUNTRIES

ESTABLISHED

AUTONOMOUS OFFICIAL B O D I E S

The arbitration courts considered so far were official bodies
set u p by legislation. An account will now be given of the bodies
for conciliation and arbitration in industrial disputes established
by autonomous official bodies. In this connection it should be
noted t h a t the Government has done much t o consolidate the
machinery in question, which functions in agriculture and the
sugar industry.
Agriculture
I n agreement with the Bohemian Provincial Advisory Council
for Agriculture, the Bohemian Administrative Committee on
20 March 1919 set u p a Joint Arbitration Committee for the
settlement of collective labour disputes. Similar machinery was
established in the other Provinces of the Old Kingdom.
The functions of these bodies were confined to assisting in
the drafting of general agreements, the determination of conditions
of employment in particular undertakings being left to the local
organisations. If disputes arose in this connection, the Central
Government appointed joint district committees to work under
the administrative authorities of the district. Further, special
joint district committees were set u p for agricultural salaried
employees.
The duty of these committees is to intervene in collective
wage disputes when the district authorities consider such action
necessary. The committees must first endeavour to bring about
a friendly settlement ; if they fail they must issue an arbitration
award. The procedure is governed b y the provisions concerning
arbitration of the Code of Civil Procedure and the decisions issued
have the same legal effects as an arbitration award under t h a t
Code. When the decisions of the district committees affect the
provisions of a general agreement for the whole Province, an appeal
may be made to the Provincial Joint Committee. The above
applies to Bohemia. As was explained elsewhere, similar machinery
exists in Moravia and Silesia, but in these Provinces the Provincial
Advisory Council intervenes directly in collective labour disputes,
whereas in Bohemia it delegates this function to the Provincial
Joint Committee, set up for the special purpose of considering
and deciding disputes. In Slovakia and Sub-Carpathian Russia

CZECHOSLOVAKIA

317

similar machinery has been established by the Central Government
direct.
Forestry
With regard to forestry, the Ministry of Social Welfare, under
the Order of 6 April 1922, established machinery modelled on
the agricultural conciliation and arbitration committees. Disputes
are settled in the first instance by district committees, from whose
decisions an appeal may be made to a Joint Committee of the
Ministry of Agriculture. A special feature of the last-mentioned
Committee is that the Land Office (i.e., the authority in charge
of agrarian reform) may send a representative to the meetings
of the Committee to act in an advisory capacity.
Sugar Industry
The machinery established in the sugar industry closely
resembles that operating in agriculture. Here again arbitration
committees have been attached to the Provincial Corporations
(autonomous official bodies), but these differ from those in
agriculture in that they were not set up by the Government.
NON-GOVERNMENTAL CONCILIATION AND ARBITRATION MACHINERY

Settlement of Disputes by Means of Collective Agreement
In the section dealing with the history of conciliation and
arbitration it was observed that until recent years comparatively
few collective agreements in the Czechoslovak Republic contained
clauses relating to the settlement of collective disputes. It should
be noted, however, that the agreements which did possess such
clauses invariably operated over a wide area.
The following broad classes of agreement may be distinguished :
(a) Collective agreements providing for the settlement of
disputes by ad hoc arbitration committees.
The most important of these is the agreement in the porcelain
industry, which has some interesting features. Before the proceedings are opened, the executive of the arbitration committee (a
permanent body) must enquire whether the committee has already
been called upon to decide a similar difference. Should this be the
ease, the executive must forward the previous award to the parties
concerned and request them to state whether they desire a fresh
decision. If the answer is in the affirmative, an arbitration committee is appointed to conduct the negotiations.

318

CONCILIATION AND ARBITRATION IN DIFFERENT

(b)

COUNTRIES

Collective agreements providing for the appointment of a
permanent arbitration board.

To this class belongs the agreement in the chemical industry
which provides for the establishment of district conciliation boards
and a central conciliation board. Only the central board is competent to issue a decision.
The very elaborate agreements concluded in the printing
industry also provide for the setting up of permanent bodies.
Disputes are decided by arbitration committees, subject to a right
of appeal to a joint industrial board, which supervises the observance of collective agreements.
In the metal industry also a permanent arbitration board has
been set u p by collective agreement.
No general rules can be laid down with regard to the legal
effects of decisions issued by boards set up under collective agreements as mentioned in (a) and (b) above. Some agreements
refer to the provisions of the Civil Procedure Code in order to
secure observance of the decisions arrived at.
(c)

Collective agreements t h a t leave the parties free to refer
disputes to an outside body for conciliation or arbitration.

In this category should be mentioned the collective agreements
in the textile, hollow-glass and spirit industries. The bodies to
which disputes are referred under these agreements are the industrial inspectorate, the ordinary courts or the Joint Central Committee for all industries in Prague. This Committee is a central
body for the whole of industry, set u p by the employers' and
workers' organisations without a n y assistance from the State, and
its activities must therefore be described in this section.
General Machinery

for the Whole of

Industry

The Joint Central Committee in Prague
In the spring of 1919 representatives of the Czechoslovak
Manufacturers' Association and the two most important Czechoslovak federations of trade unions (the Odborevé Sdruzenî Ceskoslovenshé and the CeskoslovensJcá obec dêlnicka) met to devise suitable
machinery for the peaceful settlement of labour disputes.
The outcome of this conference was the setting up of a Joint
Central Committee for all industries in the Provinces of the Old
Kingdom. A factory inspector was appointed as chairman, acting
not in his capacity as a civil servant, but merely as an expert
appointed by the two parties. Disputes are referred to the Central

319

CZECHOSLOVAKIA

Committee under the provisions of collective agreements or if the
two parties agree to bring a particular difference before it.
As the activities of the Central Committee are held t o be
arbitration proceedings under the Code of Civil Procedure, the
parties must agree in writing to abide by the decision of the arbitration court (section 577 of the Code). For some industries (e.g.
the spirit industry) in which the competence of the Central Committee to settle disputes is recognised by collective agreement,
permanent assessors from the industry concerned are added to
the Committee. The chairman conducts the proceedings. The
competence of the members is confined to the investigation of
facts and to discussion and voting. Decisions are taken by a
majority of votes ; in default of a majority the chairman has a
casting vote.
During the first few years of its existence the Central Committee
aroused widespread interest. Disputes were referred to it most
frequently by the trade associations in the textile industry. Next
in order of frequency came disputes in the food and drink industry,
the wood industry and the cement, metal, chemical and paper
industries. In recent years, however, the number of differences
submitted to the Central Committee has declined.
The General Joint Committee in Pressburg

(Bratislava)

The jurisdiction of the Central Committee in Prague extends
only to the Provinces of the Old Kingdom. As the need for a
conciliation and arbitration board for the whole of industry was
also felt in Slovakia and the parties concerned did not, as in
Bohemia, themselves provide machinery for the voluntary settlement of disputes, the Government appointed a General Joint
Committee in Pressburg (Bratislava) to investigate wage disputes
and complaints. The functions of this Committee are similar to
those of the Prague Central Committee. The Ministry of Social
Welfare and the Ministry of Commerce and Industry each send a
representative to the committee and designate one of these as
chairman. The rules governing voting are peculiar. Decisions
are taken by a majority of votes, but the chairman takes no p a r t
in the voting, even when both sides cast an equal number of votes.
In this case the second Government representative present has a
casting vote.
The Committee itself decides whether an appeal may be allowed
against its award. If it decides in favour of an appeal, it is made
to the Joint Central Committee in Prague (see above).

320

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

The Joint Committee in Uzhorod
This Committee is competent to take measures for the amicable
settlement of all collective differences arising between groups
of employers and workers in factory undertakings in Sub-Carpathian Russia. The employers appoint two-thirds of the members
and cover two-thirds of the expenses of the Committee and the
workers one-third. The Committee is mentioned here because
its jurisdiction extends to matters that in other parts of the
Czechoslovak Republic are normally dealt with by bodies appointed
by agreement between employers and workers, instead of by the
Government.

§ 3. — Results and Opinions
Owing to the variety in form of the existing machinery for
conciliation and arbitration in Czechoslovakia, it is difficult to
give statistical data concerning the results achieved. Up to the
present, moreover (the end of 1930), no statistical returns of the
activity of the conciliation and arbitration boards have been
published, but the reports of the factory inspectors contain some
data relating to their activities in the sphere of conciliation and
arbitration, from which the following table has been compiled :

Total number of industrial disputes
Including :
Strikes
Look-outs
Number of disputes not involving an interruption of work
Number of disputes referred to
t h e factory inspectors
. . . .
Number of these disputes accompanied by strikes
Number of disputes settled by
the factory inspectors
. . . .

1924

1 925

1926

Í927

1928

1929

652

573

415

447

535

365

294
18

236
16

170

225
16

157

340

321

310

275

227

185

120

185

120

22
255

294
216
213
121
93

7
201
154
83

121
93

It will be noted that the efforts of the factory inspectors were
mainly directed towards the prevention of open strife. A considerable number of disputes were however referred for settlement
to other governmental or non-governmental conciliation and
arbitration boards.

321

CZECHOSLOVAKIA

From the following figures referring to the activities of the
central and district committees for home work in 1924. it is
clear t h a t the official conciliation and arbitration boards met with
initial difficulties, which were only gradually overcome.
District committees
Number Number of Number of
of comcommitamicable
mittees
tees that
settlethat took remained
ments
action
inactive
reached
Textile manufacture . .
Clothing trades
Glass industry
Manufacture of
mother-of
pearl goods.
Boot and shoe
industry . .

4
3
4

4
5
I

4
2
1

Central committees
Number
of
decisions
issued

Number
of
disput es

4
2
3

Wage
agreement s
concluded

1
1

The small number of decisions issued is particularly striking ;
in practice these committees mainly exercised mediative functions.
In the case of the Joint Central Committee in Prague, on the
contrary, the number of decisions issued in collective disputes was
13 in 1920, 55 in 1921 (including 4 appeals against decisions of the
General Joint Committee in Pressburg (Bratislava)) and 29 in
1924. For later years no figures are available, since the task of
compiling conciliation and arbitration statistics, which has figured
on the programme of the Czechoslovakian Government Statistics
Office for some years, has not yet been begun.
There is a considerable difference of opinion in interested quarters
with regard to the influence exercised by the central bodies for
conciliation and arbitration set up by the Government. Employers
and workers have differed even with regard to the wartime
committees for the investigation of complaints, t o which reference
was made in the introduction. I n 1921 t h e Prümyslowj véstnîk
(Industrial Gazette), the organ of the Czechoslovakian manufacturers, welcomed the abolition of these committees, which in its
opinion h a d been so unsatisfactory t h a t " no Government desirous
of promoting economic progress would dare to reintroduce them "
(Vol. V I I I , Prague 1921, p . 148).
On the other hand the Odborové sdruzenî ceskoslovenské, the
organ of the Czechoslovak Trade Unions, stated t h a t " although
the work of the committees has not always been satisfactory, they
2 2.

322

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

have nevertheless succeeded in preventing a great deal of highhanded action " (Vol. XXV, 1921, p. 115).
Notwithstanding the unfavourable comment mentioned above
on the committees for the investigation of complaints, the governmental machinery for the settlement of disputes subsequently
established in the building industry appears to have functioned to
the satisfaction of both sides. The report of the factory inspectors
for 1923 (p. 181) sums up the situation as follows : " Although
at first the workers did not regard the wages arbitration courts
with any great favour . . , they nevertheless frequently
availed themselves of their services. The employers on their part,
although demanding, whenever occasion offered and especially
when asked for their opinions by the Chambers of Commerce and
Industry, that the wages arbitration courts should not be renewed,
nevertheless came to them with their grievances as soon as the
courts were re-established. As, with few exceptions, the decisions
issued have been faithfully observed by both sides, it may be
considered that the value of these bodies has been proved in
practice. "
While the employers have occasionally raised objections to
governmental machinery for conciliation and arbitration, no such
complaints have been voiced with regard to the boards set up by
the autonomous public bodies. In a report issued in 1921 the
Czechoslovak Manufacturers' Association admits that " in the
sugar industry during the whole of the period since the new State
came into being there have been neither strikes nor wage disputes
threatening to interfere with production ". It should be noted
that in the sugar industry, as in agriculture, the conciliation and
arbitration boards of the autonomous public authorities have
taken over the duties performed in other industries by governmental bodies.
Among non-governmental bodies for the settlement of disputes
the activities of the Prague Central Committee were particularly
fruitful during the first few years of its existence. The report
of the factory inspectors for 1925 stated the importance of that
body was growing every year. The number of collective agreements
stipulating that disputes were to be referred for final settlement
to the Central Committee was on the increase.
According to the same report " the parties sent representatives
to the meetings of the Committee who were fully acquainted both
with the technical and with the administrative aspects of the
dispute ". The report concludes as follows : " Particularly

CZECHOSLOVAKIA

323

striking were the knowledge of the law shown by the workers'
representatives and the broad views taken of the questions at
issue. Thus the Committee, after years of laborious effort, is at
at length developing into what it should be : a tribunal that settles
differences by agreement wherever possible and whose procedure
is more elastic than the rules laid down by legislation or collective
agreement."
In recent years the number of disputes dealt with by the Central
Committee has declined.

§ 4. — Summary
The situation with regard to conciliation and arbitration in
the Czechoslovak Republic may be summed up as follows :
Conciliation and arbitration are recognised in all Czechoslovak
industries as normal methods of promoting the settlement of
collective disputes. No uniform machinery for the conciliation
and arbitration of disputes has been established. Where the State
has not set up official boards or courts the parties concerned have
themselves taken steps to establish the necessary machinery, or
have set up boards in agreement with the autonomous public
authorities.
In principle no distinction is drawn between conciliation and
arbitration, but settlement by means of an award is invariably
preceded by an attempt to arrive at an amicable agreement. The
varying forms of the existing machinery are adapted to the needs
of the separate industries and to varying local conditions. In the
highly industrialised Provinces of the Old Kingdom the autonomous public authorities are granted considerable freedom of action.
In Slovakia and Sub-Carpathian Russia the State takes a predominant part in the settlement of disputes. The Bills for the establishment of uniform conciliation and arbitration machinery drafted
iter the war were never laid before Parliament.
The Labour Courts Act of 4 July 1931 contains a provision
under which the parties may by mutual agreement refer collective
labour disputes to the labour courts for conciliation. This provision
contains the germ of a uniform legislative regulation of conciliation
on the basis of the voluntary collaboration of the parties.

324

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

BIBLIOGRAPHY
CHYTIL, Alois. Závodní vfìboy podle prava íeskoslovenského a pfehledem judU
katury rozhodtick komiai. Briinn, 1922.
D U N D E R , Hampl. Kolektivni smlouvy pracovni. Prague, 1924.
DVOTA, V. Sbirkanálezüvrchníhorozhodcíhosoudu
báníkjjch bratrakjjch pokloden,
Prague, 1927.
K O Ï B N E B , E . Nov¿ zákon o ¿ivnoatenak¿ch aoudech a aoudnictví ve aporech z
¿ivnoatenakého poméru pracovniho, uëebniho a námezdnlho z dne 27. Uatopadu 1896
6 218, v. z. 2 vgdani.
Prague.
K O M I N E K , K a r l . Kollektivverträge
für landwirtachaftliche
Arbeiter. P r a g u e ,
1919.
MEISSNER and W I N T E R . Rukovêt ¿ivnoatenakého aoudce. Prague, 1901.
SKALA, J . Strubné dëjiny dêlnického hnuti èeakého. Prague, 1922.
ToBOiiKA, Dr. Z. Poèatky dêlnického hnuti. Prague, 1923.
TuéNY, A. Vfjvoj délnické a zfizenecké otdzky v prvém pétileti Ceakoalovenské
republiky. Prague, 1924.
W E Y R , Dr. Fr. Ceakoslovenaké pravo správni. Cást vgeobecná. Brunn, 1922.
W I N T E R , Dr. Leo. Poidtky hnuti dêlnického (Académie, r o í . I . str. 319).
WoKtTREK, Ludwig. Das Arbeitarecht der Tachechoalowakischen
Republik,
B r u n n , 1928.

POLAND

§ 1. — Economic Background and Development
Poland, as reconstituted by the Peace Treaties, has an area of
388,390 square kilometres. This area comprises former Russian
Poland (Congress Poland), Galicia, Upper Silesia, former Prussian
Poland and part of the Vilna area. On 1 J a n u a r y 1928 the country
had a population of 30,213,000.
Although Poland is essentially an agricultural country, it
nevertheless has eight very large industrial centres. The principal
industries are the mining industry (especially coal-mining) and the
textile industry, while the chemical factories, the metal industry
and the refineries rank next in importance. The total number of
workers may be estimated at about three and a half million.
Of these one and a half million are agricultural workers, one
million are industrial workers, 400,000 State officials and employees
in the independent public services, and 250,000 professional workers.
Under the three systems of government t o which the present
Poland was subject before the war, employers' associations were
able to develop their activity without any particular restrictions.
At the present time, most of the associations formed by employers
in the different industries of the country are affiliated to central
organisations, of which the most important is the Central Union
of Polish Industries, Mines, Commerce and Finance (Centralny
Zwiqzelc Polskiego Przemyslu, Gornictwa, Handln i
Finansow)
formed in 1920, which, in its turn, is affiliated to the International
Organisation of Industrial Employers.
The local organisations of artisans are grouped in a Central
Society of Artisans in the Polish State (Centralne Towarzystwo
Bzemieslnicze w Panstwie Pólslciém).
The Chambers of Industry and Commerce, the Chambers of
Agriculture and the Chambers of Artisans, created under the
Orders of the President of the Republic issued in 1927 and 1928,
have made considerable progress in the country generally.
Finally, agricultural employers' associations have joined to
2 2 *

326

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

form several powerful central organisations such as the Union of
Polish Agricultural Organisations (Zwiqzek Polskich Organiszacji
Bolinczych), the Central Agricultural Society (Centralne Towarzystwo Bolnioze), and the Controlling Council of Landed Proprietors' Organisations (Bada Naczelna Organizacji
Ziemianskich).
For the purpose of concluding collective agricultural agreements,
landed proprietors are as a rule represented by their district
organisations.
The development of the trade union movement before the war
was hampered by rigid restrictions, particularly in the territories
under Russian domination. After the reconstitution of Poland the
movement made considerable progress. The unions are grouped
in three large national organisations, according to their political
opinions.
(a) The Federation of Trade Unions of Poland
(Zmqzek
Stowarzyszen Zawodowych w Polsce), represents the Socialist point
of view. I t is affiliated to the International Federation of Trade
Unions of Berlin. A certain number of Communist workers,
however, belong to the Federation, and the workers who support
the Jewish Socialist P a r t y " Bund " are now also affiliated to it.
I n 1928 26 central trade unions with a total membership of
237,197 were affiliated to the Federation.
(b) The Federation of Polish Trade Unions (Zjednoczenie
Zawodowe Polskie) was also formed t o protect the interests and
improve the conditions of the proletariat, but, in addition, it has
a pronounced Nationalist outlook. I n 1928 it comprised 8 unions
with 125,897 members.
(c) The Federation of Christian Trade Unions of Poland
(Chrzeécijañskie Zjednoczenie Zawodowe w Bzeczyposvoliteij Polskiej)
and the five central organisations connected with it form part of
the International Christian Socialist Movement. I n 1928 their
total membership was 59,778 and the number of affiliated trade
unions 42.
(d) The Central Federation of Workers' Trade Associations
(former revolutionary section) (Centralne Zrzeszenie Klasowych
Znazków Zawodowych d. frakcja revolucyjna) has 40,000 members.
(e) The General Federation of Labour (Generalna Federacja
Pracy) is a body with a membership of 20,000, to which trade
unions approving the principle of collaboration belong.
(f) The Confederation of Economic Associations (Konfederacja
Zwiqzków Gospodarczych) has 20,000 members.

327

POLAND

Besides these organisations there are several other less important
central trade union associations 1.
To understand the present legislation on labour disputes it is
necessary to go back to the three systems of government in force
in the various territories that now constitute the Republic 2 until
Poland regained its independence. In Russian Poland, as in the
rest of Russia, it was impossible to develop conciliation and
arbitration machinery. Up to 1905 there was no freedom of
association for trade purposes, or indeed for any purpose, and under
the Penal Code of 1903 persons who combined for the purpose of
strikes or incited others to combine were liable to imprisonment.
The territories under Austria and Germany, on the other hand,
enjoyed a more liberal rule, and even before the war lawfully
constituted bodies for conciliation and arbitration were to be
found there. In the part of Poland under the German Empire,
the Revolutionary Order of 23 December 1918 respecting collective
agreements, workers' associations and the settlement of collective
disputes was put into force.
As a result of these different systems of government, the laws
of the new Polish Republic suffered at first from a lack of unity
and even at the present time methods of conciliation and arbitration
have not yet been co-ordinated in all respects.
However this may be, the right of assembly and association was
recognised from the outset by the Polish Constitution of 17 March
1921. A Legislative Decree concerning associations was issued as
early as 3 January 1919, but like the Legislative Decree of 8 February 1919 establishing freedom of association for trade purposes,
it applied only to former Russian Poland. The last-mentioned
Decree was extended in 1923 to former Austrian Poland.
The present legislation on the subject of conciliation and
arbitration in collective labour disputes has reference only to
agriculture. The provisions in question are contained in the Act
of 1 August 1919, amended by the Act of 11 March 1921 3 and
supplemented by that of 18 July 1924 4 (cf. following section).
These same provisions were reproduced by the Act of 23 January
1920, amended on 16 May 1922, which applied them to the settlement of disputes between house owners and caretakers.
A general measure dealing with arbitration and conciliation,
1

Cf.

INTERNATIONAL

LABOUR

OFFICE :

Freedom

of Association,

pp. 209 e t seq.
2
Cf. t h e studies on Germany, Austria and t h e U.S.S.R.
3
Legislative Series, 1921, Pol. 2.
4
Ibid., 1924, Pol. 4.

Vol.

Ill,

328

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

applying to all labour disputes, has been under consideration for
some years. A Bill on this subject was even submitted to the
Constituent Assembly of 1919 ; it proposed to establish a system
of conciliation and to make arbitration compulsory in cases where
conciliation failed, but was not adopted.
Since then, more recent proposals have been considered by the
Council for the Protection of Workers (Rada Ochrony Pracy),
especially after 1928. The latest of these (1929) would cover all
labour disputes, except in agriculture, as well as collective disputes between employers and apprentices. According to this scheme,
disputes are to be brought before " special " and " district "
conciliation and arbitration boards. In each case the Minister of
Labour will appoint the members of the board and determine its
competence. There will also be a Central Conciliation and
Arbitration Board, with headquarters at Warsaw and jurisdiction
over the whole of the Republic. Its duty is to supervise the general
observance of the Act and to hear any appeals against the arbitration awards. Its chairman and vice-chairman will be appointed
by the President of the Republic.
Each board is to be composed of a chairman and one or two
vice-chairmen, a number of assessors selected among employers
and an equal number selected among workers. Each board will
also have a secretariat staff of officials.
The parties may either appear in person before the boards or
send accredited representatives, invested with full powers.
The conciliation proceedings will be initiated either at the
request of the parties to the dispute, or, in the cases specified by
the Act, by the chairman of the board. If an agreement is reached,
it will have the force of a collective agreement between the parties.
In this case a report will be drawn up and signed by the chairman.
Recourse to arbitration will be had, on the one hand, if no
agreement is reached by conciliation (at the request of one of the
parties or of the chairman of the board) or directly, whenever the
parties so decide, or the collective agreement contains a provision
to this effect. Before delivering an arbitration award the board
will have to consider the circumstances of the dispute and will be
empowered for this purpose to call witnesses and experts and even
to request for official information and examine books and documents.
The board must moreover hear the parties to a dispute.
The award will be delivered by a majority vote. An appeal
will he with the Central Board against unjust or illegal awards,
in accordance with the procedure to be established by the Act.

POLAND

329

Finally, if the dispute endangers important public interests, it
may, if no agreement is reached by the ordinary procedure, be
dealt with by special arbitration procedure. For this purpose an
Extraordinary Arbitration Board is to be established, composed of a
member appointed by the Minister of Justice, a member appointed
by the Minister within whose competence the case in question Mes,
and assessors representing the employers and workers.
The whole of the legal proceedings are to be free of cost, the
expenses being borne by the State Treasury.

§ 2. — The System in Force
GENERAL SYSTEM

As has been mentioned above, there is no general system of
legislation instituting conciliation and arbitration in collective
labour disputes, except in the territory formerly under Prussian
rule, in which the German laws 1 are still in force. I n practice
however, the amicable settlement of these disputes is secured by
the labour inspectors ; indeed, the Order of the President of the
Republic of 3 J a n u a r y 1919 and the Order of 14 July 1927 2
concerning labour inspection instruct the inspectors " to endeavour,
in agreement with the parties concerned, to prevent and settle
labour disputes ". Apparently this method is regarded with some
favour by the parties concerned and disputes are frequently
referred to the inspectors. I n any case, conciliation constitutes
an important p a r t of t h e inspectors' duties. If their efforts a t
conciliation fail, the Minister of Labour intervenes to secure the
amicable settlement of the dispute.
SPECIAL LEGISLATION (AGRICULTURE)

The Acts of 1 August 1919 and 11 March 1921 (new text of 12
October 1931 3) deal with collective disputes between employers
and workers in agriculture. In 1921 these provisions were also
1
I n particular, t h e Order of t h e Council of the People's Commissaries of 23
December 1918, concerning collective agreements, workers' associations and t h e
settlement of collective disputes. (Cf. t h e chapter o n Germany.) Bulletin of the
International Labour Office, 1918, Vol. X I I I , p . 10.
2
Legislative Series, 1927, Pol. 8.
3
Ibid., 1931, Pol. 4.

330

CONCILIATION AND ARBITRATION EST DIFFERENT COUNTRIES

put into force in the divisions of Poland formerly under Russian
and Austrian rule.
The Act of 18 July 1924 \ which also refers to agricultural
disputes, introduces a system of special arbitration boards covering
the whole of the Republic, except the province of Silesia.
All the boards established under the above Acts are ad hoc
committees set up for each dispute.
CONCILIATION

The Amending Act of 1921 to the Act of 1919 (new text of
12 October 1931) introduces a twofold system of conciliation.
Side by side with the direct mediation of the labour inspectors it
institutes conciliation boards.
The labour inspector in his capacity as direct conciliator
intervenes either on his own initiative or at the request of one
of the parties. He invites the parties to appear before him in
person or by representatives and endeavours to bring about a
mutual understanding or the conclusion of an agreement. For the
purpose of determining conditions of work or wages for the whole
of a district, the parties are deemed to be represented by their
trade associations.
Recourse is had to the second method of conciliation if the
parties so decide in the course of the proceedings before the
inspector. A conciliation board is then set up and it is at this
point that the representation of the parties by their respective
organisations becomes important. I t is the duty of the trade
associations of the two parties to appoint the representatives who
are to serve on the conciliation board. The Act strictly regulates
the procedure governing the appointment and eligibility of
representatives ; persons who refuse to take part in the elections
are Hable to a fine. If one of the parties does not belong to a trade
association or the organisation concerned refuses to send representatives to the conciliation board, the party in question elects his
own representatives, provided that the number of persons concerned
in the dispute exceeds ten.
The labour inspector is chairman of the conciliation board
ex officio. The decisions taken are embodied in a report which
must be signed by all the members of the board. The agreement
reached is binding for a period not exceeding one year.
Legislative Series, 1924, Pol. 4.

