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INTERNATIONAL LABOUR OFFICE

STUDIES AND REPORTS
Series A (Industrial Relations) No. 36

INDUSTRIAL RELATIONS
IN GREAT BRITAIN
By

J. HENRY RICHARDSON, M.A., Ph.D.
Montague Burton Professor of Industrial

Relations in the University of Leeds

GENEVA
1938
Published in the United Kingdom
For

the

INTERNATIONAL LABOUR O F F I C E ( L E A G U E OF NATIONS)

By P . S . KING & S O N , Ltd.
Orchard House, 14 Great Smith Street, Westminster, London, S.W.i

First printed iç33
Second Impression 1933
Second Edition IÇ38

FOREWORD
PROFESSOR RICHARDSON'S report on industrial relations in Great
Britain is a new edition of a study first published in 1933. I t forms
part of a programme of research on industrial relations undertaken
by the International Labour Office in accordance with a resolution
adopted in 1928 by the International Labour Conference. This
resolution, proposed by Mr. H. H. Champ, employers' delegate of
Canada, and seconded b y the Canadian workers' delegate, Mr. R.
J. Talion, ran as follows:

" Whereas it is contended that a policy of active collaboration
between employers and employed, such as exists in certain countries,
has resulted both in an improvement in the level of real wages and
working conditions, and also in greater and more economical production ;
and
" Whereas the economies resulting from such collaboration can also
be made available for the benefit alike of the employers, employed and
the community as a whole;
" Therefore be it resolved :
" That this Conference requests the Governing Body to consider the
advisability of instructing the International Labour Office to follow
with due attention the progress of the spirit of collaboration between
employers and employed and to report on the subject from time to
time."
This resolution was the reflection in the international sphere
of the growing attention which had been paid to the scientific
study of industrial relations since the war. Much of the impetus
to this study was derived from North America, and as a result
of his visit to that country in the previous year the Office published
in 1927 a Report b y Mr. Harold Butler, then Deputy-Director
and now Director of the Office, on Industrial Relations in the
United States. But, quite apart from American developments,
the whole question of the technique of joint consultation and
collaboration between employers and workers had been the subject
of a great deal of study and discussion in other countries also.
Conferences had been held in Australia, Finland, Great Britain,
the Netherlands, New Zealand and Sweden, to mention only some
of them, sometimes under Government auspices, sometimes on
the initiative of employers' and workers' organisations. Another

FOREWORD

illustration of the same tendency was to be found in the creation
of the Reichswirtschaftsrat in Germany, the Conseil national économique in France, and the procedure established for regular consultation between the representative employers' and trade union organisations in Great Britain. Indeed, the interest in the subject was
so widespread that when the Governing Body discussed the Resolution of the Conference in October 1928 it authorised the Office to
undertake a fairly comprehensive programme of study.
In conformity with this programme the Office has issued four
volumes x of studies on industrial relations in individual firms.
The purpose of the Office in undertaking these studies has been
to supply definite and reliable information on the practice of
industrial relations in a certain number of undertakings, that is
to say, on the methods adopted by these undertakings to organise
satisfactory relations between the management and the staff.

1
INTERNATIONAL LABOUR O F F I C E : Studies on Industrial Relations, I. Studies
and Reports, Series A (Industrial Relations), No. 33, Geneva, 1930. The undertakings dealt with in that volume were: The Siemens Works, the Lens Mining
Company, the London Traffic Combine, the State Mines of the Saar Basin, and
t h e Bat'a Boot and Shoe Factory. Studies on Industrial Relations, II. Studies
and Reports, Series A (Industrial Relations), No. 35, Geneva, 1932. The undertakings dealt with in t h a t volume were: The Zeiss Works, the F.I.A.T. Establishments; the Philips Works, t h e Sandvik Steel Works. Studies on Industrial Relations,
III. Studies and Reports, Series A (Industrial Relations), No. 38, Geneva, 1935.
The undertakings dealt with in t h a t volume were : The Canadian National Railways,
t h e Pequot Mills, Salem, Mass., U.S.A., a Paris Department Store (La Samaritaine),
the Norwegian Nitrogen Company, t h e United Steel Works of Burbach, Eich and
Dudelange, Luxemburg. Studies on Industrial Relations, IV. Studies and Reports,
Series A (Industrial Relations), No. 33, Geneva, 1938. The undertakings dealt
with in t h a t volume were : The " Globe Stores ", Zurich, Switzerland, the Geo
Factory, Paris, the Mühlig Glassworks in Teplitz-Schönau, Czechoslovakia, the
B a t a undertaking in Borovo, Yugoslavia.

AUTHOR'S PREFACE TO THE FIRST EDITION
THE object of this study is to give a descriptive account of
industrial relations in Great Britain. The study begins with a
general outline of the economic and social background. Reviews
are then given of the development, structure and policy of the
trade union movement and of employers' organisations. The
very comprehensive joint machinery established voluntarily for
negotiation and conciliation of disputes is examined, and an account
is also given of the State systems of conciliation and arbitration
and of minimum wage regulation. In addition to this survey of
collective relations, the methods applied individually in progressive
undertakings with a view to the establishment of good relations
between the management and workers are described. Among the
methods discussed are joint consultation in works councils, and
various measures of industrial welfare and labour management which
have been increasingly adopted during recent years. Throughout
the study, attention is directed mainly to the present position,
but trends of development are illustrated by comparisons with
pre-war data.
Part of the information given in the study is drawn from official
publications and from the extensive non-official literature available on certain aspects of the subject. For other data and also
for numerous suggestions the author is indebted to officials of the
Ministry of Labour, the Industrial Court, and the Industrial Health
Research Board, and to representatives of various employers'
associations, trade unions, and other organisations, including the
National Institute of Industrial Psychology, the Industrial CoPartnership Association, the Institute of Labour Management and
the Industrial Welfare Society. Special thanks are due to Management Research Groups for many suggestions, facilities and
contacts, and to a large number of individual firms which have
accorded the fullest opportunities to study at first hand their
methods of industrial relations.
J. HENRY RICHARDSON.

The University, Leeds.
7 November 1932.

AUTHOR'S PREFACE TO T H E SECOND EDITION
D U R I N G the five years since the first edition of this study was
written, industrial relations in Great Britain have shown remarkable stability, combined with a high standard of industrial peace.
This stability has been maintained in a period of great change
in economic conditions; the first edition was written during the
worst year of the world depression while the present edition was
prepared in a year of prosperity which ranks amongst the best
since the war.
Voluntary machinery for collective negotiation has remained
the chief method of regulating working conditions; it stood the
test of the depression and has worked efficiently during the subsequent recovery. The State has continued its policy of intervening
in industrial relations only as a last resort when other means have
failed. There is growing recognition, however, that in certain
industries, including some which are new or rapidly expanding,
the organisations of workers and employers are too weak and
unrepresentative to ensure the effective regulation of working
conditions by voluntary agreements alone, and there is a distinct
tendency for the State, though preferring voluntary agreements, to
consider the introduction of statutory methods in such industries.
Also, important legislation for the improvement of working
conditions has been passed especially in fields not normally covered
by collective agreements. Special mention may be made of the
Factories Act, 1937, and the extension of unemployment insurance
to agricultural workers.
The stability of British industrial relations is the more noteworthy
when it is contrasted with the almost revolutionary changes
during the last five years in the United States, Germany and
France. For each of these countries a study written five years ago
would require to be completely reconstructed in order to indicate
the present situation. In preparing this new edition for Great
Britain few changes have been necessary in order to bring the
first edition up to date, the general framework and large parts
of the original study being maintained without modification.
J.

The University, Leeds.
December 1937.

HENRY

RICHARDSON.

CONTENTS
Page

FOREWORD
AUTHOR'S PREFACE TO THE FIRST EDITION

in
v

AUTHOR'S PREFACE TO THE SECOND EDITION

I : Economic and Social Background

CHAPTER

Area, Climate and Population
Industry and Trade
Employment and Unemployment
Currency and Prices
Wages and Hours of Work
Social Insurance and Other Public Social Services
Unemployment Insurance
Health Insurance .
Old-Age Pensions
. Other Social Services
Education
The Co-operative Movement
Summary
CHAPTER I I : The Trade Union Movement
Development
Membership
Finance
Legal Position
Structure
Individual Unions
Federations of Trade Unions
Trades Councils
The Trades Union Congress
Policy
CHAPTER I I I : Employers' Organisations
Development
Structure and Constitution
Objects
Contributions
Management
National Co-ordination
National Confederation of Employers' Organisations . .
Federation of British Industries
Policy

i
4
io
19
22
35
36
40
41
42
42
44
44
46
47
52
54
55
60
60
64
67
69
73
77
78
83
85
86
87
89
90
96
98

CONTENTS
Page

IV: Methods of Negotiation between Trade Unions and
Employers' Organisations
ioo
Development of Collective Relations
ioi
Industrial Disputes Involving Stoppages of Work
107
Machinery for Collective Bargaining
no
Coal Mining . .'
in
Railways
114
Road Transport
119
Shipping
122
Iron and Steel
124
Engineering
125
Cotton
127
Building
• . . 129
Boot and Shoe
130
Joint Industrial Councils
132
State Regulation of Minimum Wages
141
Trade Boards
142
Minimum Wages in Agriculture
147
The Coal Mines (Minimum Wage) Act
149
State Conciliation and Arbitration
150
CHAPTER V: Works Councils
155
Development
156
Constitution
159
Functions
164
Summary and Results of Experience
166
CHAPTER VI: Industrial Welfare
171
CHAPTER

I. Statutory Requirements
Miners' Welfare Fund
/ / . Voluntary Welfare
Arrangements for the General Well-being of Workers . .
Recreation, Social Activities and Education
Sport
Social Activities
Education
Works Magazines
Financial Schemes
Labour Co-Partnership and Profit-sharing . . . .
Pension Schemes
Savings Schemes
Sickness and Benevolent Schemes
Unemployment Benefit Schemes
The Industrial Welfare Society
CHAPTER VII: Labour Management
Vocational Selection and Training
Health and Safety

173
175
177
180
183
184
186
186
189
189
190
194
198
200
204
207
209
212
216

CONTENTS

xi
Page

Suggestion Schemes
Research and Exchange of Experience
Industrial Health Research Board
National Institute of Industrial Psychology . . . . . .
Institute of Labour Management
Management Research Groups
CHAPTER

220
222
223
226
228
230

VIII: Co-operation in National Economic Councils . . 233

National Industrial Conference, 1919
Turner-Melchett Co-operation and its Sequel
Economic Advisory Council
CHAPTER I X : Conclusions

234 •
235
243
245

APPENDICES
I.
II.

Short Bibliography
Average Weekly Full-time Rates of Wages at July 1914
and 31 December 1936
III. Full-time Hours of Work in Various Industries, 1914 and
1936
IV. Membership of Trade Unions, 1913, 1920, 1930, 1935 and
1936
V. Industrial Disputes involving Stoppages of Work, 1893 to
1936
VI. Constitution and Functions of Works Councils
VII. Industrial Co-Partnership and Profit-sharing Schemes in
Various Undertakings
VIII. Pension Schemes in Various Undertakings
IX. Sickness Benefit Schemes in Various Undertakings . . . .
X. The National Industrial Alliance

INDEX

254
257
258
259
260
261
270
273
281
284

285

•

CHAPTER I

ECONOMIC AND SOCIAL BACKGROUND
THE object of this chapter is to give a sketch of those features
of economic, industrial and social conditions in Great Britain
which are essential for the understanding of industrial relations
in this country. Attention is directed chiefly to population,
industry and trade, employment and unemployment, currency
and prices, wages and hours of labour, social insurance and education. In dealing with these subjects reference is made to the
effects upon industrial prosperity and labour conditions of monetary
policy, including the suspension of the gold standard, to foreign
trade and the successful demand by British industry for tariff
protection, to the distribution of the national income, and to the
course of prices. A note on the Co-operative Movement is included.
Post-war conditions are mainly reviewed, but for purposes of
comparison information is often given on the position immediately
before the war.1
AREA, CLIMATE AND POPULATION

The total area of Great Britain and Northern Ireland is less
than 95,000 square miles, of which Scotland represents about
30,000 square miles, Wales 7,500, and Northern Ireland over 5,000.
This small area has facilitated the formation of national organisations of employers and of workers. All the chief industrial centres
except those in Scotland and Northern Ireland are within six or
seven hours by rail from London, while from such cities as Leeds
and Manchester there are very few important industrial areas
which cannot be reached within three or four hours. Contacts
between the representatives of organisations in the different cities
are, therefore, readily maintained and a co-ordinated national
policy is relatively easy to evolve. Also, local variations in
1
Most of the data given in this chapter are compiled from Board of Trade and
Ministry of Labour publications, including the Statistical Abstracts and Abstracts
of Labour Statistics.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

conditions are not great and, consequently, a basis is provided
for considerable uniformity of working conditions whether under
national legislation or national collective agreements. The worst
industrial dispute in the history of the country, indeed, resulted
largely from disagreement on the question of national versus
district regulation of wages.1
The country is so small that there is little variation in climate.
The latitude is between 50o and 6o° North, and the climate is
temperate, insular, and free from extremes; the mean annual
temperature is about 48 o Fahrenheit and the range is from about
39o in January to 58.5o in July. In consequence of the temperature
and equable climate there is little interruption of outdoor work in
winter, and seasonal fluctuations in the demand for labour are
much smaller than in many other countries. Also shipping is not
interrupted by ice-bound harbours. The small size of the country
and the narrow range of its climate imply dependence upon other
countries for the supply of a wide variety of products from other
climatic zones.
The population of Great Britain and Northern Ireland was
42,136,000 in 1911, 44,027,000 in 1921, and 47,098,000 in the
middle of 1936.2 The numbers of persons gainfully occupied were
about 45 to 46 per cent, of the totals. The following estimates
show the geographical distribution of the population in 1936:
England and Wales
Scotland
Northern Ireland

40,839,000
4,966,000
1,293,000

In common with many other countries, there has been a fall
during recent years in birth rates and death rates compared with
those before the war. The trends during the last twenty-five
years in Great Britain and Northern Ireland were as follows:
Rates per 1,000 population 1
Birth
Death
1910-1912
24.5
14.3
I92I
22.6
12.5
1930
16.8
II.7
1935
152
I2.0
1 The post-war figures exclude the Irish Free State. The separate figures for England and Wales, Scotland
and Northern Ireland show trends generally similar to those indicated above.

The net result was that during these twenty-five years the growth
of population was less in absolute numbers and much smaller as
1
2

This was t h e stoppage in the coal-mining industry in 1926.
T h e 1936 figure is a provisional estimate.

ECONOMIC AND SOCIAL BACKGROUND

a rate of growth than during any corresponding period in the
previous hundred years. A further fall in the birth rate of about
1.5 per thousand would result in a stationary population, or a
declining one if there were losses by emigration.
The outward balance of British migrants to countries out of
Europe and not within the Mediterranean area averaged about
90,000 per annum during the years 1924 to-1929. About 44 per cent.
went to British North America, about 36 per cent, to other parts
of the British Empire, and the remaining 20 per cent, to the United
States of America.1 Emigration was considerably less between 1924
and 1929 than during the previous four years and during the years
immediately preceding the war when, however, the rates were
exceptionally high. In 1930 the net outward balance of British
migrants fell to 25,955, while in each of the years 1931 to 1936
there was a net inward balance the annual average of which was
about 29,000.

The numbers of males and females in the population of Great
Britain and Northern Ireland in the middle of 1936 were 22,613,000
and 24,485,000 respectively. These figures represent a higher
proportion of females to males in 1930 than in 1911, largely as a
result of the number of men killed during the war. Also, partly
for this reason and partly owing to the relation between the movements of the birth and death rates the average age of the population
was somewhat greater in post-war years than in 1911.
The population is very homogeneous and this facilitates the
organisation of trade unions and employers' associations. Except
among a very small and rapidly diminishing minority of people
in Wales and Scotland who speak only Welsh or Gaelic, the English
language is universal. There are, of course, regional variations of
dialect and type of population, but they present little or no obstacle
to the formation of national associations of workers or of employers.
Thus, the trade unions in Scotland, while retaining distinct characteristics and activities, are merged for most purposes in organisations
which extend throughout the whole of Great Britain and Northern
Ireland. The formation of organisations has not been complicated,
as in some countries of Continental Europe, by questions of
religion.
1
There was a very small net immigration into Great Britain from other foreign
countries, the amount of which, however, increased appreciably during the period
1930 to 1935.

INDUSTRIAL RELATIONS IN GREAT BRITAIN
INDUSTRY AND TRADE

The lines of development of British industry and trade have
been determined largely by the suitability of the country's geographical position for world commerce, the possession of valuable
deposits of coal and iron conveniently situated near navigable
water, and an early start in the industrial revolution, especially
in the application of mechanical methods in the textile industries.
Consequently coal mining, the iron and steel trades, engineering,
shipbuilding, the shipping services and dock labour, together with
the textile trades have been the characteristic industries of the
country. Britain's great international trade and London's position
as a world financial centre have resulted in the development of
banking, insurance and other financial services which are widely
used by the nationals of other countries and are a valuable source
of revenue and employment to British people. Agriculture, which
for many years was unable to resist the pressure of the manufacturing interests for free importation of food and raw materials,
is relatively less important in Britain than in most other countries;
pasture is much more extensive than arable land. Since 1930,
however, measures of State intervention have been adopted with
the object of protecting, conserving, and fostering the development
of British agriculture. Large numbers of workpeople are, of course,
employed in building, the food industries, clothing, furniture
making, printing, internal transportation, and the distributive
trades, and in public utility and local and national government
services, but these are common to every country.
The relative importance of some of the chief British industries
and services is indicated by the figures tabulated below. They
are the estimated numbers of workpeople insured against unemployment, whether employed or unemployed, in the different industrial
groups at July 1937 in Great Britain and Northern Ireland.1 The
groups are ranged according to size. Percentage figures are added
showing the relation between the numbers in July 1937 and in
July 1923 ; they indicate which industries have expanded and which
have contracted during this period. In studying these changes it
should be remembered that the total number of insured persons
aged sixteen to sixty-four years rose by 22.7 per cent, between
July 1923 and July 1937; therefore industries and services with
1
The total numbers of workpeople in these industries would be somewhat
greater, owing to the employment of uninsured workpeople.

ECONOMIC AND SOCIAL BACKGROUND

a lower percentage than 122.7 n a d experienced a relative decline.
Agriculture and domestic service are not included in the table;
nearly 1,000,000 persons are engaged in agriculture, and 1,400,000
workpeople in domestic service. 1 The railway service, in which
the insurance system has only a partial application, employed
nearly 600,000 persons in March 1937, but this figure is not
comparable with those given in the table for other industries,
as it includes persons in the higher clerical and administrative
grades, and also omits unemployed railway workers. • Other
important groups not given in the table are national and local
government services, and commerce, banking, insurance and finance.
ESTIMATED NUMBERS OF INSURED WORKPEOPLE AGED l 6 TO 64 IN
CERTAIN INDUSTRIES IN GREAT BRITAIN AND NORTHERN IRELAND,
JULY 1937, AND PERCENTAGES SHOWING RELATION TO THE
NUMBERS IN JULY I923 ( = IOO) 1
Industry

Distributive
trades . . .
Building . . .
Coal mining. .
General engineering . . .
Hotels, restaurants, etc. .
Cotton . . . .
Motor vehicles.
Public works
contracting .
Printing . . .
Wool and
worsted. . .
Gas, water and
electricity . .
Tailoring . . .
Road transport
Tramway
and
omnibus service
. . . .
Iron and steel
rolling, etc. .
Shipbuilding .

Insured workpeople in
J u l y 1937
Percentage
Number
(July 1923
= 100)
2,061,390

167.4

1,035.290
868,360

I5I-9
72.O

613,910

95-6

444,110
408,580

174-8
73-o
185-5

35!>63o
294,110
284,550

239.8

223,260

86.1

218,480
215,170
207,170

1324
117.2
142.7

203,850

193-4

181,900
172,810

89.3
66.3

128.0

Industry

Electric cables,
wire and
lamps . . .
Bread, biscuits
Laundries and
dyeing . . .
Docks, harbours, etc. .
Furniture making . . . .
Entertainments
and sports .
Boots and
shoes . . .
Shipping service . . . .
Hosiery . . .
Electrical engineering . .
Drink . . . .
Chemicals . .
Textile bleaching, dyeing,
Dressmaking
and millinery

Insured workpeople in
J u l y 1937
Percentage
Number
(July 1923
= 100)

177,670
176,490

248.7
112.2

173,890

166.O

166,030

92.2

149,910

165.8

139,620

236.8

97.8

135."

IO7.O

134,080
119,870

135-6

114,630
114,030
109,540

I9I-7
I16.4
I08.5

102,450

93-5

102,450

88.2

1 Ministry 0/ Labour Gazette, Nov. 1937. Some of the industries given include allied branches not specified
in the table.
1
Agricultural workers were brought under a special unemployment insurance
system by the Unemployment Insurance (Agriculture) Act, 1936, the number of
insured persons in July 1937 being 723,000.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

The figures show high rates of increase since 1923 in public
works contracting, tramway and omnibus service, entertainments
and sports, the distributive trades, electrical engineering, electric
cables, wire and lamps, hotels and restaurants, laundries, and
motor vehicles. The industries which show marked decreases include shipbuilding x and ship-repairing, iron and steel rolling and
allied trades, coal mining, and textiles. Among several of the basic
industries the changes in recent years have been in part a correction
of abnormal developments during the war, when iron and steel,
engineering and shipbuilding were expanded beyond peace-time
needs, while building and allied trades were greatly curtailed. Some
of the trends of earlier years were, however, sharply changed by
rearmament work in 1936 and 1937, particularly in iron and steel,
and engineering.
The changes between 1923 and 1937 are also illustrated by the
following table:

RELATIVE PROPORTIONS OF THE TOTAL INSURED POPULATION
WHICH WERE INCLUDED IN CERTAIN LARGE GROUPS
OF INDUSTRIES IN I 9 2 3 AND I 9 3 7

Percentages of total number
insured at

Industry Group 1

July 1923

July 1937

0.2
II.7

Commerce, banking, insurance and finance
National and local government services .

7-3
17.8
1-5
4-7
2.0
3-7

0-3
71
471
9-7
21.7
1.6
6.7
2.0
3-8

All industries and services . . .

100.0

Transport and distributipn
Gas, water and electricity supply

. . . .

1 Not including agriculture.
2 Including hotel and boarding house services, professional services, laundries, dyeing and dry cleaning
entertainments and sports.

Notwithstanding the reduction, the tonnage of British merchant vessels
launched in each of the years 1927 t o 1930 was more than half the world total of
tonnage launched. From 1931 t o 1937, however, British tonnage launched was
usually less t h a n half, and in some years less t h a n one-third of the world total.

ECONOMIC AND SOCIAL BACKGROUND

The course of industrial production, which is intimately related
to the trends of real wages and to the possibilities of improved
material standards of living, is indicated below for recent years.
The figures show the growth of production, which more or less
kept pace with the growth in the number of workpeople employed
during the years 1927 to 1929, the severe set-back during the
depression, and the advance to record levels of production from
1935 to 1937.1
Year

Iudex

1924
1927
1928
1929
1930
1931

IOOO
106.8
105.4
III.8
103.2
93.7

Year

Index

1932
93.3
1933
98.3
I0
1934
9-9
1935
117.8
1936
129.2
1937 (ist half) . . 137.5

The nature of British foreign trade reflects the structure of
industrial production. Imports consist mainly of food and raw
materials, and exports are chiefly coal and manufactured products.
The general lines of distribution of imports and exports are shown
below for the year 1929, i.e. before the effects of the world depression
had been felt, and for 1936, when foreign trade was slowly improving
but was still much below the pre-depression level.

Food, drink and tobacco . .
Raw m a t e r i a l s 2
Manufactured a r t i c l e s 3 . . .

-r- . . .
i -.
Total imports 1 .
in million £'s
1929
1936
535
383
340
248
334
213

Exports of United
Kingdom produce
¡/million £'s
1929
1936
55
36
79
51
575
341

* Exports of imported merchandise were as follows: in 1929, food, etc., £26,000,000; raw materials,
£54,000,000; manufactured articles, £29,000,000; in 1936, food, etc., £11,680,000; raw materials, £32,960,000;
manufactured articles, £r5,45o,ooo.
2 Ihcluding articles mainly unmanufactured.
3 Including articles mainly manufactured.

Compared with the years immediately before the war there was
a notable increase during the first post-war decade in the proportion
of manufactured imports to total imports. An increasing proportion of exports of United Kingdom produce went to countries
within the British Commonwealth. Also, exports decreased
relatively to imports. These changes led to a growth of support
1
The figures are t h e Board of Trade index numbers of industrial production.
The figures for 1934 to 1937 a r e calculated from indexes on a revised basis.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

for protection of the home market against imported manufactures,
and for measures of Imperial preference. The system of protection
and preference introduced in 1931 and 1932 had the effect of
reducing the proportion of manufactured imports and of strengthening the tendency towards closer trade relations within the Commonwealth.
British trade since the war has formed a smaller part of the
value of world trade than in 1913. For several years the United
States occupied the leading place, but in 1930 Britain resumed the
premier position in total trade though not in exports. The figures
below show the percentages which British trade formed of world
trade in 1913, and in various recent years.1

BRITISH PERCENTAGES OF WORLD TRADE

Imports

Exports

Total

16.48
1593
17.04
17.46
18.22

1393
II.15
IO.32
II.08
IO.61

15-24
13.62
13.81
1434
14.50

Calculated from totals not including Italy and Spain in post-war years.

Thus between 1929 and 1936 British imports represented a
growing proportion and exports a fairly stable proportion of world
trade.
The value both of British imports and exports fell between 1924
and 1933, the fall in the value of imports being particularly great
between 1930 and 1931 owing to the collapse in world prices of
food and raw materials. The volume of imports, however, was
10 to 13 per cent, higher in 1930 and 1931 than in 1924. The
volume of exports, which in 1929 had been about 8 per cent.
greater than in 1924, fell heavily in 1930 and 1931. After 1933
a noteworthy increase began in the volume both of imports and
of exports. These variations in value and quantity are shown
by the following index numbers (1930 = 100) .2
1
League of Nations Monthly Bulletin of Statistics, and Review of World Trade,
1936. The figures do not make allowance for the exclusion of the Irish Free State
in recent years.
2
Statistical A bstract for the United Kingdom. The indexes of average values are
calculated on the basis of values in 1930.

ECONOMIC AND SOCIAL BACKGROUND
•

1924
1930
1931
1932
1933
1934
19352

.
•
•
.
•
•

Imports retained

Exports of United
Kingdom produce

Average
values

Volume

Average
values

Volume

130-8
100.0
81.0
75-3
713
73-3
74.8

90.9
loo.O
102.8

120.9
100.0
89.4
83-3
81.9
82.2
81.8

116.0
100.0
76:5
76.8
78.7
84.4
91.2

903
91.7
96.9
97-8

1 Total imports less re-exports.
8 Provisional figures.

There has been an appreciable decline since pre-war days in the
importance of the export trade relatively to the whole national
economy. Whereas in 1907 the number of workers manufacturing
for export formed 44.5 per cent, of all manufacturing workers,
the percentage has fallen appreciably below 40 per cent, since the
war1. Among the reasons for this change have been high foreign
tariffs, the development of industries abroad, reduced export of
capital, and currency factors at home and abroad. The British
tariffs introduced in 1932 are tending further to diminish the
relative importance of external trade, and are causing changes in
the relative importance of different industries.
With regard to balance of trade, Britain has had for many
years a large balance of visible imports over visible exports, but
this has usually been much more than counterbalanced by invisible
exports, and a surplus has been maintained for lending abroad.
This surplus has recently been smaller than in the years immediately
preceding the war. The effects of the world depression, indeed,
resulted in 1931 and in several subsequent years in unfavourable
balances of payments. It was in consequence of the heavy unfavourable balance in 1931 that the gold standard was suspended,
new tariffs imposed and measures of economy adopted by the
National Government with a view to increasing confidence in
sterling. The tariffs and the preferences introduced at the Ottawa
Conference in 1932 are designed to establish a more satisfactory
relation between British imports and exports and to increase
the relative importance of trade within the British Empire. The
Committee on Industry

and Trade Report, p . 308.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

balance of payments in each of the years 1913, 1924, 1928, 1932,
and 1935 is shown below.1

1913

1924

1928

1932

«935

(In million £'s)
Excess of imports of merchandise and
bullion over exports
Estimated excess of Government pay-

158

324

339

302

332

140
220
60

130

250

150
25
15

185
30
10

136

— 66

— 34

Estimated net income from :
94
210

Short interest and commissions . .
Estimated total credit balance . . .