POLAND

331

ARBITRATION

The Act of 1919-1921 (new text of 12 October 1931) also
establishes arbitration boards, composed of from three t o five
representatives for each party and a chairman elected by the
parties, or if the parties fail to agree upon his choice, designated
b y the Minister of Labour. The members of the board are chosen
by the parties' respective trade associations, or b y the representatives elected in each commune b y employers and workers. Persons
who, without sufficient reason, refuse to carry out their duties
or to take part in the elections, are hable to a fine.
The labour inspector does not convene the arbitration board
unless the two parties affirm their willingness to accept its award.
The board settles disputes referred to it at the request of one of
the parties, as well as disputes in regard to which no agreement
has been reached by conciliation. Moreover, at the request of
either party, but not necessarily with the consent of the other
party, the labour inspector refers to the arbitration board any
disputes that have arisen in respect of failure to observe an agreement previously concluded, or to carry out an arbitration award
previously delivered. Failure of either party to appear, without
sufficient cause, does not entail the suspension of the proceedings.
A number of detailed provisions lay down the procedure of
the arbitration board. The board is not competent to adopt
resolutions unless the chairman and at least three representatives
of each party are present. The same number of representatives
must be present on each side. Awards and resolutions are adopted
by majority vote, and are recorded in writing and signed by the
members of the Board, together with the minutes. The parties
are entitled to demand copies. The proceedings are free of charge.
The awards are enforceable and their provisions binding for
a period not exceeding one year. An award t h a t regulates wages
and conditions of employment for the whole of a district is enforceable throughout t h a t district and forms the basis for the conclusion
of individual contracts of employment. The conditions established
by the award, like those of all other contracts of employment,
are therefore safeguarded by the provisions of civil law.
The Act provides t h a t in certain cases an award of an arbitration
board may be quashed.
Side by side with the normal arbitration procedure mentioned
above, the Act of 1921 made transitional provision for special
arbitration procedure " in order to ensure the normal regulation

332

CONCILIATION AND ABBITRATION IN DIFFERENT COUNTRIES

of work on the land " This procedure was made permanent by
the Act of 18 July 1924, concerning special arbitration boards,
which provides for compulsory arbitration when a settlement
cannot be reached by the ordinary methods of conciliation and
arbitration.
The special board consists of a chairman appointed by the
Minister of Labour and one representative each of the Minister of
Agriculture and the Minister of Justice. The three Government
representatives are assisted by equal numbers of representatives of
the employers' and workers' trade associations in the district
concerned in the dispute. But if difficulties are encountered
respecting the appointment of the representatives of the parties or
their participation in the proceedings, the board may meet and
issue valid decisions even if it is composed solely of the three
Government representatives.
As in the case of other arbitration awards, the working conditions laid down by the board are binding for not more than one
year. They are, moreover, automatically annulled by the subsequent conclusion of a collective agreement by amicable arrangement
between the parties.

§ 3. — Results and Opinions
The following table gives some figures relating to strikes
between 1921 and 1930. It shows the number of strikers, days
lost and undertakings affected.
Year

Number
of strikes

Number of
undertakings
affected

Number
of strikers

Working
days lost

720
800
1,263
915
532
590
616
769
488
322

9,143
8,093
7,451
5,400
1,910
2,827
3,855
5,230
3,894
1,666

479,327
607,011
849,051
564,134
148,527
145,493
234,938
354,018
214,493
50,399

4,117,925
4,630,833
6,378,680
6,544,852
1,284,553
1,422,540
2,455,270
2,787,775
958,287
367,711

1921
1922
1923
1924
1925
1926
1927
1928
1929
1930

According to the report of the Labour Inspectorate for 19281,
the results of the strikes registered in 1928 were as follows : 23 per
1

MINISTERSTWO PBACY I

opiEKi SPOLECZNEJ : Inspekcja Pracy. 1928.

333

POLAND

cent, were unsuccessful, about 58 per cent, were partially successful
and 17 per cent, entirely successful. The results of 20 strikes were
unknown. The report does not supply any general information for
the preceding years, but gives some figures on industrial strikes,
which represent from 90 to 95 per cent, of the total. In industry
the proportion of unsuccessful strikes was only 23 per cent, in
1927, as compared with 30 per cent, in 1926 and 31 per cent.
in 1925 *.
The report also contains some information on the chief causes of
strikes during the year under review. About 62 per cent, of the
strikes arose out of demands for higher wages, 8 per cent, were
called to secure the observance of conditions laid down by the Act
and 5 per cent, to secure that of the eight-hour day.
As regards the intervention of the labour inspectorate and other
bodies for mediation in collective labour disputes, the table below
gives some general figures for the period 1924 to 1928 2.
Industry
Year

1924
1925
1926
1927
1928

Agriculture

Disputes Total Number Number Disputes Total
of
followed number
followed number of underof
of
takings workers
by
by
disputes affected affected strikes disputes
strikes
574
288
431
502
644

3,283
2,290
2,115
2,128
2,328

9,667
4,023
4,935
7,221
10,819

484,301
308,435
331,572
382,657
361,162

153
134
42
23
27

1,039
893
583
416
398

Number Number
of underof
takings workers
affected affected

8,095
6,195
5,826
4,876
3,854

111,794
54,684
39,525
1
28,514
25,569

1
These two figures are doubtful ; the 1928 report, which for purposes of comparison
reproduces the figures for the previous year, gives only 3,676 undertakings and 22,714
workers affected by strikes in 1927.

The majority of the above disputes were settled by the labour
inspectors. Even in agriculture, where arbitration boards have
been established under the law, not more than one sixth of the
cases have been referred to these bodies, while as a rule (95 per cent.
of the boards convened in 1928) the labour inspector himself
acts as chairman of the board. For agriculture, the reports contain
the following information on the results achieved by the various
agencies for mediation during the last three years under review.
Among the disputes that the labour inspectors considered without
convening an arbitration board, 51 per cent, were settled by means
of conciliation in 1926, 56 per cent, in 1927 and 54 per cent, in
1928. Among the disputes in which conciliation failed, 11 per cent.
1
2

Ibid., 1927.
Ibid., 1925, 1926, 1927, 1928.

334

CONCILIATION AND ABBITRATION IN DIFFERENT

COUNTRIES

in 1926, 25 per cent, in 1927, and 21 per cent, in 1928 were referred
to the courts or other bodies. Action taken by the arbitration
boards had the following results : in 1926, an agreement was
reached in 49 per cent, of the disputes considered, 5 per cent, of the
awards were annulled and in 46 per cent, of the cases it is stated
that " partial satisfaction " was given. In 1927, the corresponding
figures were 20 per cent., 6 per cent, and 74 per cent. Finally,
in 1928, 83 per cent, of the disputes were settled and " partial
satisfaction " was given in 17 per cent, of the cases.
In a recent article x on the present condition of Polish agricultural workers, Mr. J. Gnoinski, Chief of Service, in the Ministry
of Labour and Social Assistance, expresses his views on the
evolution and present importance of conciliation and arbitration
machinery. He points out that as a result of the exceptionally
difficult situation of agricultural wage earners (especially in former
Russian Poland) the Polish Government was from the outset
obliged to establish conciliation agencies for the purpose of avoiding
stoppages of work. A necessary corollary of this system was the
legal recognition of the trade associations, without whose assistance
it was impossible to ensure the observance of the agreements
reached.
Referring to the juridical value of the bodies for conciliation
created by the Act of 1 August 1919, the author expresses the
following opinion :
" The fact that disputes regarding the observance of collective
agreements must be referred to the district conciliation boards
confers on these bodies something of the status of agricultural
labour courts. If the question is considered impartially, some
doubts may be expressed as to the value of the arbitration boards
as permanent judicial organs.
" The main reason for the establishment of special courts to
deal with labour disputes is the need of a speedy settlement of
such disputes. The arbitration boards, which do not possess the
necessary authority to make their decisions enforceable, do not
fulfil this requirement. Moreover, as they are professional bodies,
composed of a relatively large number of persons representing
employers and workers (at least seven persons), most of whom have
had no legal training of any kind, there is no doubt that these
boards, generally speaking, are less qualified than the ordinary
courts to give a considered opinion on the suits referred to them.
1
J . GNOINSKI : " Die Landarbeiterfrage in Polen ", in Vierteljahrshefte
Polnischen Landwirtschaft, Vol. I, No. 2, J a n . 1930, p p . 28 et seq.

der

POLAND

335

" At the same time it cannot be denied t h a t these institutions
are of social value. The essential social function of the arbitration
boards is to ensure the enforcement of collective agreements.
Indirectly they help to prevent disputes between employers and
workers on the observance of collective agreements. "

§ 4. — Summary
In Poland no general Act on conciliation and arbitration has
as yet been passed. I n the districts which, up to the end of the
war, were under Prussian rule the German legislation on the
subject still remains in force. I n the rest of the country the
amicable settlement of collective disputes is undertaken by the
labour inspectors, who exercise the function of conciMator in
addition to the other duties assigned t o them by the Legislative
Decrees issued by the Government.
I n former Russian and Austrian Poland special legislation has
been passed to regulate conciliation and arbitration procedure in
collective disputes in agriculture. These laws introduce a twofold
system of conciliation and a twofold arbitration procedure. Conciliation proceedings are instituted, either before the inspector alone
or before a conciliation board convened to consider the dispute.
As regards arbitration, besides the ordinary proceedings before a
board that, like the conciliation board, represents the parties to
the dispute, the Act also provides for compulsory arbitration in
cases of failure to reach agreement by the methods already mentioned. Compulsory arbitration proceedings are instituted before a
special board, composed of three Government representatives in
addition to the members appointed by the parties to the dispute.
A comprehensive Bill, applicable to the whole of the country,
is at present under consideration by Parliament.

BIBLIOGRAPHY
GNOINTSKI, J. " Die Landarbeiterfrage in Polen ", in Vierteljahrshefte der
Polnischen Landwirtschaft, Vol. I, No. 2, January 1930.
KOWNACKI, C. de. " Les Grèves et les Lock-outs en Pologne au Cours des
Années 1923-1929 ", in L'Economiste Européen, 10 October 1930, pp. 228-229.
RACZYIÎSKI, Dr. Alexander. Polski Prawo Pracy. 7. Hocsicka, Warsaw, 1930.
MnasTEBSTwo PRACY I OPIEKI SPOLECZNEJ. Inspekcja Pracy. 1927, 1928.

BALTIC STATES
(ESTONIA, LATVIA, LITHUANIA)

Historical Development
When the modern industrial development of Europe began,
what are now known as the Baltic States of Estonia, Latvia and
Lithuania belonged to the Russian Empire, and this fact justifies
the treatment in common of their historical development. It must
nevertheless be remembered that before the coming of Russian
rule the history of these three countries was not one and the
same. Latvia and Estonia were formerly territories of the Teutonic
Order of Knights, and the advantages of the coast favoured trade
and industry and brought these countries into close contact with
the Hanseatic League. Lithuanian interests, on the other hand,
were predominantly continental. It played a part in the history
of Poland, and entered into union with that State at the end of
the Middle Ages. Before that time it was politically independent
— the only one of the Baltic States to be so.
Agriculture is in all three States the most important industry.
Until the end of the war large estates predominated and the
landowners possessed besides their estates many privileges, public
and private. They had a permanent monopoly of brewing and
distilling, hunting and fishing. Their voice was also all-important
in legislation and administration, for with landed nobility went
the right to elect the members of the Landtag (Parliament). These
social contrasts were accentuated by certain contrasts in nationality.
In Estonia the majority of the large landowners were Germans,
while in Lithuania they were mostly Poles ; in Latvia, where
48 per cent, of the total area was in the hands of 820 families, they
were either Germans or Poles.
These conditions aroused dissatisfaction in wide circles of the
population and are considered to be the reason why the Baltic
countries, which were culturally in advance of the rest of the
Russian Empire, played a particularly vigorous part in the popular
movement of 1905.

BALTIC STATES

337

Besides agriculture a not unimportant industrial development
took place in the last thirty years of the nineteenth century on
the Baltic coast, chiefly in the working up of goods 'for re-export
— timber, flax and animal products in particular. The steady
market provided by Russia favoured also the growth of the engineering and chemical industries.
The great war and its consequences brought with them a
complete change in these conditions. The agrarian reforms carried
out in each of the three States after the declaration of independence
caused the number of agricultural labourers to fall considerably,
while t h a t of independent proprietors multiplied. The creation
of thousands of small farms and the growth of the intensity with
which the land was worked brought about a big demand for credit.
To be able to meet this the three States were compelled a t the
beginning of their existence to give u p the idea of rendering any
considerable aid to their industries, which had been completely
destroyed by the war. The reconstruction of the latter without
State assistance proved particularly difficult, for the Russian
market was lost and others had to be found instead.
Despite these obstacles the three States succeeded in breathing
new life into their industries, though it is true t h a t these now give
an impression completely different from t h a t made before the war.
A process t h a t is typical of the structural transformation of industry
in the three Baltic countries can be seen most plainly in Latvia,
where small instead of large or medium-sized undertakings are
now the rule. Before the war there were in Latvia some 120 workers
to an undertaking ; now the average is only 20.1. This development
did not favour the growth of machinery for conciliation or arbitration in collective disputes. The large number of undertakings
a n d the decreased size of the staffs was a reason for leaving the
settlement of collective disputes more than in other countries to
direct negotiation between the interested parties. This explains
the fact t h a t in not one of the three States has a systematic regulation of conciliation and arbitration, covering all industries, come
into being.

2 3

338

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

ESTONIA

§ 1. — Basic Facts
The Republic of Estonia extends over 47,588 square kilometres,
of which some 3,800 are accounted for by the Islands of Ösel,
Dagë and Mön. There are about 1,170,000 inhabitants, only
15.7 per cent, of whom earn their living in industry. More than
half of this total, 59 per cent., are occupied in agriculture.
The trade union movement suffered a serious setback in 1924
by reason of the discovery of a Communist conspiracy. According
to official figures 561 trade unions had registered on 1 J a n u a r y 1929
as against 370 a t the end of February 1925. On 31 December 1928,
29 trade unions, with 5,506 members in all, were affiliated to the
Estonian Federation of Trade Unions (Eestimaa
Jöölisümlimgute
KesMit), which is itself affiliated to the International Federation
of Trade Unions.
The principal employers' organisations are the Estonian Manufacturers' Association and the Association of Medium and Smallscale Industries *.
§ 2. — The System in Force
The Estonian conciliation and arbitration system rests on two
bases : trade and industry come under the Act passed by the
short-lived Russian revolutionary Government of 5 August 1917,
agriculture under the Act of 1 November 1921 2.
(a) The Act of 5 August 1917 was supplemented for Estonian
territory by an Order concerning labour inspectors, issued on
19 December 1918, according to which it is part of the d u t y of
these inspectors to decide disputes between employers and workers.
They have in such circumstances to arrange for the institution of
conciliation and arbitration boards.
1

Cf. INTERNATIONAL LABOUR OFFICE : Freedom of Association, Vol. Ill, pp. 253
et seq.
2
Legislative Series, 1921, Part II, Est. I.

BALTIC STATES

339

In cases of dispute, employers and workers may, by application to the labour inspector, have their differences brought
before a conciliation board. The inspector has then to inform the
other party of the application and require him to state within
forty-eight hours whether he will take part in the proposed conciliation proceedings. Should his answer be in the affirmative, the
inspector invites the parties to appoint representatives for the
formation of a conciliation board ; should he refuse, the inspector
has to publish the fact in the daily press. The inspector is also
empowered in his official capacity to summon the parties to form
a conciliation board without their application, and can also form
permanent boards for the settlement of future disputes. Should
either employers or workers object to the foundation of permanent
machinery for conciliation, the inspector has to publish this fact
too in the daily press.
The procedure before the conciliation board is settled ad hoc
by the representatives of the two parties. Should the board come
to no decision, it can propose to the parties to go before an arbitration court and can assist them, if they so desire, in its constitution. Such a court is composed of an equal number of employers'
and workers' representatives and an impartial chairman chosen by
the other members of the court.
(b) For the settlement of collective disputes in agriculture,
special regulations have been in force since the passing of the Act
of 1 November 1921. This Act set up " district joint commissions " and a general joint commission for the whole country.
The former have to draft proposals for conditions of employment
in agriculture (minimum wages, daily working hours, overtime
conditions, lists of working and rest days) and to transmit these at
intervals to the general joint commission.
According to section 19 of the Act, the district joint commissions have to hold ordinary and special sessions, the former once
a year, in December at the latest, the latter as required. The Act
does not state exactly when the special meetings are to be held,
but there can be little doubt that they are intended to take place
when an exceptional economic situation makes a change in conditions of employment seem necessary in order to avoid a labour
dispute. In the light of section 19 of the Act the agricultural
district joint commissions appear as a means of averting and if
necessary of settling labour disputes ; particular interest attaches
to this fact, for agriculture is the most important source of production in Estonia, as in the other Baltic States.

340

CONCILIATION AND ABBITRATION IN DIFFERENT COUNTRIES

§ 3. — Results
The conciliation system handed down from the Russian revolution has been put into practice in a few eases only. More favourable results have been obtained in the prevention of disputes in
agriculture by the help of the district commissions. The number
of labour disputes in Estonia may be gathered from the following
strike figures compiled by the Statistical Office of the Estonian
Republic :
Year
1922
1923
1924
1925
1926
1927
1928
1929
1930

Number
of strikes

—
16
16
14
5
5
16
7

Workers
involved
5,623
3,492
1,568
904
660
218
1,098
1,915
154

Undertakings Working days
involved
lost
29
35
16
16
14
5
43

—
—

42,162
10,299
4,831
2,539
1,196
3,067
49,336
4,386
338

The number of workers and of lost working days applies only
to the workers directly affected. The data were collected from the
parties concerned and calculated by the Statistical Office.

BALTIC STATES

341

LATVIA

§ 1. — Basic Facts
The total surface of Latvia is 65,791 square kilometres. The
population was, at the end of 1927, estimated by Dr. C. Ballod *
at about 1,880,000. No census has been taken since that date.
The number employed in industry in-1926 was 57,000.
Among employers' organisations the Riga Manufacturers'
Alliance included in 1929 the owners of 641 undertakings with
15,866 workers ; the medium-sized and smaller undertakings are
organised in the Association of Latvian Industrial Employers and
Handicraftsmen. There are also many associations in particular
industries.
Most of the organised workers belong to the " free " or social
democratic trade unions, which are affiliated to the Central Office
of Latvian Trade Unions. This included 25 unions with 25,524
members in 1930. A few free trade unions (teachers, dockers,
engineers) do not belong to the Central Office. They are described
as " independent ". There are also in Latvia " Nationalist "
and '' Left " trade unions, whose membership is not exactly
known 2.
§ 2. — The System in. Force
The Latvian conciliation system, like much of that in Estonia,
follows Russian legislation. For details of the provisions of the
law, therefore, reference may be made to the description of the
Estonian system given above. Latvian experience of the Russian
Conciliation Act was, however, less satisfactory than in Estonia.
This may be seen particularly from the history of the Riga dockers'
strike in the spring of 1920. The rapid depreciation of the currency
led at that time to an extraordinary rise in the cost of living with
1
2

Lettlands Ekonomüt, 1928.
Cf. INTERNATIONAL LABOUR

et seq.¡
2 3

OFFICE

: Freedom of Association, Vol. Ill, pp. 264

342

CONCILIATION AND ARBITRATION LN DIFFERENT COUNTRIES

which wages could not catch up. The trade unions in Riga applied
to the Ministry of Labour in order to obtain the establishment
of a permanent conciliation institution. The employers' organisations agreed, and after various discussions in common under the
presidency of an official of the Ministry of Labour, it was arranged
to establish a permanent " Conciliation Chamber " in Riga. The
constituent document was signed on 10 May 1920 by representatives of the employers' and workers' organisations.
The parties agreed that the activities of the Chamber should
be governed by the Russian Act of 1917, together with the following
additional regulations : For the proceedings, each party elects
two representatives for discussion and three for the final vote.
The Central Office of Trade Unions in Riga sends two, and the
trade union actually concerned one representative. For the
employers, the Riga Manufacturers' Alliance, the Association of
Latvian Industrial Employers and Handcraftsmen, and the
particular organisation concerned with the dispute each send one
representative.
In case of dispute the parties must first of all apply to their
trade organisation. If this body cannot bring about an agreement,
it must take the case via the labour inspector to the Conciliation
Chamber.
The agreement of 10 May 1920, too, refrained from making
conciliation compulsory ; indeed, the proceedings are possible
only if both sides agree to them. The only means by which the
labour inspector can bring pressure to bear upon a recalcitrant
party is to publish its attitude in the daily press.

§ 3. — Results
The Riga Conciliation Chamber failed even in the attempt to
settle the dispute between the dockers and their employers in
1920 — the very purpose for which it had been founded. Since
that time there have been repeated labour disputes in the industry,
but the Chamber has not been able to make any important contribution to their settlement. To begin with, the representatives of
the workers frequently did not attend the sessions ; the employers'
representatives followed their example ; so that finally, there
ceased to be any regularity in its sittings. The lack of any sort
of compulsion to submit to conciliation proceedings is given as a

BALTIC STATES

343

cause of failure of the Chamber. Another circumstance which
helped to make it useless was that its decisions carried with them
not the least guarantee of execution.
The decisions taken by the conciliation committees set up by
collective agreements had also, until 1927, no special legal guarantees. Only so far as the activities of these committees could be
brought under the law of contract in civil law had they any legal
force. The attempt to establish conciliation and arbitration by
non-official means must therefore have led to the same failure
which met the attempts to revive the Russian legislation of the
transition period, had the Emergency Order of 4 October 1927
on collective labour agreements 1 not been issued.
This Order includes among other things a conditional instruction
to the effect that provisions concerning the settlement of differences
of opinion and of disputes may also be included in collective
agreements (section 5, second sentence). From section 10 of this
Order it is clear that the provisions of a collective agreement bind
the contracting parties even when they are Government authorities. The individual members of an organisation which has
concluded a collective agreement are also bound by that agreement,
for the effect of section 5 of the Order taken in conjunction with
the first sentence of section 10 is that if a collective agreement
contains provisions on conciliation and arbitration, these are
binding both upon the organisations party to the agreement and
upon the individual members of such organisations.
These regulations are strengthened still further by the provision
of section 10 that " the organisation and its individual members "
are jointly liable for the fulfilment of the collective agreement.
Any failure on the part of the organisation or its members to
participate in the conciliation and arbitration committees mentioned
in the collective agreement may thus have serious results for them,
and may in particular render them liable for damages.
These regulations make conciliation to a certain extent obligatory, though it should be remarked that the Order of 4 October
1927 on collective agreements covers only members of the organisations party to the agreement and not outsiders. This follows
from the second sentence of section 10, which stipulates that the
individual members of organisations may, by giving due notice
of their resignation to their organisation, be exempt from complying
with the provisions of the agreement. The period of notice specified
Legislative Series, 1927, Lat. 3.

344

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

in the Order is a fortnight. This is a defect of the system and can
have serious effects on the settlement of collective disputes by the
institutions set up by collective agreement. The system can
function only if both employers and workers remain loyal to their
own organisations.
The Emergency Order concerning collective agreements has
not yet been in force long enough to allow of a final judgment ;
but the following strike statisticsJpublished by the Ministry of
Public Welfare show that so far it has failed to produce any
considerable change in the development of labour conflicts.
Year
1922
1923
1924
1925
1926 .
1927
1928
1929
1930

Workers
involved
3,554
13,566
9,523
3,224
5,065
5,273
13,431
26,462
1,547

Undertakings Working days
involved
lost
41
199
87
53
53
95
179
362
38

31,505
78,220
95,988
24,552
63,968
60,267
62,254
45,838
12,077

BALTIC STATES

345

LITHUANIA

§ 1. — Basic Facts
The Republic of Lithuania, including the autonomous territory
of Memel, covers 55,658 square kilometres a n d has 2,317,000
inhabitants. Of t h e 362,000 workers of Lithuania, 242,000 are
engaged in agriculture. I n 1919 and 1920 workers' organisations
were founded in Kovno (Kaunas) and Shevli (Siauliai), t h e peak
of the labour movement coming in 1920, when some 38,000 workers
were organised in trade unions. The following years brought a
decline, and a t t h e end of 1926 the " free " unions, according t o
their own data, h a d a membership of 18,486. There were also
Christian workers' unions, b u t their representative character was
affected by t h e adhesion of a large number of peasant farmers.
A manufacturers' association watches t h e interests of t h e
employers.
Since the coup d'état of 16 December 1927 t h e activity of the
trade associations has been limited 1.

§ 2. — The System in Force
On 14 November 1924 a n Act on labour inspection 2 was passed
in Lithuania.
According t o section 9 of this Act t h e labour inspector can
intervene ex officio in disputes between employers and workers
in order t o settle them, a n d if necessary t o arrive a t a decision
binding on t h e parties.
With this object the inspector should enquire into t h e dispute
on t h e spot, and attempt t o bring t h e parties t o an agreement.
In widespread disputes, he should constitute conciliation boards
and arbitration courts. I n all t h e decisions a n d steps he takes
1

Cf. INTERNATIONAL LABOUR O F F I C E : Freedom of Association,

et ssq.
2
Legislative Series, 1924, Lith. 3.

Vol. I l l , p p . 273

346

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

on the basis of section 9, the inspector has to follow the directions
of the Chief Labour Inspector, who is himself directly subordinate
to the Ministry of the Interior 1 . Political authorities have thus
a final voice in collective labour disputes in Lithuania.

MEMEL T E R R I T O R Y
The Territory of Memel, separated from Germany since
15 February 1920, was joined to Lithuania by the decision of
the Ambassadors' Conference in February 1923. I t extends over
2,650 square kilometres and has about 145,000 inhabitants.
German conciliation legislation in the shape of the Order of
23 December 1918 on Conciliation in Labour Disputes (Reichsgesetzblatt 2 p . 1456) is valid for the Territory. This system has,
however, been considerably supplemented by an Order of 9 August
1922 (Official Gazette for Memel Territory, p . 785) and by the
Administrative Regulations of 12 September 1922 (ibid., p . 961^.
The first-named Memel Order made it obligatory on all undertakings employing more than twenty persons to constitute committees representing workers and employees. The duties of such
committees are described in section 10 of this Order, which requires
them '•' to assist in regulating wages and other conditions of
employment, unless these are regulated by collective agreement ".
Disputes arising in this connection are decided in the first instance
by conciliation committees. The parties have a legal right of
appeal against such decisions, in which case they go before the
arbitration court for the Territory. This court was set up. with
its seat a t Memel, by the Administrative Regulations of 12 September 1922, section 1, as an " Appeal and Revision Court for
decisions made by conciliation committees ".

Summary
The machinery for arbitration and conciliation in collective
labour disputes has not yet reached a high state of development
in the Baltic States. Only Estonia has arrived at systematic
1
2

ABBAMSON : Zeitschrift für Ostrecht, 1928 (VII), p. 934.
Bulletin of the International Labour Office (Baslo) 1918, Vol. X I I I , p . 10.

BALTIC STATES

347

legislation, and even this is limited to agriculture. In Latvia, the
Russian transitional legislation is still valid, but under the completely altered conditions it has achieved no great success, conciliation being left very largely to the parties themselves. In Lithuania
the question of conciliation and arbitration was settled as a
subsidiary matter in course of framing the Labour Inspection
Act.
BIBLIOGRAPHY
ESTONIA

GROHMANN, Woldemar. La législation sociale, en Estonie. Tallinn, 1928.
" Estlands Arbeitsrecht." Zeitschrift für Ostrecht, Vol. II, No. 7, p. 411.
Eesti Statistika (monthly publication of the Estonian Central Statistical Office).
BRITISH DEPARTMENT OF OVERSEAS TRADE.

Reports on the Economic and

Industrial Conditions in Estonia. London, 1927.
LATVIA

WALTERS, Dr. M. Lettland, seine Entwicklung zum Staat und die baltische
Frage. Rome, 1923.
Lettlands Ekonomist. Riga, 1928.
Darba Statistik (Labour Statistics), 1929.
LITHUANIA

ABRAMSON, A. " Arbeitsrecht in Litauen. " Zeitschrift für Ostrecht, Vol. I I ,
No. 7, pp. 934 et saq.
Darbininku Kalendorius, 1927 Metams.
Lietmos statstikos metrastis (Statistical Yearbook), 1924-1928.
ME MEI

Aufgaben, Rechte und Pflichten der Arbeiter und Angestellten-Ausschüsse und
Schlichtung von Arbeitsstreitigkeiten.
INTERNATIONAL FEDERATION OF TRADE UNIONS. 6th Yearbook. Amsterdam

1930.

DENMARK
§ 1. — Economic Background and Development
The total area covered b y the Kingdom of Denmark is about
42,926 square kilometres. According t o the census of 1925, it has
a population of 3,434,555.
Denmark is a country of small and' medium-sized holdings, in
which the peasant class for a long time formed the major part of
the population. Fishing also employees a large number of t h e
inhabitants. I n 1925, 392,000 persons, or roughly 30 per cent, of
the working population, were engaged in industry. One-third of
the factories are equipped with mechanical power. The principal
forms of industry are connected with the working u p of agricultural
products and t h e most important branches are sugar refining,
distilling, brewing, flour milling and the manufacture of margarine,
Shipbuilding is also a particularly important industry.
Thanks t o the fact t h a t the right of association has been recognised since 1849, Denmark has a widely developed system of
employers' and workers' organisations. The employers' associations
are grouped in the Danish Employers' Federation (Dansk Arbejdgiverforening) and the workers' unions in the Danish Trade Union
Federation (De samvirkende Fagforbund i Danmark) which in
1929 included 55 federations with 250,162 members, of whom
210,439 were men and 39,723 women. There are also a certain
number of independent unions with a total membership of
about 80,000 1.
The trade associations instituted systems of conciliation and
arbitration a t a very early date. As early as 1898, a joint body for
the settlement of labour disputes was set u p by the Trade Union
Federation on the one hand and the Employers' Federation on the
other. I t consisted of three representatives of each party, of whom
two on either side had t o be members of one of the organisations.
In the event of a dispute between the trade associations affiliated
1

Cf. INTERNATIONAL LABODB O F F I C E : Freedom of Association,

et seq.

Vol. I l l , p p . 281

DENMARK

349

to either of the central federations, the Committee had to decide
whether the collective agreements had been respected.
In the following year, a general lock-out affecting fourteen
occupations in the building trade led to the conclusión in September 1899 of an agreement which now forms the basis of
industrial relations in Denmark. It was then that provision was
made for the establishment of the Permanent Arbitration Court
(den permanente Volgifstret), whose principal function was to
consist in judging all cases of infringement of the September
agreement. Pending its establishment, this function was entrusted
to the Copenhagen Court of Appeal. An Act of 3 April 1900 laid
down provisions for the calling of witnesses before the arbitration
tribunals, but it was not until 12 April 1910 that an Act was
passed setting up the Permanent Arbitration Court. This Act
was drafted on the basis of a report submitted by a new joint
committee set up on the occasion of a dispute in the printing
industry in 1908. It was amended on certain points by the Act
of 4 October 1919 concerning the Permanent Arbitration Court,
which constitutes the legislation on arbitration at present in force.
As regards labour disputes, the Act of 12 April 1910 concerning
the nomination of a conciliator for labour disputes provided for
the appointment by the Minister of the Interior of one conciliator
for the whole country for a period of two years at a time. The
Act of 21 December 1921 concerning intervention in labour disputes
fixed the number of official conciliators at three. This Act was
originally intended to expire at the end of 1925, but was then
prolonged until 1 December 1926, by which date it was expected
that the new Bill prepared by the " Grand Committee on Labour "
would have been debated in the Riksdag. The Bill introduced by
the Social Democratic Government of that time was rejected, and
the operation of the existing Act was prolonged from year to year.
A new Bill was introduced, but was equally unsatisfactory both
to the employers, who under its terms would have been obliged
to give the conciliation bodies information on the economic position
of their undertakings, and to the workers, who would have had to
empower the negotiators or other less important bodies to conclude
binding agreements. Finally, a compromise was adopted, based in
the main on the Act of 1921. It includes certain additional clauses,
however, notably those enabling the conciliator to make his
mediation conditional on agreement not to declare a stoppage for
a week. This Bill was adopted unanimously by both Chambers of
the Riksdag and constitutes the legislation at present in force.

350

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

§ 2. — The System in Force
In Denmark an official conciliation system is provided under
the Act of 28 February 1927 1. No statutory provision is made
for arbitration proper in disputes concerning the regulation of
conditions of employment, wages or other circumstances connected
with labour t h a t are not covered by collective agreement, t h a t is
in " disputes about interests ".
Disputes concerning the validity or the interpretation of collective agreements or '•' disputes about rights " are covered by the
Act of 4 October 1919 concerning the Permanent Court of Arbitration 2. Although this Act deals only with disputes about rights
and not those about interests (according to the distiction drawn
in most of the Northern countries) the procedure it lays down is
worth noting here.
Infringements of the agreement of September 1899 are also
dealt with under the Act of 4 October 1929 concerning the Permanent Court of Arbitration.
CONCILIATION

The Act of 28 February 1927 respecting conciliation in labour
disputes provides for the appointment of three conciliators for the
whole Kingdom, nominated for three years at a time and re-eligi ble
for appointment, and of one substitute conciliator. The appointments are made by the Minister of Social Affairs on the proposal of
the Permanent Court of Arbitration. The conciliators elect from
among themselves a chairman who directs the proceedings of the
Conciliation Committee for a year. The Committee sends an
annual report on its activities to the Minister of Social.Affairs.
Normally, each conciliator performs his functions as mediator
without the collaboration of the other conciliators. Nevertheless,
if a labour dispute is of considerable public importance, all three
conciliators may decide to intervene in the dispute in concert.
Any dispute concerning the competence of the conciliators may
be submitted to the Permanent Court described below in connection
with justiciable disputes. The conciliator may ask the Court to
intervene for the purpose of hearing witnesses.
1
2

Cf. Legislative Series, 1927, Den. 1.
Annuaire de la législation du travail, 19H-1919, Vol. I, p. 306.

DENMAEK

351

The conciliators meet as often as required, a t the invitation of
the chairman. They fix, by standing orders drawn up for each
year or for each case, the labour questions in which each conciliator
must intervene if occasion arises.
The conciliators must keep in touch with the general conditions
of labour and especially with wage conditions. If there is reason
to fear a stoppage of work or if such a stoppage has already occurred
and the competent conciliator considers t h a t the scope and effects
of the strike or lock-out are of considerable public importance,
he may summon the parties to enter into negotiations, either on
his own initiative or a t the request of one of them, in any case
in which negotiations have already taken place and have been
declared fruitless. In such cases, the parties themselves may
designate their representatives, who must, however, be members
of the organisations or federations concerned.
I n the course of the negotiations between the parties, the conciliator may propose terms of agreement calculated to bring about a
peaceful settlement of the dispute. Before submitting a draft
settlement the conciliator must discuss its substance and form with
two representatives of each of the parties and, if the latter belong
to federations, with a representative of each federation concerned.
The draft settlement may not be made public without the conciliator's consent until the replies of both parties have been received.
The conciliator may refer back to the parties concerned any questions t h a t have not been the subject of actual negotiations on their
merits or t h a t are of a special occupational character, and may
refuse to continue his mediation until such negotiations have taken
place. He also fixes the limit within which such negotiations must
be effected.
If, in the course of a dispute in which a conciliator has intervened
because a stoppage is feared or has already occurred, any doubt
should arise as to the actual facts concerning wages, hours of work,
and overtime, the conciliator may require the parties to give
explanations.
Conciliation procedure is not compulsory. The conciliator may
require the parties to appear if a strike of considerable importance
is feared or has occurred, but no penalties are provided in this
connection. When the conciliator offers t o mediate, he may require
once in every dispute t h a t no stoppage of work shall take place
before the negotiations have come to an end, but such requirement
may not apply to a period longer than one week. This provision
is one of the main changes made in the Act of 1921.

352

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

When prolonged negotiations have proved fruitless and terms
of settlement have been proposed by the conciliator, acceptance
of these terms is not compulsory, but they must be p u t to the vote
in the organisations if the latter so desire. They may not be voted
in any form other than t h a t drawn u p by the conciliator and the
vote must be given as a simple yes or no.
ARBITRATION I N JUSTICIABLE

DISPUTES

I n Denmark, as has already been noted, a distinction is drawn
both in law and in practice between disputes about the substance
of a collective agreement, arising in connection with its conclusion
or renewal, and disputes about the interpretation or validity of
collective agreements. The former, known as disputes about
interests, are not subject to official arbitration, and are regulated
by special clauses in the collective agreements themselves.
Arbitration in justiciable disputes is effected by the Permanent
Arbitration Court set up by the Act of 4 October 1919. The Court
has its seat a t Copenhagen, but may also sit elsewhere if it considers
it expedient. I t consists of six ordinary judges, six substitutes, a
chairman, a secretary, and two (or, if the Court considers it
necessary, three) vice-chairmen. Ordinary and substitute members
of the Court are elected half by the Danish Employers' Federation
(Dansk Arbejdsgiverforening) and half by the Danish Trade Union
Federation (De samvirJcende Fagforbund i Danmark) for a period
of two years. The ordinary members thus elected then elect the
chairman and vice-chairman for the following year.
Breaches of the agreement of September 1899 (mentioned
above, § 1) are compulsorily submitted to the Permanent Arbitration Court. At the request of an organisation, and on condition
t h a t no agreement contains provisions t o the contrary, the Court
also has jurisdiction in cases concerning a collective breach of the
labour agreement concluded between a workers' organisation and
an employers' organisation or a particular undertaking.
In the event of the declaration of a strike or lock-out t h a t ,
in the opinion of an organisation, constitutes a breach of agreement,
and after the organisation has within five days sent a protest
against the strike or lock-out to the organisation, its members, or
the undertaking responsible for it, each party has the right t o
submit to the Arbitration Court the question of the legitimacy
of such a strike or lock-out. Similarly, if an organisation considers
t h a t a lock-out is being carried out contrary to the agreements

DENMARK

353

concluded, t o arbitration awards or to a decision of the Court, or if
a workers' organisation or its members declare or continue a
strike contrary to the terms of the agreement, to arbitration
awards or t o a decision of the Court, the other p a r t y may bring
an action against them before the Arbitration Court with the
object of declaring the stoppage illegal or of having fines inflicted.
Other disputes may also be submitted to the Court, provided
t h a t the latter accepts them by a majority of five members, if a
general or special agreement has been concluded to this effect
between the organisations. If one of the organisations or undertakings forms part of a larger organisation, the proceedings must
be instituted by or against the latter.
The Arbitration Court must decide if the act giving rise to
the proceedings constitutes a breach of the agreements and in
what measure the decision giving rise to the proceedings is contrary
to the agreements and therefore null.
The decisions of the Court are binding, and it may inflict fines
in accordance with the provisions of the Act. I t may inflict on
the parties responsible for the breach of an agreement, or for a
strike or lock-out contrary to the terms of the agreement, a fine
which, if injury is proved, is payable to the victim, and in other
cases to the party bringing the action. If the breach consists in
omission to pay a sum due, the Court may, instead of inflicting a
fine, condemn the offending party to the payment of this sum.
Unless an agreement exists to the contrary, a union can be made
legally responsible only if it has taken p a r t in the act giving rise
to the proceedings.
If the offender refuses to submit to arbitration a case which,
under the terms of the agreement in force, should be settled by
t h a t means, this constitutes a particularly aggravating circumstance.
PROVISIONS FOR ARBITRATION L A I D D O W N
I N COLLECTIVE AGREEMENTS

Disputes concerning the interpretation of a n agreement are
subject to the conciliation and arbitration procedure laid down in
collective agreements. These generally provide t h a t all such disputes shall be submitted to a permanent conciliation committee
consisting of an equal number of representatives of each of the
parties to the agreement, and set u p for the particular industry
concerned. If the committee does not succeed in effecting a
settlement, the case is referred to the organisation itself, which
2 4

354

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

must continue negotiations. Failing a settlement through these
negotiations, the dispute is normally submitted to an arbitration
board for the occupation concerned, at the request of one of the
parties. These arbitration boards are composed of an equal number
of representatives of each of the parties and an independent
arbitrator nominated by the parties themselves, or, in the event
of their inability to reach agreement, by some outside authority,
generally the Permanent Arbitration Court.
The Permanent Arbitration Court cannot be looked upon as
a court of appeal from the decisions of the arbitration boards
set up by the different industries, and cases that belong to the
latter are usually referred to the ordinary courts of law.

§ 3 . — Results and Opinions
According to the Statistical Yearbook for 1931, published by
the Danish Statistical Office, the figures relating to labour disputes
for the years 1921 to 1930 are as follows :

Year

1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931 !
1

Strikes
and
lock-outs

Workers
affected
by strikes

Workers
Working days
affected
lost
by lock-outs

110
31
58
71
48
32
17
11
22
37
19

13,356
640
1,941
8,993
35,477
975
537
469
1,040
5,349

34,791
48,219
1,941
765
66,854
75
2,814

—

3,692

—
—
—

1,321,000
2,272,000
20,000
175,000
4,138,000
23,000
119,000
11,000
41,000
144,000
246,000

Strikes and
lock-outs in
which the
officia 1
conciliator
intervened
as mediator
20
6
5
13
18
3
2
4
7
14

—•

Provisional figures. Cf. Industry and Commerce, 4 March 1932, No. 54, p. 3.

During the first ten years of its existence (1910-1920) the
Permanent Arbitration Court dealt with 262 cases. Seventy per
cent, were settled by an award, 20 through conciliation, and
in 10 per cent, of the cases the charge was withdrawn. Of the
401 cases submitted to the Court during the years 1921-1924,
187 were settled through conciliation, and in 44 cases the charge
was withdrawn.

355

DENMAEK

For the five years from 1925 to 1929 the annual results were
as follows :
Year
1925
1926
1927
1928
1929

Total number
of cases

Settlement through
conciliation

Charges
withdrawn

115
127
93
90
89

51
33
41
36
36

20
14
6
14
4

The present system appears on the whole to have proved
satisfactory to the persons concerned. Any criticism to which it
has been subjected has been directed mainly to two points.
In the first place, it has occasionally been noted that the
possibility of resorting to conciliation proceedings has had the
effect of preventing the parties concerned from concluding new
agreements, since each party hopes to obtain more satisfactory
terms by means of conciliation than by direct negotiation.
Secondly, it has been maintained that the conciliation committees in their present form lack adequate powers of enquiry to
form a sufficiently objective opinion on the economic position of
the parties.
Both employers and/ workers, however, are equally strongly
opposed to the introduction of a compulsory arbitration system.

§ 4. — Summary
The conciliation and arbitration system in operation in Denmark
distinguishes, as is the case in most Northern countries, between
disputes concerning interests and disputes that are justiciable
because they constitute a breach of a collective agreement or
concern the interpretation of an agreement in force. For disputes
arising in connection with the fixing or alteration of the terms of
agreements the law allows the associations to have recourse to
the official conciliator. A provision peculiar to Danish law is that
introduced by the 1927 Act concerning conciliation, which allows
the conciliator to require as a condition of his mediation that for a
period of seven days there shall be no stoppage of work.
As regards arbitration, besides cases voluntarily or compulsorily
subject to the Act on the Permanent Arbitration Court, the

356

CONCILIATION AND ARBITRATION I N DIFFERENT

COUNTRIES

arbitration procedure laid down in collective agreements for the
interpretation of the provisions contained in them plays a very
important part. The arbitration system in force in Denmark is
thus partly unofficial. Nevertheless, collective agreements often
provide that the Court shall act as a court of final appeal in cases
for which it has no compulsory jurisdiction.

BIBLIOGRAPHY
Arbejdsgiverforeningen
gennem 25 aar. 1898-1923.
Beretning fra Fœllesudvalget af 17. August 1908 angaaende
Arbejdsstridigheler.
Beretning fra Fœllesudvalget af 1. Juni 1915 angaaende
Arbejdsstridigheter.
Betœnkning I fra Arbejdskommissionen
af 1925. Copenhagen, 1926.
Den faste Voldgiftsret Kendelser.
D R E Y E R , Erik. Kollektive Arbejdsstridigheder og deres Bilœggelse i Danmark.
Udarbejdet paa Indenrigsministeriets
Foranstaltning forDet Nordiske Socialpolitiske
Mede 1927. Copenhagen, 1927.
ELMQTJIST, H j . V. Den kollektive Arbejdsoverenskomst
som retsligt Problem.
Copenhagen, 1918.
J E N S E N , Adolph. " Forligsmandsinstitutionen. " Danmarks
Sociallovgivning
IV, Vol. I I I . Copenhagen, 1920.
J E N S E N , J., and OLSEN, C. M. Oversigt over Fagforeningsbevœgelsen
i Danmark
i Tiden fra 1871 til 1900.
K R U S E , Vinding. Arbejdets og Kapitalens Organisationer,
retslig bedemt.
I. Del. Synspunkter for Retsudviklingen i Industriens Hovedlande.
Copenhagen,
1913.
MACKEFRANG, E. P . Arbejdsoverenskomsten.
Copenhagen, 1908.
Statistiske Meddelelser, 4. Rsekke, 49. Bind, 2. H e f t e : " Arbejdsoverenskomster
D a n m a r k den 1. Aug. 1915. "
Statistiske Meddelelser, 4. Rœkke, 75. Bind, 5. Hefte : " Strejker og Lockouter
i D a n m a r k (1921-25). "
STEINCKE, E . " Den faste Voldgiftsrets. " Danmarks Sociallovgivning
IV,
Vol. I I I . Copenhagen, 1920.
Z E U T H E N , F . Danmarks sociale Lovgivning i Hovedtrœk. Afsnittet " Mœgling ",
Retsafgörelser og Voldgift i Arbejdsstridigheder.
Copenhagen, 1923.

DENMARK

357

FAROE ISLANDS

The provisions applicable to the Faroe Islands, which, for
administrative purposes, form a Department of the Kingdom of
Denmark, are laid down in the Act of 31 March 1928 concerning
conciliation in labour disputes. This Act provides for the formation
of a committee of eleven members, consisting of representatives of
the most important organisations of employers and wage earners.
A majority of seven members of this committee nominates a
conciliator for the islands as a whole. Conciliation procedure is
similar to that in the rest of the Kingdom.

2 <,

•

358

CONCILIATION AND ABBITRATION IN DIFFERENT

COUNTRIES

ICELAND

Unions have been set up in most of the fisheries in Iceland
and have formed themselves into a National Federation, whereas
the employers are grouped in various associations. The development of the fishing industry and the growth of the trawler fleet
have brought about an increase in the number of strikes, lock-outs
and labour disputes in general.
Before the passing of the 1925 Act on conciliation in labour
disputes 1, various Bills had been introduced into Parliament, one
of which proposed the introduction of compulsory conciliation
and arbitration for all labour disputes.
The Act of 27 June 1925 introduced conciliation procedure
similar to that in operation in Denmark. It provides, however,
for the appointment of a single conciliator by the Minister of
Economic Affairs, on the proposal of a committee composed of
five members chosen by the workers' union, five by the general
employers' association and one by the Supreme Court.
This Act is chiefly applicable to trawl-owners and to persons
in their employment.

Legislative Series, 1925, Ice. 2.

NORWAY
§ 1. — Economic Background and Development
In 1929, Norway, with an area of 323,993 square kilometres,
had a population of 2,821,000. According to the census taken in
1920, 33.25 per cent, of the inhabitants were employed in agriculture, including horticulture and forestry. At the same date
nearly 100,000 persons were engaged in shipping and fishing.
Industry proper, which is of comparatively recent growth, is
now one of the most important economic activities of the country.
In 1920 it employed 29.4 per cent, of the population, and since
that date, thanks to the increasing development of water power,
it has steadily continued to progress. The most important industries are wood (including the manufacture of cellulose, paper pulp,
and paper), metals, chemicals, textiles, and foodstuffs (canning,
brewing, etc.). In the main, industrial activity is not concentrated
in the large towns, but scattered over the whole country, including
the rural districts.
Both employers and workers have formed extensive organisations, which have entered into collective agreements for most
trades. The central employers' organisation, the Norwegian
Employers' Federation (Norsk Arbeidsgiverforening), covers industrial employers throughout the country. The shipowners have
created their own organisation (Norsk Rederfor bund), as also have
the employers in the paper industry and in forestry. The trade
unions are grouped into national unions, which in turn form the
Confederation of Trade Unions (Arbeidernes Faglige Landsorganisation), with a joint secretariat 1 .
The first attempts to regulate conciliation and arbitration
procedure in Norway date from the end of the nineteenth century.
Following a resolution adopted in 1899 by a number of workers'
unions, urging that legislation on conciliation and arbitration
should be enacted at the earliest possible date, the Government
1

Cf. INTERNATIONAL LABOTJB O F F I C E : Freedom of Association,

et 83q.

Vol. I l l , p p . 303

360

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

introduced in 1902 a Bill which, besides setting up concihation
and arbitration procedure, also contained provisions dealing with
the right of association for trade purposes.
This Bill provided that a concihation council should be set
up to act as mediator in all disputes between employers and
workers affiliated to two central organisations. If concihation
were unsuccessful the dispute might with the consent of the parties
be submitted to an arbitration court. No stoppage of work might
be declared either before concihation had been tried or during the
arbitration procedure. This Bill, introduced by the Liberal Government then in power, was at first opposed by the Conservatives,
at whose request an amendment was adopted providing for the
protection of unorganised workpeople willing to work during
strikes and lock-outs. The Bill so amended was opposed by the
workers' organisations and rejected by a small majority.
In 1907 an important dispute broke out in the paper industry,
and the workers submitted the matter to the Storting with a
request that concihation procedure should be introduced. This
resulted in the setting up of a Royal Commission to enquire into
the question, but it was not until 1912, under a Conservative
Government, that a Bill was finally introduced.
This Bill drew a distinction between two kinds of collective
disputes — those arising out of the regulation of wages, conditions
of employment, and all other matters connected with labour not
covered by collective agreements, described as disputes about
interests, and those concerning the validity, interpretation or
existence of a collective agreement, which, since they are based
on the conditions fixed by existing agreements, may be described
as disputes about rights 1 .
A special court was to be set up for the settlement of labour
disputes arising out of the interpretation of collective agreements.
The Bill proposed to make conciliation and arbitration procedure
compulsory in disputes concerning the vahdity and interpretation
of agreements, i.e. disputes about rights, whereas the option of
resorting to arbitration procedure was to be left to the parties
themselves in disputes about the substance of new collective
agreements, i.e. in disputes about interests.
In 1913 a new Liberal Government drafted a Bill providing for
compulsory arbitration in all disputes about interests that by
1

and

This distinction is still made in the relevant legislation of Norway, Sweden
Denmark.

NORWAY

361

their nature or extent were such as to endanger public interests.
At the request of the secretariat of the Confederation of Trade
Unions and the central executive of the Employers' Federation,
the question was adjourned pending its examination by a joint
committee appointed by the two organisations.
In spite of the fact that the employers' and workers' representatives on this committee were alike opposed to compulsory
arbitration, the Government recommended in 1914 that this
Bill should be adopted, whereupon the Confederation of Trade
Unions decided to declare a general strike as a protest against
the introduction of compulsory arbitration. The provisions concerning compulsory arbitration in disputes about interests were
therefore omitted, and the Bill became law in 1915. It was only
a year later, however, that the first Act on compulsory arbitration
was passed.
The Act of 6 August 1915 on industrial disputes set up a Labour
Court for the settlement of all labour disputes arising out of the
interpretation and validity of collective agreements or claims based
on collective agreements. It also made conciliation procedure
compulsory in collective labour disputes.
The Act of 9 June 1916, which introduced the compulsory
arbitration provisions omitted from the 1915 Act, was provoked
by a serious outbreak of stoppages of work, particularly in the
mining and iron and steel industries. This Act empowered the
Government to order that any dispute affecting important public
interests should be submitted to an arbitration court consisting of
a chairman and four members. This court might forbid the declaration or continuance of a stoppage of work. The Act was to
remain in operation only for the duration of the war.
In 1919, and again in 1920, the Act was prolonged for another
year. A proposal to prolong it for a further year was rejected in
1921 by the united votes of the Conservative and Labour parties.
In the same year, a strike broke out, of an extent unprecedented
in Norway, affecting 120,000 workers, i.e. the majority of the
members of the Confederation of Trade Unions. The workers
gained nothing from this strike ; the Confederation lost nearly a
third of its members, and when the Compulsory Arbitration Act
again came up for discussion in 1922, the Executive of the Confederation advised the workers' parliamentary representatives to
support the Act, which was in fact prolonged for a further year.
In 1923, however, both the trade unions and the Labour members
of the Storting returned to their former attitude, and the proposal

362

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

to prolong the Act was rejected by a majority formed by the
parties of the Left and the Conservatives.
The Labour Disputes Act of 5 May 1927 * amended in certain
respects that of 6 August 1915. Under its provisions the party
injured by the breach of an agreement is entitled, with the consent
of the Labour Court, to declare a strike or lock-out. The Act
increases the penalties for unlawful stoppage of work.
In the same year, as a result of serious disputes in the mining,
smelting, textile and shoe industries, the Government again
introduced a Bill concerning compulsory arbitration, which was
passed on 5 May 2 at the same time as the Labour Disputes Act.
It was to remain in operation until August 1929. Like the 1916
Act, it provided for the setting up of an arbitration court consisting
of a chairman and four members. This court was to settle by an
arbitration award any dispute submitted to it by the Crown which
was hable to endanger important public interests, and in which
conciliation had been attempted in vain. The provisions concerning
the court and its procedure were similar to those contained in the
Labour Disputes Act. On its expiry in 1929, the Compulsory
Arbitration Act was not prolonged.