25
10
181

1 Provisional figures.
2 Including receipts and payments in respect of reparations and the principal of inter-Governmental loans.
For 1913, Government receipts and payments were not separately estimated.

EMPLOYMENT AND UNEMPLOYMENT

No economic problem has received more attention during recent
years, or exercised a more profound influence upon industrial
relations, than that of the protracted unemployment from which
British industry has suffered during most of the post-war years. The
table below gives for July in each of the years 1923 to 1937 the
estimated numbers of workpeople in Great Britain and Northern
Ireland aged 16 years and over who were insured under the Unemployment Insurance Acts, and the numbers and percentages of those
workpeople who were recorded as unemployed. The Acts in force
during this period applied to most manual workers and also to nonmanual workers earning not more than £250 per annum; the
principal exceptions were persons employed in agriculture and
private domestic service, and these categories are not included in
these statistics.2 The figures include persons wholly unemployed
and persons temporarily stopped.
1

Figures compiled by the Board of Trade.
Agricultural workers were brought within the field of unemployment insurance
by the Unemployment Insurance (Agriculture) Act, 1936.
!

ECONOMIC AND SOCIAL BACKGROUND
NUMBER

INSURED

WORKPEOPLE

AND

THE

NUMBER

AND

PERCENTAGE UNEMPLOYED IN GREAT BRITAIN AND
NORTHERN IRELAND IN J U L Y OF EACH

YEAR

I923 TO I937 !
Insured workpeople recorded as unemployed
Year

1923
1924
1925
I926
1927
1928
1929
1930
I931
1932
1933
1934
1935
1936
1937

. . . .

Number of insured
workpeople

11,485,800
11,664,000
11,892,000
12,041,000
12,131,000
11,881,500
12,094,000
12,405,700
12,771,800
12,809,800
12,885,000
12,960,000
13,058,000
13.354.4 0 0
13,697,000

Number

Percentage

1,327,000
1,138,000
1,329,000
I.737.000
1,114,000

II.6
9-8
II.2
I4.4

i.377>°°°

11.6
9-7
16.7
22.6
22.9
19.6
16.8
154
12.4
10.1

1,178,000
2,070,000
2,806,000
2,921,000
2,507,000
2,162,000
1,919,000
1,660,000
1,386,000

9.2

1
From Jan. 1928 all persons aged 65 and over ceased to be insured as they became pensionable under
legislation passed in 1925.

The figure of about 2% millions of unemployed among insured
workpeople which was reached in the 1921 depression was exceeded
during the world depression of 1930-1933. The high percentage
in 1926 was due to the industrial conflicts of that year, especially
the protracted stoppage in the coal-mining industry. Throughout
the whole period the lowest percentages of unemployment were
8.7 and 8.8 in May and June 1927, representing over a million
unemployed. The volume of unemployment in the relatively good
years 1922 to 1925 and 1927 to 1929 was considerably greater than
that which prevailed before the war ; pre-war figures of unemployment among trade unionists show an average percentage of 4.5 for
the years i860 to 1914.1 The highest figures registered during
the world depression were over 2,900,000 in the autumn of 1932
and the early months of 1933. They represented about 23.0 per
cent, of the total numbers insured, which was very similar to the
1
I t is probable t h a t t h e r a t e of unemployment among non-trade unionists,
including large numbers of unskilled and semi-skilled workers, was much higher
t h a n t h a t among trade unionists.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

highest percentage reached in the 1921 depression, but was a more
serious burden coming after ten years of severe unemployment.1
After the beginning of 1933 the numbers unemployed fell steadily,
and by 1937 were about one-half of those at the worst period of the
depression, the percentage of unemployment in July 1937 being
10.1. Although since 1921 few periods show appreciably lower
percentages, the number unemployed in July 1937 was no fewer
than 1,386,000.
The figures of unemployment given above must be completed
by certain supplementary data. Thus the numbers recorded as
unemployed include a considerable proportion of workpeople who
are only temporarily stopped from their jobs. On 21 July 1937,
out of the total of 1,386,000 insured workpeople aged 16 to 64 years
who were unemployed, 249,000 were temporarily stopped; it is
also of interest to note that the total included 268,000 female
workers. Another point which merits attention is that there was
very little difference between the numbers of insured workpeople
in employment during the years of exceptional depression 1931-1932
and the relatively prosperous year 1924. The averages for Great
Britain were 9,421,000 in 1931 and 9,526,000 in 1924. Between
these years, however, the number of insured workpeople had risen
by about 14 per cent., and the demand for labour had not kept pace
with the greater supply. In the first half of 1937 the numbers
in employment were the highest on record. The estimated average
numbers of insured workpeople, aged 16 to 64, in employment in
Great Britain during the years 1924 and 1928 to 1937 were as
follows :
1924
1928
1929
1930
1931
1932

9;52Ó,ooo
10,019,000
10,220,000
9,797,000
9,421,000
9,348,000

!933
1934
!935
1936
1937 (ist half) .

9,681,000
10,139,000
10,377,000
10,896,000
11,305,000

The results of investigations by sample conducted by the Ministry
of Labour show that, before the world depression, more or less
continuous unemployment was confined to a small section of the
insured population. During the seven years ended 1930 the
numbers were not more than about 100,000 men and 3,000 women,
1
The highest figure reached in the 1921 depression was 2,549,395 in May of
t h a t year. This figure, which is for Great Britain only, represents an unemployment percentage of 23.0.

ECONOMIC AND SOCIAL BACKGROUND
and these represented the " standing army " of the unemployed.
These numbers were, however, much increased as a consequence
of the world depression, the older men being most seriously
affected.
A special analysis of unemployed men and women at 2 November
1936 showed that of the men roughly two-fifths were below the
age of 35, one-fifth between 35 and 45, and two-fifths were over 45.
Among women the proportions in the same age groups were roughly
three-fifths, one-fifth and one-fifth. Over a quarter of a million
or 20 per cent, of the men were over 55, the corresponding figures
for women being approximately 20,000, or 9 per cent. These data
indicate the handicap of age for men in obtaining employment.
During the recovery years 1935 to 1937 there was a considerable
change in favour of the younger men in the age distribution of
unemployed men. The statistics also show that in recent years
there has been considerably more long-term unemployment among
men than among women. Such unemployment has been greatest
in coal mining, public works contracting, the distributive trades,
and local government service. These four industries were responsible for one-half of all long-term unemployment in 1936, the coalmining industry alone accounting for 25 per cent, of all men who,
in that year, had been unemployed for twelve months or more.x
The following table shows the numbers of unemployed applicants
for unemployment benefit or assistance at 24 October 1932 and
26 October 1936, classified according to the length of each worker's
latest period of continuous unemployment.2
DURATION OF CONTINUOUS UNEMPLOYMENT
Men

Women

24 October
1
1932

26 October
1936

24 October
1932

26 October
1936

Less t h a n 3 months . .
3 b u t less t h a n 6 m o n t h s .
6 b u t less t h a n 12 months
12 months or more. . .

1,123,400
261,543
303.422
419,109

616,195
109,447
112,004
299,123

212,638
35.592
24,728
27.253

145.645
19,662
13,636
18,874

2,107,474

1,136,769

300,211

197,817

Total

Duration

Ministry of Labour Report for the Year 1936.
Ministry of Labour Gazette, January 1937. The number of unemployed
applicants for benefit or assistance represents about seven-eighths of the number
of insured workpeople unemployed.
2

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Short-term unemployment reached its highest level in 1932,
whilst the peak of long-term unemployment among men was
reached about a year later. Between 1932 and the end of 1936,
unemployment of less than six months was reduced by nearly
one-half, while the numbers unemployed for six months but less
than twelve months was reduced by two-thirds. Long-term
unemployment of twelve months or more declined considerably
between 1933 and 1935, and the rate of reduction was accelerated
during 1936, due mainly to revival in that year of basic industries
such as iron and steel manufacturing, shipbuilding and shiprepairing. The number of men and women who had been continuously unemployed for twelve months or more at the end of 1936
was, however, still about 314,000. Long-term unemployment has
been consistently serious in the North of England, Scotland, Wales
and Northern Ireland. In most parts of the country unemployment
among juveniles has been slight except in periods of depression;
they experience little long-term unemployment, while in periods
of good trade there is a shortage of juvenile workers in many parts
of the country.
Additional information on unemployment is given in the reports
of the Unemployment Assistance Board, which was set up under
legislation passed in 1934 to provide assistance to unemployed
workpeople who had exhausted their right to benefits under the
unemployment insurance scheme. The main body of the long-term
unemployed and a large proportion of the unemployed in the
higher age groups are dealt with by the Board. Thus, in 1936,
45 per cent, of the Board's applicants for unemployment assistance
between the ages of 18 and 64 were 45 years of age and over, as
compared with 27 per cent, of such claimants to unemployment
insurance benefits.1 In commenting upon the large volume of
unemployment among older people, the Board referred in its 1936
Report to the difficulties that will be caused during the coming
years by the trends of population increasing the proportions of
older sections in the community, and indicated that industry will
have to accustom itself to the fact that it will not be able in the
future to find a continuous supply of juvenile labour equal to the
present volume, and that it must be prepared to engage and to
retain older men. The Board also noted that there are still numbers
of young applicants for assistance " who have been unemployed
1

Report of the Unemployment

Assistant

Board for the Year 1936 (Cmd. 5526).

ECONOMIC AND SOCIAL BACKGROUND

for considerable periods, and are losing the appreciation of the
difference that would be made in their lives if they could secure
employment."
The large volume of post-war unemployment has been distributed
very' unevenly between different industries and districts. In
general, the industries which have experienced the greatest unemployment have been those exposed to foreign competition
whether at home or abroad, while the " sheltered " industries
have been relatively prosperous. This difference in prosperity has
resulted in the development of disparity, which is reviewed in a
later section, between the wages of workers in sheltered and
unsheltered industries. From 1922 onwards the demands for wage
reductions and other adjustments of working conditions have been
relatively frequent in the unsheltered industries. These have often
resulted in conflicts, and the losses from industrial disputes during
the period have been much higher in the unsheltered than in the
sheltered industries. It is noteworthy, however, that, despite the
adverse economic conditions and the inevitable strain on both
employers and workers, several important unsheltered industries
have maintained a clean record of industrial peace throughout the
period.1
The following table shows the wide differences in the extent
of employment in some of the chief industries. Figures are given
for July 1932, when the world depression was at its worst, and for
July 1937, after recovery had greatly reduced unemployment.
The highest percentages in 1937 were in dock and harbour services,
shipbuilding, shipping, and coal mining. The greatest improvements
since 1932 are shown by the iron and steel, engineering, and textile
industries, coalmining, and railway transportation. Cyclical improvement in trade, including better markets overseas, and the rearmament programme were mainly responsible for these improvements.
Public utility services, commerce, printing, laundries, food and distributive trades show low percentages. Among industries not included
in the table in which unemployment has been below the average in
recent years are chemicals, electrical engineering, dressmaking,
grain milling, drink and tobacco, and the manufacture of scientific,
photographic, and musical instruments, toys, games and sports
requisites.
1
Excluding the general strike in 1926, which was outside the ordinary course
of industrial relations.

NDUSTRIAL RELATIONS IN GREAT BRITAIN
PERCENTAGES

OF INSURED

WORKPEOPLE

RECORDED

UNEMPLOYED IN CERTAIN INDUSTRIES IN GREAT BRITAIN
AND NORTHERN IRELAND, JULY I 9 3 2 AND JULY I 9 3 7

Percentage
unemployed

Percentage
unemployed
Industry

Coal mining . . . .
Iron and steel rolling
General engineering
Motor vehicles
Shipbuilding . .
Cotton
Wool and worsted
Tailoring . . . .
Boot and shoe . .
Bread and biscuit
Furniture making
Printing
. . . .
Building
. . . .
Gas, water and electricity supply . . . .

July

1932

1937

41-3

48.9

16.8
11.0

30.1
22.1

4-9
4.8

63.8
33°

22.4
10.4
10.4
12.1
II-3

27.2
16.2
22.6
10.8
21.8
10.0

6.9
8.Ö

5-6

27.6

11.2

10.9

7-5

July,

Railway service . .
Tramway and omnibus
Other road transport.
Shipping
Docks and harbours .
Distributive trades .
Commerce, banking,
insurance
. . . .
National government.
Local government
Hotels
Laundries

All industries

July

1932

1937

15-8

5-3

5-2
21-5
32.8

2.4
10.5
19.8
29.0

33-7
11.6

7.6

5-5

3-3

11.9
17-5
14.6
8.2

IO-5
154
10.4

4-9

22.8

1 The percentages are for a date in the latter part of each month. Some of the industrial groups include
allied branches not specified in the table.
2 Including many other industries in addition to those given in the table.

Statistics of unemployment in agriculture have become available
since the introduction of unemployment insurance for agricultural
workers under legislation passed in 1936. In July 1937 in Great
Britain and Northern Ireland the estimated number of agricultural
workers aged 14 to 64 years covered by the insurance system was
723,000, of whom 654,000, or more than 90 per cent., were males.1
The numbers and percentages unemployed at 26 July 1937 were:
Percentage

Males
Females

15.555
1,626

2.8
4.9

Total

17,181
2.9

1
The figures include farming, forestry, market gardening, horticulture and other
gardening (except private gardening).

ECONOMIC AND SOCIAL BACKGROUND
These figures show that unemployment in agriculture is much
smaller than in industry. Unemployment in agriculture is higher
during the winter months than in summer; the percentage at
14 December 1936 was 4.8, but even this winter figure was less
than one-half the industrial percentage.
Regional variations in unemployment are indicated by the
following table, which gives the average percentage rates of unemployment among insured persons in different areas during the years
1929, 1932, 1935 1936 and at 21 June 1937.

AVERAGE PERCENTAGE RATES OF UNEMPLOYMENT
INSURED

PERSONS

DIFFERENT

DIVISIONS

AMONG

GREAT

BRITAIN AND NORTHERN IRELAND IN THE YEARS

1929, I932, 1935, I 9 3 6 , AND AT 21 JULY I 9 3 7

Average percentage of unemployment
Division
1929

5-6
5-6

1932

1935

8-5

1936

7.2
7-3
9-4

5-8
7.2
II-5
131
16.3
19.9
22.2

10.1

North Eastern
North Western
Scotland . . .

9-3
137
133
12.1

135
143
17.1
20.1
28.5
25.8
27.7

Northern Ireland

193
14.8

36-5
27.2

21.3
31.2
24.8

9.2
16.8
17.1
18.7
29.4
22.7

Great Britain and
Northern Ireland .

10.4

22.1

15-5

13.2

South Eastern
South Western

8.1

8.1
11.6
n.2
20.7
19.7

21 July
1937

5-2

6.5

The figures show much lower percentages in London and the
South of England generally than in the North of England, Wales,
Scotland and Northern Ireland. In 1937 the Midlands enjoyed a
level of prosperity not far below that of the South. Wales and
in recent years Northern Ireland are the areas which have experienced the most severe depression. The percentages of unemployment in the most depressed areas in different years have been more
than two or even three times those in the South of England. The
districts with high levels of unemployment are those where the most
depressed industries, particularly shipbuilding and coal mining

INDUSTRIAL RELATIONS IN GREAT BRITAIN

are localised and where the demand for labour by other industries
is relatively small.1
The relatively greater prosperity of the southern areas has
caused a drift of workers to the South. This was greatest during
the years 1923 to 1929 but was retarded by the general depression
of 1930-1933, which resulted in a considerable fall in the demand
for labour in the southern areas. The movement was resumed
when unemployment in the South and Midlands fell to low levels
in 1935 to 1937. An Industrial Transference Scheme instituted
by the Government has facilitated the movement from the distressed
areas of considerable numbers of juveniles and of young adult
men without dependants. Instructional centres have also been
established to ensure, as far as possible, the suitability of transferred
workers. On the other hand, the distressed areas have recognised
that their difficulties were in large measure due to dependence upon
one or two main industries, e.g. shipbuilding in Northern Ireland
and coal mining in parts of Wales. The public authorities and
business men in several of these areas, therefore, considered means
of increasing diversity in the demand for labour, industrial development boards have been set up, and plans have been formulated
with a view to attracting new industries. With the support of the
Government acting through Commissioners for the Special Areas,
trading estates have been established with favourable conditions
for new undertakings, and other measures have been introduced
for the reconstruction of areas suffering from severe unemployment.2
Some employers have apparently been unwilling to establish
factories in the distressed areas because of fear of undue trade
union restrictions in these districts, where the workers have long
been strongly organised. This difficulty does not appear to have
been encountered by employers who have set up factories in these
areas during recent years.
Some of the effects of the long and severe unemployment upon
industrial relations have already been indicated. The fall in
prosperity of many of the basic industries which had long enjoyed
relatively high standards of living provoked severe conflicts,
especially in the early post-war years. The results of the stoppage
1
There was a total of 239,026 insured workpeople unemployed in t h e specially
depressed areas of the country a t 15 March 1937.
2
Powers were granted by the Special Areas Reconstruction (Agreement) Act,
1936. In 1937 a Royal Commission was set up to consider the Geographical Distribution of the Industrial Population in its economic, social and strategic aspects.

ECONOMIC AND SOCIAL BACKGROUND

in 1926 in the coal-mining industry, however, confirmed the opinion
that, whatever might be the value of strikes in more prosperous
times they would inevitably involve loss, distress and often defeat
so long as unemployment remained serious. This contributed to
the result that the severity of industrial disputes during the world
depression was much less than in the years shortly after the
war.
The post-war depressions also resulted in a heavy decline in
trade union membership, in a fall, the extent of which is not
known, in the membership of employers' organisations, and in
an increase in the number of firms in which wages and hours have
been fixed in agreement with their own workpeople, independently
of collective agreements. The movement of workers to seek employment in the South in expanding industries which had no trade
union tradition increased the difficulties of organisation. The more
prosperous years from 1934 to 1937, however, saw trade union
membership recover, but industrial relations remained peaceful.
CURRENCY AND PRICES

Great Britain has not suffered from the catastrophic changes
in monetary values experienced by several Central European
countries in 1922 and 1923, or from the less violent but still considerable post-war inflation in Italy and France. Nevertheless, British
currency changes have exercised an appreciable influence upon
industrial relations and working conditions. Inflation continued
with one or two minor interruptions throughout the war years
and until May 1920, when wholesale prices according to the Board
of Trade index were 225 per cent, above the pre-war level, or, in
other words, sterling had depreciated to less than one-third of its
pre-war value. A considerable part of the rise in wholesale prices,
and also in the cost of living, had taken place during the twelve
months preceding May 1920, and the consequent upward adjustment of money wages had been marked by serious industrial
conflicts in several industries.
From May 1920 inflation gave place to rapid deflation and in
less than two years sterling doubled in value, wholesale prices
falling to only 60 per cent, above the pre-war level. This was
accompanied by a rapid decline in the cost of living and by downward adjustments of money wages which again were marked by
severe conflicts. It was during the rapid upward movement of

INDUSTRIAL RELATIONS IN GREAT BRITAIN

prices to May 1920 and the subsequent collapse that the slidingscale system of adjusting money wages to changes in the cost
of living was of specially great value in a number of industries.
From the spring of 1922 until the end of 1924 prices were
remarkably stable; wholesale prices were slightly higher at the
end of the period than at the beginning, and the cost of living
was at the same level in December 1924 as in May 1922. Then a
new deflation took place when Britain returned to the gold standard
in 1925 ; the index of wholesale prices fell from 171 in January 1925
to 152 in December of the same year (1913 = 100), and a further
decline took place during 1926. The return to the gold standard,
however, increased British gold costs for wages, interest and other
charges by about 10 per cent, and consequently placed British
industry at a disadvantage in its competition with foreign producers
both in the home market and abroad. Owing to the inelasticity of
these charges, including not only wages but also especially rents,
rates of interest, taxes and other overhead expenses, the disadvantage continued to be felt throughout the next six years, and
accentuated the depression of British industry. The view is now
widely held that the return to the gold standard in 1925 at the
pre-war parity was an unfortunate mistake, although at the time
it was impossible to have foreseen the subsequent trend of world
prices which aggravated British difficulties.
There was little variation in British prices during the years
1927, 1928, and the first nine months of 1929. Then the world
depression set in. British wholesale prices, moving with world
gold prices, plunged down by about 30 per cent, from 136 in
September 1929 to 99 in September 1931 (1913 = 100). Unemployment more than doubled, exports fell enormously, the
balance of foreign trade became adverse and, finally, the drain of
gold abroad became so great that in September 1931 the gold
standard was suspended. The immediate effect of suspension was
a considerable depreciation of sterling in terms of foreign gold
currencies, the decline soon reaching more than 30 per cent. But
British prices were now released from the " tyranny " of gold,
and, although foreign exchange rates of sterling might fluctuate,
the internal price level could be effectively controlled. The
Government declared its intention of preventing currency inflation,
and price changes were small. Wholesale prices, however, rose
by 6 per cent, during the last quarter of 1931, largely in anticipa-

ECONOMIC AND SOCIAL BACKGROUND
tion of the increased costs of imports in terms of depreciated
sterling; also the fall in the cost of living was arrested. The
relatively small rise in wholesale prices was due largely to the fact
that a number of other countries had suspended the gold standard,
and goods required by Great Britain could be purchased from
them at about the old parities of exchange. In the spring of
1932 the downward movement of wholesale prices and cost of
living was resumed, but by the middle of the year it was again
interrupted, and for three years both wholesale and retail prices
remained remarkably stable. The years 1936 and 1937 experienced
considerable increases owing to the high level of business activity.
The depreciation of sterling in terms of gold currencies imposed
restrictions upon imports and gave a stimulus to exportation.
Restrictions to imports also resulted from the tariffs introduced
in 1931 and 1932, but the tendency for increase in the export
trade was largely counteracted, so long as the depression continued,
by the new obstacles to trade erected by a number of other
countries. Also the purchasing power of other countries was
diminished by the restriction upon imports into Britain. The
suspension of thè gold standard and the consequent reversal of
the trend of prices saved Great Britain from the necessity
of making widespread reductions in money wages, some of
which might have been effected only after severe industrial conflicts.
One further effect of British post-war currency policy upon the
prosperity of industry may be mentioned. The policy of deflation
resulting in the return to the gold standard at the pre-war parity
in 1925 maintained or increased the burden of public and industrial
indebtedness. This placed British producers at a relative disadvantage in their competition with producers in countries where
the gold standard was restored by a process of devaluation following
currency depreciation ; in these countries the real burden of internal
public debts and industrial capital charges was greatly reduced,
if not altogether eliminated.
The general course of British prices during the years 1920 to
1937 is shown in the table below. The figures are yearly averages
calculated from the monthly index numbers of wholesale prices
published by the Board of Trade, and of the cost of living published
by the Ministry of Labour.

INDUSTRIAL RELATIONS IN GREAT BRITAIN
YEARLY AVERAGE INDEX NUMBERS OF WHOLESALE PRICES
AND COST OF LIVING IN GREAT BRITAIN, I 9 2 O TO I 9 3 7
(PRE-WAR =
Year
1920

1923
1924
1925
1926
1927
1928

IOO)

Whole- Cost-ofsale price living
index
index
307
197
159
159
166
159
148
142
140

249
226
183
174
175
176
172
167 y 2
166

Whole- Cost-ofsale price living
index
index

Year
1929
1930
I93I
1932
1933
1934
1935
1936
1937

•

136
119
104
1011/ 2
IOI
104
106
113
128

164
158
147 %
144
140
141
143
147
151H

1 First half.

W A G E S AND H O U R S OF W O R K

Wages

In considering the course of wages during recent years changes
in rates of wages will be related to changes in the cost of living
in order to determine the trend of " real " wages, i.e. the purchasing
power of the money wages. The Ministry of Labour has estimated
that in the first half of 1937 weekly full-time rates of money wages
were less than one per cent, above the level in 1924; the cost of
living was about 13.3 per cent, below the 1924 level, and consequently weekly full-time rates of " real " wages were 16 per cent.
above those in 1924. This increase is not, however, representative
for post-war years, having been due to the fall in the cost of living
between 1930 and 1933. During the eight years from the beginning
of 1922 to the beginning of 1930, the level of real rates of wages
averaged only about 2.6 per cent, above the 1924 level. The changes
from 1920 to 1937 are shown by the index numbers of weekly
full-time rates of money wages and real wages tabulated below.1
As real wage rates in 1924 were at practically the same level as
in 1914, the real wage index numbers on the basis of 1924
( = 100) also show approximately the levels of real wages in post-war
years compared with that in 1914. The figures take no account of
changes in average earnings resulting from short time or overtime,
from changes in the proportions of workers paid at time and piece
rates, or from changes in the proportions of workers in different
1
Compiled from figures published in the Abstract of Labour Statistics, 191Q-33
(Cmd. 4625), and in the Ministry of Labour Gazette. See also E. C. RAMSBOTTOM'S
paper on " The Course of Wage Rates in the United Kingdom, 1921-1934", published in the Journal of the Royal Statistical Society, Part IV, 1935.

ECONOMIC AND SOCIAL BACKGROUND

industries and occupations. If, for example, allowance were made
for short time and overtime the indexes in the years of depression,
1921 and 1930 to 1933, would be lower and those in the years of
prosperity, 1927 to 1929 and 1935 to 1937, would be higher than
those given in the table.
Index numbers

Index numbers

(1924 = 100)

Year

1920
1921
1922
1923
1924
1925
1926
1927
1928

. . .