§ 2. — The System in Force
The conciliation procedure at present in operation in Norway,
introduced by the Labour Disputes Act of 5 May 1927, is official,
whereas arbitration procedure, since the expiry of the Compulsory
Arbitration Act of 5 May 1927 (i.e. since 1929) depends purely on
private agreement between the parties. Under the provisions of
the Labour Disputes Act of 5 May 1927, all justiciable disputes
concerning the interpretation or validity of collective agreements
must be brought before a Labour Court.
Chapter III of the Labour Disputes Act of 5 May 1927 provided
for the introduction of conciliation procedure by the appointment
by the Crown of one permanent conciliator for the whole Kingdom
and one permanent conciliator for every conciliation district. The
division of the Kingdom into conciliation districts was to be
effected by the Crown. The district conciliators, appointed for a
period of three years at a time, are under the authority of the State
1
2

Legislative Series, 1927, Nor. 1 (A).
Ibid., 1927, Nor. 1 (B).

SrOBWAY

363

Conciliator. A supplementary Act adopted on 8 June 19311 provides
that the permanent conciliators shall in future act alone, and
repeals the provision formerly in force allowing them to form
conciliation committees by co-opting assessors from a panel nominated by the trade unions and the employers' associations.
In case of a dispute between a trade union and an employer
or employers' association concerning the regulation of conditions
of employment, wages, or any other matters connected with labour
not covered by a collective agreement, the State conciliator or
district conciliator must immediately be informed of the serving
of notice to cease work — that is, notice of the termination of a
collective agreement by the workers or employer, with a view to
the organisation of a strike or lock-out.
A strike or lock-out may not be declared before the expiry
of the period of notice, and not in any case until four working
days have elapsed since the date when the notification that
negotiations had not been begun or had been broken off. or that
the notice to cease work had been prolonged, was received by
the conciliator.
The notification of the notice to cease work must contain particulars of the subject of the dispute, the undertakings affected by
the notice to cease work, the number of employees in each of the
undertakings concerned, the date when the notice expires, and
whether negotiations between the parties have been begun, are
still in progress, or have been broken off.
If negotiations are in progress, notice of any subsequent
breaking off must be given in the same manner. The notification
must be sent by the trade union, employer, or employers' association which has served the notice. If the person or association
concerned is a member of the Norwegian Employers' Federation
(Norsk Arbeidsgiverforening), the Confederation of Trade Unions
(Arbeidernes Faglige Landsorganisation), or any other important
employers' or workers' association, the notification must be sent
through the executive committee of the organisation concerned,
which must at the same time forward a copy of it to the other
party. If the State conciliator or district conciliator considers
that a stoppage of work will prejudice public interests, he must,
within two days of receiving the notification, prohibit the stoppage
of work until conciliation proceedings have been completed.
He must then institute conciliation proceedings without delay.
1

Legislative Series, 1931, Nor. 1.

364

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

The conciliator fixes the time and place for the proceedings
in the dispute. The session may take place outside the concihation
district, and is held in camera.
The parties may appear in person or by means of authorised
representatives, not more than three representatives being allowed
for each party. Practising barristers and solicitors may not be
employed as authorised representatives without the consent of the
concihation authority.
The permanent conciliator dealing with the case must collect
all the information necessary for the settlement of the dispute as
promptly as possible, and endeavour to the best of his ability to
induce the parties to agree to a reasonable compromise. He may
call for declarations from the parties and require the production
of documents. Witnesses are bound to appear if their place of
residence or sojourn is within such a distance from the place where
the proceedings are held that it is not necessary for them to travel
more than 600 kilometres by railway or 300 kilometres by steamer,
or 100 kilometres by any other means of conveyance. The same
applies to the parties themselves if they are required to appear
in person. Any person who is required to give evidence in the
case is bound to serve as an expert on being appointed by the
conciliator to do so.
If a compromise is reached, a collective agreement in conformity with it must be drawn up with the co-operation of the
permanent conciliator, and signed by the parties or their representatives. Either party may demand that the concihation proceedings shall be terminated if ten days have elapsed since the
prohibition of a stoppage of work was issued, unless the party in
question has failed to co-operate duly in the conciliation proceedings. The proceedings must be terminated not more than four
days after the sending in of a lawful application.
The concihation authorities may submit a definitive proposal
to the parties for the settlement of the dispute. In case of failure
to reach a compromise, the conciliator who has conducted the
proceedings may issue a report in whatever manner he thinks fit.
If a district conciliator has conducted the proceedings, he must
send a report on the case to the State conciliator as soon as possible.
This report must contain the definitive concihation proposal if
such proposal was made.
In general, the Act allows no right of appeal against the
measures adopted by the conciliators. Any person who is not a
party may, however, appeal against a decision requiring him to

NORWAY

365

make a declaration, take an oath, or give a surety ; to produce
documents or other evidence or grant access thereto ; to serve as
an expert ; or rendering him hable to pay a fine or costs.

§ 3. — Labour Law Jurisdiction
The procedure for the settlement of justiciable labour disputes
is laid down in the same Act as the conciliation procedure summarised above for the settlement of disputes about interests. It
may therefore not be out of place to describe it shortly here.
The Labour Court, which has its seat in the capital of the
Kingdom, is composed of a chairman, six members, and two
substitute members for each member. Appointments are made by
the Crown for a period of three years, two members being nominated
by the trade unions and two by the employers' associations.
Every employers' association with a membership of not less than
100 employers who employ in all not less than 10,000 members,
and every trade union with a membership of not less than
10,000 members, has the right to submit nominations for two
members of the Court with their substitutes.
The two other members of the Court and the chairman are
appointed freely by the Crown, but the chairman and one of these
members must satisfy the requirements prescribed for judges of
the Supreme Court, while the other may not be employed in any
post or occupation making him Hable to be considered as a representative of either party. If no nominations are received by the
competent Government Department, the appointments are made
without nomination. Members of the Court are required to take
an oath, and may not be members of the executive committee or
the permanant staff of any trade union or employers' association.
The Court is not competent to deal with a case or adopt a decision
unless all the members are present.
The jurisdiction of the Court covers not only individual labour
disputes but also the disputes which are of particular interest in
the present connection, namely, disputes concerning the validity,
interpretation or existence of a collective agreement or any claim
based on a collective agreement, and disputes arising out of the
breach of a collective agreement or an unlawful stoppage of work.
Any attempt to settle by means of a strike or lock-out a dispute
between a trade union and an employer or an employers' association

366

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

respecting the validity, interpretation or existence of a collective
agreement, or any claim based on a collective agreement, is
forbidden.
If the Labour Court has issued an award declaring t h a t a
breach of an agreement or a stoppage of work contrary t o the
above provisions has taken place, and if the action constituting
this breach or stoppage is not brought to an end within four days
after the issue of the award, the injured party or the organisation
to which he belongs may apply to the Labour Court for its consent
to the declaration of a strike or lock-out.
The application must be addressed to the chairman of the
Labour Court, who must convene a meeting to discuss it. The
Court may not give its consent unless the chairman and at least
one of the two members appointed b y the Crown without nomination are in favour thereof.
Disputes within t h e jurisdiction of the Labour Court may not
be brought before any other court. If a collective agreement has
been concluded by a trade union or an employers' association,
the rights and liabilities of the individual members under the
collective agreement may not be enforced otherwise than by
means of an action brought by or against the union or association
on behalf of the person concerned. If a member of a trade union or
an employers' association is guilty of a breach of a collective
agreement or of an unlawful stoppage of work, the union or
association is liable, unless it proves t h a t it was not itself responsible,
or t h a t it endeavoured by all means in its power to prevent the
offence in question.
I t is the duty of the Court to assess compensation for the
breach of a collective agreement or for an unlawful stoppage of
work. I n so doing, it must take into consideration not only the
extent of the damage, but the proven guilt of the defendant and
also any unlawful action on the part of the injured party.
The provisions laid down for conciliation procedure in respect
of the duty of parties and witnesses t o appear also apply to the
Labour Court. The proceedings take place in public, unless the
Court decides to hold them in camera, as it may do in any case
involving discussion of the secrets of a business or association.
The decisions of the Court are adopted by a majority vote.
The award must be issued as soon as possible after the proceedings
are closed. No appeal is allowed against the awards of the Court,
which may be enforced in conformity with the rules applicable to
the decisions of the Supreme Court. Appeal may, however, be

367

NORWAY

made to the Supreme Court, or to the Appeal Committee of the
Supreme Court, against any decision disallowing an action or
opening the proceedings therein.
The Act provides for penalties in the form of fines up to a
maximum of 25,000 kroner or imprisonment for not more than
three months for any person who supports a resolution to initiate,
continue, support with contributions, or approve an unlawful
strike or lock-out, or who co-operates therein. The same penalties
are imposed on any employer or representative of an employer
who institutes or continues an unlawful lock-out. On the other
hand, the mere participation b y a worker in an unlawful strike is
not punishable. Further penalties are provided for contempt of
court, breach of the obligation to observe secrecy, and failure to
appear without sufficient reason.

§ 4 . — Results and Opinions
The Statistical Yearbook for the Kingdom of Norway for 1932
gives the following figures for strikes and lock-outs.
Year
1922
1923
1924
1925
1926
1927
1929
1930
1931

Disputes

Workers affected

Working days lost

26
57
61
84
113
96
63
73
82

2,168
24,965
63,117
13,752
51,487
22,456
8,042
4,796
59,524

91,380
796,274
5,152,386
666,650
2,204,365
1,374,089
363,844
196,704
7,585,832

I n the course of the development of Norwegian legislation for
the settlement of collective labour disputes, the attitude of both
workers and employers has undergone a notable change.
Up to the year 1907 the employers opposed every legislative
measure for the settlement of labour disputes, but after t h a t they
supported the introduction of compulsory conciliation procedure.
Although the Employers' Federation has constantly opposed the
permanent establishment of compulsory arbitration machinery, it
agreed to the various provisional Acts for this purpose, and even
quite recently voices have been raised among employers' in favour
of such a system.

368

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

The trade unions, on the other hand, advocated the introduction of conciliation and arbitration procedure until 1912, but
have opposed every attempt to introduce compulsory arbitration
since the 1915 Bill, and have consistently maintained this attitude
ever since. I n general, they are afraid t h a t compulsory arbitration
would hamper their efforts to raise their standard of living by
depriving them of their most powerful weapon. Yet it is also
admitted t h a t the arbitration awards have often been favourable
to the workers, particularly on the occasion of the 1920 disputes.
The following lines, written by the former Norwegian Minister
of Justice, Johan Castberg, convey an exact impression of the
situation created by the attitude of the parties :
Compulsory arbitration in Norway has been achieved in the face
of vigorous opposition, sometimes from the workers, sometimes from
the employers, and most often from both parties. The institution has
thus had to work under extremely difficult conditions. Nevertheless,
it has so far stood the test, since the decisions of the arbitration court
have always been respected by the parties, and in many instances
have created at least temporary peace in the industrial world. For
Norway again to have an Act on compulsory arbitration in labour
disputes is a mere question of time 1.

§ 5. — Summary
The Norwegian Act of 5 May 1927, together with the supplementary Act of 8 June 1931, regulates both the procedure for the
settlement of justiciable disputes in labour matters and conciliation procedure for the settlement of collective labour disputes
(disputes about interests). I t prescribes severe penalties for any
stoppage of work before conciliation has been attempted with a
view to the conclusion of a new agreement. In particular, no
stoppage of work may be declared before the expiry of a period of
notice, and in no case until four working days have elapsed since
the date when the prescribed notification was received by the
conciliator. Further, the conciliator may in the public interest
forbid ex officio any stoppage of work for a specified time while
conciliation proceedings are in progress. He has wide powers of
compulsion in all matters concerning the investigation of the
facts (calling of witnesses, examination of books, etc.).
1
Johan CASTBERG : " Compulsory Arbitration in Norway ", in
Labour Review, Vol. X I , No. 1, J a n . 1925, p. 38.

International

NORWAY

369

The Act of 5 May 1927 respecting compulsory arbitration in
collective labour disputes expired at the end of the period originally
fixed.
Disputes respecting the validity, interpretation, or existence
of a collective agreement are settled by the Labour Court. Any
attempt to settle such disputes by means of a strike or lock-out
is unlawful, and severe penalties are prescribed for contravention
of these provisions.
BIBLIOGRAPHY
B E R G , Pol. Arbeidsrett.
Oslo, 1930.
Forhandlinger pä den Nordiske Socialpolitiske Konferanse i Oslo, 21-22. September 1927. Oslo, 1928.
F B Y D E N B E B G , Alf. Kollektive arbeidstvister og deres bileggelee i Norge. Oslo,
1927.
ÖSTBEM, S. De kollektive arbeidskampe.
Oslo, 1925.
See also CASTBEBG. " Compulsory Arbitration in Norway. "
International
Labour Review, Vol. X I , No. 1, p p . 15-38.
Statistisk Arbok for Kongeriket Norge (Statistical Yearbook for t h e Kingdom of
Norway). Oslo, 1931.
W I E S E N E B , Cr. Norges Sociallovgivning.
Oslo, 1922.

2 5

SWEDEN
§ 1. — Economic Background and Development
The population of Sweden in 1931 was 6,410,000, the total
area being 173,156 square miles. I t is a country of emigration,
the net annual outflow for the last five years having averaged
some six to seven thousand.
Down to the middle of the nineteenth century, the country
was predominantly agricultural, but the numbers now engaged
in production are almost equally divided between agriculture
on the one hand, and industry and commerce on the other.
Since the war, in particular, Swedish industry has undergone
a considerable extension. I t s most important branches are
those based on timber and iron as raw materials. According
to the Sweden Yearbook for 1931, some 1,851,212 workers
and 40,000 administrative personnel were engaged in industrial
production proper in 1925. Trade and transport occupied about
300,000 persons, about 100,000 were engaged in handicrafts and
home industries and about the same number in the building
trades. The various factories and industrial undertakings are
widely scattered throughout the country.
Both employers and workers in Sweden are exceedingly well
organised. The chief employers' organisation is the Swedish
Employers' Federation (Svenska Arbetsgifvareföreningen).
In
addition, shipowners, agricultural employers and a few other
groups, particularly in the handicraft trades, have their own
organisations. Collaboration between the general federation and
the organisations of shipowners and agricultural employers is
secured by an institution called the Council of the Swedish
Employers' Associations.
The chief workers' organisation is the Confederation of Trade
Unions (Lanâsorganisationen),
which in 1930 comprised thirty-'
seven national unions (mostly of the " industrial union " type)
with a total membership of some 530,000. A certain number of trade
unions—although of the same type—have for economic or practical
reasons not formally associated themselves with the Confederation.
During recent years, however, there has been a marked tendency

SWEDEN

371

to further centralisation, which has brought the farmworkers'
union, among others, within the framework of the Confederation.
With the exception of a few organisations of public employees,
the only important union of the " reformist " type which is still
outside the Confederation is the Textile Workers' Union, with
about 30,000 members (mostly women), but this union, too, is
expected to affiliate in the near future. x
Measures for the prevention and settlement of industrial
disputes make their first appearance in Sweden as part of the
system of collective agreements built up by the employers' and
workers' organisations in the latter half of the nineteenth century.
Governmental measures do not appear until the beginning of the
twentieth century. The question of legislative measures for
conciliation and arbitration was indeed raised in Parliament as
early as 1887 and was the subject of proposals by private members
in most sessions during the following ten years. No parliamentary
action resulted, however, until in 1901 a Royal Commission was
appointed to enquire into the question and it was not until 1906
that legislative action was taken, in the form of an Act relating
to mediation in industrial disputes. This Act, which made provision for State conciliators, whose task it was to endeavour
to prevent and settle disputes in cases where the parties concerned
were willing to avail themselves of such services, remained in
force until 1920.
Between 1906 and 1920 a number of proposals were put forward
with the object of making the legislation concerning industrial
disputes more effective and on 28 May 1920 three Acts were
promulgated : an Act respecting conciliation in trade disputes,
substantially similar to the 1906 Act which it replaced ; an Act
respecting the Central Arbitration Board for certain trade disputes ;
and an Act respecting special arbitrators 2.
The second of these Acts was replaced in 1928 by an Act
setting up a special Labour Court for dealing with disputes relating
to collective agreements 3 . This was accompanied by an Act
on collective agreements 4 defining the legal effects of such instruments.
To understand the evolution of measures for conciliation
and arbitration in Sweden it is necessary to recognise the distinction
1

Cf. INTERNATIONAL LABOTJB O P P I C B : Freedom of Association,

et seq.
2
Legislative Series, 1920, Swe. 6-8.
3
Ibid., 1928 Swe. 3.
4
Ibid., 1928 Swe. 2.

Vol. I l l , p p . 323

372

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

made between " disputes on interests " (i.e. disputes on the
substance of new collective agreements) and justiciable disputes
or " disputes on rights " (i.e. concerning the meaning and application of a collective agreement). The Conciliation Act of 1906
was chiefly applied to the so-called " disputes on interests ".
For the settlement of the " disputes on rights " there was for a
long time a lack of special authorities. Employers and workers
very widely employed the same measures as in " disputes on
interests ", viz. negotiation and possibly conciliation with the
help of the State conciliators. It was also open to them to refer
the case to an ordinary court, but they seldom made use of this
method, among other things because of the delay involved. A
more usual procedure was that of arbitration, the parties to a
collective agreement voluntarily undertaking to submit " disputes
on rights " to the decision of an arbitration board. It was with
a view to promoting such voluntary arbitration that the Act
of 1920 setting up a Central Arbitration Board was passed.
With the special legislation on collective agreements adopted
in 1928 came the complementary Act setting up a special Labour
Court to settle disputes arising out of collective agreements. This
relieved the ordinary courts of cases of this kind. At the same
time the Central Arbitration Court ceased to act, being no longer
needed.
§ 2. — The System in Force
The system as it at present stands, therefore, makes provision
for conciliation by the Act respecting conciliation in trade disputes
of 28 May 1920 ; for compulsory proceedings before a special
court of disputes concerning the validity, existence and interpretation of collective agreements by the Act concerning the
Labour Court of 22 June 1928 ; and for voluntary arbitration by
the Act respecting special arbitrators in trade disputes of 28 May
1920.
CONCILIATION

Conciliation under the Act respecting conciliation in trade
disputes of 28 May 1920 takes three forms : it provides for the
appointment of a conciliator in each of the seven districts into
which the country is divided for the purpose of conciliation ;
it provides that a conciliator may be appointed to act in some
definite sphere of activity other than or in addition to the

SWEDEN

373

district 1 ; it provides also in special instances, e.g. important
disputes affecting more than one district, that special conciliators
may be appointed or conciliation commissions may be set up.
The great bulk of the work of conciliation is performed by the
district conciliators. These conciliators are appointed by the
Government for a calendar year. It is their duty to follow attentively the industrial conditions obtaining in their particular
district and to co-operate in adjusting industrial disputes which
may arise. Where the dispute in question threatens to lead to a
stoppage of work of great importance, the conciliator must take
steps to procure adequate information regarding the subject of
the dispute ; must urge the parties, pending a settlement, not to
engage in or extend any stoppage of work ; and must summon
the disputants to meet together for the purpose of discussion and
negotiation. The negotiations arranged by the conciliators between
parties to a dispute aim primarily at bringing about an agreement
on the basis of proposals made by the .disputants themselves, but
the conciliator may also make suitable proposals if such a course
is judged advisable. If it is found impossible to reach an agreement
by means of negotiations, the conciliators may propose the submission of the dispute to arbitration, but may not himself act as
arbitrator ; although, if such a course seems desirable, he may
offer bis assistance in the selection of a suitable person.
The system thus briefly outlined is in no sense compulsory,
but on the other hand is not completely optional. It is laid down
in section 4 of the Act that " the parties to the dispute shall be
bound to respond to the conciliator's summons ". According to
the amending Act of 12 June 19312, the obligation of the parties
summoned to appear exists, not only when, as at present, the
dispute is followed or is likely to be followed by a stoppage of
work of great importance, but also when the summons is demanded
by one of the parties. If the demand is made by a workers' federation it is only valid when the federation in question is representative of at least half of the workers involved in the dispute.
There is no penalty provided for failure to comply. The disputants
moreover are under no obligation either to accept the proposals
by the conciliator or to submit their differences to arbitrarion.
The official conciliators are given considerable powers, it
being incumbent upon the parties, at the request of the conciliator, to furnish him with extracts from accounts and other
1

The possibility envisaged here of appointing a permanent conciliator for all
conflicts within a certain industry has so far never been resorted to.
-Legislative Series, 1931, Swe. 4.
2 5 *

374

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

documents, together with statistical data and other facts with
which the dispute is concerned, as also to grant him access to
workplaces, in so far as this is necessary in order to afford him a
sufficient basis for coming to a decision. It is laid down that any
information so obtained must be treated as confidential, if the
parties furnishing it so desire.
Conciliators are paid out of public funds, and may not accept
any remuneration from employers or workers for their assistance
in adjusting industrial disputes, or for any other reason. They
are under the supervision of the Social Board and present a yearly
report to the Board on their work and on the progress of the
disputes dealt with. The Social Board has instituted a special
secretariat (the Conciliation Office) where statistical information
regarding collective agreements and labour disputes is collected
and placed at the disposal of the conciliators. Annual reports,
together with a short statistical survey of the work of the
conciliators, are available from the year 1907.
ADJUDICATION OF JUSTICIABLE DISPUTES AND ARBITRATION

As already noted, an important distinction is made between
justiciable disputes or " disputes on rights ", i.e. disputes concerning the validity, existence or interpretation of a collective agreement, and disputes concerning the setting up of new conditions,
referred to as " disputes on interests ". The Act concerning the
Labour Court of 22 June 1928 deals with the adjudication of the
so-called " disputes on rights ".
Under the provisions of this Act a Labour Court was set up
having its permanent seat in Stockholm but capable of holding
sessions elsewhere. The members of this Court consist of three
impartial members and four other members representative of
employers and workers. The three impartial members, comprising
a president and two associates, are appointed by the King, it being
laid down that the president and one of the associate members
must have legal knowledge and experience. The four other members
are appointed by the Bang for a period of two years, the central
employers' and workers' organisations providing two each. These
members are selected from lists submitted by the organisations in
question, which must contain at least twice as many names as
the appointments to be made. Substitute members are also
chosen both for the impartial members and for those proposed
by employers and workers.

SWEDEN

375

The Court is given power to call witnesses and make the
necessary investigations, and has the power to inflict fines. The
details of procedure are designed to make it possible to arrive
at decisions with the minimum of delay, preferably in a single
sitting, and it is stipulated t h a t the report made on the case shall
be as brief as possible. These decisions are legally enforceable.
By the 1928 Act on collective agreements, it was laid down t h a t
no militant action (i.e. strike or lock-out) may be taken, during
the life of an agreement, in connection with " disputes on r i g h t s " .
The Act of 28 May 1920 respecting special arbitrators in trade
disputes makes provision for arbitration machinery to be set u p
in the event of both parties to a dispute wishing to avail themselves
of it. The persons thus appointed as arbitrators may serve either
as single arbitrators or as chairmen of arbitration boards constituted by the parties. Such special arbitrators may be called upon
to act as chairmen on arbitration boards either of a permanent
character or constituted for a particular case. They are appointed
for a period not exceeding two years at a time, and. like the conciliators, have to report every year to the Social Board on their
activity.
§ 3. — Results and Opinions
The following table shows the number of stoppages of work,
workers directly involved and working days lost through industrial
disputes in Sweden during the years 1903-1930.
Returns giving the causes of strikes and lock-outs show that,
as usual, wage disputes are responsible for the great majority
of such stoppages. Over the period 1918-1927 73.9 per cent.
of the strikes and lock-outs were due in the main to questions
of wages. During 1928 this percentage shrank somewhat, to
63.2 per cent. ; in 1929 it was 66.1 per cent.
Turning to the results of stoppages of work, it is worthy of
note t h a t whereas over the period 1918-1927 the percentage settled
in favour of workers was approximately the same as the percentage
settled in favour of employers (21 per cent, of the total number
in one case, 21.8 per cent, in the other), only 5 per cent, of the
number of workers engaged in stoppages of work were successful
in enforcing their demands, while 16.6 per cent, were compelled
to accede to the employers' demands. Over the whole ten-year
period 77 per cent, of the workers returned to work as the result
of a compromise. During 1928 this percentage increased still

376

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

NTJMBER OF STRIKES AND LOCK-OUTS, WORKERS DIRECTLY INVOLVED
AND WORKING DAYS LOST
Year

Number of strikes
and lock-outs
142
215
189
290
312
302
138
76
98
116
119
115
80
227
475
708
440
486
347
392
206
261
239
206
189
201
180
261

1903
1904
1905
1906
1907
1908
1909
1910
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930

Number of workers Number of working
directly involved
days lost
24,571
12,248
32,906
18,655
23,540
40,357
301,749
3,671
20,576
9,980
9,591
14,385
5,119
20,711
46,701
61,223
81,041
139,039
49,712
75,679
102,896
23,976
145,778
52,891
9,477
71,461
12,676
20,751

642,000
386,000
2,390,000
479,000
514,000
1,842,200
11,800,000
39,000
670,000
292,000
303,000
621,000
83,000
475,000
1,109,000
1,436,000
2,296,000
8,943,000
2,663,000
2,675,000
6,907,000
1,205,000
2,560,000
1,711,000
400,000
4,835,000
667,000
1,021,000

further to 89.4 per cent. In 1929, the proportion was 77.1 per
cent.
The details given in the two following tables (taken from the
annual reports of the work of the official conciliators for the years
1924-1930) give some idea of the degree of success achieved by
this method of dealing with industrial disputes in Sweden :

Year

1924
1925
1926
1927
1928
1929
1930

Number of cases
Number of cases
actually dealt with Number of workers
in which
by conciliators and
settlement reached
affected
conciliation
through
committees
conciliation
205
220
200
147
160
151
215

187,829
233,177
52,891
63,919
89,838
48,005
23,453

171
183
170
117
140
122
177

377

SWEDEN

Year

1924
1925
1926
1927
1928
1929
1930

Number of
Number of cases
of concicases of conci- liation
which
liation in which work in
ceased
stoppage of
before
work occurred intervention

118
102
98
89
83
66
88

105
78
89
76
71
53
71

Percentage of
Number of
Percentage of total number
cases of concitotal
of workers
liation in which stoppages of
affected by
work ceased work in which stoppages of
after
conciliation work, in which
intervention
intervened
conciliation
intervened

•

13
24
9
13
12
13
17

Per cent.
47
39
45
43
36
37
30

Per cent.
70
92
89
52
86
74
60

As will be seen, some 150 to 200 cases were dealt with every
year affecting, on an average, about 100,000 workers. In over
80 per cent, of the cases settlements were reached. In about
half the disputes dealt with by the official conciliators a stoppage
of work occurred, but only in about one out of every seven of the
cases did the stoppage begin after the intervention took place.
Altogether, between one-half and one-third of the total number
of strikes and lock-outs that occurred were made the subject
of intervention, but these covered fully 75 per cent, of the workers
affected.
In fine, the conciliation service would appear to play a large
part in the technique of industrial relations in Sweden, both
in preventing strikes and lock-outs and in settling stoppages
of work once they have occurred ; and, so far as can be judged,
the methods followed would appear to have achieved a large
measure of success.
Opinions as to the system of conciliation and arbitration
in Sweden — apart from political utterances made at the time
when some specific measure is under consideration — are on the
whole rare ; the essential reason being, it would seem, that both
employers and workers are in the main satisfied with the methods
used. The general principle that stoppages of work should
not take place over the interpretation of a collective agreement
is accepted by both parties, although the passing of the present
Act met with strong opposition in various quarters. Compulsory
arbitration of disputes in general, on the contrary, finds little
favour with either side, although various attempts have been
made to extend the principle of compulsory arbitration to " disputes
on interests " when it is a question of what are termed " disputes
dangerous to society " (including disputes in agriculture). For

378

CONCILIATION AND ABBITRATION IN DIFFERENT

COUNTRIES

such disputes certain changes in the Conciliation Act have also
been contemplated — though so far not adopted — viz. the
introduction of a certain period of notice before a stoppage could
take place, as also, the establishment of a special institution,
a so-called " Board of Opinion ", which, after a thorough study
of the conditions, would publish a report on the case, in order
to make it possible for public opinion to exercise an appropriate
influence upon the parties. All things considered, it may be
said that the conciliation system, as it at present exists, while
not immune from criticism, meets on the whole with the appreciation of employers and workers alike.

§ 4. — Summary
The system of conciliation and arbitration in Sweden is governmental, based upon the effective organisation of both employers
and workers, who have built up a highly developed system of
collective agreements.
Conciliation is carried out almost exclusively by official conciliators having power to convoke the parties and to obtain necessary
information, but otherwise acting solely as mediators. In the
event of the failure of the conciliation proceedings, provision is
made for arbitration, but only on the consent of both parties.
" Disputes on rights " concerning the validity, existence or
interpretation of a collective agreement are dealt with by a special
Labour Court. The decisions of this Court are legally enforceable.
The system of conciliation and arbitration in Sweden would
appear to have achieved a considerable measure of success both
in the prevention and in the settlement of stoppages of work,
and on the whole would seem to enjoy the confidence of both
parties.
BIBLIOGRAPHY
HANSSON, Sigfrid. Den svenska faekförningsrörelsen.
3rd edition. Stockholm, 1930.
K. KOMMERSKOIXEGIUM.
Statens förlikningsmäns
verksamhet, arsberätteUe
for aren 1907-1911.
K. SOCIALSTYRELSEN. Översikt av statens förlikningsmäns verksamhet under
aren 1907-1914 jämte redogörelse för utländsk lagstiftning angâende medling och
skiljedom i arbetstvister. Stockholm, 1916.

379

SWEDEN

Staiens förlikningsmäns verksamhet, drberättelser for aren 1912-1922.
ArbetsinstäUelser i Sverige àrg. 1908-1911.
ArbetsinstäUelser i Sverige àrg. 1912-1922.
ArbetsinstäUelser och kollektivavtal samt förlikningsmännens
verksamhet
arg. 1923-1928.
Social Work and Legislation in Sweden. Stockholm, 1928. (Also in
a French edition.)
Nordisk Familjebok. 3rd ed. Vol. 1, articles " Arbetsdomare " by O. JARTE,
" Arbetsfred "

E . F . K. SOMMARIN

and

" Arbetsvist "

A. BRUNITO.

Stockholm, 1923.
Social Handbok. Article " ArbetsinstäUelser, medling och skiljedom i arbestvister " by Olle EKBLOM. Stockholm, 1925.

FINLAND

§ 1. — Economic Background and Development.1
Finland has an area of 388,217 square kilometres. Over one
tenth of its territory consists of lakes, and 73.5 per cent, is covered
by forests. At the end of 1929 the country had a population of
3,623,000. A relatively small proportion of the population is
employed in industrial undertakings (169,729 persons in 1928).
The agricultural population constitutes 82.6 per cent, of the total.
Finland ranks with Canada and Sweden as one of the world's
chief timber-exporting countries. The wood industry, including
the manufacture of substances derived from wood, accounts for
86 per cent, of the exports, compared with only 11 per cent, derived
from agriculture and 3 per cent, from other industries. It is the
principal industry of the country. There are also blast furnaces
and some textile undertakings.
In 1907, the trade unions joined to form a Confederation of
Trade Unions (Suomen Ammattijärjestö) which in 1928 had a
membership of 90,231. This organisation, which, under Communist influence, gradually lost its trade union character, was
suspended by the Government and it was dissolved in October
1930. A new central organisation has been formed by the
non-Communist workers, under the name of Ammattillisten
Järjestöjen Keskusliitto— Finland's Fackföreningars Centralförbund.
The employers' organisations are affiliated to the Central
Federation of Employers of Finland (Suomen Työnantajain Keskusliitto — Arbetsgivarnas i Finland Central-Förbund). This organisation took the place of the General Federation of Finnish Employers, founded in 1907. It has been in existence since 1 January
1918 and consists of the members of general and local industrial
associations and private persons. In 1928 it had 505 members,
who employed 95,457 workers.
1

Cf. Freedom of Association, Vol. I l l , pp. 353 et seq.

FINLAND

381

The earliest special provision on conciliation in, labour disputes
was t h a t in section 26 of the Industrial Act of 1879. Under this
Act the task of trying to settle labour disputes was entrusted to
the boards of directors of the chambers of industry set up in
the different towns of the country. This provision was never of
any practical value.
The Regulations issued to factory inspectors in 1889 also
contained a provision relating t o conciliation in labour disputes.
This instructed the inspectors to undertake the settlement of
labour disputes in their respective districts. Later, public opinion
inclined to the view t h a t the factory inspectors were not the proper
persons for this task, and the provision in question was omitted
in the new Order on factory inspection issued in 1917.
At the beginning of the present century Parliament on several
occasions considered proposals for a system of chambers of labour
or joint labour committees, whose functions would include the
settlement of labour disputes. Side by side with the local committees it was proposed to set up a Central Council.
I n 1913 Parliament passed a special Act on chambers of labour,
which provided for chambers consisting of equal numbers of employers and workers. The war prevented the Government from
enforcing the Act, and when in 1919 a definite decision was called
for, it was decided not to promulgate the Act on account of the
change in conditions. I t was considered that, especially in the
matter of conciliation in labour disputes, the proposed machinery
of trade councils would be too costly and cumbersome ; it was also
feared t h a t the chambers of labour would have too many different
duties.
I n 1918, however, the Government set u p a Committee to
draft proposals for the legal regulation of the relations between
employers and workers. I n 1919 it brought in a new Bill on labour
disputes, providing for the appointment of industrial conciliators
in all districts. Recourse to joint committees was to be had only
in special cases. The Bill instituted sanctions with a view t o
making conciliation in labour disputes more effective, and provided
for compulsory arbitration in cases where conciliation h a d proved
fruitless and a stoppage of work would endanger the public interest.
This Bill was rejected in Parliament, by both employers' and
workers' representatives. Later, the question was again examined
by t h e Legislative Committee responsible for drafting new Bills.
This Committee brought forward a proposal omitting nearly all
t h e repressive clauses.

382

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

An Act embodying these proposals was passed in 1924 and
promulgated in 1925. This is the Act of 21 March 1925 respecting
conciliation in collective labour disputes, which came into force
on 1 January 1926.1

§ 2. — The System in Force
CONCILIATION

Finnish legislation on conciliation is contained, as stated above,
in the Act of 21 March 1925 on conciliation in collective labour
disputes, which provides that the requisite number of conciliators
shall be appointed by Decree to intervene in collective labour
disputes between employers and workers. The Decree of 21 December 1925 2 fixes the number of Conciliators at four, and defines
their sphere of jurisdiction.
Each conciliator exercises his functions independent of the
others, under the supervision of the Minister of Social Affairs.
The conciliators are appointed by the Council of State for not
more than three years at a time.
If a difference of opinion arises between the conciliators
respecting the question which conciliator is competent to intervene
in a collective labour dispute, the Minister of Social Affairs decides.
Every conciliator is competent to intervene in a dispute if the
parties agree thereto or, without reference to the competence of
the conciliator, if the negotiations are begun under his guidance.
If a dispute falls within the sphere of jurisdiction of two or more
conciliators, each of them at once notifies the Minister of Social
Affairs, who appoints one of the ordinary conciliators to intervene
in the dispute, unless he considers it desirable to appoint a special
conciliator. The same dispute cannot, therefore, be within the
competence of more than one conciliator.
The Minister of Social Affairs may also appoint a special
conciliator, or two or more persons acting as a special conciliation
Board, to intervene in a dispute if he considers that the dispute,
owing to its nature or extent, may endanger any public interests,
or if the intervention of the conciliator concerned has been without
result. The provisions respecting conciliators apply also with
respect to the chairman and members of such Board.
1
2

Legislative Series, 1925, Fin. 1.
Suomen Asetuskokoelma, 1925, No. 376, p . 1304.

FINLAND

383

A conciliator is liable to challenge under the same conditions
as an ordinary magistrate. If he refrains from intervening in
a dispute for a valid reason or owing to challenge, the Minister
of Social Affairs appoints another conciliator.
Conciliation proceedings are opened at the request of one of
the parties to the dispute or, where the persons concerned in the
dispute belong to a trade organisation, at the request of that
organisation or of the federation to which it belongs. If, however,
the nature and extent of the dispute are such that the stoppage
of work caused by it may endanger any public interest to a
considerable extent, the conciliator has power to take steps on
his own initiative to bring about conciliation. In other cases he
does not intervene officially in the dispute unless he is requested
to do so by the parties, and not against their unanimous wish.
In principle, a conciliator does not intervene if an agreement
has been concluded for the establishment of special conciliation
or arbitration machinery, unless all the parties to the dispute
request him to do so, or if the special body has dealt with the
matter without result or is prevented by circumstances from
carrying out its duties.
The conciliation proceedings are conducted in the presence
of the representatives of the workers and the employers, invested
with full powers. An employer who is a party to a dispute may
be summoned to appear in person. If the parties to a collective
labour dispute belong to a trade organisation, the conciliator
may enter into communication with the said organisation or
its superior organisation and may permit it to take part in the
negotiations.
The parties are urged to produce and supply all information
which can be procured without special difficulty and which is
necessary to elucidate the question at issue.
The conciliator may summon experts or other persons for
the purpose of elucidating the question at issue or giving advice.
The Act, however, does not lay down any means of compelling
such persons to attend.
In the course of the negotiations the conciliator endeavours
to induce the parties to state definitely the points at issue and
restrict them as far as possible, and to arrive at a settlement
in terms as near as possible to the basis of their own proposals.
For this purpose he proposes such concessions and adjustments
as seem to be equitable.
If conciliation proceedings have been held and the conciliator

384

CONCILIATION AND ARBITRATION TN DIFFERENT

COUNTREES

has failed to settle the dispute by negotiation, he may submit
to the parties a final conciliation proposal in writing, and at the
same time urge them to ratify the said proposal within a short
time limit fixed by himself. If a settlement is reached, a written
agreement embodying it is drawn u p and signed by the parties.
If the parties fail to reach an agreement, the conciliator has
no power to compel them to do so. But the report on the conciliation
proceedings and the conciliation proposal, if any, may be published
by the conciliator, provided that this is not against the unanimous
wish of the parties.
ARBITRATION

If the parties fail to reach a settlement by conciliation, the
Act provides for possible arbitration ; it requires the conciliator
to urge the parties to submit the dispute for decision to one or
more arbitrators, whose award they pledge themselves to observe.
The conciliator himself does not act as arbitrator.
If the parties agree to submit the dispute to an Arbitration
Board for decision, a written agreement is drawn up to this effect
in the prescribed form and steps are at once taken to appoint
arbitrators.
I n this connection the conciliator gives the parties all necessary assistance, inter alia by deciding questions referred to him
respecting the choice of the arbitrators, and by supplying the
arbitrators appointed with a report of the dispute and the conciliation proceedings.
The Act finally provides t h a t if the parties fail to reach an
agreement and the dispute is not settled by arbitration, the
conciliator must at once notify the Minister of Social Affairs,
and must append to his notification a report of the dispute and
the conciliation proceedings.
The conciliator does not again intervene in the same collective
dispute, except at the joint request of the parties, or when an
alteration occurs in the dispute itself or in circumstances materially
affecting the settlement. Such renewed conciliation proceedings
are conducted in the same manner as the earlier proceedings.
The Act imposes no penalties on the parties to a dispute.
On the other hand, it provides t h a t if a conciliator unlawfully
discloses trade or business secrets which have come to his knowledge
in the course of his official duties, he is liable to a fine. If he
has done so with intent to procure economic advantage for

385

FINLAND

himself or another, or to injure a person engaged in industry or
business, he is liable to imprisonment. The same penalty is imposed
on a person who with such intention for himself or another has
procured information respecting trade or business secrets. Prosecutions for the above-mentioned contraventions are not, however,
instituted by the Public Prosecutor unless the injured party
reports the contravention for prosecution.

§ 3. - Results, Opinions of the Parties Concerned
and Plans for Reform
The following table shows the number of labour disputes
and the manner in which they were settled, according to the
Finnish Statistical Yearbook l .

Year

1910.
1920.
1925.
1926.
1927.
1928.
1929.
1930.

Number
of days
Number over
which
of
disputes the disputes extended
54
146
38
72
79
71
26
11

1,206
3,201
1,069
3,227
4,252
4,595
889
212

Outcome of the disputes
Number
of employers
affected
by the
disputes

Number
of
workers
affected
by the
disputes

183
824
156
310
221
309
138
32

4,361
21,001
2,921
10,230
13,368
27,226
2,443
1,673

Agreement

14
76
19
40
33
25
11
5

No
Accept- Accept- agreement,
ance of ance of indeñnite
the emthe
or
ployers' workers' outcome
condi- condi- unknown
tions
tions
31
41
8
13
30
18
12
4

9
25
9
14
14
24
3
2

4
2
5
2
4

In Finland the possibility of some form of compulsory conciliation has been under consideration. There is a consensus of
opinion that the Act of 1925 instituting a system of voluntary
conciliation has failed to achieve its purpose.
But the employers, when approached in the matter, have
declared against any such extension of the conciliation system,
while the Finnish Confederation of Trade Unions, split between
the Communists and the Social Democrats, has refused to enter
into discussion, maintaining that the right to strike must in
no way be limited. A Committee has been appointed to examine
ways and means of making the present Act more effective 2. In
1

Statistiak Arsboh for Finland, 1931, p p . 270-271.
* Socialinen Aikakauskirja
— Social Tidskrift, 1929, Nos. 2 and 5.
2 6

386

CONCILIATION AND ARBITRATION DT DIFFERENT

COUNTRIES

March 1931 this Committee drafted a Bill to amend the Act in
force, providing for the postponement of open conflicts by
imposing upon the parties concerned the obligation of notifying
the conciliator of proposed stoppages of work. The fate of this
measure remains to be seen 1.

§ 4. — Summary
Under the terms of the Finnish Conciliation Act, a conciliator
or the Conciliation Board may not intervene in a dispute, except
at the request of one of the parties, unless the question at issue
is a serious collective dispute endangering the public interest.
Like similar enactments in other countries, the new Finnish
Act gives the preference to conciliation machinery set up by
agreement between the parties to the dispute. In order to strengthen
the authority of the conciliator, the Act lays down that in case
of failure the conciliator may not take steps with a view to renewed
intervention, except at the joint request of the two parties, or
if the nature of the dispute has been changed through the emergence
of new facts.
The Act has a voluntary character and makes no provision
for penalties, except in the case of a conciliator who discloses
trade secrets.
BIBLIOGRAPHY
EHBNROOTH, Leo. " Työriitojen sovittelu — Medlingen i arbetstvister. " Sosialinen Aikakauskirja — Social Tidskrift, 1928, No. 1.
Kxrusi, Eino. Social Protection in Finland. Helsinki, 1928.
LEKTINEN, J a n . " Joukkotyöriitojen sovittelun tehostaminen. " Socialinen
Aikakauskirja — Social Tidskrift, 1929, No. 3.
LrNTDBl, Arvo. " Helsingin kenkäteollisuudessa sattunut lakko — Strejken
inom Skoindustrin i Helsingfors." Sosialinen Aikakauskirja
— Social Tidskrift,
1926, No. 4.
MANNIO, Nulo A. " Työriitojen pakollinen ratkaisu." Kotvmainen Työ, 1927,
No. 11.
SosiAimiNiSTEBiö — SociALMiNiSTEKrBT. « ' Joukkotyöriidat ja niiden sovittelu
Suomessa — Kollektive arbetstvister och medling a v dem i Finland." Sosialinen
Aikakauskirja — Social Tidskrift, 1927, No. 9.
Työsopimuskomitean
mietintö työriidoista, 1920.

1
Cf. the article of Nulo A. MANNIO in Socialinen
Tidskrift, 1931, No. 4.

Aikakauskirja

—

Social

UNION OF SOCIALIST SOVIET
REPUBLICS

§ 1. — Historical Survey
B E F O R E THE REVOLUTION

Until the War
Early in the nineteenth century (about 1825-1830), when
Russian industry was still young, it began t o feel the first effects
of competition and the difficulties in the relations between employers
and workers. On the employers' side complaints became more
and more numerous, especially concerning the sudden leaving
of the workers en masse on the pretext t h a t they were recalled
by their lords 1 . On the workers' side there was no less complaining ; they objected t o the unsatisfactory conditions in which
the manufacturers compelled them to live, in tenements attached
to the undertakings, t o the irregularity in the payment of their
wages, etc. The lack of contracts of engagement and regulations
defining the relations between workers and employers was felt
throughout industry.
The first Act intended to regularise the situation of the workers'
relations with employers was promulgated a t the request of the
manufacturers in 1835. I t made it compulsory t o conclude
a contract of engagement or issue to the worker an account book
(worker's cards), and forbade t h e worker to leave his job before
the termination of the contract or the period for which he had
been engaged. The Act also prescribed t h a t certain steps should
be taken to improve t h e conditions in the workers' tenements,
for which it laid down regulations. On the other hand, it made
no provision for conciliation proceedings in disputes in industrial
undertakings.
1
At that time, and until 1861, serfdom prevailed in Russia, and the landowners
had the right to recall the peasants who were attached to their land and to whom
they had granted temporary permission to take up industrial work.

388

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

After the abolition of serfdom in 1861, all the persons concerned
became clearly aware of the need of regulating the status of the
workers and avoiding industrial disputes, for political as well
as for economic reasons. But the different views of the various
ministries and the diversity of industrial interests in the different
regions of Russia considerably delayed the adoption of any measure
in this field. It was not until 1896 that an Act was passed instructing the factory inspectors to act as conciliators between employers
and workers.
Industrial Disputes and Labour Inspection
A staff of inspectors had been formed in 1882 for the purpose
of supervising the observance of the Act of 1845 prohibiting the
employment in industry of children of under twelve years of age.
The inspectors were subordinate to the Ministry of Finance (Department of Industry) 1 . Later, they were instructed to supervise
the conditions of health and safety in the undertakings and to
see to it that labour laws were observed by employers and workers.
When the Government decided to organise a system of conciliation
between employers and workers it made use of the factory inspectors, whose knowledge of the conditions of employment in industry
appeared to make them the most suitable for the purpose.
The Act of 3 June 1886 concerning " the supervision of the
factories and the relations between manufacturers and workers "
was due to the initiative of the Minister for the Interior, who
considered that it was absolutely necessary to take steps to
limit and conciliate industrial disputes, which were tending more
and more to become political in nature. The Minister urged
in support of his Bill that " the enquiries made by the local authorities into the cost of recent strikes have shown . . . that
these disputes were for the most part due to the absence in Russian
legislation of provisions dealing with the relations between manufacturers and workers " 2 .
The Act provided that the inspectors should visit any undertaking where there was a prospect of a dispute, and for this purpose
the poüce were ordered to notify the inspectors at once. The
inspectors were to ask the claimant party, whether employers
or workers, for a written or oral explanation of their dissatisfaction.
1

Subsequently the Ministry of Commerce and Industry.
Letter of the Minister of the Interior to the Minister of Finance, 4 Feb. 1885
(N. 281). Cf. M. TOUGAN-BABANOWSKY : The Russian Factory of Yesterday and
To-day, p . S62; St. Petersburg, 1900.
2

TJ. s . s . R.

389

They were to make an enquiry on the spot and try to concUiate
the parties, although their decisions had not the force of law.
During the first years of their activity the inspectors acquired
a certain measure of popularity among the workers, and they
succeeded in making their authority felt in many disputes and
in conciliating the parties.
But the scope of this Act was substantially restricted by the
circulars subsequently issued by the Ministry of Finance. Thus,
a circular of 1897 *, which was contrary to the spirit and letter
of the Act of 1886 and was the result of complaints made by
manufacturers, forbade the inspectors to question workers on
strike until they had resumed work. Furthermore, the workers
were allowed to make their complaints only in public.
The Act of 1886 provided that every worker considered as
a " strike leader " rendered himself liable to four to eight months'
imprisonment, and other active strikers to two to four months'
imprisonment. If a strike involved violence or threats to the person
or the destruction of the property of the undertaking, the penalty
for strike leaders could be increased to sixteen months and for
other active strikers to eight months. This measure restricted
the freedom.of the workers to lay their complaints openly before
the factory inspectors.
An instruction issued to the factory inspectors in 18982 restricted
the conciliatory functions of the inspectors still more. Thenceforward the inspectors were to intervene only if the dispute arose
out of the interpretation or application of an individual contract
of employment 3. In other words, they could no longer consider
disputes concerning questions of interests or questions of safety
or hygiene, or disputes arising between the date of engagement
and the issue of the work card, when the contract of employment
officially came into force. Finally, in 1903, a new Act placed
the factory inspectors immediately under the provincial governors.
In spite of all this, the factory inspectors often succeeded in
conciliating the parties, and in many cases brought about a settlement in favour of the workers. Thé reason for this lay in the
moral authority they enjoyed in the eyes of the workers and
manufacturers, and in the skill with which they enforced the
1
Circular of the Department of Industry in the Ministry of Finance (N. 9677),
8 April 1897. Cf. A. MEKOUXIN : Factory Inspection in Russia, p . 224; Kiev, 1906.
2
Instruction t o the factory inspectors issued in Sept. 1898. Cf. A. MXKOUIJN,
op. cit.
3
There were n o collective agreements in Russia a t t h a t time.

6 *

390

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

existing legislation, if need be circumventing or ignoring certain
provisions intended to restrict the field of their activities.
Workers' Representation
Another measure intended to prevent labour disputes was
the creation of posts of workers' representatives (starosta) in
industrial undertakings 1 . The workers in each department
of an undertaking could elect a representative to defend their
interests with respect to the application and interpretation of
contracts of employment.
But the selection of these representatives had to be approved
by the managers of the undertaking. This made the workers
mistrustful, and they often refused to elect representatives in
whom the employers had confidence. The 1903 Act was thus
applied only in a very small number of undertakings, principally
in State industries.
During the War (until February 1917)
The need of finding some method for the prompt settlement
of disputes by way of negotiation was felt more and more strongly
during the war. The war industries committees 2 decided that
workers' delegates should participate in their work, and in most
of these committees, as well as in the Central Committee, so-called
" workers' groups " were formed. .They consisted of delegates
from the meetings of workers' representatives] in industrial undertakings, these representatives themselves having been elected
for the purpose by general meetings of the workers in the undertaking. The power thus given to the workers to elect representatives on the war industries committees gave fresh life to the
1903 Act on the starosta, which became more widely applied
during the war.
The workers' groups, whose duty it was to defend the
interests of the workers and ensure that they would collaborate
in the work of national defence, had also to deal with disputes
arising in the important munitions and related industries. This
they did at first only occasionally, but later more regularly.
Several disputes were settled by negotiation between the workers'
groups and the employers' representatives, and chiefly by the
1

Act of 10 June 1903. Cf. Code of Laws of the Russian Empire, 1913 edition.
These committees consisted of representatives of manufacturers, traders,
local authorities, " zemstvos " (autonomous rural councils), and municipalities.
2

U. S. S. B.

391

intervention of the workers' group in the Central War Industries
Committee.
When this Committee decided tö set up conciliation boards,
the workers' groups took an active part in forming these boards.
The rules for the Central Conciliation Board (attached to the
Central War Industries Committee) were approved in February
1916 by the Second Congress of War Industries Committees.
These rules were also to serve as a model for the foundation of
local conciliation boards which the Central War Industries
Committee proposed should be set up.
The Central Conciliation Board consisted of eight employers'
representatives, selected by the Association of Manufacturers
for the Petrograd area, and eight workers' representatives; selected
by the workers' groups of the Central War Industries Committee
and the Petrograd War Industries Committee. Each party
was to elect in addition two substitute delegates. The chairman
was elected by a simple majority of votes from among the members
of the Board, but failing agreement, he could be chosen elsewhere,
in which case he had only a consultative vote. The Conciliation
Board could not deal with a dispute until it had been referred
to it by the parties. Once this had been done, the Board referred
the question to a committee of four of its members, two workers'
and two employers' representatives, which had to be set up within
twenty-four hours. This committee acted as an intermediary
and proposed a compromise to the parties to the dispute. If
it was accepted, the committee immediately informed the Conciliation Board, which then took a decision in accordance with
the agreement reached. If the committee failed, it informed
a plenary session of the Conciliation Board. The Board then
drew up a new proposal, which it submitted to the parties. If
the latter accepted this proposal, the Board took a final decision
by a majority of votes. If the voting was equal, the Board could
take no decision, and in that case it had to propose to the parties
to organise an arbitration court.
The necessary funds for the working of the conciliation boards
were allocated by the war industries committees to which these
boards were attached.
Owing to the opposition that this scheme met with among
both workers and employers, it could not be applied in practice to
any great extent. Nevertheless, besides the Central Conciliation
Board in Petrograd, conciliation boards were set up in certain
important industrial centres.