Money
wage
rates

Real
wage
rates

148.7
*43-7
I07-3
98.5

IO45
in.3
102.5
99.0

IOO.O

100.0

IOI.7
IOI.3
100.5
99.0

ioilo
103.0
105.0
104.7

1929 . . .
1930
I93I
1932
1933
1934
1935
1936
19371

Money
wage
rates

Real
wage
rates

98.8
98.4
96.5
94-7
94.0
94-4
95-5
98.2
100.7

1055
109.5
II4-5
II5-5
117.8
117.0
117.0
117.0
116.2

1 First half.

The changes in wage rates since 1914 show wide diversity among
different industries and classes of workpeople. Thus for some classes
of workers the weekly rates of money wages in recent years were only
20 per cent, above those in 1914, whereas for other classes of workers
they were more than 100 per cent, above the pre-war rates. The
chief relative changes since 1914 have been between skilled and
unskilled workpeople, between men and women, and between the
sheltered industries and those exposed to foreign competition. 1
The position of unskilled workers has shown a greater relative
improvement than that of skilled workers. This divergence has
been due mainly to the granting of similar money increases to both
skilled and unskilled workers in many industries to meet the rising
cost of living u p to 1920, but mention may also be made of the
effects of improved organisation among unskilled workers, better
general education, increase in the demand for workers to tend
semi-automatic machinery, the operation of the Trade Boards
fixing minimum rates of wages in certain, industries, and the
influence upon wage-bargaining of the flat rate of benefits for both
unskilled and skilled workers under the Unemployment Insurance
Acts. For some of the same reasons there has been a tendency for
1
In Appendix I I statistics are given of wage rates in some of the chief occupations a t July 1914 and December 1936.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

the wages of women to rise in somewhat greater proportion than
those of men. During the post-war years, however, unskilled
workers have lost a part of their relative gain during the war,
whereas women workers have at least maintained the relative
improvements of the war years.
In industries exposed to foreign competition skilled workers in
recent years have been paid on the average at rates only about
three-quarters of those in the sheltered industries, and, in some
industries, have been worse off than before the war. Among unskilled
workers the divergence has been smaller, those in sheltered industries
having wage rates about io per cent, above those in unsheltered
industries. With certain exceptions unskilled workers generally,
and skilled workers in sheltered industries, have been in a better
position than before the war. There is a tendency towards a gradual
narrowing of the divergence between the sheltered and unsheltered
industries.
The data tabulated above were time rates of workers in full
employment, and should be considered in relation to statistics of
full-time earnings and of actual earnings, but there are no continuous series of such data. The London and Cambridge Economic
Service, however, publishes a general index, which combines the
effects of changes in rates of wages and changes in methods of
work and in categories of workers affecting earnings. The index
shows appreciably greater increases in money wages and real wages
than those indicated by the statistics of wage rates given above.
This is due mainly to the allowance which it makes for the growing
productivity of piece-workers equipped with improved machinery
and organisation, for increases in the proportion of workers in the
higher paid grades, and for increase in the proportion of piece
workers. These statistics show the following levels of full-time
money earnings and full-time real earnings (i.e. the purchasing
power of the money earnings) in July 1914, and the second quarters
of 1928, 1936 and 1937:
Year

Index of full-time
money earnings

Index of full-time
real earnings

I914
1928
1936
1937

IOO
195
190
x
95

IOO
"9
131
128

These figures make no allowance for short time, overtime, unemployment, sickness, or reductions of earnings from certain other
causes. Also they are general averages which cover wide diversities,

ECONOMIC AND SOCIAL BACKGROUND

similar to those already indicated, between the various industries
and occupations.
Detailed statistics of the weekly earnings of more than 5 % million
workpeople in most of the chief industries were collected by the
Ministry of Labour in a special enquiry relating to the week ended
12 October 1935. These statistics are summarised in the table
below. Owing to under-representation, in the returns received,
of the building industry and certain other industries in which
men are largely employed and to the relative over-weighting of
the textile and certain other industries in which women and girls
form a high proportion of the total number of operatives, the
average of 48s. lid. shown for all workers is considered to be
appreciably below actual average earnings of all workpeople
AVERAGE EARNINGS

IN VARIOUS INDUSTRIES

ENDED 1 2 OCTOBER

IN THE

WEEK

I935

Average earnings in the week
ended 12 October 1935
Industry group

of
workpeople
covered

All
workpeople
covered
s. d.

Mining and quarrying
(other t h a n coal mining)
65,981
Treatment of non-metalliferous
mine
and
quarry products . .
50,925
Brick, pottery, glass,
chemical, etc. . . .
318.356
Metal, engineering, shipbuilding, etc
1,478,212
Textiles
923,674
Leather
41.551
Clothing
471,100
Food, drink and tobacco
363,119
191,979
Woodworking . •. . .
Paper, printing, station292,649
ery, etc
Building, contracting,
etc
387,985
Other manufacturing in138,065
dustries
Transport and storage
231,622
(other t h a n railways)
450,835
Public utility services .
Government industrial
101,676
establishments . . .
All above industries

5.507,729

Youths
Men
Women
Girls
(21 years and boys (18 years
(under
(under
and
and
21 years)
18 years)
over)
over)
s. d.
5. d.
s. d.
s. d.

53 4

17 I I

56 8

15 4

53
36
44
35
44

67
55

31 1
30 3
29 6
32 8
32 1
33 10

17 3
17 2
15 4
15 o
17 o
15 7

33 5

6
6

0
10
51 2

61 9
64 6
63 8
65 1

22 3
23 1
22 9
22 5
24 11
21 11

55 5

83 8

2 2 11

4
9

65 6
55 6

69 1
57 10

25
25

3
8

32
28

4
2

2 9 11

38 10

15 5

INDUSTRIAL RELATIONS IN GREAT BRITAIN

employed in the industries covered. It is estimated that if these
defects were corrected, the average would be approximately
49s. 6d. The inclusion of coal mining and railway service would
raise the figure to about 50s. a week.1 Owing to the general rise
in the average level of rates of wages and to the general improvement in employment between October 1935 and the autumn of
1937, average earnings in many of the industries were appreciably
higher in the last quarter of 1937 than two years earlier.
Comprehensive statistics of average earnings of workpeople
(adults and juveniles) in the coal-mining industry are available
and these are summarised below to show the position in recent
years of a severely depressed industry.2 The period when the
lowest standard of real shift earnings was experienced was in 1928
and 1929 when the cost of living was still high and the industry
was suffering from a large surplus of labour. There was little
variation in money shift earnings during the world depression,
and purchasing power increased as a result of the fall in the cost
of living, but there was so great an increase in unemployment
that, although not shown by the statistics below, the standards
of living in the mining communities were seriously reduced. After
1934, earnings and employment both improved, and in 1936 and
1937 average real shift earnings, which for a number of years had
fallen below those in 1914, rose slightly above the pre-war level.
AVERAGE SHIFT EARNINGS OF COAL MINERS, I 9 1 4 ,
AND I 9 2 7 TO 1 9 3 7
Year

1914 ( J u n e )
1928-29
1930-31
1932-33

1937 (first half)

Money earnings
per shift
6
10
9
9
9
9
9
10
10

5-75
0.75
3°°
300
1-75
1-75
3°°
0.25
7.00

Index numbers of shift earnings
Money
|
Real
IOO
155
142
142
141
141
142
!55
163

IOO
93
86
93
99
IOO
IOO
105
107

1
The figures do not cover agricultural workers, domestic servants and workers
employed in the catering, entertainment and certain other industries.
2
The money earnings do not include the value of allowances in kind which
averaged about 4%á. per shift in recent years. The average number of shifts per
week in the years 1935 to 1937 ranged from about 4 % to slightly more than 5.

ECONOMIC AND SOCIAL BACKGROUND

For workers employed in railway service statistics of average
full-time weekly earnings are published by the Ministry of Transport. The most recent detailed information, which is for the
week ended 7 March 1936, is tabulated below. The figures are
compiled from information supplied by the four main line railway
companies.
TOTAL NUMBERS AND AVERAGE FULL-TIME EARNINGS
WORKERS DURING

1ST W E E K OF MARCH

OF RAILWAY

I936

Earnings
Total
numbers 3

Category

Conciliation
grades1 . . .
Shop and artisan
staff
Other classes 2 .
All . . .

Men
(20 years
and over

Youths
and boys

326,036

6 4 s . 5<i.

27s. yd.

117,270
43.543

6 9 s . id.
62s. 4 ¿ .

24s. 2d.
19s. od.

36s. gd.
18s. bd.

18s. od.
14s. od.

64s. 4 a .
4 9 s . id.

486,849

6 5 s . 4í¿.

25s. 9 d

19s. yd.

16s. 6d.

(¡is.

Women

Girls

General
average

62s. 3a.

yd.

1 Including traffic, goods and cartage, permanent way, locomotive, carriage and wagon, signal and
telegraph
departments.
2
Police, ancillary services, etc., including docks, canals, hotels, refreshment rooms, dining cars, marine
services.
3
Not including clerical and supervisory, staffs. Of the total number 442,566 were men of 20 years of age
and over, including 307,422 in the conciliation grades. The average wage of adult male clerical and supervisory staff during the same week was 92s. od., and in the week ended 13 March 1937 it was 93s. od.

In the week ended 13 March 1937 the average full-time earnings
of adult male workers in the conciliation grades had risen to
66s. iti., and of shop and artisan staff to 70s. io¿. The increases
for other categories were on a somewhat similar scale.
The above general conclusions about wage changes since the
war may be supplemented by the results of the New Survey of
London Life and Labour.1 The data show that during the period
1890 to 1930 the purchasing power of weekly time wages in London
over essential objects of expenditure had risen on an average by
about 20 per cent., i.e. 14 per cent, for skilled and 28 per cent.
for unskilled occupations; during the same period the number of
hours constituting a full week's work had fallen by nearly 15 per
1
New Survey of London Life and Labour : Forty Years of Change. London, 1930,
Volume I. See especially the introductory chapter by Sir H. LLEWELLYN SMITH,
p p . 19-21. See also A. L. B O W L E Y and M. H . H O G G : Has Poverty Diminished ?

INDUSTRIAL RELATIONS IN GREAT BRITAIN

cent. " Thus the average ' real ' remuneration for labour of the
same kind and duration has increased by over a third. In the
case of unskilled labour the rise has been even greater. One
hour of such labour is now worth about half as much again as in
1890, measured in terms of the necessary commodities which it
commands." The data reviewed afford " conclusive proof that
the material conditions under which the mass of London workers
live have considerably improved."
" All the data at present known and especially the fact that
the rates of wages of unskilled workers have risen more rapidly
than those of skilled workmen, suggest that the percentage of
poverty (according to Charles Booth's standard x) must have considerably diminished. Moreover, the real privation, suffering and
apprehension endured by those still living in poverty have been
largely reduced by the operation of various forms of public social
services." Charles Booth found in 1890 that over 30 per cent, of
workers were living below what he defined as the poverty line.
The figures of the New Survey suggest that the present proportion
is under 8 per cent. In addition to increases in real wages among
unskilled workers the reduction in the size of families has contributed
to the diminution of poverty both in London and in the country
as a whole.
Estimates made by Sir Josiah Stamp and Professor Bowley of
the national income 1911 and 1924 show that the aggregate real
income was about the same per head in the two years, but that
there had been changes in distribution; in general those with the
higher incomes had lost, skilled artisans had gained little, while
the least well-off of the working class had gained most.2 The
conclusion on the distribution of the national income has not been
seriously affected by subsequent changes, and all the evidence
available shows that generally the distribution is somewhat less
unequal than it was before the war. The wide differences which
still exist are, however, a cause of social and industrial discontent.
1

The standard of the 1890 Survey.
The National Income in 1924, by Professor A. L. BOWLEY and Sir JOSIAH
STAMP. See also Some Economic Consequences of the Great War, b y Professor
A. L. BOWLEY, Chapter VI. Data for 1880 and 1913 are given in Professor BOWLEY'S
Change in the Distribution of the National Income, 1880-1913. An estimate of t h e
national income in 1931 is given in a paper entitled The Citizen's Purse, b y
Dr. W. H. COATES, read before the Manchester Statistical Society, 15 Dec. 1931.
Estimates of the national income in various years from 1924 to 1936 are given in
National Income and Outlay, by COLIN CLARK.
2

ECONOMIC AND SOCIAL BACKGROUND
I n comparison with real wages in other countries statistics
published b y the International Labour Office show Great Britain
to be in an intermediate position. Real wages in Great Britain in
1929 and 1930 were considerably lower than in the United States
of America, Canada and Australia, were very similar to real wages
in Sweden and Denmark, appreciably higher than in Germany and
Holland and very considerably higher than in France, Belgium,
Italy, Poland and other European countries. More recent data
are not available.
Hours of Work
The outstanding development in hours of work in recent years
has been the extensive reductions made mainly b y collective
agreements at the end of the war, and the general maintenance
throughout the post-war years of the shorter hours then introduced.
Before the war, average full-time weekly hours were between
fifty-three and fifty-four, and the great majority of industries
were within the range of fifty to fifty-six hours per week. I n
1919, reductions in hours affecting more than six million workpeople are known to have been effected, and these changes, together
with reductions made in 1920, brought the average hours down
to about forty-eight per week. I t was almost invariably agreed
that, with the introduction of the shorter hours, weekly time wages
should be maintained, while in many industries piece rates were
increased.
In consequence of the reduction in hours the forty-eight-hour
week became predominant, although a forty-seven-hour week came
into operation for a considerable number of workpeople. The
reduction of between five and six hours per week immediately
after the war is the more remarkable when it is remembered that,
although during the twenty years before the war there was a
continuous tendency to reduce hours, the aggregate reductions
distributed over the whole of industry amounted to less than one
hour per week.
Since 1920 there have been only slight changes in agreed hours,
and the general average remains about forty-eight per week. 1
Summer hours in the building trades in a number of districts
were increased, especially in 1923, to forty-six and a half per week.
1
Appendix I I I gives t h e full-time hours of work in some of the chief industries
in 1914 and 1936.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

The industry principally affected by changes has been coal mining.
The hours of underground miners were fixed by Act of Parliament
in 1919 at seven per shift ; they were increased to seven and a half
in some districts and to eight in others following the stoppage in
1926, and, after other changes, were fixed at seven and a half
hours under the Coal Mines Act, 1930.1 It is noteworthy that in
some branches of the cotton industry tentative suggestions were
made in 1931 for a general reversion to the pre-war hours of fiftyfive and a half per week, but opposition was so strong that no
serious proposal was made. On the other hand, hours of work have
been reduced in several industries during recent years, and reductions
are under consideration in other industries.
Detailed statistics of hours of work in most of the chief industries
were obtained by the Ministry of Labour in a special enquiry
relating to the week ended 12 October 1935. The results of
this enquiry are summarised in the table below. They show
both average normal hours, and average actual working hours
exclusive of short time.2 Recognised intervals for meals are
excluded.3 The statistics show that 91 per cent, of workers had
a normal working week of 48 hours or less. Average actual weekly
hours in the week ended 12 October 1935 were just under 48.
Account should be taken of reduction in short time and increase
in overtime owing to the improvement in trade between October
1935 and the autumn of 1937.
The hours of work of women and young persons in factory
employment are regulated by the Factories Act, 1937. With
exceptions providing for shorter hours4, the normal working hours,
exclusive of intervals for meals and rest, for women and for young
persons under 18 years of age are fixed at 9 in any day and 48 a week,
1
In order to obtain t h e average time underground there should be added one
winding time which averages about half an hour for the whole of t h e industry.
In the British system of regulating the hours of work of underground miners t h e
duration is reckoned from the time when the last man in a shift goes down to the
time the first man comes up. No arrangement is made to ensure t h a t the men
come up in the same order as t h a t in which they go down.
2
The averages do not include loss of time by individual workers due t o voluntary
absence from work, sickness, bad time keeping, etc. Agricultural workers, domestic
servants and workers in the catering, entertaining and certain other industries
are not included.
3
The mealtimes of shift workers for whom no definite interval for meals is
recognised are included.
4
After 1 J u l y 1939 the weekly hours of work of young persons under 16 years
of age are to be reduced t o 44, b u t the Home Secretary may increase their hours
to 48 in industries which would otherwise encounter serious difficulty, provided
t h a t the health of the young persons would not be injured and t h a t the occupation
would not be a blind alley.

ECONOMIC AND SOCIAL BACKGROUND
instead of the former standard of ten in any day and 55% a week
in textile factories and 60 in other factories under the Factory
and Workshop Act, 1901.1 Overtime beyond 48 hours a week is
permitted for women and young persons over 16 years of age up
AVERAGE WEEKLY HOURS OF WORK IN VARIOUS INDUSTRIES,
OCTOBER

I935
Average
actual
working
hours
for all
Average worknormal people,
in the
hours
Over 48
week
ended
12 Oct.
1935

Proportions of workpeople
whose normal weekly hours were:
Industry group
44 or
less

Mining and quarrying (other
t h a n coal mining)
Treatment of non-metalliferous
mine and quarry products
Brick, pottery, glass, chemical,
etc
Metal, engineering, shipbuilding,
etc
Textile
Leather
Clothing
Food, drink and tobacco . . .
Woodworking
Paper, printing, stationery, etc.
Building, contracting, etc.
. .
Other manufacturing industries
Transport and storage (other
than railways)
Public utility services
. . . .
Government industrial establishments
Airabove industries . . .

Over 44
and
under 47

47 to

Per

cent.

29.1

16.0

393

.15-6

46.4

45-7

II.2

10.2

47.2

314

48.6

49.6

7-7

654

12.6

47.2

48.0

6.9

5-7

4.0

4-2

83.0
85.2
83-1
66.3
65-5

4-4
6.6
10.0
3-5
135

514

14.8

3-4

3-5

13-8

16.4

12.4
9-9

8.6
I5-I
7-5

35-9

29.8

9-7

12.4

18.7

78.7

3-9

9-5
673

24.8

46.8
47.8
47.8
47.0
47-7
46.9
47-3
46.8

10.6

47.2

48.2
47-7
48.8
45-4
48.5
48.3
48.6
46.9
48.2

7-4

2-5

8.2

4.8

79-3
72.9

10.8
14.1

47-9
47-3

48.6
48.0

0.2

96.8

—

47-3

49-7

10.6

8.7

71.7

9.0

47.2

47.8

to 100 hours in a year, but employment beyond 48 hours a week
is not permitted for young persons under 16 years of age. Overtime
is limited to 25 weeks in the year and to 6 hours in any week; in
certain seasonal and other trades the maximum overtime of women
in a year may be extended to 150 hours. For young persons
employed about the business of a shop the Shops Act, 1934, fixes
1
The Chief Inspector of Factories has indicated in his reports t h a t many undertakings often worked up to these long legal limits, and some worked beyond t h e
legal maximum; see Reports for 1935 and 1936.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

the normal maximum working hours of young persons at fortyeight in any week, and regulates overtime.1
In a number of occupations the hours of work of young persons
are not regulated by legislation or collective agreements, and hours
considerably in excess of forty-eight a week are frequently worked.
A Committee appointed in 1936 by the Home Secretary to enquire
into the hours of employment of young persons under 18 years
of age whose hours were not fixed by legislation, estimated that
the number of such persons may be about 125,000. The following
information covering about 36,000 young persons, mainly van boys,
errand boys, warehouse boys, page boys, lift boys, and ushers in
cinemas, shows a large proportion working long hours.
HOURS OF WORK OF CERTAIN CATEGORIES OF YOUNG PERSONS, I 9 3 6
Number of young persons employed
Hours per week 1

•

U p t o and including 48
O v e r 48 a n d u p t o 54
O v e r 54 a n d u p t o 60
O v e r 60 a n d u p t o 6 6

Totals
1

In London

In Provincial Centres

3,8ll
5.844
4,629
1,049
271
7,069

2,798
5.411
2,865
1,215
538
512

22,673

13,339

Including meal times and/or rest periods.

The Committee recommended uniform statutory regulation of
hours, with the immediate adoption of a normal working week
of 48 hours, exclusive of intervals for meals and rest, and the subsequent reduction of hours to something substantially less than 48.
They also recommended that overtime should be entirely prohibited
for young persons under 16, and strictly limited for those over 16.
Regulations should prevent the unduly long spread-over of hours,
whereby a young person may be employed, with intervals, from
morning till night—sometimes to a late hour.
Except in continuous processes the hours of industrial workers
are generally so distributed over the six ordinary working days
1
For the first two years from t h e coming into operation of the Act the maximum
was 52 hours.

ECONOMIC AND SOCIAL BACKGROUND
that only half a day is worked on Saturday, or, in some
occupations, e.g. shop assistants in many districts, on a day in
the middle of the week. In recent years there has been a slow
but growing tendency to introduce the five-day week.
In almost all collective agreements provision is made for overtime, for which wages are paid at higher rates than for ordinary
time. In many,industries the rates for overtime by time workers
during ordinary working days are time-and-a-quarter for the first
two hours' overtime and time-and-a-half for subsequent hours, i.e.
25 per cent, and 50 per cent, respectively more than during ordinary
time. In several important industries, however, payment for all
overtime on ordinary days is at time-and-a-third or time-and-a-half.
For work on Sundays double time is usually paid. For piece
workers arrangements are also made for overtime increments. A
number of important agreements limit the amount of overtime
which may be worked.1
Although the full-time hours fixed by collective agreements
were little affected by the world depression, there appears to have
been some increase during recent years in the number of undertakings in which longer hours are worked without increased overtime rates being paid. Numbers of employers not bound by the
agreements are less inclined to conform to the agreed standards
and have increased hours of work, while other employers have
failed to observe the conditions of the agreements, and individual
workers have been willing to work the longer hours.2 This development was facilitated during the depression by the decline in
membership of the trade unions, in consequence of which in a
number of factories in certain industries the influence of the unions
is small. Some unions were unwilling to make a protest during
the depression, but others took action with a view to ensuring
the observance of the agreements. Thus in the cotton industry
the question of the observance of hours was raised early in 1932
by some of the unions.
The reduction of hours in 1919 and 1920 has led to the need
for an increase of facilities for the use of leisure time. Some
1
Although overtime has been worked during recent years even in some undertakings in depressed industries, short time has been much more important, especially in coal mining and the textile industries; this method of distributing work
during a depression is widely adopted in these industries-. The amount of short time
was much reduced and overtime increased when trade improved in t h e years 1935
to 19372
See recent reports of the Chief Inspector of Factories.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

facilities are provided on a strictly commercial basis, e.g. by
development of the cinematograph. Many others are on a nonprofit-making basis. Thus there is the British Broadcasting
Corporation, which offers daily programmes with a wide variety
of educational and recreational items. The public authorities in
the various localities arrange evening classes and popular lectures,
and provide facilities for outdoor games. The Workers' Educational Association, the co-operative movement, the trade unions
and other organisations arrange for classes primarily intended to
meet the requirements of workers. Popular lectures and courses
of instruction are available under University Extension Schemes.
In the villages there has recently been a considerable increase in
the variety of opportunities for using leisure time as a result of
the work of community councils set up in different parts of the
country. Community centres on the new housing estates offer
facilities for social and educational activities, while occupational
clubs provide opportunities for art and craft work mainly but not
entirely for unemployed persons; the National Council of Social
Service co-ordinates these movements. Social and educational work
is undertaken by numerous clubs and settlements in the cities,
some of which are organised in association with the universities
or with religious organisations. The cultivation of allotments is
encouraged by allotment holders' associations. Rambling has
lately received a considerable stimulus and hostels are being provided in different parts of the country. The establishment of a
complete network of motor-coach services throughout the country,
and the large number of bicycles and motor-cycles owned by workers,
have resulted in opportunities for cheap travel on a scale undreamed
of before the war. In the mining industry special arrangements
have been made for outdoor games and social institutes by the
Miners' Welfare Fund. Large numbers of industrial firms provide
facilities for sports, social and educational activities; these facilities,
together with those offered by some of the organisations mentioned
above, are reviewed later in the present study.
It may appear surprising in view of the widespread application
of the forty-eight-hour week in British industry that Great Britain
has not yet ratified the Washington Hours Convention.1 To discuss
1
As already indicated, provisions for a forty-eight-hour week or less apply to
about 91 per cent, of all workers whose hours are fixed b y collective agreements
or regulations. A large proportion of t h e remainder are in continuous processes
which are allowed as exceptions by the Convention.

ECONOMIC AND SOCIAL BACKGROUND

in detail the reasons for non-ratification would be beyond the
scope of this study. Among the chief reasons, however, has been
opposition by British employers to legislative restrictions upon
freedom t o change hours of work b y negotiation. Uncertainties
about the interpretation of some provisions of the Convention,
and the need for revisions to make the Convention more flexible
have been urged. Difficulties have also been raised about the
manner of application of the Convention to certain industries. 1

SOCIAL INSURANCE AND OTHER PUBLIC SOCIAL
SERVICES

An outstanding feature of British economic and social life, which
is exerting a profound influence upon industrial relations, is the
great expansion of expenditure on public social services during the
last two decades. Also there are large future commitments b y
legislation, notably in respect of widows' and old-age pensions.
The trend since 1890 is shown by the following figures of total
expenditure for social services in Great Britain under various Acts
of Parliament; the figures include cost of administration but
exclude war pensions. 2
Financial year
1890
1900
1910
1920
1930
1935
1 This figure is not comparable with those for previous years as
expenditure not included in the earlier figures.

Expenditure
22,645,000
36,010,000
62,817,000
205,685,000
419,022,000
463.333.0 001
it includes items of central departmental

The figures include not only sums voted by Parliament, b u t
amounts obtained by local rates, chiefly for education and poor
relief, and also contributions of employers and employed for health
insurance, unemployment insurance, and widows', orphans' and
old-age contributory pensions. In 1935, parliamentary votes and
grants totalled over £246,000,000, or about 53 per cent, of the total
1
The reasons for the opposition of British employers to the ratification of the
Convention are given in detail in a memorandum, The Washington Hours Convention, A Statement of the Facts, published by the National Confederation of
Employers' Organisations in June 1927. The chief arguments used in this
memorandum are summarised in Chapter I I I of the present study.
2
Public Social Services (Total Expenditure under Certain Acts of Parliament),
House of Commons Paper, 15 Dec. 1930, No. 17, Cmd. 3971, Nov. 1931, and Cmd.
5609, Nov. 1937.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

expenditure, while contributions of employers and employed and
local rates accounted for nearly ¿90,000,000 and nearly £68,000,000
respectively. Owing to changes in the cost of living the real
increase between 1910 and 1920 was considerably less and that
between 1920 and 1935 considerably greater than is indicated by
the above figures. In 1890 and 1900, education and poor relief
accounted for about 90 per cent, of the totals. The 1910 expenditure included £7,360,000 for old-age pensions. In 1920, 1930,
and 1935 the chief services and amounts expended, excluding war
pensions because of their special character, were:
Service
x

1920
L
10,768
—
29,857

Expenditure
(ooo's omitted)
1930
i
t
81,278
s
"20,316
38,604

1935

Unemployment i n s u r a n c e
. . .
52,111s
Unemployment assistance . . . .
46,855
Health insurance1
38,344
Widows', orphans' a n d old-age
contributory p e n s i o n s 1 . . . .
—
34,607
. 44,628
Other old-age pensions
20,750
37,520
43,774
2
Education
88,788
104,171
111,748
Public health 3
10,654
i3,7!3
18,219
Working-class h o u s i n g 4
4,693
39,995
48,157
Poor relief
34,260
42,496
51,819
1 The major part of this expenditure was covered by contributions by employers and employed.
2 Id addition to parliamentary votes and local rates a part of the cost of education was covered by
revenue from fees, endowments and voluntary contributions.
3 Hospitals and treatment of disease, and maternity and child welfare.
* A considerable part (more than one-half) of this expenditure was covered by rents.
5 Transitional payments.
6 The reduction in unemployment insurance expenditure compared with that in the year 1930 was due
mainly to the transfer of a large number of unemployed persons from tbe insurance to the unemployment
assistance scheme. Improved trade was also a factor, and this resulted in the estimated expenditure in
1936 on unemployment insurance being £44,050,000, and on unemployment assistance £41,861,000.