392

CONCILIATION AND ARBITRATION I N DIFFERENT

COUNTRIES

A F T E R THE REVOLUTION

Under the Provisional Government
(March to October 1917)
The political and economic changes t h a t accompanied the
Revolution of March 1917 led to a very large number of disputes
in all branches of industry, which made it necessary for both the
Government and the parties concerned to t r y t o find means of
settling, them by amicable agreement. Legislation failed to keep
up with events ; the private initiative of the workers' and employers'
organisations, being encouraged by the Government and stimulated
by the conditions of the labour market and the political situation,
was particularly active in the field of conciliation and arbitration.
Government

Measures

Workers' committees were set up in nearly all undertakings
when the Revolution broke out, in the form of councils of workers'
representatives (starosta). By an Act of 22 April 1917 the Provisional Government approved the creation of these committees.
This Act provided t h a t workers' committees could be set up in
all private and Government undertakings, either at the request
of not less than one-tenth of the workers or at t h a t of the management. Tt was the duty of the workers' committees : (a) to represent
the workers in all discussions with the management concerning
wages, hours and discipline ; (b) to regulate the mutual relations
between the workers ; (c) to represent the workers in their relations
with Government or public institutions ; (d) to organise a n d .
develop institutions for improving the moral and material welfare
of the workers ; (e) to convene plenary meetings of the workers.
From the outset these committees acquired great importance
as authorities of first instance in disputes. They became responsible
for taking the effective decisions in strikes and disputes in general.
They also took an active part in the formation of conciliation
boards.
But the Act on conciliation boards promulgated shortly before
the fall of the Provisional Government was not applied. As a
matter of fact, it merely confirmed the situation established in
practice, with this difference t h a t when a dispute broke out, the
parties were to refer the case directly to a conciliation board by
common agreement, without acting through the factory inspectors.
Apart from these legislative measures, reference should be made

393

TT. S. S. B.

to the activities of the Ministry of Labour, which in all cases of
serious dispute sent a representative to the spot, whose duty it
was to bring his influence to bear on employers and workers with a
view to making them refer the dispute t o a conciliation board,
or if the dispute threatened national interests, to the " Department
for Industrial Relations " in the Ministry of Labour. This Department also acted as an optional authority of higher instance when
the conciliation boards failed in their negotiations. But it often
happened t h a t the Department was unable to decide on the merits
of the case referred to it by the parties.
Private

Initiative

From the beginning of the Revolution private initiative led to
action in the matter of industrial disputes. The first attempt of
this kind was the agreement concluded between the Association
of Manufacturers in the Petrograd area and the local soviet of
workers' delegates. This agreement provided t h a t every dispute
was to be submitted to the conciliation board of the undertaking,
which was to consist of an equal number of representatives of the
two parties. If the board failed to settle the dispute, it was to be
referred to the Central Conciliation Board for the Petrograd area,
consisting of an equal number of representatives of the Association
öf Manufacturers and the (Council) Soviet of Workers' Delegates.
Similar conciliation boards were set up on the initiative of
workers or manufacturers throughout the country, and soon
acquired great importance.
With the increasing development of the trade unions and the
growth of their economic and political influence, special conciliation
sections were opened in the unions, and as they developed, more
and more disputes were referred to them instead of to the conciliation
boards.
This was the situation at the time of the Bolshevist Revolution.
Under the System of "War Communism
(1918-1921)

Under the system of " war Communism ", t h a t is to say, from
the Bolshevist Revolution in November 1917 until 1921, when the
" New Economic Policy " (partial freedom of trade and management of State undertakings on commercial principles) was introduced, the situation changed completely, the question being regarded
from an altogether different aspect.
I n theory, there could be no industrial disputes, since the

394

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

undertakings were nationalised and the free engagement of workers
had been replaced by compulsory labour. The State fixed wage
rates and conditions of employment by way of Decree. When the
State officials managing an undertaking infringed these conditions
there was no question of a dispute, b u t of a contravention of labour
laws leading to administrative proceedings. Workers who contravened the Labour Code or the Decrees of the Soviet authorities were
punished by disciplinary penalties pronounced by the disciplinary
courts of their respective unions.
I t was soon found, however, t h a t frequent disputes were
produced by the difficulty of applying the Communist policy and
by the diversity in the conditions of employment in the different
undertakings. To settle these, the trade unions organised conciliation committees as early as 1918, quite apart from legislative action,
and these committees became of considerable importance.
As a matter of fact, during the period of war Communism, the
trade unions through their conciliation committees were the only
bodies t h a t dealt with disputes between management and workers.
The committees based their activities on the principle t h a t there
could be no divergence of interest in an undertaking between the
workers representing the management and those representing
labour, since both belonged to the working classes, the interests of
which were defended by the trade union. Consequently, cases
brought before the union were not disputes between employers and
workers, but simply required a pronouncement on the application
of legislation.
The work of the conciliation committees was thus entirely
one-sided. The committee, which consisted of delegates of the
organised workers, explained or interpreted any given legislative
provision after hearing the respective statements of the management
and the workers. But the explanation given by the committee
by no means always satisfied both parties. When it was impossible
to reach an agreement between employers and workers, the trade
union applied to the local section of the Commissariat of Labour
for an interpretation, the decision of this body being considered
final and irrevocable.
Owing to the increase in these applications for interpretation,
the local labour departments decided to organise their own
disputes committees, which acted as higher authorities for the
settlement of disputes between management and workers.

395

TJ. S. S. B .

§ 2. — The Present Policy

BASES OP THIS POLICY
After the introduction of the New Economic Policy, which
restored freedom in the engagement of workers by the conclusion
of individual or collective employment contracts, authorised the
creation of private undertakings or their concession to foreign
concerns, and reorganised the management of national undertakings
on commercial principles, it became quite clear t h a t labour disputes
could not be avoided.
The question was first discussed at the eleventh congress of the
Russian Communist P a r t y (March 1922), which came to the
conclusion t h a t during the period of transition from capitalism to
socialism, there would continue t o be different classes, " and as
long as classes continue to exist, the class war remains inevitable " 1 .
I t was the question of the right to strike t h a t gave the Communist
party and the trade unions most cause for concern. Although it
was desirable for political and economic reasons to make it practically impossible to declare a strike, it was difficult to prohibit
this ; for, once the strike was authorised in principle for private
undertakings (and this point of view was generally accepted), how
were the workers t o be prevented from resorting to it in State
undertakings ? After prolonged discussion the Communist Congress decided t h a t the right t o strike should not be abolished, b u t
t h a t strikes, being " harmful to the general interests of the country
and the working class ", should be regarded only as a last resort
to be employed in extreme cases. The resolution adopted by the
eleventh Congress contained the following passage :
The final object of a strike under the capitalist system is the destruction of Government authority and the annihilation of the class in power.
In a proletarian State in the transitional stage such as ours, on the
contrary, the activities of the proletariat should aim only at consolidating
the proletarian State and the class Government of the proletariat by
fighting bureaucracy, the faults and weaknesses of that Government,
the class appetites of any capitalists who have evaded State supervision,
etc.
For this reason, when there is friction and dispute between groups
of workers and the institutions of the workers' State, it is for the trade
unions to help to put an end to disputes as soon and as efficiently as
1
Record of the Eleventh Congress of the Russian
1922.

Communist Party.

Moscow,

396

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

possible by trying to obtain for the workers they represent whatever
advantages may be compatible with the development of the proletarian
State and its economy, without injury to other groups of workers.
The resolution explains t h a t the only " just and rational "
means of settling a dispute lie in the intervention of the trade
unions, which must act with the greatest possible rapidity to
terminate the dispute. If for some reason or other a strike cannot
be avoided, it is to be considered lawful only if approved by the
union, and must be settled as soon as possible. I n a general
way, it is the d u t y of unions t o prevent disputes whenever possible
by watching over the observance of labour legislation and collective
agreements. They must also make the workers understand t h a t
strikes injure the Soviet State as a whole and the working class in
particular 1.
The need of creating a suitable system of conciliation and
arbitration institutions was generally admitted in the trade unions.
But questions of principle — e.g. should conciliation and arbitration
be compulsory ; should the conciliation authorities be constituted
on the joint principle ? — gave rise to much discussion in the trade
union press and at the Fifth Trade Union Congress in September
1922.
Certain trade union leaders considered t h a t the unions should
surrender their exclusive right to regulate conditions of work
and wages, which they held under the system of communism,
and t h a t therefore they could no longer be responsible alone for
the conciliation of disputes. Other trade unionists held t h a t
the unions should retain the one-sided right to regulate conditions
of work and put an end to disputes, so as to uphold their status
as against the employers and counteract the development of
capitalism. The supporters of this view were prepared to accept
the introduction of the joint principle in the disputes bodies
formed for, the separate undertakings, b u t they maintained t h a t
disputes which could not be settled by these bodies should be dealt
with by the unions alone. At first this view prevailed, and only
the conciliation bodies in the undertakings were constituted
on the joint principle. These were the " committees for the
determination of wages and the settlement of disputes ", usually
known as " joint committees ", as they consisted of an equal
1
I t may be added that Soviet legislation, does not expressly prohibit strikes,
but according to a Soviet writer, " in our State industry there can be no recourse
to the lock-out, for a proletarian State cannot use this method of bringing pressure
to bear on the workers ". (P. AVDEJEV : Labour Disputes in the U. S. S. R. Moscow,
1928. 67 pp.)

TT. S. S. R.

397

number of representatives of the workers (selected by the workers'
committee of the undertaking) and the management 1 .
With the growing use of collective agreements, however,
the need of other bodies constituted on the joint principle became
urgent. To meet this need, the Commissariat of Labour set
up 2 conciliation boards and arbitration courts attached to the
local departments of the Commissariat of Labour. The Central
Trade Union Council cleared up the obscurities of procedure
by issuing instructions stating that the continued existence of the
trade union disputes committees was no longer justified, and
that disputes which could not be settled by agreement before
the joint committee of an undertaking should be submitted directly
to the conciliation board of the local labour department. This
decision was approved by a resolution of the Fifth Trade Union
Congress, which added that a dispute could not be submitted
to a higher authority until the trade union had exhausted all
means of arriving at a direct agreement. The resolution of the
Congress declared that " it is inadmissible that the trade unions
should alone be competent to conciliate in disputes " 3 .
From the first it was provided that recourse to the conciliation
board should be optional, the very principle of conciliation proceedings resting on the assumption of previous agreement between
the parties to the dispute. The question whether arbitration
should be optional or compulsory, on the contrary, gave rise
to prolonged discussion in the Central Trade Union Council, some
of the members of the Council being of the opinion that compulsory
arbitration would afford a more serious guarantee of the protection
of the worker's rights. The Council finally adopted the view
of the Commissariat of Labour, which advocated voluntary arbitration except in the following cases : that of a dispute in an
undertaking where the workers are not covered by collective
agreement, and that of a dispute which directly involves social
legislation or threatens the safety of the State. In these cases
arbitration may be ordered by the Commissariat of Labour.
The supporters of compulsory arbitration then demanded
that the trade unions should have the sole right to apply for
arbitration. They were more or less successful, for the Labour
1
These committees were first set u p a t the beginning of 1922, but it was not
until 3-18 November 1922 t h a t the Commissariat of Labour for the R. S. F . S.R.
issued a Decree governing their activity.
2
By Decree of 13 J u l y 1922.
3
Verbatim Report of the Fifth AU-Russian Congress of Trade Unions. Moscow,
1922.

398

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

Code, which came into force on 15 November 1922, shortly after
the Fifth Trade Union Congress closed, granted this right to trade
unions in all State undertakings 1 .
EVOLUTION

THE

PRESENT

SYSTEM

SETTLEMENT

OF D I S P U T E S

The system of conciliation and arbitration was sanctioned by
the Labour Code, which came into force on 15 November 1922 8 ,
and the Decrees and Orders issued by the Labour Commissary
to supplement the provisions of the Code. This system dealt
in the first place with contraventions of labour legislation and
the conditions of employment established by collective agreements
and individual employment contracts, or b y rules of employment.
Such contraventions were treated as offences over which only the
labour courts — or, more precisely, the labour sessions of the
people's courts of first instance — had competence. Secondly,
the Code recognised labour disputes properly so called, which
were divided into two classes : (a) disputes arising out of the
conclusion, amendment, or interpretation of collective agreements ;
(b) disputes arising out of the application of "or failure to apply,
collective agreements or individual contracts of employment.
From the first, Soviet legislation held t h a t disputes in class
(a) could only be within the competence of the joint conciliation
boards attached to the local departments of the Commissariat
of Labour and the arbitration courts set u p by t h e same departments.
On the other hand, it was agreed in principle for disputes
in class (b) t h a t the first authority to take cognisance of them
should be the joint committee of the undertaking where the
dispute occurred. This was for instance the opinion of the Central
Council of Trade Unions from the beginning, and was advocated
by all the trade union congresses. If the dispute were not settled
by t h e joint committee, whose decisions have to be unanimous,
or if the decision of the committee were set aside by the competent
institution of the Commissariat of Labour, the Labour Code decided,
with regard to the further treatment of the case, t h a t the party
concerned should be free to choose between the labour court
on the one hand and the conciliation board or arbitration court
on the other. The Code only provided t h a t the worker could
1
B y the decision of the Fourteenth Congress of the Communist Party, this
right was conferred in 1926 also on the managers of State undertakings.
2
Legislative Series, 1922, Ruse. 1.

tr. s. s. B.

399

not have recourse to the conciliation board or arbitration court
unless his interests were defended by his trade union. This
measure was the outcome not only of the very structure of the
conciliation boards and arbitration courts, which had to include
a representative of the union for the workers' side, b u t of the
desire to prevent individual disputes of minor importance from
cumbering the work of the arbitration and conciliation institutions.
The Labour Code, and the subsequent Orders of the Commissariat for Labour on the organisation and working of the arbitration
and conciliation institutions, did not deal with the case in which
a person applies simultaneously to the labour court and the
conciliation board, nor did they contain any categorical statement
on the impossibility of submitting to the labour court a case
t h a t had already been settled by the joint committee. Furthermore, this legislation did not in any way limit the number of
authorities with competence to set aside the decisions of the
conciliation boards and the awards of the arbitration courts.
I t merely stated t h a t the Commissariats of Labour and their
local departments had competence with regard to the joint committees, the conciliation boards, and the arbitration courts, and
t h a t the office of t h e Labour Prosecutor had competence with
regard to the labour courts. This lack of precision in the law
has not failed to produce a certain amount of confusion and many
abuses of procedure, and to some extent it has even paralysed
the working of the whole system. This may be illustrated by
the following passage in the report of the Central Council of
Trade Unions t o the Eighth Congress (1928) :
Until recently the system for the settlement of disputes involved
incredible delays. The overlapping between the different authorities,
their intricacy, and the fact that the decisions taken were hardly final,
contributed largely to this result. Disputes could come before twentythree authorities. A case could be brought up repeatedly before the
same authority if the higher authorities failed to take a final decision
on its merits, and merely set aside previous decisions, asking the lower
authorities to reconsider the case. Once a dispute had been submitted to
the institutions of the Commissariat of Labour, it could be carried
right up to the Labour Commissary of the U. S. S. R. A dispute referred
to the courts could be carried right up to the Supreme Court. With
this system it was possible for a dispute to drag on for years 1 .
On several occasions the Commissariat for Labour issued
instructions on the need of organising the procedure for dealing
1
" The Trade Unions of the U. S. S. R. in 1926 to 1928." Report of the Central
Council of Trade Unions of the U. S. S. R. to the Eighth Congress, pp. 368-369.
Moscow, 1928.

400

CONCILIATION AND ARBITRATION I N DIFFERENT

COUNTRIES

with disputes so as to reduce delays and hasten the adoption of
a final settlement 1 .
The Fourteenth Congress of the Communist Party, too, urged
in a resolution that the examination of disputes should be decentralised so as to speed up procedure. Finally, the Seventh Congress
of Trade Unions (December 1926), noting that all these recommendations had not had the desired effect, considered the need
of reorganising the system of conciliation and arbitration and
the procedure before the labour courts.
In 1927 the Commissariat for Workers' and Peasants' Inspection
(State supervision), in close touch with the Central Executive
Committee of the Communist Party on the one hand and the
Commissariat of Labour of the U. S. S. R. on the other, together
with the Central Trade Union Council and the central committees
of the principal unions, attacked the question of principle. It was
clear from the outset that the first thing to do was to clear away
the obscurities in the legislation on disputes and to issue new
orders on the working and competence of all disputes authorities.
The question of the order of procedure did not give rise to much
difference of opinion. All were more or less agreed with the
Commissariat of Labour, which had advocated in its circular letter
of 20 May 1926 that the conciliation boards and arbitration courts
should deal only with disputes arising out of the conclusion,
amendment, and interpretation (of the substance) of collective
agreements. Individual disputes arising out of the application
of collective agreements and individual contracts of employment
should be within the competence of the joint committees and
labour courts.
The second question to be settled was that of the appeal authorities who would have the power to set aside the decisions of the
disputes authorities. The excessive number of appeal authorities
had been one of the causes of the slowness hampering the normal
progress of litigation, and it was therefore decided to deal with
it radically by reducing the number of such authorities to not
more than two. Only the Commissariats of Labour and their
departments were to have this power in respect of the conciliation
and arbitration authorities. The Labour Prosecutor was to have
only a general right to contest the decision if it was in flagrant
contradiction with the law, threatened the safety of the State,
or seriously injured the interests of the workers. The regional
1
Instructions of the Commissariat for Labour of the U. S. S. R., 20 May
1926, and Circular Letter of the Commissariat, 2 March 1927.

401

V. S. S. R.

court was the only appeal authority accepted in the case of the
decisions of the labour courts.
Another important decision was t h a t which substantially
reduced the time limits within which disputes could be submitted
to the joint committee or the labour court. Formerly, the right
to submit a dispute did not lapse for three years, a period fixed
by the Civil Code. I t was not until 1927 1 t h a t this period was
reduced to six months for disputes on overtime pay and dismissals.
On the ground t h a t the three-year period often seriously complicated the treatment of cases before the courts (difficulty of
obtaining exact information, etc.), it was decided to reduce it to
fourteen days in cases of dismissal, one month in wage questions,
and three months in other cases. Similarly, it was decided to fix
short and clearly defined time limits for the examination of cases
before the conciliation and arbitration authorities and before the
labour courts, as these bodies frequently postponed cases from
session to session, thus helping to complicate and delay the
settlement.
Finally it was decided t h a t any decision of the court giving
material satisfaction to the worker should be enforced immediately,
whether an appeal was brought against the decision or not, provided
t h a t the sum to be paid at once by the employer did not exceed
the monthly wages of the worker.
All these decisions were incorporated in the new Act on disputes
promulgated by the Central Executive Committee of the U. S. S. R.
on 29 August 1928.
P R E S E N T SYSTEM OF SETTLEMENT OF D I S P U T E S

Procedure
As indicated above, Soviet legislation classifies labour disputes
into three groups : (a) disputes arising out of the conclusion,
amendment, or interpretation of the substance of collective
agreements ; (b) disputes arising out of the application of
contracts of employment, collective agreements, or social legislation ; (c) cases of failure to observe, or of contravention of,
labour legislation and the provisions of collective agreements or
1
Decree of the Central Executive Committee of the R. S. F . S. R., 10 Oct.
1927 (Izvestia N. K. T., 1928, Nos. 1-2).
2
Cf. the Labour Code ; Decree of the U. S. S. R. Central Executive Committee, 29 Aug. 1928 (Collection of Laws of the U. S. S. B., 1928, No. 56, § 495) ;
Orders of the U. S. S. R. Commissariat of Labour on the Working and Competence of Arbitration and Conciliation Institutions, 12 Dec. 1928. (Izvestia
N. K. T., 1928, Nos. 51-52.)

2 7

402

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

individual contracts of employment. The procedure to be followed
differs according to the group to which the dispute belongs.
(a) Disputes Arising Out of the Conclusion of a Collective Agreement
When a dispute occurs during negotiations between a trade
union and an employer 1 for the conclusion, amendment, or
interpretation of a collective agreement, the matter can be referred
only to a conciliation board or arbitration court as agreed by the
parties. Conciliation boards can be set up only if both parties so
desire. On the other hand, if the dispute takes place between a
trade union and the State as employer, the constitution of an
arbitration court is compulsory at the request of either party alone.
A dispute t h a t is not settled by amicable agreement before
the conciliation board is taken t o the arbitration court. If the
parties fail to agree before this court, its referee settles the dispute.
The decisions of the conciliation boards and arbitration courts
are final and irrevocable. B u t if the decision of the court or board
contravenes the law or the provisions of the collective agreement,
or if it suffers from a defect of form t h a t may entail serious consequences, or if it was based on false or inaccurate documents or
false declarations, or finally, if the board or court was unaware
of facts or documents t h a t might have had a decisive influence
on the settlement of the dispute, the decision may be set aside by
the institution of the Commissariat of Labour immediately above
t h a t to which the board or court is attached. An application for
the setting aside of the decision may be made by either party or
by the institution of the Commissariat of Labour responsible for
supervising the work of the conciliation board or arbitration court.
(6) Disputes Arising Out of the Application of a Collective Agreement or Individual Contract of Employment
When a dispute arises out of the application of a collective
agreement or individual contract of employment, it may be
referred at the choice of the worker to the joint committee or to
the labour court 2 .
1
Under Soviet law the term " employer " includes the State, co-operative
societies, municipalities, etc., as well as private employers or concessionaires.
2
When the dispute relates to the following subjects, reference to the joint
committee is compulsory :
(a) Transfer of a worker from one job to another ;
(b) Remuneration of a worker who has not reached the individual standard
of output fixed by the collective agreement (whether on time work or piece work) ;
(c) Remuneration of workers during suspensions of work due to the temporary
stoppage of the undertaking or part of the undertaking ;
(d) Various kinds of compensation (for the probationary period, for annual

403

TT. S. S. B .

The decisions of the joint committee must be unanimous.
They are final and irrevocable except in the cases enumerated
above for conciliation boards and arbitration courts. The regional
departments of the Commissariat of Labour have competence to
set aside the decisions of t h e joint committees in the said cases,
either on their own initiative or at the request of either party.
If the case is not settled by the joint committee, it is referred
to the labour court. If the decision of the joint committee is set
aside, the labour department responsible for doing so decides
whether the case shall be referred back to the joint committee or
submitted to the labour court.
An appeal against the decision of the labour court may be
taken to the ordinary regional court, except in cases involving
sums not exceeding the monthly wages of the worker, or disciplinary penalties, or deductions from wages. I n these cases, the
decision of the labour court is final 1 .
Unless the regional court rejects the appeal or declares t h a t
it has no competence in the matter, it may settle the case itself
or refer it back to the labour court for reconsideration.
The work of the labour courts is supervised by the labour
prosecutor's office, which may appeal to the regional court for the
cancellation of the decision.
(c) Contraventions
lation

of Contracts of Employment

or Labour

Legis-

All cases of contravention of individual contracts of employment, collective agreements or labour legislation are solely in the
competence of the labour courts, and are treated as offences.
Similarly, if during the consideration of a dispute by the joint
committee, the conciliation board or the arbitration court, it
appears t h a t the case involves a contravention of the law or a
leave not taken, for wear and tear of working tools belonging to the worker, etc.) ;
(e) Dismissal for inefficiency or refusal to work ;
(f) Working clothes and special food supply (milk, fats) ;
(g) Short time ;
(h) Additional leave ;
(i) Remuneration for a worker who does several jobs paid a t different rates ;
(k) Deductions from wages for waste or for breakages of machinery and
tools by the worker ;
(I) Bonuses due to the workers ;
(m) Overtime pay ;
(n) Compensation on leaving when the termination of the contract of employment resulting in the worker's leaving is due to the employer ;
(o) Compensation for the period during which the worker is prevented from
working by the employer.
1
If the worker has been dismissed from the undertaking against which he
institutes proceedings, an appeal against the decision may be made.

404

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

contract of employment or collective agreement, a report to that
effect must be drawn up and sent to the labour court, which opens
an enquiry and decides on the proceedings to be taken against
the offender.

§ 3. — Conciliation and Arbitration Institutions
The principal institutions for conciliation and arbitration are
the joint committees, the conciliation boards, and the arbitration
courts 1.
There are special disputes committees for certain groups of
workers, such as agricultural workers, domestic workers, and
seasonal workers employed in felling and floating timber.
For railway and water transport there are special conciliation
boards and arbitration courts, in view of the special conditions
of employment in these industries. As a matter of fact, these
bodies differ very little from the ordinary conciliation boards and
arbitration courts.
CONCILIATION BOARDS

Organisation
The conciliation boards are permanent bodies attached to the
Commissariats of Labour of the Federated States, and their local
departments. There are a Central Conciliation Board attached to
the Commissariat of Labour of the Soviet Union, conciliation
boards attached to the Commissariats of Labour of the Federated
States and the Republics and autonomous regions belonging to
each of the Federated States, and finally, boards attached to the
local labour departments.
A conciliation board is composed of a chairman appointed for
a certain period a by the department of the Commissariat of Labour
to which the board is attached, and one representative of each of
the two parties to the dispute 3.

~*
•

1
The joint committees deal only with individual disputes. An account of
their competence and working is given in an appendix, together with a survey
of the organisation of the labour courts.
2
Soviet legislation contains no provision on the term of onice of the chairman
of the conciliation board. Nor does it state whether the sittings of the board
are public or not.
3
In the case of the interpretation or modification of a collective agreement,
only the organisations concluding the agreement can be regarded as parties to
the dispute.

TT. S. S. B .

405

Only a delegate of the workers' union may represent the
workers, and the employer's representative must be a member of
the management of the undertaking or group of undertakings
(trust). The representatives of the parties must be nominated for
each dispute by the parties. I t is the duty of the chairman to
check their credentials before opening the proceedings.
The conciliation boards are set up only on a request being
made to the competent department of the Commissariat of Labour
by common agreement between the parties. I n making the
application each party must state in writing its views on the
dispute and the settlement it proposes.
The technical organisation of the conciliation board and the
remuneration of the chairman is in the hands of the department
of the Commissariat of Labour t o which the board is attached.
The representatives of the parties and experts, witnesses, etc. have
no right to special remuneration, but the undertaking employing
them is bound to pay them their full wages during the whole
period they devote to the conciliation board, if the sittings are
held during their normal hours of work 1 .
Competence
The conciliation board has competence to consider all disputes
arising out of the conclusion, amendment, or interpretation of a
collective agreement. I t may not agree to consider a dispute
unless the interests of the workers are represented by their trade
union.
I n no case may a conciliation board consider a dispute t h a t
has already been settled or is being considered by the joint committee, the arbitration court or the labour court.
The district conciliation boards, attached to the district departments of the Commissariat of Labour, have competence in disputes
covering only one district.
The regional conciliation boards, attached to the regional departments of the Commissariat of Labour, have competence in disputes
affecting several districts or a whole region.
The conciliation boards, attached to the Commissariat of Labour
of an autonomous republic or a Federated State, have competence
in disputes t h a t affect the whole or part of the autonomous
republic or Federated State, or are of a serious nature.
1
According to the Ordinance of 21 May 1931 (Isvestia, 27 May 1931), the
sittings of t h e conciliation boards must be held outside the normal hours of work
of t h e parties concerned.

2 7

406

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

The Central Conciliation Board, attached to the Commissariat
of Labour of the U. S. S. R., has competence in disputes t h a t affect
the territory of several Federated States or raise important questions
of principle, or are particularly serious. I t s chairman is the
U. S. S. R. Labour Commissary in person, or a high official of the
Commissariat to whom he may delegate his powers.
Procedure
The conciliation board must take its decision within seven
days, and the decision must be the result of agreement between
the parties. The chairman has not the right to vote, his function
being to direct the negotiations with a view to obtaining a settlement
t h a t will satisfy both parties without injuring the interests of the
State. If either party fails t o send its representative to the conciliation board, the latter has no competence and the case is closed.
To have it reopened before the board, the parties must again
arrive at an agreement.
When an agreement has been reached on the dispute, a report
is drawn up and signed by the chairman and the representatives
of the parties. Copies of this report must be sent within seventytwo hours to the parties and the competent department of the
Commissariat of Labour ; and as soon as t h a t has been done, the
decision of the board becomes binding on both parties with the
force of law.
If the case involves a sum of money and this sum is not definitely
fixed in the agreement between the parties before the conciliation
board, the department of the Commissariat of Labour requests the
labour court to define the exact amount.
Enforcement of the Decision
The duty of enforcing the decision of the conciliation board
lies with the parties.
If the employer refuses to observe the decision of the
conciliation board, the injured workers may apply in person or
through their trade union to the labour court to compel the
employer to fulfil his obligations.
If the trade union refuses to carry out the decision of the board,
the employer may apply to the competent department of the
Commissariat of Labour, which then invites the trade union
organisation immediately above the recalcitrant union to take the
necessary steps to compel it to observe the decisions of the board.
I n the case of the workers taken separately, it is for the trade

S. S. R.

407

union that countersigned the decision of the board to see to it
that they fulfil their obligations.
If during the discussion it is found that the case shows serious
contraventions of labour legislation or the provisions of the collective agreement, or if it is evident that the employer has displayed
culpable negligence, sabotage or rapacity, the conciliation board
draws up a report to that effect and refers it to the labour court.
If this does not affect the merits of the case at issue, the board
may continue its discussions ; otherwise it hands over the whole
case to the labour court.
Cancelation of Decisions
The decision of the conciliation board may be set aside in the
following cases :
(1) when by its decision the board establishes conditions of
employment less or more favourable than those fixed by
legislation or the collective agreement 1 ;
(2) when it has failed to observe the law on conciliation and
arbitration or on the working, competence or procedure of
conciliation and arbitration institutions, provided that
this failure influenced the decision taken ;
(3) when the decision was based on documents, information
or declarations that have been recognised to be false or
untruthful by a decision of the courts, or could quite
patently be recognised as such ;
(4) when the board was not acquainted with facts that might
have had a capital importance for the settlement of the
dispute ;
(5) when the dispute considered by the board has already
been settled by the labour court or is pending before it.
Only the department of the Commissariat of Labour to which
the board is attached may set aside its decision. It may do so
on its own initiative within not more than three months of the date
it receives official notice of the decision. It may also set aside the
decision at the request of either or both parties within seven days
of receiving such request, which must be made within fourteen
days of the decision.
1
This applies to collective agreements concluded by organisations with authority over the organisations party to the dispute (e.g. an agreement between a
State industrial t r u s t and a central trade union committee, if the dispute has
taken place in an undertaking belonging to the trust).

408

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

A decision of the department of the Commissariat of Labour
of this kind may be appealed against by the parties. This appeal
must be made to the department of the Commissariat of Labour
immediately above the one in question ; which department,
moreover, has a right to set it aside on its own initiative. Such
a decision is final and only the Labour Prosecutor may contest it 1 .
When the head of the labour department presides over the
board of conciliation in person, its decision can be set aside only
by the department of the Commissariat of Labour immediately
above that to which the board is attached. In that case, the
decision of this department is final, and no request for its
cancellation may be made except by the Labour Prosecutor.
The Labour Prosecutor may request the department of the
Commissariat of Labour which has competence to set aside the
decision of the conciliation board, or the department immediately
above it, as the case may be, to set aside the decision reached. He
may make use of this right only in exceptionally serious cases of
flagrant contravention of the law or grave threat to the interests
of the State or the workers.
An appeal for the cancellation of the decision of the board
made by either party or the Prosecutor cannot suspend its enforcement, unless the competent department of the Labour Commissariat
decides otherwise.
ARBITRATION COURTS

Organisation
The arbitration courts are attached to the same departments
of the Commissariats of Labour as the conciliation boards. Each
court consists of two judges and a referee, the former being nominated for each individual case by the parties to the dispute. The trade
union appoints one of its representatives, and the employer, a
member of the management of the undertaking or group of undertakings. The referee is chosen by common agreement among the
parties, preferably from among the higher officials of the Com1
The Labour Prosecutor's Office is part of the judiciary. I t is presided over
by the Labour Prosecutor who also acts as an assistant to the General Prosecutor
in the Supreme Court. The regional prosecutors for the industrial regions are
assisted by special assistant prosecutors for labour disputes. I t is the d u t y of
the Labour Prosecutor : (a) to supervise the working of the labour courts and
the conciliation and arbitration institutions ; (b) to take proceedings against
officials and employers who contravene labour legislation. The Labour Prosecutor
attached to the Supreme Court m a y contest any decision of a conciliation or arbitration institution or labour court by requesting the competent department of
the Labour Commissariat to set it aside, provided t h a t the decision involves a
judicial error or danger to the State.

U. S. S. E .

409

missariat of Labour. If the parties fail to agree on a referee, or
the constitution of the court is demanded by only one of the
parties, the referee is appointed by the department of the Commissariat of Labour to which the court is attached.
Before applying for the constitution of a court, the parties
must draw up a report, stating their joint decision to submit the
dispute to arbitration and declaring in advance their readiness
to submit to the award of the court. The Commissariat of Labour
cannot set up the court until it has received this report. Nevertheless, if a dispute breaks out in a State undertaking, the trade
union or the management may apply for arbitration even if the
other party objects. In that case, arbitration is compulsory and
a report is not necessary for the constitution of the court.
Before the proceedings open, each party must submit in writing
its opinion on the dispute and the settlement it proposes.
If the dispute threatens to have grave consequences, the
competent department of the Commissariat of Labour has the
right to initiate arbitration proceedings on its account without
consulting the parties. In that case it appoints the referee and
nominates the judges ex officio if the parties refuse to designate
their representatives.
Competence
The arbitration courts have competence to consider the same
disputes as the conciliation boards, whether the case has previously
been submitted to such a board or not. The respective competence
of the regional, district, etc., arbitration courts is the same as that
of the corresponding conciliation boards.
The arbitration court may not consider a dispute unless the
interests of the workers are represented by their trade union.
The court may not consider a dispute that is pending before
a conciliation board or a labour court, or that has already been
settled by one of these bodies.
If arbitration proceedings are instituted by common agreement
between the parties and either party fails to send its representative
(judge) to the court, the latter has no competence to decide on the
dispute and the case is closed. It cannot be re-opened before the
court until the parties have agreed. If the court is set up at the
request of one of the parties only and the other party fails to
attend without valid reason, the dispute is settled by the referee 1.
1
I t is for the referee to judge of the validity of the reasons submitted ; if
he considers them valid, t h e ease is dismissed.

410

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

If, on the other hand, the party applying for arbitration fails to
appear, the court has no competence and the case is closed.
Procedure
The court must give an award within seven days of receiving
the report applying for the opening of arbitration proceedings.
When the arbitration court has been set up, the referee, after
checking the credentials of the judges, first proposes to the parties
to settle the dispute by amicable agreement. If the parties cannot,
or will not, do so, the referee pronounces his award, which becomes
binding as soon as the final record has been signed by him and
transmitted within seventy-two hours to the parties concerned
and the competent department of the Commissariat of Labour.
If the case involves a sum of money and this sum is not definitely
fixed in the agreement between the parties before the arbitration
court, the department of the Commissariat of Labour requests
the arbitration court to define the exact amount.
Enforcement and Cancellation of Awards
The enforcement and cancellation of the awards of the arbitration courts are subject to the same rules as apply to the conciliation
boards.

§ 4. — Statistics of Disputes
The following tables illustrate the progress of conciliation and
arbitration in the U. S. S. R. during the period 1924-1925 to
1927-1928. !
DISPUTES I N 1924-1925 AND 1925-1926 2
TABLE I . — NUMBER OF DISPUTES

1924-1925
1925-1926
1

Number of disputes

Number of workers
involved

2,357
4,999

1,585,100
4,059,400

More recent d a t a are not available.
According to the data of the Commissariats of Labour of the U. S. S. R.,
the R. S. F . S. R., and White Russia, and the labour departments of seventyeight regional centres (Labour Statistics and Social Insurance in 1925-1926 ;
published by Voprosy Truda, Moscow, 1927 ; 88 pp.).
2

411

U. S. S. R.

TABLE n . — PERCENTAGE DISTRIBUTION BY BODIES
SETTLING THE DISPUTE
Disputes

1924-1925
1925-1926

Conciliation board
alone

Conciliation board
and arbitration
court

Arbitration court
alone

19.4
14.7

14.4
18.2

66.2
67.1

Conciliation board
alone

Conciliation board
and arbitration
court

Arbitration court
alone

3.2
16.1

5.3
7.0

91.5
76.9

. . . .
. . . .

Workers

1924-1925
1925-1926

TABLE i n .

. . . .
. . . .

—

Settled

Involved

DISTRIBUTION BY CAUSE OE DISPUTES

SUBMITTED

TO CONCILIATION AND ARBITRATION

Percentage of
disputes '

Percentage of workers
involved in disputes '

Cause of dispute
1924-1925 1925-1926 1924-1925 1925-1926
69.3

79.3

83.5

99.8

40.6

39.9

57.0

48.6

19.2

19.0

12.7

14.6

6.1

7.1

1.4

8.6

21.7

26.4

27.8

28.1

Payments by undertakings for
the housing of the workers and
Compensation for dismissal and
for annual leave not taken .
Engagement and dismissal of
Protection

workers

(salety,

As each dispute was due to several causes, the total of the percentages is not 100.

él 2

CONCILIATION AND ABBITRATION IN DIFFERENT

COUNTRIES

TABLE IV. — PERCENTAGE DISTRIBUTION BY RESULT OF DISPUTES
SETTLED, CLASSIFIED ACCORDING TO CAUSE
Result of dispute
1924-1925

1925-1926

Cause of dispute
In
In
In
In
favour favour Com- favour favour Comof em- promise
of
of em- promise
of
union ployer
union ployer
Basic wage rates
Payments by undertakings for
union
Compensation for dismissal and
for annual leave not taken . .
Engagement and dismissal of
workers
H o u r s of work

24.8

23.7

51.5

17.9

15.4

66.7

45.1

27.2

27.7

39.0

20.5

40.5

38.0

41.7

20.3

24.3

44.9

30.8

54.6
48.0

19.2
30.4

26.2
21.6

33.0
7.3

11.3
33.1

55.7
59.6

TABLE V. — RESULTS OF DISPUTES RELATING TO WAGE RATES

of workers
Percentage of disputes Percentage
involved
Result of dispute
1924-1925 1925-1926 1924-1925 1925-1926
(a) I n favour of union
(b) I n favour of employer
(c) Compromise

. . .

33.7
19.8
46.5

10.2
7.3
82.5

24.8
23.7
51.5

17.9
15.4
66.7

1
According to the data of the conciliation boards and arbitration courts of the
Commissariats of Labour for the U. S. S. R. and the R. S. F. S. R. and the labour
departments of 100 regional centres (150 in 1925-26).

DISPUTES I N 1926-1927 AND 1927-1928 1
TABLE I .

1926-1927
1927-1928

NUMBER OF DISPUTES

Number of disputes

Number of workers
involved

4,694
3,888

3,251,500
3,341,200

1
According to the data of the Commissariats of Labour of the U. S. S. R„ the
R. S. F. S. R., the Ukraine, and White Russia, and the labour departments of fifty regional
centres (Voprosy Truda, 1930, Nos. 3-4).

413

U. S. S. R.

TABLE I I .

PERCENTAGE DISTRIBUTION BY BODIES SETTLING
THE DISPUTE
Disputes

1926-1927
1927-1928

. . . .
. . . .

Conciliation board
alone

Conciliation board
and arbitration
court

Arbitration court
alone

13.6
19.9

20.7
22.7

65.7
57.4

Conciliation board
alone

Conciliation board
and arbitration
court

Arbitration court
alone

8.5
12.8

13.6
13.1

77.9
74.1

Workers

1926-1927
1927-1928

. . . .
. . . .

Settled

Involved

TABLE H I . — DISTRIBUTION BY CAUSE OF DISPUTES SUBMITTED TO
CONCILIATION AND ARBITRATION

Percentage of
disputes '

Cause of dispute

Percentage of workers
involved ir disputes '

1926-1927 1927-1928 1926-1927 1927-1928
Wage rates
Payments by undertakings for
the housing of the workers
and for the trade unions . . .
Compensation for dismissal and
for annual leave not taken . .
Engagement and dismissal of
Protection

workers

73.5

75.7

76.4

71.2

41.2

47.0

39.0

23.4

19.1

21.5

20.4

19.4

17.0

22.0

18.9

37.2

41.7

46.3

48.6

(safety,

As each dispute was due to several causes, the total of the percentages is not 100.

414

CONCILIATION AND ARBITRATION IN DIFFERENT

TABLE IV.

COUNTRIES

PERCENTAGE DISTRIBUTION BY RESULT OF DISPUTES
SETTLED, CLASSIFIED ACCORDING TO CAUSE

Result of dispute
1926-1927

1927-1928

Cause of dispute
In
In
In
In
favour favour Com- favour favour Comof em- promise
of
of em- promise
of
union ployer
union ployer

Payments by undertakings for
the housing of the workers and
for the trade unions
. . . .
Compensation for dismissal and
for annual leave not taken . .
Engagement and dismissal of

24.0

20.1

55.1

26.0

17.3

56.7

26.9

36.3

36.8

36.3

31.3

32.4

31.0

44.4

24.6

40.9

28.9

30.2

45.7

14.3

40.0

40.4

14.6

45.0

36.1

22.1

46.3

Protection of workers (safety,
special clothing, etc.) . . . .

TABLE Y (a).

—

PERCENTAGE DISTRIBUTION OF DISPUTES

BY BODY SETTLING THE DISPUTE, CLASSIFIED BY CAUSE OF
DISPUTE

Percentage settled by
Cause of dispute

1926-1927

1927-1928

Concilia- Arbitration Concilia- Arbitration
court
tion board
tion board
court
Wage rates
Payments by undertakings for
housing and for the trade
union
Compensation for dismissal and
annual leave not taken . . . .
Engagement and dismissal of
workers
Protection of workers (safety,
special clothing, etc.)
. . . .

12.6

87.4

20.4

79.6

22.1

77.9

12.4

87.6

26.8

73.2

14.2

85.8

32.2

67.8

22.2

77.8

The sign — signifies that there are no data.

415

U. S. S. R.

TABLE V (b).

—

PERCENTAGE DISTRIBUTION OF WORKERS

INVOLVED IN DISPUTES BY BODY SETTLING THE DISPUTE,
CLASSIFIED BY CAUSE OF DISPUTE

Percentage of workers involved in
disputes settled by
Cause of dispute

1926-1927

1927-1928

Concilia- Arbitration Concilia- Arbitration
court
tion board
court
tion board
Wage rates
Payments by undertakings for
housing and for the trade
union
Compensation for dismissal and
annual leave not taken . . . .
Engagement and dismissal of
workers . •
Protection of workers (safety,
special clothing, etc.)
. . . .

TABLE VI. —

6.1

93.9

8.9

91.1

1.2

98.8

7.0

93.0

12.5

87.5

24.3

75.7

18.3

81.7

19.4

80.6

SETTLEMENT OF DISPUTES BY ARBITRATION COURTS
IN 1 9 2 6 - 1 9 2 7 AND

Distribution

1927-1928

of Disputes and Workers by Procedure of Settlement
Percentage of disputes settled b y Percentage of workers involved in
disputes settled by

Cause of dispute

Referee

and
Agreement Referee
between agreement
between
parties
parties

Referee

A g r e e m e n t Referee and
agreement
between
between
parties
parties

1926- 1927- 1926- 1927- 1926- 1927- 1926- 1927- 1926- 1927- 1926- 19271927 1928 1927 1928 1927 1928 1927 1928 1927 1928 1927 1928
Wage rates
57.8 57.7 19.2 23.3 23.0 19.0 52.8 53.6 17.4 13.2 29.8 33.2
P a y m e n t of undertakings
for housing a n d t h e t r a d e
54.8
21.4
59.5
30.0
10.5
union
23.8
Compensation for dismissal
and for a n n u a l leave n o t
9.0 58.8 58.4 35.4 33.2
62.4 60.4 32.8 30.6 4.8
5.8
8.4
E n g a g e m e n t a n d dismissal
of workers
45.5 45.6 41.1 35.0 13.4 19.4 42.6 37.6 43.1 51.1 14.3 11.5
Protection of workers
(safety, special clothing,
etc.)
29.3
20.5
50.2
40.2
35.2
18.6

416

CONCILIATION AND ABBITRATION IN DIFFERENT COUNTRIES

Distribution

by Result of Disputes and Workers, in Disputes Settled by Referee
Percentage of disputes settled

Cause of dispute

In favour In favour
of union of employer

B y compromise

Percentage of workers involved
in disputes settled
In favour In favour
of union ofemployer

B y compromise

1926- 1927- 1926- 1927- 1926- 1927- 1926- 1927- 1926- 1927- 1926- 19271927 1928 1927 1928 1927 1928 1927 1928 1927 1928 1927 1928
Wage rates
25.8 32.7 26.6 22.5 47.6 44.8 28.9 35.5 10.1 10.2 61.0 54.3
P a y m e n t of undertakings
for housing a n d t h e t r a d e
31.4
39.1
29.5
15.1
13.1
71.8
Compensation for dismissal
a n d for a n n u a l leave not
26.2 44.1 56.9 34.9 16.9 21.0 48.7 16.1 40.0 46.8 11.3 37.1
E n g a g e m e n t a n d dismissal
*of workers
57.2 47.2 14.2 20.8 28.6 32.2 44.5 46.8 20.4 22.1 35.1 31.1
P r o t e c t i o n of workers
(safety, special clothing,
etc.)
33.4
33.7
35.7
51.7
32.0
12.6

APPENDIX I
Joint Committees
ORGANISATION

A joint committee (rastsenochnokonflictnaia kommissia or "R. K. K.")
is set up in any undertaking where there is a workers' committee (fabzavkom). If the undertaking has no workers' committee, as is usually the
case for those employing less than thirty workers, the joint committee
is attached to the local workers' committee acting for a group of undertakings (growpkom) 1. In large undertakings joint committees may
also be set up in the more important workshops.
The joint committee must consist of an equal number of representatives of the parties, the number being fixed by agreement between
the trade unions and the management 2. The chairman and secretary
of the committee may not both represent the same party. At each
sitting these officers for the next sitting are appointed, in such a way
that the offices are held alternately by representatives of either party.
The joint committee must be convened by the chairman within
three days of the submission to it of a dispute.
The sittings are not public and are attended only by the members
of the committee, the parties concerned, and any persons invited by
the committee, for it has the right to request the opinion of experts,
witnesses and other persons. Such persons can only act in an advisory
capacity.
1
If there is no local workers' committee (groupkom) for the region, the joint
committee is attached to the local trade union committee and consists of a representative each of the trade union committee and the employer concerned.
2
The workers' committee and the management respectively fix the term of
office of the parties' representatives on the joint committee, and inform the other
party of their decision.

S. S. K.

417

A member of the committee who is personally interested in the
result of the dispute must be replaced by a substitute. The persons
concerned in the dispute have, moreover, the right to ask for the exclusion
of a member whom they consider to be a party to the dispute. In the
case of a representative of the workers, the satisfaction of such a request
needs the approval of the workers' group of the committee, and in the
case of an employers' representative it needs that of the employers'
group (the State or a private individual).
All the sittings of the joint committee take place as a rule outside
the hours of work of the undertaking. The workers personally concerned
in the result of the discussion may attend the meeting.
The members of the joint committee and the experts, witnesses,
etc., they summon, are entitled to the average wages they earn for
their work in the undertaking in respect of all the time they spend on
the sittings of the committee, when these sittings are held during the
normal hours of work of the persons concerned. All administrative
expenses are met by the undertaking.
COMPETENCE

In their capacity as conciliation authorities, the joint committees
may deal with any individual or collective dispute concerning the
application or interpretation of the conditions of employment fixed
by legislation, individual contracts of employment, collective agreements,
or rules of employment, except in the following cases :
(1) Modification of wages fixed by the rules in accordance with
the State wage regulations.
(2) Changes in the staff.
(3) Termination of contracts of employment at the request of the
trade unions.
(4) Dismissal and re-engagement of administrative staff in all
undertakings, and of responsible officials in public or co-operative
State undertakings.
(5) Questions of the housing and material welfare of workers, if the
dispute does not arise out of a clause of a contract of employment
or collective agreement.
(6) Disciplinary penalties imposed by the authorities to whom the
worker is subordinate.
The joint committees may in no case deal with disputes arising out
of the conclusion of collective agreements or aiming at an amendment
of an agreement. They have no power to consider disputes already
settled by the conciliation board, the arbitration court or the labour
court, or disputes pending before one of these bodies.
PROCEDURE

The joint committee must decide within three days on any dispute
regularly referred to it by one of the parties. The employer addresses
himself to the committee directly, while the worker acts as a rule through
the workers' committee of the undertaking, though he has the right
to apply to the committee in person. Before applying to the committee,
however, the worker must enter into direct negotiation with the management in order to try to settle the dispute by amicable agreement 1 .
1

2 8

This provision does not apply to disputes afieeting several workers.

418

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

When a dispute has been referred in due order to the joint committee,
the chairman or secretary must first decide whether it can be heard.
They consider first whether it is within the competence of the committee,
and if so, whether the parties have observed the time limits fixed by
law. These limits are as follows : If the dispute relates to a dismissal,
it must be referred to the joint committee within fourteen days of the
actual dismissal. If the worker was dismissed for breach of the contract
of employment, the time limit is reckoned from the date of his offence.
If the dispute relates to overtime pay, the maximum period is one
month reckoned from the date on which the worker was entitled to
claim overtime pay. For all other disputes, the time limit is three
months reckoned from the date on which the injured party was entitled
to submit his claim to the other party. After these time limits have
expired the case can no longer be referred to the joint committee. If,
however, the committee is unanimously agreed that the delay is due to
force majeure, it may agree to consider a case referred to it after the
expiration of the statutory time limit 1 .
Decisions taken by the joint committee for the settlement of a
dispute must be unanimous. Any decision adopted by a majority only
is null and void and must be set aside by the department of the Commissariat of Labour responsible for supervising the activities of joint
committees. This also applies to decisions of the committee sanctioning
unlawful action by the employer. If a joint committee has settled a
dispute by a decision taken in accordance with the regulations for
conciliation proceedings, its decision acquires the force of law, once
the final record has been signed by the chairman and secretary of the
committee, and it then becomes binding on both parties 2. The decision
of the joint committee must be made public within seventy-two hours,
and a copy of the deed must immediately be sent to the parties and the
competent department of the Commissariat of Labour. If either party
fails to observe the decision, the other has the right to inform the department of the Commissariat of Labour. If the employer is the delinquent,
the joint committee applies to the said department, which may compel
the employer by administrative action to observe the decision. If, on
the other hand, it is the worker who fails to comply with the decision
of the committee, the department of the Commissariat of Labour
requests the competent trade union to require the worker to observe
the decision. The employer cannot be allowed to make deductions
from wages, but he has a right to sue a worker who refuses to comply
with the decision for damages.
If during the hearing of the dispute it appears that the case presents
serious contraventions of the law, culpable negligence, cupidity, or
sabotage, the joint committee must immediately inform the Labour
Prosecutor through the workers' committee of the undertaking. The
Prosecutor may then refer the case to the labour court. This does not
mean, however, that the committee ceases to be responsible for hearing
the dispute ; but if the criminal action it has noted and its possible
1
The legislation on labour disputes defines the cases of force majeure as follows :
(a) Sickness necessitating treatment in a hospital or nursing home ; (b) quarantine or nursing of a sick member of the family ; (c) annual leave ; (d) arrest ;
(e) mission ; (f) removal owing to a change of employment ; (g) performance
of military service or duties as a judge ; (h) participation in a congress, conference, etc. ; (i) breakdown in the means of communication.
2
The parties m a y by agreement request the committee to re-examine the
dispute.

TT. S. S. E .

419

results may affect the decision to be taken by the committee, it
suspends any decision until the labour court has decided.
No dispute on which the joint committee has decided may be referred
to a higher conciliation or arbitration authority or to the labour court.
Its decision may be set aside only in the following cases :
(1) When by its decision the committee establishes conditions of
employment less or more favourable than those fixed by legislation or the collective agreement 1 .
(2) when it has failed to observe the law on conciliation or arbitration
or on the working, competence, or procedure of conciliation or
arbitration institutions, provided that this failure influenced
the decision taken ;
(3) when the decision was based on documents, information or
declarations that have been recognised to be false or untruthful
by a decision of the courts, or could quite patently be recognised
as such ;
(4) when the committee was not acquainted with facts that might
have had a capital importance for the settlement of the dispute ;
(5) when the dispute considered by the committee has already been
settled by the labour court or is pending before it.
An appeal to set aside the decision may be taken by the parties 2,
within fourteen days of the date they are officially informed of the
decision of the joint committee, to the local department of the Commissariat of Labour, which alone is responsible for supervising the
decisions of the joint committees.
The local department of the Commissariat of Labour must hear
the appeal within seven days. If it is admitted, the decision of the joint
committee is set aside, and the department of the Commissariat may
either- refer the case back to the committee for reconsideration or submit
it to the labour court. In the cases enumerated above, the local
department of the Commissariat of Labour may, on its own initiative,
set aside a decision of the joint committee within a maximum period
of three months from the date on which it is officially ^informed of the
decision.
An appeal against the decision of the local department of the Commissariat of Labour may be taken to the competent regional department
of the Commissariat in the same cases, and subject to the same time
limits. The decision of the regional department is final, and no appeal
against it is allowed. In exceptional cases, however, if it is considered
that this decision is illegal or seriously injures the interests of the State
or the workers, the prosecutor may appeal against it to the Commissariat
of Labour of the Federated State concerned 3.
1
This applies to collective agreements concluded b y organisations with authority over the organisations p a r t y to the dispute (e.g. an agreement between a
State industrial trust and a central trade union committee, if the dispute has
taken place in an undertaking belonging to the trust).
2
Either t h e worker concerned or the workers' committee or the trade union,
or the management concerned, or the management of the group of undertakings.
3
Soviet legislation does not fix a time limit for the intervention of the labour
prosecutor. In a n y case, recent legislation is somewhat obscure on the powers
of the prosecutor. Even though the basic Act of 29 August 1928 appears t o
provide t h a t the prosecutor has the right to ask for the cancellation even of the
decision of the higher authority in the Commissariat of Labour, the Order of
12 February 1929 concerning the bodies responsible for supervising the work

420

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

As a rule, the appeal does not suspend the enforcement of t h e decision
of the joint committee, unless the local department (or the Commissariat
of Labour) decides otherwise.
When a decision of a joint committee has been set aside, all the
provisions resulting from t h a t decision are considered null a n d void
with all their effects. Nevertheless, the employer has no right t o claim
from the worker the reimbursement of any sums he m a y have paid
him under the decision of the committee, unless t h a t decision was
based on false declarations b y the worker or false documents produced
b y him before the committee.