Unemployment Insurance
Among the above-mentioned services the one which has received
the greatest public attention during recent years has been unemployment insurance. The system of compulsory State insurance
against unemployment was introduced in 1911 for a few industries
employing about 2 1 / 4 million workers. It was financed by joint
contributions from the workers, the employers and the State—a
method which has been maintained. The contribution in respect
of each workman totalled 6 2 / 3 ¿. (2%¿. by the worker, 2%á. by
the employer, and i2¡3d. by the State). The weekly benefit for
adults was ys., but payments were limited to one week's benefit
for five weeks' contributions, and the maximum number of weeks
for which benefit could be drawn was fifteen in any twelve months.
Subsequently many changes were made. The chief change in
scope was in 1920 when compulsory State insurance was extended

ECONOMIC AND SOCIAL BACKGROUND
to cover, with certain exceptions, all manual workers and nonmanual workers earning not more than £250 a year. The most
important exceptions were workers in agriculture and in private
domestic service. Rates of contributions and benefits were
increased. In the summer of 1931 the total weekly contribution
in respect of an adult male worker was 22 y2d. (8d. by the employer,
yd. by the worker, and yx/2d. by the State). 1 The total weekly
contribution in respect of adult female workers was 19 x/<¿d., each
of the contributing parties paying id. less than the men's rates.
The rates of benefit for adult men and women were 17s. and 15s.
per week respectively, and in addition gs. per week was paid for
one adult dependant and 2s. per week for each dependent child.
Thus a workman with wife and two dependent children would
draw 30s. per week, which represented a large proportion of the
average wage paid to unskilled workmen, through a purchasing
power involving privation to workers with no other resources. The
payment of benefit was subject to various conditions, the chief
of which was the payment by the workman of at least thirty
contributions in the last two years. But this condition for ordinary'
benefit was supplemented by the provision of transitional benefit
at the same rates if eight or more contributions had been paid
during the last two years or thirty contributions at any time.
Persons not entitled to unemployment benefits could apply for
public assistance (outdoor relief), the amount of which depended
upon the income and means of the household.
The high level of unemployment from 1921 onwards and especially
the large increase during 1930 and 1931 resulted in the inability
of the scheme to meet its obligations without borrowing. In 1928
the scheme borrowed £11,430,000 from the Government, and in
1929 about £3,000,000; in 1930 a sum of £36,440,000 was borrowed,
while it was estimated that in 1931 £50,000,000 would be required
in addition to the regular receipts. In these circumstances a majority
of the Royal Commission appointed in 1930 to enquire into the
provisions of the unemployment insurance scheme recommended
increases in rates of contribution, reduced benefits, greater limitation upon the right to benefit, and the removal of certain anomalies. The recommendations of the majority of a Committee on
1
The rates of contribution for young persons, together with the scales of benefit
applicable t o t h e m a t t h a t date, are reviewed in the First Report of the Royal
Commission on Unemployment Insurance, Cmd. 3872, 1931.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

National Expenditure appointed by the Treasury in March 1931
were along similar lines, but were even more drastic.1
Faced with a financial crisis in the late summer of 1931 the
Cabinet of the Labour Government considered proposals for
reducing scales of benefit and for effecting other economies in
the operation of the scheme. The majority were opposed to these
measures, their opposition being in agreement with the views of
the Trades Union Congress General Council. The Labour Government then resigned and a National Government came into power
and rapidly passed a National Economy Act. By Orders under this
Act unemployment insurance contributions were increased, benefits
reduced, stricter limitations imposed and various anomalies
removed. The contributions in respect of an adult male worker
were henceforth to be lod. by the worker and lod. by the employer;
for adult female workers the contribution from each party was
raised to gd. The contributions by the State remained unchanged.
Benefits for men and women over twenty-one years of age were
reduced to 15s. 3d. and 13s. 6d. respectively, and reductions were
also made in the benefits of workpeople under twenty-one years of
age. Benefits for a dependent adult were reduced to 8s., but no
change was made in the benefits payable in respect of dependent
children. The right to ordinary benefits was based as before on
thirty contributions in the last two years, but the previous right
to transitional benefits was withdrawn. Instead a new system of
transitional benefits was introduced, and payments were made
only where the worker satisfied his local Public Assistance Committee that he was in need of assistance (i.e. he was required to
pass a " means test "). a The amounts paid were based on the needs
of each applicant. Among the chief anomalies removed were those
arising in respect of seasonal workers and married women.
Further changes now in force were made by legislation passed
in 1934. The system of transitional benefits was ended, and ablebodied unemployed persons who have exhausted their claim to
unemployment insurance benefits no longer apply to the local
1
Committee on National Expenditure Report, Cmd. 3920, 1931. It may be noted
t h a t the majority of the Committee also advised reductions in the large sums
which were being spent on unemployment relief works.
2
Public Assistance Committees are bodies set up in the various localities to
decide upon the amounts to be paid from public funds to persons who make
application for assistance. The amounts paid vary according to the resources and
necessities of the applicants. The Committees deal with applications for assistance
from uninsured persons as well as from those under unemployment insurance
schemes who consider their resources inadequate for their maintenance.

ECONOMIC AND SOCIAL BACKGROUND
public assistance committees but to the officer in their district
of the newly created central Unemployment Assistance Board.
Thus, the unemployed are distinguished from persons seeking poor
relief, and are divided into those covered by insurance and those
claiming assistance. 1 Unemployed persons claiming assistance are
submitted to a means test, and, as the Unemployment Assistance
Board, assisted by local advisory committees, is the responsible
authority throughout the country, reasonable uniformity is ensured
in the principles applied for determining means and also in the
scales of assistance granted. 2 This avoids the former difficulty of
varying conditions of assistance for the unemployed in different
areas owing to each area being under its own local public assistance
committee.
The 1934 Act restored the rates of unemployment insurance
benefits to those in force before the reductions were made in 1931.
I t also extended the period of benefit to a maximum of one year
for unemployed persons who have been in regular employment
during the previous five years. E n t r y into the unemployment
insurance scheme begins at the school-leaving age instead of at
16 years as under the earlier legislation. Since 1934 certain increases
in benefit have been granted, including the raising of rate of benefit
for dependent children from 2s. to 3s. With the decline in unemployment in the years 1935 to 1937 the Unemployment Insurance Fund
began to show large surpluses. I n consequence, from July 1936,
the weekly rates of contribution in respect of adult male workers
were reduced to gd. by the worker and gd. b y the employer, and
for adult female workers the contribution of each was reduced
to 8d. The State contributes equal amounts to the Fund.
Unemployment insurance was extended to agriculture b y the
Unemployment Insurance (Agriculture) Act, 1936. Owing to the
conditions being different from those in industry the Act provides
for a separate scheme for agriculture, with a separate account,
instead of bringing agricultural workers within the scope of the
scheme established for workers in industry. The rates of contribution for men of 21 years or over are 4%d. a week each from the
employer, the worker and the State, and similarly for women ¡\d.
a week. The rates of benefit are 14s. a week for men and 12s. 6d.
1
In 1937 not far short of one-half of the total number of persons unemployed,
including a large proportion of the older men, received unemployment assistance.
2
The scales of assistance correspond closely to the rates of benefit under the
unemployment insurance scheme.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

for women, with an increase of 7s. a week for an adult dependant
and 3s. for each dependent child, subject, however, to a maximum
rate of benefit of 30s. a week.1 In order to qualify for benefit,
20 contributions must have been paid in the last two years, and,
this condition having been satisfied, the length of time for which
a claimant may draw benefit is proportionate to the number of
contributions standing to his credit.
An effect upon industrial relations of the system of unemployment insurance has been to increase the resistance of the trade
unions to wage reductions. It is sometimes argued that if the insurance system had not been in force, or benefits had been considerably
smaller, the pressure of privation among the unemployed would
have been great enough to bring wages down to a level at which
many of them could have found work. This contention is not,
however, supported by recent experiences in countries which have
not adopted unemployment insurance and in which, in many
industries, trade unionism is little developed.
Health Insurance
The British system of compulsory health insurance applies,
with unimportant exceptions, to the whole wage-earning community above the age of sixteen and below the age of sixty-five
whose income does not exceed £250 a year, and to certain other
categories, the total number of persons insured in Great Britain
being about 19 million. Male workers contribute 4Y2d. per week,
female workers ¿fl., and the employer contributes 4%¿. per
week in respect of each worker; the State provides a proportion
(one-seventh for men and one-fifth for women) of the cost of
benefits and their administration by approved societies and
insurance committees, together with the cost of central administration.2 Insured persons are entitled to medical benefit and to cash
payments during incapacity for work through illness or disablement.
Sickness benefits are payable from the fourth day of incapacity
for not more than 26 weeks within twelve months. Disablement
benefits are payable to incapacitated persons who have exhausted
their claim to sickness benefit, and may be continued to the age
of 65, when claim may be made for an old-age pension. Maternity
1
s

Lower rates of contribution and benefit are fixed for younger workers.
Except the cost of administration of certain special funds.

ECONOMIC AND SOCIAL BACKGROUND
benefits of 40s. are paid on the confinement of an insured woman
or the wife of an insured man. The ordinary weekly rates of cash
benefit in force from 1 January 1933 are:
Sickness : Men, 15s. ; unmarried women, 12s. ; married women, 10s.
Disablement: Men, 7s. 6d. ; unmarried women, 6s. ; married women, 5s.
Old-Age Pensions
Interlocked with the National Health Insurance Scheme is
a system of old-age contributory pensions together with pensions
for widows and orphans provided by Acts passed in 1925 and 1929.
I t covers all persons within the health insurance system. The
present rate of contribution for males is sY^d. per week and for
females 3d. ; the employer contributes 5%¿. and 2%¿. respectively. 1
The State makes annual grants (£"9,000,000 in 1930-1931, rising to
£"21,000,000 in 1942-1943). Old-age pensions of 10s. a week are
payable to insured men and insured women between the ages of
sixty-five and seventy, and 10s. a week to the wives between these
ages of insured men who are themselves entitled to pensions.
Widows' pensions are paid at the rate of 10s. a week, and additional
allowances are made for children ; the rate of pension for orphans is
7s. 6¿. per week payable up to fourteen years of age (or sixteen if
continuing full-time instruction at day school). By virtue of the
Contributory Pensions Acts, insured persons over seventy years of
age, and the wives of such persons if over seventy, are entitled to
pensions under the Old-Age Pensions Acts, 1908 to 1924 (noncontributory), at the full rate of 10s. per week without the conditions as to means which are applicable to uninsured persons.
In 1937 the Government introduced a voluntary contributory
old-age pensions scheme for persons not compulsorily insured,
provided their total income is not over £400 a year for men or
£250 for women. This scheme is available for large numbers of
shop-keepers, clerks, farmers, professional and other " blackcoated " workers who were excluded from the compulsory scheme.
Contributions vary with the age of entry into the scheme,
and the benefits are on the same scale as for the compulsorily
insured.
1
Provision was made for the rates of total contributions (employers and workers
together) to be increased successively in the years 1936, 1946 and 1956 to is. 3a.
per week for males and 7 x/^d. per week for females. The figures in the text include
the 1936 increase.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Other Social Services
With regard to other items of public expenditure on social
services given in the list earlier in this section it may be mentioned
that large sums have been expended during post-war years in
subsidising the building of working-class houses and in slum
clearance; about 1,320,000 State-assisted houses were built between
1919 and 1936. Public health expenditure is devoted to hospitals
and treatment of disease and to maternity and child welfare work.
Poor relief includes both the relief of persons in institutions and
relief of persons in their own homes (outdoor relief). Education
is dealt with separately below. These various items have involved
expenditure by local authorities as well as from the National
Exchequer.
EDUCATION

Data have already been given showing that public expenditure
on education amounted to nearly £112,000,000 in the year 1935;
the number of children and others benefiting from this expenditure
was over eight millions. A system of compulsory education is in
operation for children to the age of fourteen years ; thus the schoolleaving age is the same as the minimum age for entering industrial
employment fixed by legislation in 1920 in conformity with the
International Labour Convention. Under the Education Act,
1936, however, provision was made for the raising of the schoolleaving age to fifteen years from 1 September 1939, but the Local
Education Authorities may grant exemptions to children going
into " beneficial " employment, and it is not yet known how
extensively these exemptions will be granted. Local Education
Authorities are also empowered to provide free meals or free milk
to children whose education is suffering from underfeeding.
Provision is made for higher education, and scholarships are
offered for competition which enable large numbers of children
eleven years of age or more from the elementary schools to attend
secondary schools to the age of sixteen years or over; during the
year 1936 about 47 per cent, of pupils in the secondary schools
of England and Wales paid no fees.
Considerable numbers of scholarships are also offered for attendance at the universities, and a large percentage of university students
cover most or all of the cost of their education after leaving the
elementary schools by means of scholarships or grants. In all

ECONOMIC AND SOCIAL BACKGROUND

urban centres evening classes in a large variety of subjects, both
general and vocational, are provided by the education authorities.
In addition to educational opportunities provided by the public
authorities, a large number of voluntary bodies organise courses
of study. Special mention must be made of the Workers' Educational Association. The objects of this Association are: " T o
stimulate and to satisfy the demand of workers for education,
and to work for a national system of education which shall provide
for all children, adolescents, and adults full opportunities for
complete individual and social development." The Association
provides classes in any non-vocational subjects for which there is
a demand from working men and women. Classes vary from
short courses to the tutorial class which meets twenty-four times
each year, usually weekly during October to March, for three
successive years. A high standard of instruction is maintained
and ample opportunity is given for discussion.1 The significance
of the movement is indicated by the fact that during recent years
the Association has annually organised between 2,600 and 3,000
classes for an average of about 55,000 students.
The work of the Association is financed mainly from grants
made by the Board of Education and Local Education Authorities,
donations, contributions by various organisations, and fees paid
by members of classes (usually 2s. 6d. to 5s. od. for a session).
The Association works in close relation with the universities, and
many of its tutors are on their teaching staffs. It receives considerable support from the trade union movement, which is
represented at its Annual Conference and on its Central Executive
Committee. Also a Workers' Educational Trade Union Committee has been set up by the Association in partnership with
certain trade unions which desire the provision of educational
facilities for their members. During recent years the Association
in co-operation with this Committee and the International Labour
Office has organised an Annual School at Geneva to enable selected
workers to study the problems of the International Labour Organisation. Each year about 40 to 60 students have been able, with
the assistance of scholarships, to spend a week or a fortnight in
Geneva for this systematic study.
1
E a c h meeting of a class usually lasts two hours, the time being divided between
lecture and discussion.

INDUSTRIAL RELATIONS IN GREAT BRITAIN
THE CO-OPERATIVE MOVEMENT

The co-operative movement must be mentioned as an attempt
to harmonise the interests of capital, labour and consumers.
Although, however, there has been some development on the
productive side, the movement has hitherto achieved outstanding
success only in retail and wholesale trade. Since 1844, when
twenty-eight flannel weavers in Rochdale each contributed £1 as
capital and opened a retail store for the sale of a few articles of
food, the progress of retail stores (i.e. consumers' co-operation)
has been great and almost uninterrupted. At the end of 1935
the membership of retail societies was 7,414,000 persons; sales
rose from about £88,000,000 in 1914 to over £176,000,000 in 1924
and to about £218,649,000 in 1935. Profits, after paying interest
on capital, are largely distributed in dividends according to purchases. In 1935 an aggregate amount of £20,329,000, or an
average of over is. 10 %¿. in the pound on sales, was distributed
in dividends.
The development of the retail societies led to the formation of
wholesale societies. In 1935 the wholesale societies had sales
totalling over £118,000,000, and dividends of 4¿. and approximately
SYzd. in the pound were distributed respectively by the English
and Scottish Wholesale Societies. On the productive side there
were 982 societies engaged in various types of production in 1935,
employing over 98,000 persons. The total value of the products
was £82,896,000-,1this, however, included the cost of the materials,
and the net value created was £26,303,000. More than 92 per
cent, of the total value in 1935 was represented by productive
departments of wholesale and retail co-operative societies, and
less than 8 per cent, was represented by consumers' productive
societies and associations of workers who were their own " employers." Food, tobacco, and clothing manufacture were the chief
branches of industry covered by the productive departments.
SUMMARY

The above review of British economic and social conditions has
shown the importance of the country's geographical position,
1
The total value of the products in 1914 was over ¿32,000,000 and in 1924 was
over ¿67,000,000; the 1914 total includes Ireland.

ECONOMIC AND SOCIAL BACKGROUND

climate, and natural resources as a basis for its industries and
trade. During many post-war years both industry and trade
suffered from serious depression, due partly to external circumstances (tariffs, industrial development and currency depreciation
abroad), and partly to internal conditions. In recent years,
however, considerable progress has been made in increasing the
productive efficiency of many British industries, while business
activity has reached a high level largely owing to the stimulus
of favourable trade cyclical factors, reinforced by the rearmament
programme.
The present average standards of living of wage earners show
an appreciable improvement over the position before the war.
Real wages in most occupations are higher, hours of work have
been reduced by about an hour a day, and a comprehensive system
of social insurance has made a great contribution towards economic
security. The amount of extreme poverty has been much reduced
during the last two decades and there has been some diminution
in the inequalities of distribution of the national income. The
community has accepted increasing responsibility for many aspects
of the worker's life, especially by health and unemployment
insurance, housing and pensions, and is showing a growing interest
in the worker's family by its support of measures of child welfare,
including provision of meals for school children whose parents are
unable to provide adequate nourishment. Thus, some part of the
anxieties which in the past involved demands by the workers upon
the employers have been removed from the industrial field. This
has, without doubt, been one of the factors which have led to the
comparative tranquillity of industrial relations in this country
during recent years.

CHAPTER II

THE TRADE UNION MOVEMENT
THE British trade union movement has enjoyed a century of
almost continuous progress and during recent years has assumed
a position of great power in British industrial and political life.
Trade unions are now fully recognised by organised employers in
collective negotiations about working conditions, while in the
political field the Labour Party is predominantly a trade union
party.
The contrast between the present position and that little more
than a generation ago is indicated by the following passage from
the 1920 edition of the History of Trade Unionism, by Sidney and
Beatrice Webb. Comparing the position in 1920 with that in
1890, when the first edition was published, they state : " The trade
union movement, which then included scarcely 20 per cent, of
the adult male manual-working wage earners, now includes over
60 per cent. Its legal and constitutional status, which was then
indefinite and precarious, has now been explicitly defined and
embodied in precise and absolutely expressed statutes. Its
internal organisation has been, in many cases, officially adopted
as part of the machinery of public administration. Most important
of all, it has equipped itself with an entirely new political organisation, extending throughout the whole of Great Britain, inspired
by large ideas embodied in a comprehensive programme of Social
Reconstruction, which has already achieved the position of ' His
Majesty's Opposition ', and now makes a bid for that of ' His
Majesty's Government '."
Since this passage was written the movement has experienced
a set-back in its legal position, and has suffered a considerable
decline of membership, though it still counts over five million
members. On the other hand, it has effectively demonstrated its
political power, and its progress is especially remarkable if contrasted with the position in the early years of the nineteenth
century, when associations of workpeople were being suppressed
as criminal conspiracies.

THE TRADE UNION MOVEMENT

In the present chapter a review is given of the chief stages in
the development of the trade union movement, together with an
account of its present membership, legal position, and structure,
and the outstanding features of its industrial and political policy.

DEVELOPMENT

In outlining the chief phases in the development of British
trade unionism a beginning may be made a little more than a
century ago when, in 1824, the Combination Laws were repealed
and associations of workers for the protection of their interests
and for collective bargaining became legal. Immediate advantage
was taken of freedom to combine. The workers, whose attempts
at organisation had been vigorously repressed for a generation or
more by the governing classes, with the object of preventing the
spread of French revolutionary ideas, now began rapidly to develop
their organisations and to demand improvements in working
conditions. These demands were supported by strikes, both
numerous and bitter. So severe was the outbreak of disputes that
Parliament became alarmed and, in 1825, passed an Act imposing
restrictions upon the activities of trade unions, though freedom of
association was not withdrawn. These restrictions remained in
force for nearly fifty years.
Until about the middle of the century working-class leaders
devoted their enthusiasm more to political reform than to trade
union organisation. At first they pressed for political liberty,
but were both disappointed and disillusioned when the Reform
Act of 1832 failed to give them the franchise. Then for a time they
transferred their energies from political to industrial action.
Revolutionary ideas, including the suppression of capital, were
advocated, while Robert Owen's plans for producers' societies
received support. In order to develop strength for the attainment
of their various objects, solidarity of the workers was preached and
attempts were made to secure the amalgamation of local into
national unions and the organisation of " One Big Union " which
would cover all grades of workers in all industries. This last
project found expression, under the guidance of Robert Owen, in
the " Grand National Consolidated Trade Union ", the membership of which grew with astonishing rapidity. But lack of
experience among the leaders, difficulties of organisation and

INDUSTRIAL RELATIONS IN GREAT BRITAIN

the hostility of the public authorities and of the employers resulted
in an equally rapid collapse.
With this failure the more energetic working-class leaders
withdrew their activities from the organisation of trade unions
and again plunged into political agitation. They identified themselves with the Chartist movement for.parliamentary reform, and
for more than a decade trade unionism showed no outstanding
development. Then about the middle of the century began the
second period of trade unionism with a policy and methods of
organisation which were predominant for more than a generation
and which have profoundly influenced the subsequent history of
the movement. The period was characterised by the formation of
powerful national organisations by the amalgamation or federation
of local societies of skilled craftsmen, an outstanding example of
this " new model " of organisation being the Amalgamated Society
of Engineers, which was formed in 1851. In most of the important
unions membership was restricted almost exclusively to skilled
workers and, except in the coal-mining and textile unions, the
interests of unskilled workers were neglected. Members paid high
contributions in return for accident, unemployment, sickness,
old-age, funeral and other friendly benefits, as well as dispute pay.
The thrift and provident activities of the unions were of great
value in increasing the security of the worker at a time when there
was no system of State social insurance and when even private
insurance companies were not widely developed. They have also
been an important influence in maintaining membership during
periods of depression; workers who have paid contributions for
several years will not lightly give up their membership and,
therefore, their right to benefits.
The purpose of amalgamating the local societies was to strengthen
the financial basis of the provident funds as well as to increase the
bargaining power of the unions for improvement of working
conditions. The administration of the large funds and a desire
to avoid weakening the financial position of the unions by the drain
of resources in industrial disputes resulted in the adoption of a
conservative outlook and a cautious policy by the " Junta " of
leading officials. This, indeed, was not without its advantages,
for public opinion became more favourable and the way was
prepared for an improvement in the legal status of the unions by
Acts of 1871, 1875, and 1876. The improvements, which were
largely the result of close co-operation between the leaders of

THE TRADE UNION MOVEMENT

49
several of the great craft unions, included the according of civil
status, legal protection of trade union funds, and recognition of the
right to strike and to engage in peaceful picketing. Need for
co-operation between unions on questions of common interest
was recognised about this time by the establishment of the annual
Trades Union Congress.
Following the activity which resulted in improvement of legal
status the amalgamated unions continued their narrow and cautious
policy and paid little attention to politics. They grew steadily in
numbers but were still small when judged by present standards,
and their leaders regarded the unskilled worker as unsuited for
union membership. This policy was, however, soon to be
challenged by the growing power of Socialism which profoundly
influenced the third period of trade union development. New
leaders came forward with a more aggressive policy, a Marxian
faith in the need for solidarity of all workers against the forces of
Capitalism, and a strong belief in the value of independent political
action, both parliamentary and local, as a means of improving the
conditions of the workers. Their policy thus somewhat resembled
that which dominated the first phase of trade union development
described above. Gradually the attitude of the more conservative
leaders was modified to meet the new tendencies, but the two
currents have never completely united; they can still be
distinguished in the trade unionism of the present day and clashes
of policy are not infrequent.
The new leaders threw themselves with enthusiasm into the
task of organising unskilled and semi-skilled workers and other
groups hitherto outside the movement, especially dockers, seamen
and general labourers in various industries. The subscriptions for
membership were low so as to be within the means of the worker
whose income was small, and were used chiefly to provide fighting
funds; friendly benefit schemes were not established. A stimulus
was given by the success of the great Dock Strike in 1889 and,
although there were numerous setbacks, a permanent place in
the movement was won for the unskilled worker.
From this period, too, the trade union movement has increasingly
engaged in independent political action and the promotion of social
legislation. The older leaders, who had often shown Liberal
sympathies, were at first reluctant to take this course, but in 1900
the Labour Representation Committee was formed with the
approval of the Trades Union Congress to secure direct parlia4

INDUSTRIAL RELATIONS IN GREAT BRITAIN

mentary representation of Labour. In the General Election of
1906 twenty-nine Labour representatives were elected to the
House of Commons. The Labour Representation Committee was
then transformed into the National Labour Party, which has become
an increasingly powerful political force. Its representation in
Parliament greatly increased during the first post-war decade, and
it has twice been entrusted with the government of the country.
Its strength is drawn mainly from the trade union movement, and
close working arrangements are maintained between the Party and
the Trades Union Congress, although there have been differences
of opinion between them on questions of policy and the two bodies
should certainly not be considered identical.
During the eight years immediately preceding the war considerable progress was made in social legislation, including measures by
which the State made a beginning in minimum wage fixing and in
social insurance; also Acts were passed defining and increasing the
powers and privileges of the unions which had been menaced by
decisions of the Courts.1 But the rate of progress of legislation «
was not rapid enough to satisfy the more militant leaders, while the
temper of the workers was rendered aggressive by the pressure of
rising prices on their standards of living. The period from 1910
until the outbreak of war was one of great industrial unrest, with
rapid growth in the membership of the unions and serious stoppages
of work, especially in coal mining and transportation (seamen,
dockers and railwaymen). The principle of industrial unionism
made rapid strides, the advance being marked by the formation in
1913 of the National Union of Railwaymen by the amalgamation
of three societies with the object, not yet attained, of bringing all
grades of railway workers into its ranks.
Among the causes of pre-war unrest was the low standard of
living of a large part of the working population. Investigations
showed that from 20 to 30 per cent, of the population were living
below the subsistence level, and the trade union movement made
a powerful protest against these conditions. In some industries
the conflict for trade union recognition was still raging, and was
marked by strikes in coal mining and on the railways; in coal
mining the question was that of national recognition, an issue which
has not yet been settled. These conflicts serve to emphasise the
fact that trade union recognition implies much more than the
See the section on the legal status of the unions.

T H E TRADE UNION MOVEMENT

securing of a satisfactory legal status. Even when this has been
gained the movement must still struggle to attain effective recognition, especially by the employers for the purposes of collective
bargaining.
During the war conditions were too artificial and controlled
to be representative of natural trade union development. I t
is noteworthy, however, that, along with the employers, the
trade union leaders were associated with the Government on
many questions of economic and social administration. This
resulted in a considerable advance in the recognition of trade
unionism by employers and by the Government. Also, trade union
membership grew rapidly, especially among women and general
workers, and the movement for organisation continued until the
end of the post-war boom in 1920, which marks the highest point
yet reached in the numbers enrolled.
In the early post-war years the trade unions were successful in
securing important improvements in working conditions, notably
reductions in hours of work, while, with their support, extensions
have been made throughout the post-war period in labour legislation,
especially social insurance, and the Factories Act, 1937, and in applying the Trade Boards Acts for fixing minimum wages in low-paid
unorganised trades. Ideas of direct action and of workers' control
of industry were in considerable vogue during the early post-war
years. The trade depression which began in 1921, however, resulted
in a rapid decline in membership, and industrially the movement
was compelled to fight a succession of rearguard actions. The
unions were generally successful in maintaining the reduced hours
of labour, although the miners suffered a setback in 1926 when,
by legislation, the maximum duration of the shift for underground
miners was increased by one hour. This increase was diminished
to half an hour b y legislation introduced b y the Labour Government
four years later. In money wages there were heavy reductions,
especially in the unsheltered industries. These reductions were
attended by many conflicts and attempts were made to express
the solidarity of the movement in sympathetic strikes. An
important example was the Triple Alliance for mutual support
between the miners, railwaymen and transport workers which,
with much recrimination, broke down in 1921 owing to failure
to agree upon simultaneous action, and the miners suffered severe
defeat in a strike in which they alone participated, though they
had anticipated the support of the railwaymen and transport

INDUSTRIAL RELATIONS IN GREAT BRITAIN

workers. Even more dramatic was the General Strike of 1926
called by the Trades Union Congress, which was a remarkable
demonstration of solidarity, though it failed to protect the miners
against wage reductions. A consequence of this strike was the
passing of the Trade Disputes and Trade Unions Act of 1927, which
had the practical effect of making general or sympathetic strikes
illegal, and imposed other restrictions. The trade union movement has declared its determination to secure the repeal of this
Act at the first opportunity, but the question was too contentious
for the minority Labour Government in power from 1929 to 1931
to be able to take this step.
Against these reverses must be set the progress of consolidation
by amalgamation of unions and the growing moral authority of
the Trades Union Congress. After fourteen years of almost continuous decline, a considerable increase in membership began in
1934 under the influence of better trade. There has also been
the great political achievement in the accession to power of the
Labour Party, which formed the Government of the country in 1924
and again in 1929.
MEMBERSHIP

The total membership of Trade Unions in Great Britain and
Northern Ireland at the end of 1936 was 5,308,000 or about
44 per cent, of the number of workpeople covered by the Unemployment Insurance Acts.1 The present century began with a
membership of about two millions. Apart from minor interruptions in 1902-1904 and in 1908-1909, the numbers grew steadily
until the highest point was reached in 1920, when the membership
had more than quadrupled, the figure at the end of that year being
8,348,000. The most rapid growth was in the years 1911 and 1913,
in each of which the membership increased by more than 20 per cent.,
and during 1917 to 1919 when the numbers grew by over 3 1 / 4 millions
or about 70 per cent.
The decade of depression which followed 1920 saw an almost
uninterrupted decline in membership; there was also a continuous
decline during this period in the number of unions, but a consider1
The figures given include members in oversea branches and in Irish Free State
branches, b u t exclude members of unions having their head offices in the Irish
Free State; in recent years the number of members in Irish Free State and other
oversea branches has been about 50,000.

THE TRADE UNION MOVEMENT

able part of this reduction was the result of amalgamations. The
fall in membership was nearly 2 3 / 4 millions during 1921 and 1922,
and in each subsequent year except 1924 there were further losses
until 1929, when a gain of nearly 40,000 was recorded. During
the world depression there was again a considerable decline, but,
with improved trade and employment, membership began to grow
again in 1934, and by the beginning of 1937 the number of trade
unionists exceeded the membership in 1929 by nearly half-a-million.
The chief decreases compared with 1920 were in the transport
and general labour, mining and quarrying, and metal groups, but
almost all groups recorded heavy losses. Recovery in membership
since the end of the world depression has been most marked in
the metal and engineering trades, and in transport and general
labour.
During recent years males have represented about 84 or 85 per
cent, and females about 15 or 16 per cent, of total membership;
in 1900 the proportion of females was only about 7% per cent.,
and in 1913 about 10% per cent. Except in a few trades women
are, however, still comparatively unorganised ; less than one-quarter
of all women workers are organised, compared with nearly one-half
of all men. The number of unions and membership (males, females
and total) at the end of various years from 1900 to 1936 are given
in the following table.
NUMBER AND MEMBERSHIP OF TRADE UNIONS IN GREAT
BRITAIN AND NORTHERN IRELAND AT THE E N D OF THE
YEARS I 9 0 O , I 9 1 3 , 1 9 2 O , I 9 2 5 , AND I 9 3 O TO I 9 3 6
Membership
Year

19OO
1913
1920
1925
1930
193I
1932
1933
1934
1935
1936

Number
of unions

I.323
1,269

1,384
1,176
1,122
1,109
1,082
I,o82
1,065
I,054
1,041

Males

Females

Total

Thousands

1,868
3,702
7,006
4,671

154

433

2,022
4.135

1,342

8,348

4,°49
3,859
3,699

835
793
765
745

5.506
4,842
4,624

3,662

730

3,854
4.105

737
763

4.392
4.591

4,5o6 .

802

4.444
4,868
5.308

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Strength of organisation varies considerably in the different
industries. 1 Nearly one-half of all trade unionists at the end of
1936 were in the metal, textile and building trades, mining, quarrying and railway service; except in the textile trades almost the
whole membership in these groups consisted of males. About
one-fifth more (also chiefly men) were in other transport (water,
road, dock, etc.), and general labour. Organisation among women
was strong only in the textile trades, clothing, teaching, and national
and local Government service, these groups accounting for 70 per
cent, of the female membership of all unions.

FINANCE

The total income in 1935 of 448 registered unions with a membership of 3,770,487 workpeople, or about 78 per cent, of the total
membership of all workers' unions, was £9,436,460. Of this, over
£7,000,000 was contributed by members, the average contribution
being about 8y2d. per member per week, or between 1 and 1 % per
cent, of an average weekly wage; the actual range of contributions,
however, was from a few pence a week b y women and unskilled
men in some unions to i s . 6d. or 2s. per week, or even more,
in certain unions of skilled craftsmen which provide considerable
friendly benefits. Allowances b y the Minister of Labour to various
unions in connection with unemployment insurance accounted in
1935 for a further £1,834,909 of the trade union income. 2
The expenditure of the unions in 1935 included £2,503,585 for
unemployment, together with travelling and emigration benefit. 3
A total of £2,720,662 was required for management and similar
expenses. Various social insurance benefits, including sickness,
accident, superannuation, and funeral benefits, cost about
£2,308,000. A sum of £231,054, or just under 3 per cent, of total
expenditure, was paid in dispute benefits. The proportion is higher
in years of serious industrial conflicts, and during the decade 1920
to 1929 the percentage was about 12y 2 ; this included over £5,500,000
spent in dispute benefits during the year 1926. In 1929 only
1
The membership in each of the chief industries in 1913, 1920, 1930, 1935
and 1936 is shown in Appendix IV.
2
I n 1929 t h e allowances by t h e Minister of Labour amounted to ¿1,876,000,
and the total income of 474 unions was ¿9,681,635. In 1931 the allowances by
the Ministry of Labour totalled ¿6,404,965, this being a year of exceptionally
heavy unemployment.
3
In 1929 the amount was ¿2,852,542, and in 1931 it was ¿8,339,981.

T H E TRADE UNION MOVEMENT

£178,453, or about 2 per cent, of total expenditure, was paid from
the political fund, though this was the year of a General Election
when the Labour Government was returned to power. In 1935,
when there was also a General Election, the payments from the
political fund were £167,667. In view of the prominence which
has been given for many years in political circles to the principle
involved in contributing to this fund, it is interesting to note that
the expenditure is so small. 1 The question of principle is reviewed,
from the legal point of view, in the following section.

LEGAL POSITION

The legal position of British trade unions is determined by various
Acts of Parliament which remove the Common Law handicap
that contracts or agreements in restraint of trade are illegal and
which indicate the activities unions may undertake. The chief
Acts are the Trade Unions Acts of 1871 and 1876, the Trade
Disputes Act, 1906, the Trade Union (Political Funds) Act, 1913,
and especially the Trade Disputes and Trade Unions Act, 1927.
A brief indication of the chief features of these Acts is given below.
By legislation in 1824 and 1825 a trade union ceased to be a
criminal conspiracy, but though workers could no longer be
punished merely for membership, trade union activities were
severely restricted and unions were not entitled to institute legal
proceedings for the protection of their funds. An important
advance was made by the Act of 1871, which provided that a
trade union would not be unlawful merely because its objects were
in restraint of trade, and that it could acquire definite civil status
by registration with the Registrar of Friendly Societies. 2 Protection
of trade union funds was also secured, the unions being able, for
example, to take legal proceedings against defaulting officials.
The unions were accorded a large measure of freedom from legal
proceedings with regard to their internal affairs, including: (1)
agreements between members concerning the conditions under
1
The number of members of registered unions contributing to political funds
a t the end of 1935 was 1,671,000, or 56 per cent, of the membership of those unions
which collected political contributions; in unregistered unions 525,000 members
contributed to political funds.
2
Registration is voluntary and some unions do not register. I t involves the
submission of rules and the furnishing of an annual return, which includes a
statement of the financial position. An advantage of registration is t h e exemption
from income t a x of a union's provident funds.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

which they shall or shall not employ or be employed ; (2) agreements
for the payment by any person of any subscription or penalty
to a trade union; (3) agreements for the application of the funds
of a trade union to provide benefits to members, or to discharge
any fine imposed upon any person by a court of justice; (4) agreements between one trade union and another. These are among the
important normal activities of trade unions, which are often
included in their rules and, though not enforceable by legal process,
are undertaken daily as "gentlemen's agreements." The.Act of
1871 also included a definition of a trade union, which was, however,
modified by the Act of 1913.
Until 1875 workers were liable to be convicted for criminal
conspiracy for almost any act done in furtherance of a strike.
In that year the Conspiracy and Protection of Property Act
declared that an agreement or combination by two or more persons
to do or procure to be done any act in contemplation or furtherance
of a trade dispute shall not be indictable as a criminal conspiracy
unless the same act committed by one person only would have
been criminal.1 The right to undertake peaceful picketing was
accorded, though penalties were provided for violence, intimidation,
and certain other aggressive acts.
It was still possible for employers to bring a civil action against
a trade union for damages resulting from the participation of its
members in a strike. This was not, however, brought to light
until the famous Tan Vale case in 1901, when an action was brought
by the Taff Vale Railway Company against the Amalgamated
Society of Railway Servants for damages due to loss caused to
the Company by members of the Society on strike. The case was
decided in favour of the Company and damages amounting to
£23,000 were awarded. The menace to the trade union movement
of a succession of similar actions led to a vigorous political agitation
for amendment of the law, and this was secured by the Trade.
Disputes Act of 1906, passed shortly after the General Election of
that year, when direct Labour representation in Parliament became
considerable and many Liberal members were pledged to support
. l The Act, however, renders liable to fine or imprisonment any person employed
by a municipal authority or company supplying gas or water to the public who
breaks a contract of service knowing that the consequences will be to deprive t h e
inhabitants of their supply of gas or water. It also makes liable persons breaking a
contract of service if by doing so there is danger to human life, or if serious bodily
injury is likely or if valuable property would be exposed to destruction or serious
injury. Other criminal liabilities, introduced by the Act of 1927, are indicated later.

THE TRADE UNION MOVEMENT

trade union demands. The Act defined a trade dispute as " any
dispute between employers and workmen, or between workmen and
workmen, which is connected with the employment or non-employment, or terms of employment, or with the conditions of labour of
any person". It also legalised sympathetic strikes in furtherance
of a trade dispute. The main purpose of the Act was, however,
to safeguard trade unions against civil liability; for this purpose
it declared that a union could not be sued for any alleged wrongful
act committed by or on behalf of the union. It also gave important privileges to trade union officials acting in contemplation
or furtherance of a trade dispute, including freedom from liability
for (1) any act done in concert which would not have involved
liability if done by an individual; (2) inducing another person to
break a contract of service ; (3) picketing solely in order to inform
or peacefully persuade. These various privileges accorded to trade
unions and their officials were greatly resented by employers and
by most jurists. In consequence demands were frequently made
for a reconsideration of the law, though two decades elapsed before
the demands were successful.
The trade union movement was not, however, left undisturbed
in the enjoyment of its freedom. The growing political power of
the movement in the early years of the present century and its
success in securing the election of members of Parliament and of
local government bodies brought into prominence the question of
the legality of using trade union funds for political purposes. It
had long been assumed that a trade union, if authorised to do so by
a majority of those voting in a ballot of its members, could undertake
political and other activities supplementary to its main functions.
Trade unions had, in fact, frequently given financial assistance to
candidates during elections and to members of Parliament and of
other bodies. In 1908, however, the question of the principle
involved was raised by a Mr. Osborne, a branch secretary of the
Amalgamated Society of Railway Servants, who succeeded in
obtaining an injunction against his Society restraining it from
making a political levy on its members, and from using any of its
funds for the support of the Labour Party. The decision of the
House of Lords, to which the case was finally carried, indicated
definitely that trade unions were not legally entitled to undertake
activities not specifically mentioned in the Acts of 1871 and 1876.
This excluded not only political but also educational and many
other activities.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Agitation by the trade unions for the removal of this limitation
led to the Trade Union Act of 1913. This Act re-defined a trade
union as any combination the principal objects of which are,
under its constitution, the regulation of the relations between
workmen and masters, or between workmen and workmen, or
between masters and masters, or the imposing of restrictive conditions on the conduct of any trade or business, and also the provision of benefits. 1 It provided that trade unions in addition to their
principal functions could include other lawful objects in their
constitution and spend money for the furtherance of these subsidiary objects. Special conditions were, however, laid down
for certain political activities. The financial support of candidates
in parliamentary or local government elections, or of persons
elected, or the publication or distribution of political documents,
could be undertaken only with the approval of a majority of those
voting in a secret ballot of members of a union ; payments for these
purposes were to be made out of a special fund, but any member
could " contract out ", that is, give notice to the union on a prescribed
form of his intention not to contribute to this political fund.
A number of important restrictions changing many of the conditions outlined above were introduced by the Trade Disputes and
Trade Unions Act of 1927. This Act was passed partly with a view
to preventing general strikes such as that of 1926, but it also dealt
with other matters. During 1926 the definition of a trade dispute
and the legality of the General Strike had been much discussed.
Some held the view that the General Strike was illegal and that
every striker was personally liable to an action for damages because
the strike was not a trade dispute but a conflict between the trade
union movement on the one hand and the Government and the
Nation on the other; its objects extended beyond conditions of
labour and terms of employment and included political objects.
The trade unionists argued that they were engaging in a sympathetic strike to help the miners in their resistance to reductions of
wages and that they were legally entitled to act in this manner.
The Act of 1927 introduced various limitations upon the right
to strike, the chief being t h a t : (1) any individual engaging in a
trade dispute is liable to criminal proceedings if, by breaking a
contract of service, injury or danger or grave inconvenience to the
1
An employers' organisation may be a trade union ; some are, in fact, registered
as such.

T H E TRADE UNION MOVEMENT

community is likely to result ; (2) a strike is illegal if it has (a) any
object other than or in addition to the furtherance of a trade dispute
within the trade or industry in which the strikers are engaged;
and (è) is a strike designed or calculated to coerce the Government
either directly or by inflicting hardship upon the community. The
second of these provisions makes illegal a general strike, most
sympathetic strikes whatever their objects may be, and most
strikes the objects of which extend beyond hours, wages and
other conditions of employment. The illegality would hold even
though the workmen involved had terminated their contracts of
service. Any trade union official or other person who declares,
instigates, incites others to take part in, or otherwise acts in furtherance of an illegal strike or lock-out is liable to criminal proceedings ;
the mere cessation of work is not, however, a criminal offence.
The 1927 Act also considerably increased the restrictions upon
picketing. I t rendered trade unions liable for damages incurred
b y employers and others in illegal strikes, thus partly reversing
the favourable legislation of 1906 which followed the Taff Vale
case. The system established b y the 1913 Act of " contractingout " of the payment of contributions for political purposes was
changed to that of " contracting-in ", under which a political levy
can be made only upon those members of a trade union who notify
the union of their willingness to make the contribution. Members
of the Civil Service are only permitted to join a trade union which is
restricted to civil servants, which has no political objects and which
is not affiliated to any outside industrial or political organisation. 1
These and other restrictions imposed by the 1927 Act are much
resented by the trade union movement, which holds that the Act
was passed in a spirit of vindictiveness. Organised labour has,
therefore, expressed its determination to secure the withdrawal
of the restrictions, and this policy is included in the programme
of the Labour Party. In 1931 the Labour Government introduced
a Bill entitled the Trade Disputes and Trade Unions (Amendment)
Bill into the House of Commons but, being a minority Government,
failed to secure adequate support for provisions which would
have satisfied the demands of the trade union movement, and the
Bill was withdrawn. There is undoubtedly the need for a systematic
codification of trade union law, but so many controversial political
1
Other restrictions upon membership of trade unions according to earlier Acts
are t h a t only persons over sixteen years of age may join; persons in the police
force are excluded from trade union membership.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

and social questions are involved that the prospects of early action
are not bright.
STRUCTURE

The structure of the British trade union movement is highly
complex and shows no indications of a logical or preconceived plan.
The variety is the result of differences in origin and purpose of
the different unions and of the need for the adaptation of their
structure to changing conditions. Also, the complexity of industrial
organisation renders difficult the attempt to apply any consistent
principles of association. In outlining the structure of the movement
it is necessary to examine the chief features of the individual unions,
federations of unions, trades councils which have been set up in a
large number of centres throughout the country for purposes of
local co-operation, and the Trades Union Congress and its General
Council with which almost the whole movement is associated for
national co-ordination of policy and action.
Individual Unions
Great variety is found in the structure of the individual unions,
which range from small local unions of members of a single craft
to large national amalgamations with a membership of hundreds
of thousands open to many grades of workers in one or more
industries. As already shown, the number of unions at the end of
1936 was 1,041, but the movement is much more consolidated than
this figure indicates. The real power and control is exercised by a
few big organisations in the chief industries. Mr. Cole's statement
written in 1924 is still true, that " there are not, in all, more than
a hundred trade unions . . . that play any effective part in
the work of the movement as a whole, or add anything considerable
to its bargaining strength ".1 Also, during post-war years the Trades
Union Congress has deliberately encouraged amalgamation so
that the number of unions might be reduced to an absolute minimum.2 It is of interest to note that, whereas many of the big
1
G. D. H . COLE: Organised Labour, p. 23. Mr. Cole included in the hundred
unions those federations which for practical purposes in collective bargaining have
little to distinguish them from individual unions.
2
Amalgamations of unions have been facilitated b y the Trade Union (Amalgamation) Act, 1917, which enables amalgamations to be effected if not less t h a n
half the members of the union vote and a 20 per cent, majority favours the change.
Before 1917 a two-thirds majority of all the members, and not merely of those
who voted, was required.

THE TRADE UNION MOVEMENT

unions cover not only England and Wales but also Scotland and
Northern Ireland, there are various separate unions in Scotland
which have remained independent of those south of the Border,
while even those which have amalgamated retain considerable
district autonomy. The Scottish unions and district organisations
are affiliated to the Scottish Trades Union Congress. In Northern
Ireland there are few unions independent of those in Great Britain. 1
Most of the unions are of three main types, craft, industrial and
general labour unions,- but there are many varieties within each
group.2 The craft union was the first stable type of organisation
to develop in the British trade union movement, and, as already
indicated, has exerted and still exerts a powerful influence. The
members of most craft unions are skilled male workers who have
been trained for a particular trade but may be employed in different
industries. The simplest form is a union of members of one craft
only, but there are also amalgamations covering several kindred
crafts. The United Patternmakers' Association and the London
Society of Compositors are examples of the simplest type of craft
union, the former national and the latter local. The unions of
plumbers, plasterers, blacksmiths and boilermakers are other
examples, while in the cotton industry there are many craft unions
of spinners, weavers and cardroom operatives. The complex form
of craft union is illustrated by the Amalgamated Engineering
Union, the membership of which mainly covers ten skilled crafts
but in recent years unskilled workers have also been admitted. 3
The Amalgamated Union of Building Trade Workers, which unites
bricklayers and stonemasons, is less complex.
Industrial unions, which aim at bringing into one organisation
all workers in a single industry without distinction as to occupation,
1
The trade union movement in the Irish Free State is outside the scope of this
study. The movement is largely independent and has its own Trades Union
Congress, although a number of unions with headquarters in Great Britain have
branches in t h e Irish Free State.
2
Other types include : (a) the " material " union which brings workers t o gether according to the material upon which they are working, e.g. the Amalgamated Society of Woodworkers, though this union is in fact a craft union; (è) t h e
" employment " union, t h e membership of which is restricted to, but aims a t
covering all, the workers of a single employer or limited group of employers.
Many of the workers employed by private insurance companies are members of
separate unions according to the company to which they belong ; where the workers
are employed by a single company or organisation covering practically t h e whole
of an industry, e.g. Post Office workers, the " employment " union approximates
closely to the industrial.
3
This union is essentially the successor of t h e old-established Amalgamated
Society of Engineers.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

skill or sex, are generally of more recent development than craft
unions. They were not prominent until the wave of enthusiasm
for organisation during the years immediately preceding the war.
They have developed chiefly in industries where the line of division
between skilled and unskilled workers is not sharply defined. The
National Union of Railwaymen, formed by amalgamation in 1913,
is one of the best examples of an industrial union, although it
includes in its membership certain groups of workers who are
employed by the railway companies but not in railway service
proper, e.g. workers in hotels and steamship services owned by
the companies.1 There are, however, separate unions of locomotive
engineers and firemen and of railway clerks which the National
Union of Railwaymen has not succeeded in absorbing; also many
skilled engineering trade workers in railway construction arid
repair shops have preferred to remain members of the Amalgamated
Engineering Union. The county and other regional miners' associations are organised on industrial lines. Mention may be made
here of the Iron and Steel Trades Confederation, which, though
formally a federation of unions, is an organisation providing an
ingenious and convenient method of transition for the fusion of
separate unions into a great industrial amalgamation.2 Pending
complete fusion the Confederation conducts all negotiations on
questions of wages, hours and working conditions. It includes
within its structure an organisation called the British Iron, Steel
and Kindred Trades Association, to which members of the separate
unions are encouraged to transfer their membership, while new
members are enrolled only in this Association. It is to be presumed
that when the transition is completed the existence of the Confederation will be terminated and its functions assumed by the
Association.
General labour unions as a permanent element in the British
trade anion movement date from about 1890. They originated
largely to enrol workers who were not catered for by other unions,
and their membership is usually drawn from workers in several
industries. Frequently, though not always, the members are
unskilled and semi-skilled workers, including female workers

In this respect it resembles a n " employment " union.
It illustrates identity of association on the basis of " material " and " industry ".
The Confederation has not succeeded in uniting all organisations in the industry;
thus the National Union of Blastfurnacemen remains outside.
2

T H E TRADE UNION MOVEMENT

especially during the last two or three decades. 1 The two chief
examples are the National Union of General and Municipal Workers
and the Transport and General Workers' Union. Their machinery of
government includes separate departments which deal with the
special problems of workers in particular industrial branches
or occupations. Both these unions are the results of amalgamation
and the possibility of their being united into a great general workers'
union has been discussed..
Differences in the basis of organisation of the various British
unions have resulted in conflict within the movement, two or more
unions often competing to enrol the same group of workers. Thus,
to mention only one example, the National Union of Railwaymen
and the Amalgamated Engineering Union, the former organised
on industrial and the latter largely on craft lines, are rivals for the
membership of workers in the engineering trades employed in
railway workshops for the construction and repair of locomotives,
carriages and trucks. With a view to avoiding the application of
conflicting principles of organisation the Trades Union Congress,
inclined to favour organisation by industry, instructed its General
Council in 1924 to examine the problem of organisation on this
basis. A detailed investigation showed great differences of opinion
as to the best form of structure, and the Council came to the
conclusion that it would be impracticable to formulate a general
scheme of organisation b y industry owing to the impossibility of
defining any fixed boundaries of industry. They were also of the
opinion t h a t no comprehensive scheme for the scientific linkingu p of unions without definite merging would be practicable,
and favoured a gradual adaptation of organisation to meet
the new conditions rather than any great scheme of systematic
transformation.
The internal structure and systems of government of the various
unions also differ, though certain elements are common to most
unions. The chief unit of organisation is the local branch, usually
with voluntary officials who deal with union affairs in their spare
time. 2 Above the branch is the district, while in some unions
1
Unions t h e membership of which is exclusively female are rare in any type
of organisation; among the occupations for which separate women's unions have
been formed are teachers and clerical workers.
2
I n some industries, chiefly engineering and printing, the unions are represented in the works by shop stewards. I t is not possible here to discuss the shop
stewards' movement which developed during the war, especially in the engineering
industry, as a rank and file left-wing development not recognised by the unions;
this independent movement collapsed shortly after the war.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

districts are grouped into divisions. Each district and division
has its representative committee which deals with questions
affecting the area, though the powers of these committees vary in the
different unions; thus in some unions district committees are limited
to work of organisation and propaganda, while in others they
have wider powers, including the right to conduct negotiations.
The districts or divisions often have the services of a full-time
organiser. The representatives on the governing body of a national
union are usually appointed by the divisional or district committees.
Many unions have a large general committee or annual general
meeting of representatives, which meets only once or twice a year,
and a smaller executive committee to deal with matters in the
intervals between the meetings of the larger body. The executive
committee may include, and may sometimes, for example in the
Amalgamated Engineering Union, consist wholly of, full-time paid
officials of the union. Frequently the powers of these central
governing bodies are limited by the provision that certain important
questions, for example the declaration of a strike or the election of
the chief officers, shall be referred to a ballot of all members. In
this and other ways the attempt is made to maintain the democratic
principle throughout, though in the larger unions this is far from
easy, and it is not rare for an energetic and able general secretary
or small group of officials to succeed in wielding great personal
power.
Federations of Trade Unions
The formation of federations as well as amalgamations is encouraged in accordance with the deliberate policy now being applied
of consolidating the trade union movement. Numerous federations
have been formed, especially during recent years, and these not
infrequently prepare the way for amalgamations. Federations
differ from amalgamations in that the affiliated unions maintain
their separate organisations and funds, but are linked together for
purposes of co-operation. The degree of autonomy retained by
the affiliated unions differs widely; some federations are merely
loose associations for advisory purposes, while others have important functions, including that of negotiation with the employers.
A few federations are so highly developed that, for practical
purposes, they differ little from complete amalgamations. Federations almost always establish district and local committees in
addition to central conferences and executive councils.

T H E TRADE UNION MOVEMENT

The number of federations at the end of 1936 was 63, with a
gross membership of 2,836,000. Many trade unions or branches
are, however, affiliated to more than one federation and the estimated net federated membership was 2,246,000, or 42 per cent, of
total trade union membership. The numbers both of federations
and of membership were considerably less than in 1913, the reductions being due largely to the transformation of federations into
amalgamated unions.
The largest federations at the end of 1936 were the Miners'
Federation of Great Britain, representing an affiliated membership
of over 500,000, and the General Federation of Trade Unions,
comprising ninety-two trade unions in various industries which
paid affiliation fees on a membership of 338,000. Other federations with large memberships were the Confederation of Shipbuilding and Engineering Unions, the National Printing and Kindred
Trades Federation, the National . Federation of Building Trades
Operatives, and two federations of textile trade workers. These
bodies illustrate considerable variety in types of association and
degree of co-ordination, the chief types being associations of unions
in different industries, national associations of local unions in the
same industry, and associations of national craft unions in the same
industry; federations of the second and third types are potentially
stronger than those of the first type.
The General Federation of Trade Unions, which was established
in 1899 on the initiative of the Trades Union Congress, is of the
first type. The affiliated unions are chiefly of cotton textile
operatives and dock labourers, together with many small craft
unions in other industries. It acts " as a sort of strike insurance
society into which a number of unions pay contributions at a
regular rate per member, in return for the right to receive a regular
rate of benefit when any of their members are on strike ". 1 For
some years the Federation claimed to voice the opinions of the
British trade union movement in many home afíairs and it also
represented the movement abroad in consequence of its being the
only British organisation affiliated to the International Federation
of Trade Unions. Its claims were, however, resented and its
policy disliked by some of the larger unions, notably the Amalgamated Society of Engineers, and the Miners' Federation of Great
Britain, a n d ' b y the Trades Union Congress. Consequently, during
G. D. H. COLE : Organised Labour, p . 44.
5

INDUSTRIAL RELATIONS IN GREAT BRITAIN

post-war years its influence has declined and its chief work is now
that already indicated of mutually reinsuring strike benefits.
Very different in structure and purpose is the Miners' Federation
of Great Britain. It covers only one industry—coal mining—the
most strongly organised industry in the country. It is national in
scope and is composed mainly of district or county miners' unions in
England, Scotland and Wales.1 Its chief object is to secure the
best possible wages, hours and other working conditions by negotiation with the employers, by supporting and co-ordinating the
activities of its affiliated unions, by making representations to the
Government, and by other appropriate means. The system of
government is by an Annual Delegate Conference which decides
questions of general policy, and an Executive Council on which
the district unions are represented according to their membership.
The Executive Council may make a general levy for the support of
any district involved in a stoppage. Before the Federation can
call a national strike it must take a ballot vote among members
of affiliated unions and not less than two-thirds of those voting
must support the proposal for a stoppage. Since the stoppage
of 1926 the employers have insisted on district agreements only
and the Federation, unable to negotiate national agreements, now
endeavours to secure the application of uniform principles by the
district unions on questions of general interest; this is not always
easy owing especially to differences in economic conditions in the
different coal-fields and the degree of autonomy reserved by the
district unions. The policy of the Federation is, however, to secure
a return to national agreements on working conditions, and it
also advocates nationalisation of the coal mines. In the political
field it is a strong supporter of the Labour Party and financially
assists " Miners' Members of Parliament " from funds subscribed
by the districts. In international affairs it has taken an active
part in the work of the International Miners' Federation.
The National Printing and Kindred Trades Federation also is
limited to one industrial group, but, like the National Federation
of Building Trades Operatives, it diners from the Miners' Federation
in consisting mainly of a number of national unions of workers in
1
Consideration is being given to a proposal to form one big union of coal-miners,
for the whole of Great Britain, to replace the present organisation of autonomous
district unions which constitute the Federation. The proposal is made largely
because of a tendency for the separate unions to regard even national problems
from the standpoint of t h e supposed interests of the districts rather than of t h e
interests of the Federation.