APPENDIX

Labour Courts
ORGANISATION

The labour courts are permanent special sittings of the courts of
first instance. They are organised on the decision of the people's courts
in all the principal Federated States, autonomous Republics and regions
and in the chief industrial centres. Temporary labour courts m a y be
set u p in other places b y special decision of the judge presiding over the
local people's court *.
The labour court consists of three judges, namely, one chairman and
two assessors. The chairman is one of the judges of the ordinary court
of first instance in the locality where the labour court is set up, and
he retains his office during the whole period of his judgeship in t h e
ordinary court. The assessors are elected for one year a t a time, one
b y the local inter-trade union council and the other b y the local soviet
executive committee on the nomination of the local economic council.
The first must be a trade unionist, and the second a n official in a State
industry or State economic institution.
All the expenses of the court and of the remuneration of its members
are met b y the local authorities.
COMPETENCE

The labour courts have competence t o deal with all disputes between
a n employer and his workers arising out of failure to observe, or contravention of, labour legislation, collective agreements, individual contracts
of employment, or rules of employment, whether the claimant is the
employer or the worker, in the following cases :
(a) when the case is not within the competence of the joint committee, or when recourse to the joint committee is optional
under the law ;
(b) when the joint committee has been unable to settle the case ;
of joint committees, conciliation boards, etc., appears to show t h a t the prosecutor
m a y intervene only against the decision of the competent authority of first instance
in the Commissariat, while the decision of the authority of second instance (in
this case the regional department of the Commissariat of Labour) is irrevocable.
1
In places where there is no labour court, the cases t h a t would be within
their competence are dealt with b y the ordinary courts.

TX. S. S. B .

421

(c) when the decision of the joint committee on the case has been
set aside by the competent department of the Commissariat
of Labour.
The labour court may not judge a case that has already been settled
before the joint committee, the conciliation board, or the arbitration
court. It has no competence for disputes arising out of the conclusion,
interpretation, or amendment of a collective agreement, except in cases
of criminal action (contravention of the law or the agreement) duly
noted by the joint committee, the conciliation board, or the arbitration
court.
Before examining a case within its competence, the labour court
must ascertain that the claimant has observed the time limits fixed by
law. For the cases mentioned under (b) and (c) above, and all cases
relating to dismissals, the maximum periods within which recourse
may be had to the labour court is fixed at fourteen days. For all other
cases, it is three months. If the case has not previously been considered
by the joint committee, the period is reckoned from the date on which
the claimant was injured. If it has been considered by the joint committee but no agreement has been reached, or if the decision of the
committee has been set aside, the period is reckoned from the date on
which the party concerned was officially notified of the cancellation
of the decision or of the failure of the negotiations of the committee l .
The claimant is not required to submit a statement in writing to the
labour court. A simple oral request is sufficient for the court to be
officially seized of the case, provided that the necessary conditions have
been fulfilled.
PROCEDURE

The parties may appear before the court in person or authorise a
representative to take their place. They may also have the assistance
of a lawyer of their choice. If the claimant or his representative fails
to attend, the case is closed unless it relates to a criminal action, when
the proceedings continue in the absence of the claimant. If the other
party fails to attend before the court, the case is suspended and a summons is served on him. If he fails to appear a second time, the court
may issue a warrant against him.
The labour court must consider a case referred to it within seven
days. It gives its decision after having heard the statements of the
two parties and after examining the documents of the case. The parties
must be notified of its verdict within seventy-two hours. A copy of the
verdict must be sent to the parties and to the Labour Prosecutor for
the region and the Labour Prosecutor attached to the Supreme Court
of the Federated State on whose territory it was given.
After the period during which an appeal may be made (within
fourteen days of the date on which the parties are notified of the decision)
has expired, the decision acquires the force of law and must be enforced.
If, however, the court has adjudged to the worker a sum of money in
cash not exceeding his monthly wage, he can immediately claim such
sum, which must be paid to him by the employer on pain of prosecution.
Even if the decision is reversed, the employer cannot claim the reimbursement of this sum. Furthermore, the labour court has the right to
1
The labour court m a y decide t h a t it has competence when the time limit
has been exceeded for a valid reason. I t is for the claimant to show proof of
such validity, and the court alone has competence t o accept it.

2 8 *

422

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

decide in each separate case t h a t its decision shall be enforceable immediately, provided t h a t the interests of the worker or his means of livelihood m a y be seriously affected b y any delay in t h e enforcement.
A P P E A L S AND S U P E R V I S I O N

The responsibility for supervising the work of the labour courts is
in t h e hands of the regional labour prosecutor. H e has the right to
appeal t o the ordinary regional court for the setting aside of the decision
of t h e labour court within fourteen days of such decision. The parties
have a similar right t o enter an appeal t o the regional court within
fourteen days.
I n no case m a y an appeal be admitted if the sum of money involved
does not exceed the monthly wage of the worker or the case relates to a
punishment based on the rules of employment, provided t h a t it does
not also relate t o the dismissal of the worker.
The regional court must decide within seven days. I t m a y either
simply reject the appeal, or close the case, or refer it back to the labour
court for reconsideration. I t m a y also give an award of its own, without
referring the case back to the labour court for re-examination, whenever
the facts of the case are sufficiently clear or it is simply a question of
modifying the grounds of the award. The regional court decides also
in all cases in which, after the case has been considered a second time
b y the labour court, the latter makes the same mistakes as before and
fails t o follow the indications given b y the regional court. Any decision
b y t h e regional court, or by the labour court when dealing with the
case for the second time (provided it follows the indications of the
regional court), is final and no appeal against it is allowed. Nevertheless,
t h e labour prosecutor m a y appeal within three months t o the Supreme
Court of the State in whose territory t h e labour court is situated for the
cancellation of the verdict of the appeal court or a decision of the labour
court after a second hearing of t h e case, if it is considered t h a t the
verdict or decision involves a serious a t t a c k on t h e law, or threatens the
security of the State, or seriously prejudices the interests of the workers.

BIBLIOGRAPHY
Sobranie Zakonov SSSR, 1923-1931.
Sobrante Uzakonenii i Rasporjaienii RSFSR, 1917-1930.
Izvestia N. K. T., 1923-1931.
DejstvujuSieje Zakonodatelstvo po Trudu. Collection edited by E. DANILOVA.
Moscow, 1927. 2 vols. 1,880 pp.
Ibid. 1929 edition. 1 vol. 960 pp.
Osnovy trudovogo zakonodatelstva. Commentary edited by V. SCHMIDT. Moscow,
1929. 891 pp.
Statistiieskie Materialy po trudu i socialnomu strakhovanvju, 1924-1925, 19251926, 1926-1927. 3 vols. Moscow, 1927 and 1928. 280, 88 and 113 pp.
Obzor dejatelnosti N.K.T. SSSR v 1927-1928 godu. Moscow, 1928. 174 pp.
Voprosy Truda, 1928-1930. Monthly review published by the Labour Commissariat.
AVDEJEV, P. Trudovye Konflikty v SSSR. Moscow, 1928. 61 pp.

TT. S. S. E .

423

AvDBJBV, P . Voproay i otvety po trudovym delam. Edited by N . E R O K H I N .
Moscow, 1928. 233 p p .
¿EMOTZNIKOVA, V. Kak razbirajutsa trudovye Konflikty. Moscow, 1929. 61 p p .
ËAROV, S. Primiritelnye kamery i tretejskie sudy. Moscow, 1924. 23 p p .
KALASNIKOV, M. Rascenoino-Korifliktnye
Kommìsaii.
Moscow-Leningrad«
1927. 48 p p .
L J A K H , A. Kak razreSajutaa trudovye spory v RKK i trudsessijakh.
Moscow,
1920. 77 p p .
LITVINOV-FALINSKI. Fabritnoje
Zakonodatelstvo
i fabriànaja inspecikja v
Rossii.
St. Petersburg, 1900. x i x + 365 p p .
TUGAN-BABANOVSKI, M. Russkaja Fabrika v proêlom i v nastojaSiem. Vol. I .
St. Petersburg, 1900. 562 p p .
JANZTJL, I. Zabaatovki Hi statki raboôikk i tinovnikov i vozmoínost ikh zameny.
St. Petersburg, 1906. 42 p p .

ITALY

§ 1. — Historical Development
After the achievement of political unity in 1860 and the consequent unification of the customs and legal systems, the Government of the newly formed Italian Kingdom entered on a policy of
promoting railway, road and harbour building and the development
of means of communication in general. This marked the beginning
of a period of national prosperity.
In agriculture more intensive methods of cultivation were
adopted as soon as the prejudices arising out of reliance on the
natural fertility of the Italian soil had been overcome, land drainage
schemes were inaugurated and public services improved. The
result was a revival of grain-growing and animal husbandry and
an extension of afforestation, vine growing, etc.
Once the stage of small handicraft undertakings had been
passed, industry too expanded under the protection of import
duties, and production rose until it was not only sufficient to
supply most of the requirements of the home market, but even
provided a steadily increasing balance for export.
During this period of economic development 1 , which was
accompanied by a general rise in the standard of culture and a
keen intellectual revival, the Italian trade union movement was
born and grew 2 ; and with it the need for a solution of the problems
raised by labour conflicts and their avoidance became more and
more real and urgent.
A growing strike movement, particularly noticeable between
1890 and 1900, which also affected agriculture, gave rise
comparatively early to consideration of the possibility of
conciliation and arbitration procedure in Italy, and attempts
were made in three different fields — legislation, trade union
policy, and administration — to find a just and satisfactory means
1
Cf. B. CROCE : Storia d'Italia dal 1871 al 1915, pp. 53, 62 and 234 et seq. Bari,
1928.
2
For details cf. Freedom of Association, Vol. IV, pp. 1 et seq.

ITALY

425

of settling class differences, preventing the spread of large-scale
conflicts, and making them less acute.
I n legislation, the first step towards a conciliation and arbitration
procedure was made when the Probi viral Courts Act of 15 J u n e
1893 was passed. This Act, which owes its origin to the proposals
of the Royal Committee on Strikes, was principally concerned
with the settlement of disputes between individual employers
and workers, and only section 8 dealt with collective disputes.
I t provided t h a t application might be made to the conciliation
board of the probiviral court to secure a peaceful settlement of
disputes concerning " wages or hours of work agreed on or to be
agreed on ". The question whether this provision gave the
probiviral courts the power to act as arbitration courts in collective
disputes, with the consent of the parties, remained undecided 1 ,
and was in any case not of great practical importance, since
Italian legislation provided no penalties should one of the parties
refuse to attend the conciliation proceedings. On the other hand,
there was nothing to prevent members of the probiviral court, if
applied to, from undertaking the adjustment of a collective labour
dispute by means of conciliation or arbitration, though here again
the Act is not explicit.
I t was obvious t h a t this legislation was insufficient, and the
need for a complete statutory regulation of the matter soon made
itself felt. Among the many attempts in this direction, mention
may be made of the Bill on contracts of employment introduced
by the Ministers Cocco, Ortu and Baccelli in 1902, Mr. Cabrini's
motion, which was discussed in Parliament on 16 March 1903,
the proposals of the deputies Turati, Bissolati, Alessio, Nicolini,
and Abbiate, and the Bill to reform the probiviral courts which
was introduced in Parliament by the Ministers Cocco, Ortu and
Orlando on 27 November|1909.
That all these pre-war attempts were fruitless is not to be
put down t o lack of understanding of social questions, for at the
beginning of the century such understanding was in fact becoming
widespread ; it is rather an indication t h a t there was no real need
of special bodies and special procedure for conciliation and voluntary
arbitration, seeing that the administrative authorities tried to
prevent any outbreak of conflicts, and, if they were unsuccessful,
1
This view is maintained by ABBIATE : Riforme legislative per la soluzione dei
conflitti fra capitale e lavoro (Atti del Consiglio Superiore del Lavoro, X I I . Session,
1908, p . 204) ; R E D E N T I : Massimario della giurisprudenza dei Probiviri, Rome,
1906, p . 17 ; while BALELLA : Gli organi di conciliazione e giurisdizionali nelle
vertenze colletive fra capitale e lavoro, Rome, 1923, p. 114, is of t h e contrary opinion.

426

CONCILIATION AND ABBITRATION IN DIFFERENT

COUNTRIES

spared no pains in attempting by persuasion, mediation and the
exercise of the necessary pressure to bring them to an end. Moreover,
compulsory arbitration and other means of obligatory settlement
were opposed to the Liberalism that then ruled ; and both employers
and workers had more faith in the strength of their own organisations than in the decisions of an arbitration court, that is to
say, of the impartial person appointed as chairman by the arbitrators.
The point of view of this period is well expressed by Mr. Giolitti,
who regards it as the duty of Governments, in the case of social
conflicts, to observe a neutrality largely benevolent towards the
workers. In his own words :
In these struggles between capital and labour the only part the
State can play which is likely to be successful and which is just to
both parties is that of mediator and peacemaker.
In the case of a strike, one object only should oblige the State to
intervene, namely, the protection of the right to work — which is just
as sacred as the right to strike — when the strikers threaten the exercise
of that right by others.
These principles were at first opposed, principally by agricultural
employers, who were much incommoded by frequent strikes during
the harvest, but they gradually won general acceptance and formed
the basis of Government policy from 1901 until the beginning of
the war.
However, strikes became more and more frequent, and, under
the influence of revolutionary syndicalism, often took on a violent
and political character, so that even before the beginning of the
war a certain dissatisfaction began to make itself felt and the
discussion on the expediency of the Government's Liberal policy
revived.
The profound alteration in conditions occasioned by the war
completed this change in the national] attitude. The conviction
that every interruption or limitation of production must be avoided,
the recognition of the common task to be accomplished, and the
danger which threatened the whole people awoke both in the
masses and in the leaders of industry a realisation of the needs of
the moment and the readiness to make the sacrifices called for.
This was the national mood when the Regulations of 22 August
1915, No. 1377, were issued. These made arbitration compulsory
in all disputes on economic or disciplinary questions arising between
the staff and the management of " auxiliary undertakings ",
that is, industrial undertakings which worked for war purposes

ITALY

427

and were subject to the regulations concerning the mobilisation
of industry. Since the number of these auxiliary undertakings
grew steadily the longer the war lasted, the scope of the Regulations
was constantly on the increase. I t was also felt necessary to make
some arrangement for those undertakings which were not subject
t o the special mobilisation regulations ; and for them a conciliation
procedure for the settlement of collective labour conflicts and
the adjustment of differences was introduced. At first this applied
only to undertakings in the " war zone ", but it was extended
later to all parts of the country and all branches of industry
producing necessities of life or satisfying some important national
economic need. Finally, it was decided that, in the case of disputes
in undertakings not belonging to one of these industries and
situated outside the war zone, the conciliation committees should
have the power to act as arbitration courts if both parties made
application to t h a t effect.
The economic emergencies of the war period caused the legislative authorities to extend to agriculture the machinery for
conciliation and arbitration to deal with collective disputes of
every type.
Another legislative measure was passed before the end of the
war, and remained in force after peace was declared. This was
the Decree of 13 October 1918, No. 1672, which, before its expiry,
was extended for an indefinite period by the Legislative Decree of
31 July 1921, No. 1098.
This Decree dealt with the composition of the new probiviral
courts, and also extended the competence of both the old and
the new courts to labour disputes (controversie) and labour conflicts
(conflitti), which section I I of the Decree denned as follows :
(a) Collective disputes which arise concerning the validity, interpretation, execution or termination of agreements or contracts of
employment between a number of workers on the one hand and one
or more industrial undertakings on the other ;
(b) Conflicts which arise concerning the alteration of agreements
in force or the fixing of new conditions of employment between a
number of workers on the one hand and one or more industrial undertakings on the other. . . .
The court was to begin its attempt a t conciliation in such
cases on application b y one or both parties, or by the Prefect if the
matter was confined to a single province, or the Ministry of Commerce, Industry and Labour if it extended to several provinces.
If the attempt was successful, the chairman recorded the fact
in a minute of the proceedings, and the formula of conciliation

428

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

adopted had " contractual force to govern the relations between
the parties, the minutes having the force of evidence " (section 16).
If, on the other hand, the attempt at conciliation failed, the
court was required " to give its own judgment (giudizio) of the
case, and indicate how the matter might be settled ". This
judgment was not, as the text might imply, simply an advisory
opinion, but was, like the conciliation agreement, legally binding,
for section 20 of the Act provided that " every contract, in which
conditions of employment less favourable to the workers than
those contained in the concihation formula or in the judgment of
the court are laid down, shall be null and void ". Appeal against
such judgments could be lodged with the Permanent Committee
on Labour Questions (section 17), whose decision was final.
This was the first attempt made by t h e Italian legislative
authorities to deal fundamentally with the question of the avoidance
and settlement of labour disputes.
This legislation on conciliation and arbitration in industry was
accompanied by a similar effort to settle collective disputes and
conflicts in agriculture. Apart from the Order of 14 September 1919,
No. 1726, the Royal Order of 12 November 1921, No. 1659, should
be mentioned. This applied to the new provinces ceded to Italy at
the end of the war (Venezia Giulia and Tridentina), and gave the
.conciliation committees attached to the provincial and district courts
the power to make settlements in "collective disputes and conflicts
in any way connected with agreements concerning agricultural
labour", or, failing a settlement, exactly to establish the facts of the
case and to issue a decision " in which the associations and persons
to whom it applies, its period of validity . . . and the sanction or
sanctions provided to ensure compliance should be mentioned ".
On application by the parties or the^administrative authorities,
or on its own initiative, the concihation committee might intervene
at any moment in disputes or conflicts, " so long as the decision
made was valid, and . . . extend its validity to associations
or persons not originally covered by it ". No legal remedy was
provided against the decisions and instructions of the committee.
With the exception of the last, these provisions were extended
to cover the whole country by the Legislative Decree of 2 February
1922, No. 35, which also transferred the duties of concihation and
arbitration in agriculture to the provincial committees provided for
in the Order of 14 September 1919, No. 25, which consisted of a
professional magistrate as chairman and two representatives of
each of the parties to the dispute.

ITALY

429

Before this review of legislation in the earlier period is closed,
mention must be made of the special provisions for individual
groups of workers, in particular the rice workers and the staffs of
privately owned public transport undertakings.
The technical conditions obtaining in respect of health in the
rice fields and the fact that large numbers of foreign workers are
employed there in certain seasons made special legislation for this
branch of industry necessary. The Act of 16 June 1907, No. 337,
later incorporated as Chapter X in the unified Hygiene Regulations
of 1 August 1907, No. 636, and the Regulations confirmed by the
Order of 29 March 1908, No. 158, and later amended by the Order
of 5 January 1911, No. 41, were therefore issued.
On the basis of these regulations a committee was set up in
every commune or administrative district in which rice was cultivated, composed of equal numbers of representatives of employers
and workers and presided over by an impartial person named by
the parties or, failing agreement between them, by the magistrate
(pretore). The committee was required to decide in individual and
collective disputes concerning the interpretation, application and
execution of contracts in force or prevailing customs, but not
in labour conflicts.
Decisions arrived at unanimously by members of the committees
had the legal force of arbitration awards, and the magistrate could
require compliance with them. There were however but few such
committees.
More importance attaches to the committees to ensure equitable
treatment of the staffs of privately owned public transport undertakings (employees on tramways and light railways and inland
navigation services).
Workers of this group were not permitted to strike, and it
therefore seemed just to guarantee them equitable treatment.
Provisions with this object in view were included in section 21 of
the Act of 30 June 1906, No. 272, and later in a somewhat more
systematic form in the Act of 14 July 1912, No. 835, the Order of
1 May 1913, No. 578, in pursuance of the above Act, the Decree of
25 March 1919, No. 467, the Order of 8 January 1920, etc.
A " Committee on Equitable Treatment " was set up at the
Ministry of Public Works, composed of an Under-Secretary of
State as chairman, several officials, and equal numbers of representatives of employers and workers. It was required to hear the
spokesmen of the employers and workers and to give its opinion
on questions affecting the treatment of the latter from the economic,

430

CONCILIATION AND ARBITRATION IN DIFFERENT COUNTRIES

legal and disciplinary points of view. If the Minister consented to
application of the decisions of this committee, such decisions
received the force of law. Moreover, on the request of both parties,
the committee might be entrusted with the arbitration of collective
disputes ; but if such request was made by one party only, the
committee could not do more than give its opinion as to the most
equitable method of settling the case (Decree of 25 March 1919,
No. 462).
This system of regulation according to equity remained in
force for a number of years. The conditions of employment of
these workers were regulated in accordance with the current state
of the labour market and with the principles which governed conditions of employment on the great State railways. Nevertheless,
though the system was still nominally in force, there were several
strikes among this group of workers during the agitated period
from 1919 to 1922.
After the Fascists had come into power the whole system was
thoroughly reorganised in pursuance of the Legislative Decree of
19 October 1923, No. 2311. The legal position of these workers
was regulated by an Order issued in connection with the Decree,
the latter covering only the so-called benefit funds (sickness funds).
Economic conditions of employment were, however, to be fixed by
agreement between the particular management concerned and two
representatives of the staff, who were on the first occasion nominated
by the Ministry of Public Works. If the attempt at conciliation
failed, the case came before an arbitration court, which was
required, in making a decision, to take into consideration " the
local economic conditions, the financial position of the undertaking,
the conditions of engagement and the demands made on t h e
staff ".
The arbitration committees were composed of representatives
of the undertakings and of the staffs, the latter being appointed
by the Ministry. The chairman was nominated by agreement
between the parties or, failing this, by the president of the court of
appeal. Mixed committees for several provinces, which were set
up by the Minister, had to decide on individual disputes between
employers and workers concerning the application of the principle
of equity ; collective disputes, on the other hand, •' which directly
affected the staffs of several undertakings " were submitted to the
Minister, who acted as friendly mediator and gave his decision
after hearing the parties.
The Legislative Decree of 8 J a n u a r y 1931, No. 148, which was.

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431

intended to bridge the gap between the above-mentioned Act and
t h a t on trade associations of 3 April 1926, No. 563 1, confirmed the
regulation of the legal position of these workers and decided t h a t
economic conditions should be settled within a specified period by
agreement between the associations on either side, or, failing this,
by the labour courts.
At the end of this series of legislative measures which preceded
the Act on trade associations, mention may be made of the Legislative Decree of 9 February 1919, No. 12, concerning the contracts
of service of private employees, section 13 of which set up provisional joint committees attached to the Chambers of Commerce.
These committees, on which employers and workers were represented in equal numbers, were required " to draft standard
contracts for the various groups "of undertakings and b y these
contracts also to limit the normal hours of work of the employees ",
and " to intervene in individual and collective disputes with the
object of conciliating the parties and promoting an agreement
between them for settling the dispute ".
But this rather vague provision had not much practical effect,
and it was therefore not incorporated in the new Decree on the
contract of service of private employees of 13 November 1924,
No. 1825.
Besides the legislation which has been reviewed, a number of
labour conflicts, some of them of importance, were settled during
this period by means of awards in accordance with civil procedure.
The decisions given by the Minister Labriola in 1920 in the grave
conflict in the electrical industry may be cited as an instance.
Moreover, several important wage agreements which were concluded
at t h a t time (ships' engine-room staff, etc., iron workers, chemical
workers, electricians) stipulated that all collective disputes and
conflicts were to be submitted to arbitration.
A further fact should be noted. On several occasions during this
period the Government. exerted its authority to settle labour
conflicts of which the whole country felt the effects. When a
particularly serious conflict, the metal-workers' strike, which
eventually led to an occupation of the factories, arose, certain
general regulations to govern working relations were issued by the
Prime Minister (Mr. Giolitti) in a Decree dated 19 September 1920.
The Government was not empowered by statute to take this step,
but in the exceptional circumstances it was completely successful.
1

See below, p . 433.

432

CONCILIATION AND ARBITRATION IN DIFFERENT

COUNTRIES

§ 2. — The System in Force
GENERAL

OBSERVATIONS

The advent of Fascism to power meant the overthrow of the
doctrines of Liberalism, which until then had dominated policy.
This change may be clearly seen in the terms of the Trade Associations Act passed in 1926 to complete and consolidate the political
victory, in the Labour Charter, and in the supplementary laws.
They provide a groundwork for the new relations between employers
and workers. The Fascist attitude is that it is less important to
create institutions t o settle " inevitable " labour confMcts than to
regulate conditions of work in such a way t h a t no confMcts can
occur.
Conciliation and arbitration in modern Italy are thus an
important part of the whole Fascist system of labour law and can
only be understood as such. A few short quotations from a work
by one of Fascism's foremost theorists, Professor Rocco 1, the
Minister of Justice, who is responsible for the above-mentioned
Trade Associations Act, will serve to show the attitude of the
movement towards labour disputes and their solution :
The Fascist State is the State which realises with a maximum of
power and cohesion the ideal of all legally organised society. Society,
according to the Fascist conception, is not merely the sum of a number
of individuals but an entity with its own life, its own aims transcending
those of individuals, and its own spiritual and historical value ; and
the State, which is society as organised by law, is for Fascism something more than the citizens which compose it at a given moment,
for it, too, has its own life and its own aims, higher than those of individuals, to which the individuals' aims must be subordinated. . . .
The Fascist State has its own moral code, its own religion, its own
political mission in the world, its own functions for the furtherance
of social justice, and its own economic task. It must therefore extend
and intensify morality ; it must face religious problems, and profess
and protect the true Catholic faith ; it must carry out in the world
the civilising mission entrusted to the nations with high culture and
great traditions, which means that it must strive with all its power
to extend its political, economic and intellectual influence beyond its
own frontiers ; it must work for justice between classes and prevent any
one class from immoderately defending its own interests ; and finally,
it must aim at increasing production and wealth, using the powerful
spur of personal interest when it is of value, but intervening on its own
initiative in case of need. . . .
1
R o c c o : La trasformazione
pp. 16 et seq. Rome, 1927.

dello Stato. Dallo Stato liberale allo Stato

fascista,

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433

The Fascist State is the truly sovereign State dominating all the
existing forces in the country and bending them to its own will ; for
if the aims of the State take precedence over those of its citizens, so
too the means used to attain them must be more powerful than all
other means, and the forces at the command of the State greater than
any other force. . . .
The highest aims and the greatest force — these ideals contain the
essence of the Fascist conception of the State ; and all the new Italian
legislation tends to realise it.
In accordance with this conception, the preamble to the Trade
Associations Bill declared t h a t the Fascist State is " the truly
sovereign State dominating all the existing forces of the country
and directing them towards realisation of the nation's historical
and imperative aims ", and t h a t it " naturally . . . cannot
ignore the most serious problem which is vexing the world to-day,
that of the relations between capital and labour ; it must find a
solution which tends to peaceful collaboration between social groups
and to an ever-increasing revenue from national production".
The Fascist corporative organisation of society treats labour
conflicts as class aggression and forbids them, just as the historical
and legal development of the State has forbidden personal aggression.
The Fascist system of labour law, as embodied in the Trade
Associations Act of 3 April 1926, No. 563 *, and in the Regulations
for its administration of 1 July 1926, No. 1130 2, is built up on the
four following principles :
Legal recognition of the associations of employers and workers,
with equality of rights, under the strictest State supervision ;
Legal validity of collective agreements ;
Judicial settlement of collective labour disputes by special
labour courts ;
Prohibition of direct class action (strikes and lock-outs) and
sanctions in