THE TRADE UNION MOVEMENT

different crafts or occupations of the industry. The Federation
receives regular contributions from each union and may make
special levies if necessary to meet the cost of serious disputes.
It aims at securing uniform hours and working conditions throughout the industry, but wage negotiations are conducted by the
unions unless they request the Federation to act on their behalf.
Benefits on a regular scale are paid to members of affiliated unions
during any dispute approved by the Federation, but this right is
forfeited if a union declares a strike without consulting the
Federation.
Trades Councils
As already indicated, Trades Councils are local bodies for cooperation on industrial and sometimes political questions between
organised workers in different industries and are an expression of
labour solidarity. They are associations of trade union branches
and of any independent unions in each locality. Large towns were
the first to set up Trades Councils, but these are now established
in hundreds of localities throughout the country. Often in the
early days they grew out of temporary committees set up to
co-ordinate local action during a dispute. Their somewhat limited
functions were predominantly industrial, including organisation
of support for any union involved in a strike or lock-out, attempts to
terminate such stoppages by conciliation, and settlement of
differences between the unions themselves ; the support of candidates
for city councils and other local government bodies was, however,
frequent.
During the present century the growth of the Labour Party
has led to political activities receiving greater attention. It has
also resulted in a complication of organisation. In many localities
bodies known as the Local Labour Party have been formed, especially since 1918, and to these the local trade union organisations,
Socialist societies, and individual supporters of the Party are
affiliated. They largely represent the trade unions for political
purposes in parliamentary and local government elections, leaving
only industrial activities to the Trades Councils. In other localities
a single body known as the Trades and Labour Council undertakes
both industrial and political activities, while in some areas the
Trades Council alone still performs these functions. The position
is further complicated by the fact that for political purposes these
various local organisations are affiliated with the National Labour

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Party, which is largely the political expression of trade unionism.
Trades Councils, on the other hand, are not linked together for
industrial purposes into an effective national federation, though
several district or county federations have been formed and some
of the chief Trades Councils in different parts of the country have
established organic relations.
The future of Trades Councils as local associations mainly of
trades union branches for industrial purposes is uncertain. There
has been " some reluctance on the part of the unions to entrust
any of their really important functions to the Trades Councils.
One reason for this undoubtedly is the existence of district
committees of federations with which the branches are directly
connected, and which seem better adapted than the Trades Councils
to operate on behalf of the branches. A further reason may be
the prominence given to political questions by the Trades Councils
and their diffused character. The Trades Councils have not always
demonstrated their capacity to handle effectively purely trade
union questions, even when these have been entrusted to them.
Generally, the trade union executives maintain a somewhat reserved
attitude towards a linking-up with the Trades Councils, probably
animated by the feeling that in some sense their prerogatives would
be in danger of being usurped. Some Trades Councils have contributed to this feeling by pressing for affiliation to the Trades Union
Congress, a method which, it is considered by the unions, would
lead to duplication and overlapping without any really useful
purpose being served "} The unions are of the opinion that the
constituent elements of the Trades Councils, i.e. branches of the
unions, are adequately represented in the Congress by the unions.
It is sometimes proposed that the Trades Councils should be
organised to become the local counterpart of the General Council
of the Trades Union Congress.2 The absence of a really representative local agency of the Trades Union Congress is regarded as a
considerable handicap, and it is suggested that the Trades Councils
could be adapted to meet this need. They would then carry into
effect in each locality the national policy of the unions expressed
through the Trades Union Congress and undertake systematic
propaganda. Some development of co-ordination between Congress
and the Councils has taken place, but in view of the attitude of
1
W. M. CITRINE : The British Trade Union Movement, pp. 59 and 60. Amsterdam,
1926.
2
Ibid., pp. 60 and 61.

THE TRADE UNION MOVEMENT

the trade unions, including their unwillingness to permit the Councils
to affiliate with the Congress, it is unlikely that progress will be
rapid. 1
The Trades Union Congress
The process of consolidation and co-ordination of policy is
typified by the growing influence of the Trades Union Congress
and its General Council. The Congress, which dates from 1868,
is an annual meeting of delegates of unions at which questions of
general interest are discussed and resolutions adopted. In 1937
the number of unions affiliated to the Congress was 169 with a
membership of 4,008,647, or more than three-quarters of the total
membership of the trade union movement. Each union pays an
affiliation fee of 3Ì. per member per annum.2
Unions are entitled to send one delegate to the Congress for
every 5,000 members or part thereof. The number of delegates
appointed to attend the Congress in recent years has often been
over six hundred. As the annual session of the Congress lasts
only a week discussion of the many important questions on the
agenda each year is often severely restricted, but there has been
strong opposition to reducing the number of delegates.
According to its Standing Orders, the chief objects of the Congress
are to promote the interests of its affiliated organisations and generally to improve the economic and social welfare of the workers.
With these purposes in view the Congress demands public ownership
and control of national resources and of services, particularly the
nationalisation of land, mines, minerals, and railways; the extension
of State and municipal enterprise for the provision of social
necessities and services; and proper provision for the adequate
participation of the workers in the control and management of public
services and industries. The Congress aims at securing a working
week of forty hours either by legislation or collective agreements.
and a legal minimum wage for each industry or occupation. The
1
I t is interesting to note t h a t the Trades Union Congress owes its origin to the
initiative of the Manchester Trades Council, t h a t for twenty-five years, until 1895,
Trades Councils were represented in the Trades Union Congress, and t h a t the
Scottish and t h e Irish Trades Union Congresses include representatives of Trades
Councils as well as of trade unions.
s
Various other payments are made; each union pays a fee of 10s. for each
delegate to the Trades Union Congress and £1 per thousand members towards the
cost of the International Federation of Trade Unions, while the General Council
can make a levy on all affiliated unions for the assistance of any union defending
a vital trade union principle.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

programme also includes payment for holidays and adequate State
pensions for all at sixty years of age. Other demands, especially
in regard to social insurance, have already been partly realised
and the object of the Congress is to secure still more favourable
legislative provisions. These demands include suitable maintenance
for the unemployed ; extension of training facilities for both juveniles
and adults unemployed ; the provision of adequate housing accommodation; provision against industrial accidents and disease;
adequate State pensions for widowed mothers and dependent
children and for mothers whose family bread-winner is incapacitated; the raising of the school-leaving age to 16, with adequate
maintenance allowance; abolition of overtime for all workers
under 18 years of age; and State educational facilities extending
from the elementary schools to the universities. The Congress
actively supports workers' education both by local evening classes
and week-end and holiday schools organised by the Workers'
Educational Association, and also by full-time courses of lectures
and tuition in Labour Colleges in London and Oxford for which
it has assumed financial responsibility.
In pursuing these various objects, it should be- remembered
that the decisions of Congress have no formal but only a moral
authority, and that the affiliated unions retain complete autonomy.
Nevertheless, the Congress has made such progress, especially since
the war, that it is recognised as the central body representative
of trades unionism, expressing its views and co-ordinating its policy.
The execution of decisions of Congress is undertaken by its General
Council.1 The Council has no authority to enforce its decisions
but proceeds by the method of counsel and consent. Nevertheless,
" the decisions of Congress and the General Council are regarded
with a respect which makes its influence more effective than any
bare reliance on written rule ".2
The Council is composed of thirty-two members; two of these
are women members representing women workers, while the remaining thirty represent seventeen trade groups. The members are
elected by ballot of all the affiliated unions from among candidates
nominated for each trade group by the unions of the group.
1
The General Council was set up in 1921 to replace the Parliamentary Committee, which from 1869 onwards had acted as the executive body of the Congress.
For many years the main function of the Parliamentary Committee was to promote
legislation for effecting improvements in working conditions.
2
W. M. CITRINE: The Trade Union Movement of Great Britain, p. 70.

T H E TRADE UNION MOVEMENT

Membership of the Council is voluntary; each of the members is
an official of an affiliated union and can only give a residue of time
to the work of the Council. In view of the many meetings of the
Council and of its committees the question has arisen, but has not
yet been solved, of establishing a judicious combination to ensure
a sufficiency of members able to devote their time to the work of
organising, developing and co-ordinating the trade union movement,
while avoiding the dangers of over-centralisation of control b y
permanent officials.1
The members of the General Council are grouped into the
following six committees which keep contact with developments
affecting the interests of workers in the various industries:
Group A.—8 members : Mining and Quarrying, 3 ; Railways, 3 ; Other Transport, 2.
Group B.—8 members : Shipbuilding, 1 ; Engineering, 3 ; Iron and Steel, 2 ;
Building, Woodworking and Furnishing, 2.
GroupC.—5 members: Cotton, 2; Other Textiles, 1; Clothing, 1; Leather and
Boots and Shoes, 1.
Group D.—6 members : . Glass, Pottery, Chemicals, Food, Drink, Tobacco,
Brushmaking and Distribution, 1 ; Agriculture, 1 ;
General Workers, 4.
Group E.—3 members : Printing and Paper, 1 ; Public Employees, 1 ; Non-Manual
Workers, 1.
Group F.—5 members : Of these, 2 are women representing women workers,
and 3 are appointed by the General Council from
organisations having women members.

The method of electing members of the General Council and
the system of committees ensures that the Council effectively
represents the affiliated unions and that the special interests
of each industrial group are safeguarded.
The powers and duties of the General Council under its Standing
Orders have been summarised by its Secretary, Sir Walter Citrine,
as follows:
" To keep a watch on all industrial movements and where possible to
co-ordinate industrial action ; to watch legislation affecting labour and
to initiate such legislation as Congress may direct; to adjust disputes
and differences between affiliated unions ; to promote common action on
general questions such as wages and hours of labour ; to assist any union
which is attacked on any vital question of trade union principle; to
assist in the work of organisation and to carry on propaganda for
strengthening the trade union movement; to enter into relations with
the trade union and labour movements in other countries ; and to take,
if necessary, trade union legal2 cases to the House of Lords as the Court
of Final Appeal for decision."
Ibid., p . 68.
Ibid., p . 70.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

In promoting co-operation between unions the General Council
may intervene in disputes if requested to do so by the union or
unions concerned, or if wages, hours and other conditions of work
are menaced and there is no probability of an amicable settlement
by direct negotiation between the employers' organisations and
the unions. If in these circumstances a stoppage of work occurs,
the Council must organise all such moral and material support as
appears justified. Affiliated unions are required to keep the General
Council informed about industrial negotiations, especially those
involving large bodies of workers. These obligations were specifically imposed on the affiliated unions and on the General Council
b y the Hull Congress in 1924. The Council has had occasion to
intervene in disputes in various industries including building,
transport, textiles and shipbuilding. The most outstanding intervention was during the coal crisis of 1925 and 1926 when, on the
request of the miners, the General Council promised full support
in their demands. The culmination was marked by the General
Strike of May 1926, authorised by a special session of the Trades
Union Congress, with the object, as stated b y the General Council,
of organising " united resistance to the attempt to enforce a settlement of the mining problem at the expense of the miners' wages."
The Trades Union Congress and its General Council have shown
great activity in entering into relations with the trade union
movement in other countries. The Congress is affiliated with the
International Federation of Trade Unions, and its representatives
play a leading rôle in the work of the Federation. Fraternal
delegates are sent to various annual trades union meetings abroad,
notably to the Conventions of the American Federation of Labour
and the Canadian Trades and Labour Congresses. The General
Council nominates the British workers' delegate and advisers to the
International Labour Conference.
During several years, especially in 1924 and 1925, the Trades
Union Congress, through its General Council, endeavoured to
establish co-operation with Russian trade unionism and to close
the breach between the Russian Federation of Trade Unions and
the " Red " Trade Union International on the one hand and the
International Federation of Trade Unions on the other. Following
the visit of a delegation sent to Russia by the General Council, an
Anglo-Russian Advisory Committee was set up for the regular
exchange of information and to consider the possibilities of establishing co-operation between the Moscow and Amsterdam trade

T H E T R A D E UNION MOVEMENT

union organisations. Fundamental differences in policy between
the two organisations resulted in failure of the British effort
towards reconciliation, and the activities of the Advisory Committee
were terminated in 1927.
POLICY

Many features of British trade union policy have been indicated
in enumerating the objects of the Trades Union Congress. The
purpose of the present section is to amplify the indications already
given. The general policy of the British trade union movement
may be described as socialistic, though there is little trace of doctrinaire inflexibility, and measures of application are determined by
considerations of practical opportunism. The great majority of
trade unionists favour evolutionary and constitutional methods for
attaining their objectives. Revolutionary methods commend
themselves neither to the leaders nor to the largely conservative
rank and file of the movement. There has been intimate association
between the movement and the Labour P a r t y and rapid strides
have been made by the Party since the war. Indeed, many trade
union objectives have been gained as a result of the pressure
exerted in Parliament by the Labour Party. Members of unions
affiliated to the Trades Union Congress are urged to support the
Labour Party. Ultimate Socialist aims do not prevent the trade
union organisations from engaging in continuous relations with
the employers in collective negotiations and in many other ways
for regulating working conditions.
As already indicated, an item in the forefront of trade union
policy is to secure improved legal status and especially to obtain a
reversal of the provisions of the Trade Disputes and Trade Unions
Act of 1927. Within the movement the Trades Union Congress
is pursuing a policy of consolidation and amalgamation of unions.
A consequence of the formation of great national unions and federations is that failure to reach agreement with the employers'
organisations involves large numbers of workers in dispute, with
serious losses to themselves, the employers and the community.
This menace is tending to the development of trade union leaders
with an increasing sense of responsibility and greater willingness
to establish and operate voluntary joint machinery for conciliation
and arbitration. The movement is, however, still strongly opposed
t o compulsory arbitration by the State; retention of the right to

INDUSTRIAL RELATIONS IN GREAT BRITAIN

strike as a last resort is regarded as fundamental to the security
of the movement.
On the question of wages, although the need for a scientific
policy is felt within the trade union movement, little progress
has been made in evolving a consistent programme. This is,
no doubt, a consequence of the extreme complication of the wage
problem. Immediate practical considerations invariably determine the action taken in wage negotiations, a chief object being
to secure the maximum increase or the minimum reduction according to the circumstances ruling at the time. The main principle
is to secure a standard rate for each class of work which shall be
regarded as a minimum throughout the area covered by any
agreement. Where piece rates are fixed the trade unions endeavour
to ensure that they shall be accompanied by a guaranteed minimum
rate on a time basis. The attitude of the unions towards time
work or piece work and other systems of payment by results
varies according to the industry. Outside the field of collective
bargaining by the different unions one of the objects of the Trades
Union Congress is the establishment of a legal minimum wage for
each industry or occupation.1
With regard to hours of labour, as with wages, each union
endeavours to obtain the best possible conditions by collective
bargaining. The Trades Union Congress includes in its programme the ratification of the Washington Hours Convention,
but goes beyond this and seeks to obtain a working week of forty
hours, without reduction of earnings. Its objects also include paid
holidays for all workers.
The trade union movement supports a programme for increased
benefits from State social insurance schemes and favours greater
contributions by the State towards the cost. The Trades Union
Congress demands adequate maintenance of the unemployed,
abolition of the household means test to applicants for unemployment assistance, adequate maintenance and compensation in
respect of all forms of industrial accidents and diseases, and adequate State pensions for all at the age of sixty, as well as for
widowed mothers and dependent children, and mothers whose
bread-winner is incapacitated. Rates of benefit under existing
legislation are regarded as inadequate. It may be noted that the
1
This demand of the Trades Union Congress is included in its Standing Orders.
I t s other demands noted in this section are also embodied in its Standing Orders
or expressed in special resolutions adopted at its annual meetings.

THE TRADE UNION MOVEMENT

establishment of State schemes of social insurance raises problems
for those craft unions which provide similar benefits for their
members in return for special contributions; it may ultimately
lead to modifications in the policy and methods of these unions.
Extension of social services for the benefit of workers and
their families is also advocated, the cost to be borne by public
funds. Special emphasis is laid on the provision of proper and
adequate housing accommodation and full educational facilities,
to be provided by the State, extending from the elementary schools
to the universities. At the 1929 Trades Union Congress, after
detailed consideration and investigation on the question of family
allowances, a majority voted in favour of the extension out of
public funds of certain social services for the benefit of families
as being more urgent and opportune than payment of money
allowances to the workers' families. They seemed to fear that a
system of money allowances would be detrimental to trade unionism,
although a considerable minority supported money allowances.
Especially since the Macmillan Court of Inquiry in the Woollen
and Worsted Industry in 1929, which in its wage proposals took
account of the value of social services and social insurance benefits,
the trade union movement in framing its policy has not failed to
give consideration to the intimate connection between wage levels
and the benefits derived from social legislation.
During recent years the movement has given increasing attention
to general economic questions. This is a consequence partly of
the recognition that standards of working conditions are closely
related to the efficiency of industrial, commercial and financial
organisation, but is also due to the increasing determination of
trade union leaders to participate in decisions on economic matters
and to share in the control of industry. Rationalisation and unemployment have been much discussed. The Trades Union Congress
has recognised the need for rationalisation, but demands adequate
safeguards for the workers, including reduction of hours of work
to limit displacement of labour by rationalisation and compensation
for persons displaced. As a means of dealing with unemployment
generally the Congress demands emergency public works at trade
union rates of pay and conditions, training centres for unemployed
workers, and more effective use of the credit power of the nation
to finance industry. At the 1937 Congress, Mr. Ernest Bevin in
his presidential address announced that the movement would in
future have its own Scientific Advisory Council, and this has since

INDUSTRIAL RELATIONS IN GREAT BRITAIN

been established. He and his colleagues believed that men of
science could make a great contribution to progress by placing
their knowledge at the disposal of the Congress, which could frame
its policy in the light of that knowledge and advice.
Far-reaching demands are made by the Trades Union Congress
for the public ownership and control of natural resources and of
services, particularly the nationalisation of land, mines, minerals
and railways, and the extension of State and municipal enterprise
for the provision of social necessities and services. Extension of
public regulation of industry and limitation of rates of interest
on capital are favoured. The movement has made somewhat
vague demands tor the worker to have some share in the control
of industry and for the supersession of Capitalism. Existing
schemes of co-partnership and profit-sharing are not, however,
regarded in most trade union circles as suitable means of even
partly satisfying these demands. On British Commonwealth economic policy the Congress in 1929 obtained a small majority in
support of the idea of investigating the possibility of controlling
and regulating the vast raw material resources of the Commonwealth; it did not, however, include a proposal for Empire preferential tariffs, as this would have been in conflict with its international
economic policy. In 1932 the Congress adopted a non-committal
report on fiscal policy; this carefully avoided any endorsement of
the system of tariffs, upon which the trade union movement was
divided. In the international field the British trade union movement is actively associated with the International Federation of
Trade Unions and participates in the Federation's endeavours to
secure the establishment of satisfactory international standards of
working conditions through the machinery of the International
Labour Organisation.

CHAPTER III

EMPLOYERS' ORGANISATIONS
INFORMATION about employers' organisations is much less complete
than that about trade unions. Their development and activities,
though of equal significance to those of the trade unions, have not
attracted the attention of writers on social problems and organisation. Whereas there is a considerable literature on the history,
structure, policy and legal position of the trade union movement,
no systematic review of British employers' organisations has been
published. This is no doubt partly because their defensive and
conservative attitude has been considered less interesting from a
sociological point of view than the more novel political and social
theories t h a t lie at the foundation of trade union policy.
There are, however, other reasons for this lack of information.
Unlike the Trades Union Congress and also the unions in particular
industries, which hold annual meetings where questions of principle
and policy are publicly discussed, employers' organisations frame
their programmes privately. This enables differences of opinion
to be concealed; also public discussion would usually be of less
propagandist value to employers' organisations than it is to the
trade union movement. Some employers' organisations are reticent
about their numerical strength, and consequently statistics of the
total membership of employers' organisations are not available.
By not disclosing information about membership, employers'
organisations avoid calling attention to weaknesses and disruptive
tendencies which may from time to time deplete their ranks.
Whereas many of the chief workers' organisations are registered
under the Friendly Societies Acts and supply information about
their objects, constitution and membership in accordance with
these Acts, none of the great employers' organisations is registered. 1
1
In 1935 only eighty-nine employers' organisations were registered. Many of
these were organisations of small-scale masters who, while employing a few
assistants, themselves frequently performed manual work in their trade; they
included, for example, societies of master bakers and millers, dairykeepers, hairdressers, master tailors, master farriers and blacksmiths.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

The present chapter uses the available information to give a
review of the historical development and present structure of those
employers' organisations which deal with labour matters. The
main features of policy are described and a section is devoted to
bodies which co-ordinate the activities of organisations in the
different industries. The association of employers in organisations
for the exchange of experience upon questions of labour welfare
and management is reserved for treatment in later chapters.

DEVELOPMENT

The history of employers' organisations in some respects forms
a close parallel to that of trade unions, but there are certain differences due to the fact that employers have joined together not only
to resist demands of the trade unions for improvements in wages
and working conditions, but also to prevent unfair competition
amongst themselves by regulating selling price, contract conditions
and other commercial practices and to undertake jointly various
commercial, legal, and other services of mutual interest. Associations formed for these latter purposes need not be considered here
except in so far as they have extended their objects to deal directly
or indirectly with labour matters.
Very frequently the formation of an employers' organisation in
any industry has followed the establishment of a trade union.
When, in any locality, a trade union appeared likely to succeed
in imposing wages and other conditions of labour upon individual
employers the advantages were recognised of combining together
to resist the workers' demands. Extension of trade union organisation
to a number of localities and the policy of attempting to improve
working conditions by playing off one locality against another led
to the formation of district and later of national employers' associations. This has been the usual development, although during
and since the war national associations have been formed in several
industries by the organised employers of a few localities and the
national association has then endeavoured to build a complete
structure by encouraging the formation of affiliated local and
district associations in areas hitherto unorganised.
It is not possible to give the date of the formation of the first
British employers' organisation. Associations and understandings,
often very loose and informal, have long existed between employers

EMPLOYERS' ORGANISATIONS

in various localities.1 For the purpose of this study, however, the
story need be told only from shortly after the close of the Napoleonic wars. Especially after trade unions ceased in 1824 to be
criminal conspiracies, employers associated to resist the growing
demands and agitation of the workers. It is true that in a few
trades local agreements were reached, but for many years the usual
policy of the employers was designed to secure the collapse of the
unions. Thus, especially in the period of agitation by the workers
during the years 1832 to 1834, the attitude of the employers is indicated by the presentation of the famous " Document " requiring
from workers as a condition of employment an undertaking not to
join a trade union.
Up to the middle of the nineteenth century local organisations
of employers were formed in many industries, including coal
mining, iron and steel, some branches of engineering, cotton,
building and printing. Many of these organisations were born
during periods of agitation by the workers, but when this collapsed
they often became moribund or even completely disappeared.
From about 1850, however, employers' organisations, like those
of the workers, increased in number and tended to be more permanent. The formation of the Amalgamated Society of Engineers
in 1851 was followed almost immediately by the establishment of a
central organisation of employers in the industry, and in 1852 a
lock-out involving a prolonged trial of strength took place on the
question of the abolition of overtime. The Mining Association
of Great Britain was formed in 1854, although for many years
it did not enter into direct relations with the trade unions but
confined its attention to proposals for legislation affecting the
industry, including proposals on working conditions. Local
organisations were formed in the iron and steel, building, and cotton
industries. In this period-up to 1870 there were frequent and
bitter conflicts on the question of recognition of the trade unions
and collective bargaining; mention may be made, for example,
1
Organisations existed in the eighteenth century and even earlier. Some bodies,
known as liveried companies, date from the Middle Ages, though they differ in
many respects from modern employers' organisations. During the years 1783 to
1794 Chambers of Commerce were formed in Glasgow, Edinburgh and Manchester,
and although these bodies were not primarily concerned with working conditions
they no doubt served when necessary to co-ordinate the labour policy of the
employers. There were coal-owners' associations in Northumberland and Durham
in 1805, while in certain munition and also other trades employers were associated
in various localities during the years of the Napoleonic wars ; a noteworthy example
is the organisation of master cutlers in Sheffield.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

of the lock-out of building trade workers in London in 1858, when
the master builders attempted unsuccessfully to break up the
workers' organisations by refusing to employ union labour.
During the twenty years from about 1870 the number of local
employers' organisations rapidly increased in those industries in
which the trade unions had become firmly established ; recognition
and collective bargaining became more frequent, often with systematic methods of negotiation and also with joint committees for
conciliation. Thus coal-owners' associations were set up in many
districts during the years 1870 to 1874, including Northumberland
and Durham (1871), several Scottish mining areas (1871-1874)
and Derbyshire and Nottinghamshire (1874). Another industry in
which the employers rapidly organised during these years was boot
and shoe manufacturing ; local associations were formed in Leicester
(1871), Northampton (1879), London (1882), Kettering (1886), and
Scotland (1890). This period also shows progress in centralisation.
Thus in 1873 the Cotton Spinners' and Manufacturers' Association
was formed by agreement between six local associations. An
outstanding example was the formation in 1878 of the National
Federation of Building Trades Employers of Great Britain and
Ireland.
From about 1890 a wave of organisation among employers
followed upon the agitation by the workers and extension of trade
unionism to unskilled labour which marked this period. The
movement showed itself both in the establishment of employers'
associations in industries hitherto unorganised and in the consolidation of local associations into national federations and amalgamations. Thus, following a strike by the Amalgamated Society
of Tailors and Tailoresses, the Association of London Master
Tailors was formed in 1891 to unite employers in the West End
retail trade. In other parts of the country local associations of
employers in the retail clothing trade had existed for several
decades and, in consequence of successful strikes by the workers in
Glasgow and Manchester, a national organisation called the Master
Tailors' Association of Great Britain and Ireland was formed in
1889; a few years later this organisation adopted its present title,
namely the National Federation of Merchant Tailors.1 The
year 1890 saw the formation of another national organisa1
These d a t a on the clothing trades are based on information compiled by Miss
C. SCLARE, a student of Leeds University, in an unpublished thesis on Industrial
Relations in the Clothing Trade.

EMPLOYERS' ORGANISATIONS

tion, the Shipping Federation, as a direct consequence of agitation
and strikes by the dockers' and seamen's unions. 1 In 1891, as a
result of the growing pressure of demands by the trade unions,
a federation was established to unite a number of local associations
of manufacturers in the boot and shoe industry. Five years later,
for similar reasons, the Engineering Employers' Federation was
formed.
Progress in organisation and consolidation was accelerated,
especially after 1906, by the growing power of trade unionism,
its greater influence in Parliament and the increased volume of
social legislation. Industries in which associations had been few
and sometimes short-lived began to organise extensively. An
outstanding example is the woollen industry, in which a small
number of district associations had been formed several decades
earlier, but had long remained moribund. These were revived
and several new associations were established in important centres.
The National Farmers' Union was formed in 1908. The passing
of the Trade Boards Act in 1909 and its application to certain
branches of the clothing industry was immediately followed by the
setting up of the Wholesale Clothing Manufacturers' Association.
This enabled the manufacturers to secure more effective representation on the Trade Board.
The war years and the years 1919 and 1920, which saw great
advances by the trade union movement, were also marked by
exceptionally rapid organisation and consolidation by employers.
During the war the control of production by the Government and
frequent joint relations between the Government, the employers
and the workers for the regulation of working conditions gave a
stimulus to organisation and especially to centralisation. Thus, in
the woollen industry, many new district organisations were formed
during the early years of the war. In 1917 the Woollen and Worsted
Trades' Federation was formed to co-ordinate the policy oi a large
section of the industry, and in 1919 the Wool Textile Employers'
Council was set up on a still broader basis to represent the whole
industry in dealing with labour questions. The Allied Association
of Bleachers, Dyers, Printers and Finishers was a war-time development. The extension of the Trade Boards system under the 1918
Act to many new branches of industry coincided with a wave of
1
Later this Federation developed close relations with the seamen's union,
facilitating the collection of contributions by t h e men to t h e union and organising
the payment of advances upon wages to the seamen's families.
6

INDUSTRIAL RELATIONS IN GREAT BRITAIN

organisation and provided an additional reason for the formation
of central associations in industries hitherto largely unorganised.
The tendency to organise was strengthened by the recommendations of the Whitley Committee in 1917 and by the work of the
National Industrial Conference, 1919.1 War-time conditions contributed to the complete recognition of trade unions by organised
employers, although there are still individual employers in certain
trades who refuse recognition and endeavour to impede organisation
among their workers.
These years also saw important developments with a view to
co-ordinating the policy of employers in different industries.
In 1916 the Federation of British Industries was formed to deal
mainly with commercial and economic questions. Three years
later the National Confederation of Employers' Organisations
was set up for the main purposes of representing to the Government the views of organised employers on labour matters, of taking
appropriate action to ensure that labour and social legislation
should not harmfully affect the interests of employers, and of
representing British employers in the work of the International
Labour Organisation. The Confederation was formed immediately
after the National Industrial Conference of 1919, when the need
for an employers' central authority on labour questions became
specially evident. Locally the employers have not developed
co-ordinating machinery which corresponds closely to the Trades
Councils set up by the workers, but the Chambers of Commerce
and the local branches of the Federation of British Industries
facilitate liaison between employers in different industries.
Since 1920 there has been further progress in consolidating the
associations in the various industries, but also many employers,
especially those operating on a small scale, have withdrawn from
membership mainly during years of depression. Consolidation and
co-ordination of the policy of employers was facilitated by the
growth of giant businesses as part of the rationalisation of British
industry since the war. Also the formation of federations by
employers' associations is in some ways easier than by the trade
unions as the employers are largely or entirely free from the complication of the craft versus industrial basis of organisation and of the
divergent interests of skilled and unskilled workers. The interests
of an employer of several thousand workpeople are often capable
1

See Chapters IV and VIII.

EMPLOYERS' ORGANISATIONS

of a single representation, but these workers may comprise many
groups the interests of which are not identical. The withdrawal
of employers from various organisations during periods of depression has been due partly, no doubt, to their desire for freedom in
determining working conditions; thus not infrequently employers
have withdrawn so as to be able to pay lower wages than those
fixed by collective agreements which they were morally bound
to observe while they remained members of an organisation.
Detailed figures are not available to show the membership of
employers' organisations in the various industries. According
to information compiled by the Ministry of Labour in December
1936. there were then 267 national or general federations and
associations for whole industries, and 1,550 other employers'
organisations directly concerned with labour matters. 1
This
number is nearly double that of trade unions, but is somewhat
misleading as to the progress of consolidation. The method of
federation has been used more than that of amalgamation and
the constituent members of federations are regarded as separate
organisations. It is true of the employers as of the workers that
the organisations which exercise considerable power and influence
in the determination of policy certainly do not number more than
about 100, and that less than fifty on each side are of predominant
importance. The total number of workers covered by organised
employers is not known. The National Confederation of Employers'
Organisations, which affiliates most, if not all, important associations, claimed several years ago that its membership covered firms
normally employing fully seven million workpeople, and there has
since been little change. To this should be added the relatively
small numbers employed by firms in organisations not affiliated
with the Confederation. It may be estimated as a rough approximation that about one-half of British workers are employed by
organised firms. Very many small firms are unorganised, whereas
the proportion of big undertakings which are organised is very
high.
STRUCTURE AND CONSTITUTION

The structure of employers' organisations differs considerably
from that of trade unions and this complicates negotiations and
1
Directory of Employers' Associations, Trade Unions, Joint Organisations, etc.,
1932, supplemented by later information.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

the establishment and operation of joint machinery. Employers
are free from the necessity of choosing between the craft and the
industrial basis of association, and their organisations are generally
of the industrial type. But there are wide differences. Some
organisations are by the nature of the industry relatively homogeneous, for example the Mining Association of Great Britain.
In some complex industries the attempt is made to bring together
widely differing branches into one great " omnibus " association,
e.g. the Engineering and Allied Employers' National Federation.
In other complex industries the various branches are organised
independently. Thus the textile industry is divided first according
to the material used, e.g. cotton being organised separately from
wool. Then within these main divisions the branches are organised
separately according to process. Thus in cotton textile manufacturing there is the Federation of Master Cotton Spinners, while,
largely on the weaving side but including some spinning, there
is the Cotton Spinners' and Manufacturers' Association. In the
woollen and worsted industry the chief separate organisations are
the Woollen and Worsted Trades Federation and the Worsted
Spinners' Federation. In industries which have separate organisations in the various branches, arrangements are sometimes made
for co-ordination of labour policy by setting up a special organisation; thus in the woollen industry the Wool (and Allied) Textile
Employers' Council has been set up for this purpose. In the building
industry the National Allied Building Trades Employers brings
together federations in several sections of the trade for purposes
of common policy in joint negotiations.1
In many of the chief industries, employers' organisations consist
of district or regional associations (sometimes with local branches)
combined into national federations. In most highly organised
industries the national federation affiliates only associations and
not individual firms ; the individual firms join the local associations.2
Many national federations exercise control over the election of
firms to membership of affiliated associations. Usually member
firms may not negotiate directly with a trade union, but must refer
1
The separate organisations include those of painters and decorators, plumbers,
plasterers, and the National Federation of Building Trades Employers of Great
Britain and Ireland.
2
Some national federations (e.g. the Wholesale Clothing Manufacturers' Association) affiliate both district associations or branches and individual firms. This
was the practice of the Mining Association of Great Britain until 1920, after which
date only district associations have been affiliated.

EMPLOYERS' ORGANISATIONS

any differences or disputes to the local branch or district associationMember firms are generally required not to employ, during the
continuance of a dispute, any workpeople out on strike or locked
out by other member firms. Some federations provide that member
firms before engaging a worker who had previously been employed
by another member firm shall obtain specified information from
the former employer.
Organised British employers are associated with employers abroad
through the National Confederation of Employers' Organisations
and by affiliations with international organisations in the various
industries.
Objects
Many employers' associations deal with productive and commercial as well as with labour questions, but here mention is made
only of those objects which are directly related to working conditions. Associations diner considerably in the emphasis they place
upon the promotion of good relations with their workpeople, the
development of joint machinery for conciliation and arbitration,
and the determination of reasonable working conditions; some
associations place chief emphasis upon resistance against unfair
or restrictive demands by trade unions, while others appear more
positive and constructive and include among their objects the
maintenance of amicable relations with the workpeople and their
organisations.
The following are some of the chief objects:
(1) To protect and further the interests of the association and
its member firms, and to promote organisation among
employers in the industry.
(2) To take such action as may be necessary or desirable for
securing agreements on wages and other conditions of labour,
for the avoidance of disputes and the settlement of differences
between members and their employees; some associations
specify the promotion of just and reasonable settlements
by the formation of joint boards for conciliation and arbitration, and the cultivation of friendly relations by Joint
Industrial Councils or other means.
(3) To secure mutual support, co-operation and uniformity
of policy in dealing with demands made and action taken
by workpeople or combinations of workpeople with regard

INDUSTRIAL RELATIONS IN GREAT BRITAIN
to wages or other working conditions; to resist demands
for rates and conditions likely to be injurious to the industry.
(4) To protect members against strikes or disputes with
employees or against losses incurred by acting in conformity
with decisions of the association; to give members pecuniary, legal or other assistance.1
(5) To watch over, promote, support or oppose legislation
affecting the interests of the industry; to make representations to Government departments and to give evidence
before Government committees on matters of interest to
the industry.

Some associations form companies to provide the insurance required
by legislation for Workmen's Compensation and Employers'
Liability.
Contributions
The funds of employers' organisations comprise mainly entrance
fees, regular annual contributions towards working expenses,
and special levies. The basis of payment varies according to industry.
In some organisations, especially local associations in which differences in the size of firms are not great, uniform contributions are
paid by each firm. The usual practice in all the chief organisations
is, however, for the contributions to vary according to the size
of each firm or district association of firms; relative size is also
used as basis for determining the number of representatives on
the councils of national federations and for the voting power of
member firms and district associations on questions of major
importance.
The chief criteria adopted for determining the relative size or
importance of the member firms and district associations, and for
fixing the amounts of contributions, are:
(1) Wages bill. — This criterion is widely used, annual and
other contributions being fixed at so much per £100 paid
in wages during the last financial year or average of several
years. Among organisations which have adopted this
1
Some employers' associations provide t h a t pecuniary assistance may be given
to workpeople employed by an associated firm who have sufiered loss or injury in
the firm's interests in connection with a trade dispute.

EMPLOYERS' ORGANISATIONS

criterion are the Engineering and Allied Employers' National
Federation and the Flour Milling Employers' Federation.
(2) Number of -persons employed. — The Incorporated Federated
Associations of Boot and Shoe Manufacturers of Great
Britain and Ireland is one of the bodies which use this basis.
(3) Equipment. — In some organisations in the textile industries,
e.g., the Cotton Spinners' and Manufacturers' Association,
the basis of contribution is the number of spindles and the
number of looms. The Shipping Federation takes as
criterion the gross tonnage of the vessels belonging to the
associations or companies.(4) Production. — The Mining Association of Great Britain uses
this basis, the contributions paid to it by the district coalowners' associations being determined according to the
tonnage of coal produced by the member colliery companies.
The rules of some organisations fix minimum and maximum
rates of annual contribution, the rate between these limits being
determined by the central council or management board. For
special levies a maximum rate is often fixed and the rules of some
organisations provide that special levies may be made only if
approved by a referendum to the members or federated associations.
Management
Some national federations retain the general meeting of members
held once or twice a year as part of the constitution; for example,
the National Federation of Building Trades Employers of Great
Britain and Ireland, the British Federation of Master Printers,
and the Incorporated Federated Associations of Boot and Shoe
Manufacturers of Great Britain and Ireland hold general meetings.
But whether this system is maintained or not, many of the great
national federations are managed mainly by a Central or National
Council, an Executive Committee or Management Board, and
various standing committees. There are also general meetings of
members in the various districts, together with district or regional
committees.
National Councils are usually large bodies, often consisting of
between 40 and 130 members. They include one or more representatives from each district or federated association, the number
of representatives of any district being based upon its relative

88 • INDUSTRIAL RELATIONS IN GREAT BRITAIN
importance in the industry. 1 Voting power on major questions
is also determined according to the relative importance of each
district. Regular meetings are usually held each quarter or halfyear for the determination of general lines of policy; some constitutions provide for extraordinary meetings and a few stipulate that
no step of importance shall be taken without a meeting of the
Council. 2 The Executive Committee or Management Board is a
much smaller body, often with about fifteen to twenty-five members,
which usually meets once a month; in many federations it is
mainly responsible for policy. Details of policy and administrative
matters are dealt with by an Administrative or General Purposes
Committee. Other committees include a Finance Committee, a
Legal and Parliamentary Committee, and a Labour Committee.
The Labour Committee, sometimes known as the Conference
Committee, deals with the policy to be adopted in labour matters
and often represents the federation in negotiations with workers'
representatives.
National federations vary considerably in the extent to which
local autonomy is retained b y the federated associations in the
districts, but in many industries the tendency in recent years has
been to increase the powers of the central organisation. As in
the trade union movement, a considerable measure of autonomy
is often retained by Scottish associations affiliated with federations
covering Great Britain and Ireland. The constitutions of some
federations limit the authority of the central organisation by
providing that on certain major questions a general meeting of
members shall be called or a referendum made to all the districts
or federated associations. Thus, in many federations decisions
leading to a lock-out or general cessation of work may not be
taken by the National Council or Executive until the matter has
been referred to the district organisations; some constitutions
require the approval of a two-thirds majority of the recorded
votes of members of the various districts before a lock-out may
be ordered. On the other hand, provision is usually made that
no step of general importance to the industry shall be taken by
a district association without previously consulting with the
central organisation.
1
The Shipping Federation combines two bases of representation, one of t h e
districts and the second of the great companies which are members.
2
I n some federations it is t h e Executive Committee which must meet, while in
others a general meeting of members must be called.

EMPLOYERS' ORGANISATIONS

NATIONAL CO-ORDINATION

Employers' organisations in the different industries have only
in comparatively recent years set up machinery for the co-ordination
of their activities. Also, whereas the trade union movement has
concentrated the functions of co-ordination almost entirely in the
Trades Union Congress, the employers have established two
bodies for this purpose, the National Confederation of Employers'
Organisations for labour matters and the Federation of British
Industries for economic and commercial questions.
In the present section an account is given of these two bodies
only, although it should not be overlooked that employers cooperate in other organisations also. Among these is the Association
of British Chambers of Commerce, the chief objects of which are
to consider questions concerning commerce, manufactures and
shipping, to collect and disseminate information on these questions,
to undertake the settlement by arbitration of disputes arising out
of commercial transactions ; to bring the opinions of the Association
before Parliament and the Government, and to promote or oppose
legislation in Parliament. Although the Association gives its
attention mainly to questions of production, trade and transportation, it expresses its views on labour matters to the Government and to committees and commissions of enquiry. In this
way it has indicated its attitude upon unemployment, unemployment insurance, and hours of labour. During the depression it
favoured a reduction of costs of production by a lowering of the
high wage rates paid in the sheltered trades, a reduction in the
scale of unemployment benefits and changes in the system of
unemployment insurance so as to prevent abuses, drastic reductions in national and local public expenditure ; it has opposed the
ratification of the Washington Hours Convention. The Association is a member of the International Chamber of Commerce and
of the Federation of Chambers of Commerce of the British Empire. 1
Industrialists are also organised in the National Union of Manufacturers, founded in 1915, the policy of which includes the maintenance of a considered tariff to safeguard British industries against
1
The Association was founded in i860 when some twenty local Chambers of
Commerce joined together to set up a national body. The number of Chambers
of Commerce in the Association in 1936 was over 100 in t h e chief centres of Great
Britain and Ireland and about a score of British Chambers in foreign countries
were also affiliated; the total recorded membership of all affiliated Chambers is
about 50,000 firms and individuals.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

foreign competition, the encouragement of trade and industry
within the Empire, the continuation of Society on individualist
as against Socialist principles and of a capitalist as against a
collective basis of industry, the support of or opposition to legislation affecting British industry (including opposition to Government
interference in hours of labour), and the encouragement of economy
in expenditure by Government departments and municipalities.1
For the purpose of this study the National Confederation of
Employers' Organisations is of chief importance, but some account
of the Federation of British Industries is also necessary. The
Federation is associated with the Confederation in a scheme,
introduced after the general strike in 1926, of consultation with
the General Council of the Trades Union Congress, a sketch of
which is given in Chapter VIII. In other matters there is cooperation between the Federation and the Confederation. This
is facilitated by the fact that many great associations of industrialists are members of both bodies. On various questions both
labour and economic and commercial issues are involved which
cannot be treated independently, and on these there is liaison
between the two bodies of employers.2
National Confederation of Employers' Organisations
The National Confederation was formed at the end of February
1919 to co-ordinate the work of employers' organisations which
deal with labour matters in the different industries, and on these
questions is largely the employers' counterpart of the Trades Union
Congress. Previously the various employers' organisations had
preferred to maintain independence in dealing with working
conditions and had not merged any of their powers in a national
body. When the Federation of British Industries was formed in
1916 it decided that labour matters should not be normally included
in its functions.3 But the growing importance of labour and social
legislation affecting industry and the frequency with which it
1
The Union supplies information to its members on a wide range of questions,
including oversea markets, customs duties, insurance, patents and taxation.
I t has a considerable membership of individual firms, including many large undertakings, together with more t h a n twenty associations of manufacturers, many of
which are small. Its original title was the British Manufacturers' Association, the
present title being adopted in 1917.
2
During the first few years after its formation the Confederation appointed
representatives on the Executive Council of the Federation and a joint committee
was also set up.
3
Its intelligence service compiles information on conditions of labour.

EMPLOYERS' ORGANISATIONS

became necessary to bring the views of organised employers before
the Government resulted in a change of attitude. The need for
a representative central body of employers was particularly evident
during the National Industrial Conference called by the Minister
of Labour early in 1919 to examine the problems of industrial
unrest, and the National Confederation was constituted immediately
after this Conference.
The Confederation has a membership of between forty and fifty
associations or federations in the different industries. It is believed
to include all the great employers' organisations which deal with
labour matters. It differs from the Federation of British Industries
in affiliating organisations only and not individual firms. The
claim has been made that the Confederation represents the
employers in enterprises normally employing fully 7,000,000
workpeople. One of its chief activities is to make representations
to the Government on labour matters affecting the general interests
of employers' organisations with the object of ensuring, so far as
possible, that new legislation and the administration of existing
legislation shall not be prejudicial to these interests. Each member
organisation, however, retains the right to make direct representations to the Governments on matters specially concerning its
own industry; also collective bargaining tor the determination of
wages and other working conditions is reserved for the organisations
within each industry. In addition to bringing its views before the
Government, the Confederation represents organised British employers on labour matters in the international field. Thus, it is
actively associated in the work of the International Organisation
of Industrial Employers, it is the most representative organisation
for the purpose of nominating the British employers' delegate to
the International Labour Conference, and its delegate has, by
election, continuously held a seat on the Governing Body of the
International Labour Office.
The Confederation holds general meetings at which the representation of each affiliated organisation is determined in relation to
its importance. In addition, there is a smaller body (the Council)
and a General Purposes Committee, which largely determine questions of administration and policy. It is not possible, however,
to describe more fully the system of administration, as the Confederation has always regarded the details of its constitution,
membership and methods of finance as domestic matters and the}'
have not been disclosed to the public.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

The Confederation usually avoids publicity; it publishes no
general reports on its activities and has only at rare intervals issued
statements to the press. But although the Confederation seldom
comes into the open, it exercises great authority and wide influence.
I t would probably be no exaggeration to say that no important
measure on conditions of labour has been introduced into Parliament during recent years without powerful representations having
been made to the Government by the Confederation. The Confederation has also submitted evidence to Government Committees
and Royal Commissions set up to conduct investigations into
questions affecting labour conditions.
In consequence of its avoidance of publicity, authoritative
information about the Confederation's policy is meagre, being
contained in the statements which the organisation has published,
in the evidence which it has submitted to public committees and
commissions and in the speeches of its representative at the
International Labour Conference and on the Governing Body of
the International Labour Office. The chief features of several of
the statements are summarised below as an indication of the
Confederation's policy.
One of the published statements is a Memorandum, issued in
June 1927, which deals with the Washington Hours Convention
with a view to justifying the opposition of British employers to
ratification. 1
The Memorandum indicates that Great Britain had fulfilled her obligations under the Treaty of Peace and was quite free to refrain from
ratifying the Convention. Reference is made to Great Britain's position
with a working week of forty-eight hours or less in almost all industrial
undertakings, and it is noted that this had been attained, not by legislation, but by voluntary collective agreements. Great Britain is stated
to have been the pioneer of the principle of the forty-eight-hour week.
British employers have demonstrated their loyal adherence to this
principle and " have no desire or intention to depart from it ". Preference is expressed for the elasticity of voluntary agreements rather than
for the rigidity of the Convention and the State control which it would
involve. Further, the view is held that the Convention and the Treaty
of Peace provide no adequate guarantees that the Convention would be
interpreted and applied uniformly in the different countries and it is
suggested that interpretation and application would be stricter and
more rigid in Great Britain than in some other countries. Chiefly for
these reasons it is considered that ratification would be against the
interests of British industry and therefore of the workers and of the
1
The Washington Hours Convention : A Statement of the Facts, by the National
Confederation of Employers' Organisations, London, 1 J u n e 1927.

EMPLOYERS' ORGANISATIONS
whole nation.
gested.1

The necessity for a revision of the Convention is sug-

Similarly the representatives of the Confederation have opposed
recent proposals before the International Labour Conference on
the forty-hour week.
Two important statements indicating its policy were issued by
the Confederation in 1931, one in February dealing with the general
industrial situation, and the other in May on the subject of unemployment insurance. The former statement was published during
a period of intense industrial depression with the object of enabling
public opinion to realise the gravity of the situation, such
realisation being, in the Confederation's opinion, the first step
towards national recovery. The statement also proposed various
remedies.
It indicated that the gravity of the situation lay in the fact that, for ten
years, Britain had been continuously unable to find employment for
10 per cent, of its people, even when world trade was good and other
countries were not suffering from unemployment. Emphasis was laid
upon the serious decline of the export trade which was at the foundation
of British industrial depression. The chief cause of this decline was that
British costs of production, and therefore selling prices, were too high
when compared with those of foreign competitors. Indexes taken
from public documents were quoted to show that national taxation per
head, real wages and the cost per head for social services were much
higher in Great Britain than in competing countries in Europe. Great
Britain could not set up and maintain standards of living and public
expenditure regardless of those of its competitors without paying the
price of unemployment. Nor did the Confederation look to the removal
of the disparities and the recovery of British industry from the activities
of the International Labour Organisation.
The Confederation therefore proposed measures for reducing
British costs of production. Rationalisation was considered
necessary, b u t this alone could not reduce costs sufficiently to cure
unemployment, and the Confederation made reference as follows
t o difficulties arising from State intervention :
Also industry was prevented from reducing costs because of rigidity due
to State action. This action had led to (1) maladjustment of wage levels,
(2) excessive public expenditure, and (3) legislative restrictions on
industry. Before the war it was the export industries, sensitive to
world conditions, which set the general standard of wage levels, but
since the war it had been set by the non-export industries. By fixing
1
A reply to the Memorandum was prepared by a Joint Committee of the League
of Nations Union and the British Section of the International Association for
Social Progress and published in November 1927.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

high rates of unemployment benefit, by paying grants to local authorities
which enabled them to pay higher wage rates than the export industries
could afford and by the extension of statutory wage fixing machinery,
the State had in large measure determined the general standard of wage
levels. With the high rates of unemployment benefit it was only natural
that the trade unions were inclined in wage negotiations to take less
account of unemployment. A protest was raised against the political
abuse of the unemployment insurance system " which has now degenerated into undisguised relief ", and which " has now for many years been
sapping the independence and enterprise of the people ". The Confederation therefore recommended that rates of unemployment benefit
should be immediately reduced by 33% per cent, and that the system
should be restored to a strict insurance basis by withdrawing from it the
" relief " element which was involving a heavy burden of debt upon
the fund.
The Confederation also recommend that :
(1) the Government should reduce its wage levels so as to bring them
into relation to those of the exporting industries and should
bring pressure upon the local authorities to do the same ;
(2) the power of Trade Boards to fix wages compulsorily and enforce
them by criminal proceedings should be limited to an " antisweating " rate for unskilled workers and should not include the
higher rates for semi-skilled and skilled workers ;
(3) there should be an immediate and substantial reduction in public
expenditure, national and local; a Committee on National
Economy should be set up and one of its tasks should be to fix a
maximum inclusive sum, considerably less than that spent in
1929, out of which the whole cost of the social services must be
met;
(4) until the unemployment percentage had been reduced to 5 per
cent., no legislation should be introduced or proceeded with
which would in any way add to the burdens or restrictions on
industry.
The statement summarised above on the industrial situation and
the remedies proposed included references to unemployment insurance, but a more detailed report on this subject was submitted
by the Confederation in May 1931, as evidence to the Royal
Commission on Unemployment Insurance.
Attention was directed to the persistent and deepening depression of
British industry throughout the past ten years, to the fact that the total
recipients of unemployment benefit and public relief along with their
dependants represented in the course of a year some 20 per cent, of
the entire population of the country, and to the burden of debts incurred
by the national and local authorities in paying relief and benefits. The
criticism was renewed that the whole character of the insurance system
had changed from true insurance to public relief. Money rates of payment to the unemployed had been greatly increased and their real
value had risen still more owing to the fall in the cost of living.

EMPLOYERS' ORGANISATIONS

In the Confederation's view the present methods had " fostered a
belief that this country has unlimited resources which can enable it to
act as a universal provider against all ills by paying weekly benefits
which are demandarle as a legal right, without conditions attached and
without reference either to the recipient's own contributions or his needs.
Such a belief is the negation of that spirit of thrift, independence and
sense of individual responsibility which unemployment insurance was
intended to develop, and we go so far as to say that the fostering of
that belief is insidiously sapping the whole social, financial and industrial
stability of the country ".
In proposing remedies, the Confederation supported the principle of
a national compulsory contributory system of unemployment insurance,
but recommended changes, which may be summarised as follows:
(1) the Exchequer should assume entire responsibility for the whole
of the debt under the existing system ;
(2) the weekly contributions of the worker, the employer and the
State to the fund should be equal and the total contributions
should be reduced by 33 >/, per cent, of the present rates; it is also
suggested that benefits might be reduced by 33 % per cent ;
(3) the total number of benefits which any individual could draw
should bear a direct ratio to the number of contributions he had
paid, and there should be a definite limit to the number of
benefits any individual could draw in a year;
(4) a Board of Trustees should be appointed to safeguard the solvency
of the fund ;
(5) outside the scope of the unemployment insurance system relief
of unemployment, the cost of which should be borne mainly by
the Exchequer, should only be given after adequate enquiry and
assessment of need; relief should not be given to any applicant who refused to accept work which he was reasonably
capable of performing, even though it was outside his normal
occupation. Fairly full summaries have been given of the Confederation's
statements and recommendations, both because of the importance
of the organisation and of the light they throw upon its policy.
Many of the recommendations were, however, made during the
economic depression, and do not necessarily represent the Confederation's policy in more prosperous periods. Also, some of
them were given partial application by the National Government
which came into office in the autumn of 1931.
Mention has already been made of a scheme of co-operation
between the Confederation, the Federation of British Industries
and the General Council of the Trades Union Congress. This had
its origin in a series of meetings, generally known as the TurnerMelchett Conference, between a number of leading industrialists
and representatives of the General Council of the Trades Union
Congress. An account of the scheme is given in Chapter VIII.

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Federation of British

Industries.

Unlike the National Confederation of Employers' Organisations,
the Federation of British Industries publishes information about
its constitution, membership, policy and activities. 1 It is essentially
an organisation of British manufacturers set up to promote and
safeguard their interests both at home and abroad. As has been
indicated earlier, it deals chiefly with the problems of production
and trade, and, although it claims that nothing-concerning the
welfare of British industry falls outside its scope, it does not take
any direct part in matters affecting wages and conditions of labour.
The Federation is a war-time development, being established
in the autumn of 1916.2 Individual firms and associations of
manufacturers may be members. Its membership has grown
from some 500 individual firms and 78 trade associations in October
1917, a year after its formation, to 2,685 firms and 178 associations
in November 1937. Almost all important manufacturers' associations i n ' t h e country are affiliated. Exact information is not
available as to the number of workpeople employed by firms
covered by the Federation, b u t it is approximately 5,000,000.
Contributions of member firms and associations to the Federation
are based on the numbers of persons they employ.
Constitutionally the chief bodies for general control, determination of policy and administration of the Federation are the annual
general meeting of members, the annually elected Grand Council
and the Executive Committee. The Grand Council is a large
body of several hundred members, twenty-five of whom are district
representatives, but the great majority represent industrial groups
and sub-groups ; the representation of each industry is proportional
to its importance in the membership of the Federation, coal
mining, engineering, iron, steel and allied trades, and textiles
having the largest representation. Associations are represented
on the basis of one member for every 20,000 employees or part
thereof covered, and individual firms on the basis of one member
for every 40,000 employees or part thereof covered by their
industrial sub-group. In the Executive Committee, which has
more than a hundred members, the representation of districts and
1
The chief sources of information are the Federation's Register of British
Manufacturers, its Bulletin—British Industries—and
its Annual Reports.
2
It took over the activities of the Employers' Parliamentary Association, an
organisation formed shortly before the war mainly to express the views of employers
on legislative proposals.

EMPLOYERS' ORGANISATIONS

industries is on somewhat similar lines to that in the Grand Council,
but district representation is relatively greater than in the Grand
Council and industrial representation is generally one member for
every 100,000 employees covered by each industrial group or
sub-group. In addition to these central bodies and its permanent
staff in London, the Federation has organisations with a resident
secretary in the various districts; these have committees and
annual general meetings. The Federation also has paid commissioners and correspondents in many foreign countries for the
purpose of keeping contact with trade conditions abroad.
The Federation undertakes two distinct types of activities: it
renders special services to its member firms and associations and
represents manufacturers co-operatively in relation to Governments and other interests at home and abroad. The special
services include the furnishing of information and advice about
such questions as rates and taxes at home and abroad, currency,
foreign and Dominion customs duties, transport charges, insurance
rates, patents and trade marks, oversea trade openings and
advertising abroad. It also compiles information on economic
conditions and on wages and conditions of employment at home
and abroad. In representing the collective views of British
manufacturers the Federation takes action when Bills affecting
industry are introduced into Parliament, gives evidence before
public Committees and Commissions of Enquiry and endeavours
to secure the support of public opinion for its policy. For example,
early in 1931 it published a statement of its policy for the rehabilitation of British industry. It proposed thé establishment of a
carefully adjusted system of tariffs which would combine the
protection of British industrial interests at home with the widest
possible extension of inter-Empire preference; it also called attention to the heavy burden of social services and other forms of
public expenditure and recommended a drastic reduction in the
burden of taxation and other charges borne by British industry.
The tariffs, Imperial preferences and measures of economy adopted
by the National Government in 1931 and 1932 were along the
lines of the Federation's proposals. Since the formation of the
National Confederation of Employers' Organisations, the Federation has generally refrained from expressing any views upon
conditions of labour, but, as already stated, it is participating on
economic, commercial and financial matters in a scheme of consultation with the Trades Union Congress.
7

INDUSTRIAL RELATIONS IN GREAT BRITAIN
POLICY

Many indications of the policy of British employers' associations
have been given in reviewing the activities of the National Confederation of Employers' Organisations. It is, therefore, necessary
here only to summarise the chief features:
(i) Opposition is shown to extensions of State regulation in
industrial relations, and curtailment of many existing regulations
is demanded. The view is generally held that " third-party
intervention " should be avoided, that private enterprise and
capitalist control should be maintained and that conditions determined by legislation are not sufficiently adaptable to changes in
economic conditions. Preference is shown for the greater elasticity
of collective agreements compared with the rigidity of legislation.
Among the consequences of this attitude has been resistance to
proposals for the nationalisation or public control of various
industries, e.g. the mines and railways. It offers one of the
main explanations of the opposition shown to ratification of the
Washington Hours Convention.(2) Organised employers accord recognition to trade unions for
purposes of collective negotiation. Trade union recognition is,
of course, implied in the preference expressed by organised employers for collective bargaining rather than for legislation, but
employers usually maintain the principle of the " open shop ",
that is, the right of an employer to give employment to any worker
whether a trade unionist or not.
(3) During most of the period from 1921 to 1933 a policy of
wage reduction was pursued. The view was held that wage rates
were too high, especially in the sheltered industries and services,
including national and local government services. The standard
of living which had grown up was believed to be too high in
relation to the national income and, therefore, required to be
reduced. References were frequently made to the lower levels of
wages in many competing countries. In the period of growing
prosperity, increasing employment, and rising prices from 1935 to
1937, a policy of agreeing to wage increases was adopted in many
industries, following negotiations with the trade unions.
(4) On the question of the length of the working week, the
reduced hours fixed by agreements in 1919 and 1920 have not

EMPLOYERS' ORGANISATIONS

been generally attacked by organised employers. In one or two
industries successful demands for longer hours were made some
years ago. Also, some unorganised employers, and certain organised employers, introduced longer hours in their undertakings by
individual action, especially during the depression. More recently
some industries have agreed to reduced hours, but general opposition has been shown to proposals for a forty-hour week.
(5) Recently, the employers' organisations in several industries
have agreed to schemes providing for annual paid holidays. The
latest important extension of this system was in the engineering
industry by collective agreement in 1937.
(6) Measures of economy in national and local administration
and expenditure are advocated as a means of reducing the burden
of rates and taxes borne by industry. In this connection demands
are made for diminution of expenditure upon various public social
services, and reduction of employers' contributions to social insurance funds.
(7) The principle of rationalisation of industry is supported, but
in practice in various industries the individualistic attitude of
many employers greatly hinders the successful adoption of amalgamation schemes and other methods of reorganisation.
(8) Opposition is shown to various trade union restrictions,
and also to participation by workers in the functions of management.
(9) In the economic field, a successful demand was made during
the depression for tariff protection against foreign competition and
for measures of preference within the British Commonwealth of
Nations.

CHAPTER IV

METHODS OF NEGOTIATION BETWEEN TRADE
UNIONS AND EMPLOYERS' ORGANISATIONS
conditions throughout the greater part of British industry
are determined and adjusted by collective agreements between
trade unions and employers' organisations or are much influenced
by the provisions of these agreements. It is the main purpose
of this chapter to review the chief types of machinery for collective
negotiation in the various industries; methods for the joint consideration of general questions affecting many industries are reserved for
review in Chapter VIII.
In the present chapter a short account is given of the development of collective relatiors. This is followed by data on the
number and magnitude of stoppages of work due to industrial
disputes in recent years; although some part of these losses might
have been avoided by improved machinery and more complete
information, they have been maini), due to economic conditions
and to psychological factors on one or both sides such that even
perfectly adapted machinery would probably have failed to prevent
many of the conflicts. The joint machinery set up voluntarily
in some of the chief industries by employers' and workers' organisations for negotiation and the adjustment of differences is then «
described. Special attention is directed to the Joint Industrial
Councils established in a number of industries mainly during the
years 1918 to 1921, as these Councils are the result of a conscious
endeavour to evolve a complete and fairly uniform system of
collective relations in all industries where employers and workers
are strongly organised. A review is given of the trade boards
system established by law to fix minimum wages in industries
where organisation is weak, and of wage boards set up on similar
lines for the regulation of agricultural wages; both these systems
closely resemble collective bargaining, and the various boards
consist largely of representatives of employers' organisations and
trade unions. The system for fixing minimum wages in the coalmining industry in accordance with legislative provisions is also
WORKING

METHODS OF NEGOTIATION

ioi

described. Finally a review is given of the State system of voluntary
conciliation and arbitration.
DEVELOPMENT OF COLLECTIVE RELATIONS

The present position of industrial relations, with mutual recognition and widespread regulation of working conditions by collective agreements, is the result of a century of struggle and evolution.
Throughout a considerable part of the nineteenth century the
employers resisted demands by the trade unions for recognition
and collective bargaining, regarding these as interference with their
liberty. Although the unions were no longer criminal conspiracies
after 1824, employers generally refused to discuss conditions of
labour with the trade unions leaders and for many years collective
agreements were rare. Where, however, an employer was willing
to discuss wages and other conditions with his own workpeople,
the trade unionists among them, though not often formally recognised as such, were able to exercise an influence upon' the terms
of employment.
With the growth of strong craft unions in various trades from
about the middle of the nineteenth century, recognition, first by
individual employers and then by employers' organisations,
became increasingly frequent. Especially during the last three
decades of the century there was a rapid extension of collective
bargaining, and well-organised industries frequently set up joint
machinery for the. settlement of differences. Thus the Royal
Commission on Labour, appointed in 1891 to consider industrial
relations and conditions of labour, referred to the rapid extension
of voluntary conciliation boards and recommended that a Government department might undertake to promote the universal
adoption of appropriate joint machinery. Further progress was
made during the early years of the present century, and by 1914
well-developed methods for negotiation and the settlement of
disputes had been established in many of the chief industries,
including coal mining, iron and steel, engineering, cotton, and boot
and shoe. Also in several branches of industry where wages
were unduly low, trade boards had been set up under the Act of
1909 and a system of joint relations was developed which somewhat resembled collective bargaining. On the other hand, in some
industries, including various branches of transportation, the conflict
over trade union recognition was still raging and no effective joint

102

INDUSTRIAL RELATIONS IN GREAT BRITAIN

machinery was in operation. Thus, the railway companies refused
to negotiate upon conditions of labour with officials of the railway
workers' unions, although they would meet representatives of their
own workpeople for this purpose.
Pre-war joint machinery was usually brought into operation
only when new collective agreements were under consideration
or when a dispute had arisen. Exceptionally, however, in one
or two industries, notably iron and steel, meetings were held at
regular intervals for the adjustment of wage rates in accordance
with sliding-scale agreements.1 A systematic procedure for dealing
with disputes was often formally agreed upon between the two
sides. Thus provision was frequently made that a difference in
any works or locality would be considered by a local joint board,
the constitution of which was defined. If the board should fail
to effect a settlement the dispute would be referred to a district
board, or even to a national board or conference. If these bodies
were unable to reach agreement, provision was sometimes made for
the matter to be submitted to arbitration, whether by using the
facilities offered by the Government under the Conciliation Act
of 1896 or otherwise. Until the agreed procedure had been followed
no stoppage of work was to take place. Usually pre-war negotiations and agreements determining wages and other conditions
of work were local and regional rather than national.
Industrial conditions during the war and especially the growth
of organisation on both sides between 1915 and 1920 led to many
changes in the relations between organisations of employers and
of workers, and to progress in the development of machinery for
negotiation. Among these changes were the almost universal
recognition of the trade unions, a great increase in nation-wide
negotiations and agreements, and an extension of organised collective bargaining to many branches of industry in which, before the
war, methods of regulating conditions of labour had been extremely
chaotic. These features chiefly distinguish present relations from
those in 1914.
The extension of recognition was a consequence partly of the
rapid growth of trade unions in industries where the workers
had been relatively late in building up strong organisations. It
was due in part to the necessity during the war for frequent
1
In the iron and steel industry sliding scales based on the selling price of certain
typical products were adopted.

METHODS OF NEGOTIATION

103

consultations about production and conditions of work between
the Government and representatives of employers and of workers.
The importance of recognition was also emphasised by the Whitley
Committee in 1917, the National Industrial Conference in 1919,
and the Turner-Melchett Conference in 1928 and 1929.x
The major cause of increase in joint machinery for negotiation
and settlement of disputes was growth of organisation on both
sides. It is only rational that when two strong bodies grow up in
any industry they should endeavour to establish systematic methods
for dealing with disputes. In many industries such methods were
agreed upon spontaneously by the two parties. In other industries
some features of the system of Joint Industrial Councils recommended in 1917 by the Whitley Committee and approved by the
Government were adopted. The Committee's plan for joint machinery, applicable with modifications to any industry, and the action
of the Government in bringing this plan before employers' and
workers' organisations, undoubtedly facilitated agreement during
the early post-war years upon machinery for joint negotiation in
many of the newly organised industries.
The Joint Industrial Councils which were formed served to fill
up many gaps in the structure of collective relations; they are
usually nation-wide in scope and cover industries and services
employing about three million workers. In addition to proposing
a given type of machinery, the Whitley Committee recommended
that the machinery should be used for regular frequent discussions
over a wide field of mutual interests of the two sides and not
merely for the settlement of disputes about wages and other working
conditions. As will be indicated in the section dealing with Joint
Industrial Councils, this last recommendation has been adequately
applied only in few industries, and in practice there is usually little
except their origin to distinguish most of the Councils from other
systems of joint negotiation.
In railway transportation, machinery voluntarily agreed upon
was embodied in an Act of Parliament—the Railways Act, 1921,
but in 1935 changes were made in the machinery by agreement
without any legislative recognition. The Coal Mines Act, 1930,
also makes provision for negotiating machinery, although the nature
of the machinery was not approved by organised employers in the
1
Later in the present chapter an outline is given of the recommendations of t h e
Whitley Committee; the National Industrial Conference and the Turner-Melchett
Conference are described in Chapter VIII.

I04

INDUSTRIAL RELATIONS IN GREAT BRITAIN

industry. Under this Act a National Industrial Board was set up,
which includes other members in addition to those representing
the employers and workers in the industry. An important extension
of joint machinery in branches of industry with weak organisations
was effected under the Trade Boards Act, 1918, which supplements
an Act of 1909. During the three years following the passing of
this Act, boards were set up in industries now employing about
a million workers. In agriculture, representative boards have been
set up throughout England and Wales under the Agricultural
Wages (Regulation) Act, 1924.
The general policy of the Government, however, has been to
interfere as little as possible, leaving the regulation of conditions
of work to voluntary bodies. During some years in the world
depression, owing partly to losses in trade union membership, a
greater disposition was shown to consider the strengthening of the
authority of organisations by legislation. " Nevertheless, there is
a strong feeling that the greatest efforts should be made to avoid
this by increasing voluntary organisations."1 Apart from the
above-mentioned Acts, together with legislation limiting the hours
of work of underground miners, and factory and social legislation,
there is little restriction upon freedom in collective bargaining.
Even the inclusion in the Coal Mines Act, 1931, of a provision that
the rates of wages agreed upon by the organisations of miners
and mine owners in the various districts should remain in force
for a specified period could scarcely be claimed as a serious restriction; it did, however, introduce the novel principle of giving
statutory force to rates fixed by collective bargaining. This system
remained in operation only for a short period and was terminated
in 1932,2 but the principle was applied in the cotton manufacturing
industry by legislation passed in 1934. The only other actions
by Parliament on wages have been the passing of a Resolution
by the House of Commons on the payment of fair wages by public
contractors, the extension of this obligation to persons engaged
in carrying passengers or goods for hire or reward by road motor
1

Ministry of Labour, Report for the Year 1934.
Apart from these exceptions, t h e rates of wages and other conditions of labour
determined by collective bargaining are entirely voluntary, unless embodied in
individual contracts of service, but are usually well observed in the industries with
strong organisations. Proposals have sometimes been made t h a t the method
of giving legal force and making applicable throughout an industry agreements
reached by sufficiently representative parties in the industry should be more
extensively used.
2

METHODS OF NEGOTIATION

105

vehicles, and the enactment of legislation setting u p joint bodies
to fix legally binding rates of wages in certain branches of private
industry. 1
The 'Government's policy for many years has been to encourage
the establishment and use of voluntary machinery in the different
industries and, in the event of a breakdown, to offer assistance
b y voluntary conciliation and arbitration, chiefly under the Conciliation Act, 1896, and the Industrial Courts Act, 1919. " I t has
been the deliberate policy of the Ministry of Labour to take every
opportunity of stimulating the establishment of joint voluntary
machinery or of strengthening that already in existence." 2 In recent
years special attention has been given by the Government, in consultation with representatives of the employers and workers, to the
problem of securing effective machinery for regulating working conditions in the road transport industry and the distributive trades, in
many sections of which organisation of employers and workers is weak
and collective relations inadequate. Especially in road transportation the Government has shown that failure to develop effective
voluntary arrangements may involve the institution of statutory
methods and the fixing of working conditions binding upon the
industry.
In many of the chief industries voluntary methods have been
comprehensive and have ensured reasonable co-ordination of conditions. The great extension during the war and in post-war years
of national machinery for collective bargaining was due partly to
the consolidation of local into national organisations in many
industries. It was the result also of the fact that wages and other
conditions in different localities have been increasingly influenced
b y factors which are nation-wide in their operation. When, for
example, the cost of living was rising during the war and up to
the year 1920, demands were made all over the country for increases
in money wages and it was found more expeditious and effective
to deal with them nationally than to conduct a large number of
isolated local negotiations. The same was true during periods of
falling prices after 1920. In many industries wages were adjusted
b y cost-of-living sliding scales based on the Ministry of Labour's
index; in others, which did not adopt an automatic scale, cost-of1
This was done by the Trade Boards Acts, 1909 and 1918, the Coal Mines
(Minimum Wage) Act, 1912, and the Agricultural Wages (Regulation) Act, 1924.
2
Ministry of Labour, Report for the Year 1934.

io6

INDUSTRIAL RELATIONS IN GREAT BRITAIN

living bonuses uniform throughout the country were added to
basic wage rates as the result of ad hoc negotiations.1
The establishment of national systems of negotiation did not,
of course, involve identical wage rates and other conditions throughout the country, and although in some industries uniform conditions
were fixed, in others allowance was made in national agreements
for the requirements of different localities. Nevertheless, in a
few industries the employers have offered strenuous resistance
to national negotiations, especially on wages. The outstanding
example is the opposition of the Mining Association to the regulation
of wages by national agreements. Wage rates which differed
according to district were fixed in the coal-mining industry by
national agreements during the years 1921 to 1926, but during
the 1926 conflict the return to district agreements was a vital
demand of the coal owners, which they succeeded in enforcing.
The miners have, however, continued to press for national agreements, and the issue between district and national agreements is
responsible for some of trie manoeuvres of the miners and of the
coal owners.
Despite the heavy losses suffered in certain periods by British
industry from stoppages due to breakdown of the machinery of
negotiation, the systems which have been developed during the last
sixty years have made remarkable contributions towards industrial
peace. They have given opportunity for the ventilation of grievances at an early stage, fuller consultation, a freer expression of
points of view and, above all, a clearer grasp of facts by both
parties, and by these means have contributed to the reduction of
disputes.2 Sometimes trials of strength occur in industries well
equipped with machinery for negotiation and adequately supplied
with economic facts. But strikes and lock-outs are not lightly
entered upon, especially by great national organisations, being
regarded as a last resort when peaceful methods have failed to
harmonise conflicting principles. Even in the coal-mining industry,
which has an unenviable record of serious disputes, the Royal
1
During the years 1923-1934, when fluctuations in the cost of living were
relatively smaller than in the previous decade, there was a tendency for the
cost-of-living sliding scales to be used less extensively, and for wage changes to be
based upon many other economic factors in addition to variations in the cost of
living. In recent years the number of workpeople whose wages have varied in
accordance with a cost-of-living sliding scale has fallen to little more t h a n a million,
or less than one-half the number about twelve or fourteen years ago.
2
Survey of Industrial Relations, p . 48.

METHODS OF NEGOTIATION

107

Commission (1925) stated that " if stoppages are numerous, it is
satisfactory to remember that the difficulties that are settled
without stoppages, through the conciliation machinery established
by the industry itself, are probably a hundred times as numerous ".1
Writing after the chaotic conditions of 1926 the Turner-Melchett
Conference, to which reference is made in Chapter VIII, stated
that in its opinion the existing machinery for the avoidance of
strikes and lock-outs " has, on the whole, been successful in dealing
with the great majority of disputes. On the other hand, this
does not blind us to the fact that during the last few years the
existing machinery has failed to deal with certain disputes of a
serious magnitude ". Since then a decade has elapsed during which
the processes of settling disputes without stoppages of work have
been exceptionally successful. This has been due not so much to
improvements in machinery as to increased recognition of the
many common interests of both parties, more responsible leadership, mutual understanding, and, in some industries, a more
comprehensive review of data upon the economic situation.
Before proceeding to describe some of the chief types of machinery
for collective bargaining established in various industries, data are
given showing the number and importance of industrial disputes
during recent years.
INDUSTRIAL DISPUTES INVOLVING STOPPAGES OF WORK

Strikes and lock-outs are spectacular and rightly attract wide
public attention, but the direct losses involved are probably less
than the lowering of production due to discontent and friction
while the worker is at work. The strikes and lock-outs are, however,
an index of this discontent. In Great Britain and Northern Ireland
the average number of workpeople involved in stoppages during
the forty-four years from 1893 to 1936 for which figures are available
was about 558,000, or less than 4 per cent, of all workers. In this
period the number of working days lost, i.e. the number of workers
involved multiplied by the duration of stoppage, was formidable,
the average being about 13,622,000 per annum. Expressed in
relation to the annual total number of working days of all workers
the figure seems much less serious: it represents only about one
day for all workers in the country, and, apart from the discon1

Report, p. 113.

io8

INDUSTRIAL RELATIONS IN GREAT BRITAIN

tent of which it is an index, would only be the equivalent of an
additional public holiday. The time lost from strikes and lockouts is very much less than that resulting from sickness and
unemployment.1
The average number of workers involved and of working days
lost was much greater during the early post-war years than before
the war. During the eight years before the war (1907-1914) the
yearly average number of workpeople involved was about 597,000,
and the average number of working days lost was 12,030,000.
In the eight years from 1919 to 1926 the figures were 1,383,000 and
about 44,566,000 respectively; that is, the average number of
workers involved had more than doubled and the average annual
number of working days lost had almost quadrupled. There was,
it is true, a considerably larger number of workpeople in employment in the years shortly after the war than in those immediately
preceding the war, but the losses from disputes had increased in
much greater proportion. A considerable part of the increase was
due to the exceptional year 1926 when the protracted stoppage in
the coal-mining industry and the General Strike took place; even
excluding this year, however, the early post-war losses were double
those before the war. By contrast, the decade following the General
Strike and coal stoppage was more peaceful, if measured by the
number of working days lost, than any other years in the period
from 1893 for which statistics are available.
Losses from stoppages are chiefly due to a small number of
important disputes (about 2 per cent, of all disputes) involving
large numbers of workers. The coal-mining industry alone has been
responsible since the war for over 30 per cent, of the workers involved
and for about 70 per cent, of the total working days lost by all
British industries; during the first post-war decade the average
annual loss in working days from disputes involving stoppages in
this industry was about 22,000,000, or more than three weeks per
miner per annum, but subsequently more peaceful conditions have
prevailed. Other industries in which serious losses were incurred,
though very much smaller than in coal mining, include the building,
metal, engineering, shipbuilding and textile industries, and transport; several of these industries have enjoyed years of industrial
peace, with the disturbance of an occasional big dispute.
1
Statistics of industrial disputes involving stoppages of work during the years
1893 to 1936 are given in Appendix V.

METHODS OF NEGOTIATION

109

The chief cause of disputes has been wage questions, which
have been responsible for about two-thirds of all disputes; they
have also involved by far the greatest number of workpeople.
Other causes have been the employment of particular classes or
persons, questions involving trade union principles, details of
working arrangements, discipline and hours of work. Relatively
very few disputes have taken place about hours of labour during
recent years, except in 1919 when important reductions in hours
were made in many industries. During 1934 to 1937 there were
many unofficial strikes, that is, strikes undertaken by bodies of
workpeople without the approval of the trade union in the industry. 1
Since the war, disputes involving about two-thirds of all workpeople
directly involved in stoppages have been settled by compromise;
compromise solutions are especially frequent in the larger disputes.
Stoppages involving about two-thirds of all workers in strikes
and lock-outs are terminated by direct negotiation between the
parties or their representatives ; settlements are effected for about
one-fifth of the workers by means of third-party conciliation or
arbitration.
The chief cause of the increase in the severity of industrial
disputes shortly after the war was the exceptional economic instability of the period and the difficulty of adjusting money wages to
considerable changes in the general level of prices. The severe
depression experienced by m:>st of the exporting industries was an
aggravating factor. In the depressed industries the low wages
and their contrast with wages in the sheltered home-market
industries stiffened the resistance of the workers to further reductions which economic conditions in these industries often demanded.
A further factor was, no doubt, the development, accelerated during
the war, of national organisations of employers and workers. A
breakdown of negotiations between such organisations involves
serious conflict, although its usual effect is to prevent disputes by
providing a final stage of negotiations. An increased sense of
responsibility in leadership, improved machinery for negotiation,
and greater stability of prices are some of the factors which have
resulted in a rapid diminution in the losses from industrial disputes
in recent years.
1
The Minister of Labour stated in the House of Commons t h a t in 1936 the
number of industrial disputes not officially recognised by the trade unions concerned
was 435, involving 210,000 workpeople and a loss of about 900,000 working days,
or about one-half of the totals for all disputes.

INDUSTRIAL RELATIONS IN GREAT BRITAIN
MACHINERY FOR COLLECTIVE BARGAINING

In the present section the chief features of machinery for collective
bargaining and adjustment of disputes are illustrated by the
methods used in coal mining, railway and road transportation,
shipping and in the iron and steel, engineering, cotton, building,
and hoot and shoe industries.2 Most of these are strongly organised
industries, usually with a long record of joint relations. The methods are entirely voluntary arrangements established by agreement
between the organisations concerned, except for certain statutory
provisions for coal mining. As already stated, a statutory system
is also in operation for the railway traffic grades, but it is essentially
voluntary, as the Act of Parliament—the Railways Act, 1921—
merely gives statutory effect to an agreement, subsequently
modified, between the railway companies and the railway workers'
unions.
It will be seen that, although there are often common features,
the machinery here described differs from industry to industry,
being adapted to varying industrial conditions and to differences
in the evolution and attitudes of the organisations of employers
and workpeople. In some industries local or regional machinery
plays the leading rôle, but more frequently the chief decisions are
taken by national bodies. Machinery also varies according as an
industry is localised or is distributed throughout the country. In
some industries the machinery deals with all questions of working
conditions, including general agreements on wages and hours,
the application of these agreements in particular districts and
establishments, and disputes which arise upon a wide variety
of questions within the establishments; in other industries, wages,
hours and similar matters are reserved for ad hoc conferences.
There is also variation in the extent to which the different industries
invite impartial arbitrators or conciliators to assist in effecting
settlements when deadlocks arise. In some industries agreements
provide for the regular use of this method as a last resort, while
in others which have not adopted this system ad hoc agreements
are often reached for such intervention for the settlement of a
particular dispute. The machinery in operation has been successful
1

See Survey of Industrial Relations, pp. 268 to 279.
The system of Joint Industrial Councils is reserved for separate treatment
later.
2

METHODS OF NEGOTIATION

in settling without a stoppage large numbers of disputes arising in
particular establishments or districts, and also national differences.
The chief losses from strikes and lock-outs since the war have
been due to occasional clashes on major issues between the great
national organisations of employers and workers.
Coal Mining
The coal-mining industry has evolved during a period which
extends back to about 1870 a highly developed system of joint
machinery for the settlement of disputes. This industry has also
been well supplied, especially since the war, with the facts of its
economic position by a succession of Royal Commissions and
committees of enquiry. In view, however, of the frequence and
extreme severity of the stoppages from which British coal mining
has suffered, it is evident that machinery and facts alone are not
sufficient to ensure the maintenance of industrial peace if psychological relations between the two parties are unsatisfactory, if
there is a clash of opinion upon vital economic and political
principles, and if economic conditions are difficult.
Although the Mining Association and the Miners' Federation are
exceptionally powerful national organisations, they are both federations of local organisations, and the chief machinery for negotiation
is in the various districts. The operation of this machinery is
facilitated by the large measure of autonomy retained by the
district organisations both of coal-owners and of miners. The
systems of negotiation vary in detail from district to district, but
there are many common features. Thus the workers and the
management of each colliery endeavour to settle questions of
purely local interest by joint discussion between the management
and a deputation of the workers. If they fail to reach agreement
the dispute is referred either to a special joint committee or to a
District Conciliation Board consisting of equal numbers of owners'
and miners' representatives. In some districts the Board has an
impartial chairman or umpire who arbitrates upon the matter
in the event of disagreement by the Board ; the parties are, however,
under no obligation to accept the umpire's decision. There is no
system for the settlement of local or district matters by a national
body in the event of final disagreement in the district, although
districts may refer disputes for investigation and report by the
Coal Mines National Industrial Board constituted under the Coal
Mines Act, 1930.

112

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Questions affecting a whole district and not merely a colliery or
locality within the district are also usually considered by the
District Conciliation Board. The most difficult problem with
which these Boards deal is that of determining rates of wages, and
this question was made more complicated some years ago by several
changes in hours of work. From 1921 to 1926 general principles
of wage regulation operative in all districts were adopted by national
agreements and these were applied by joint district boards of similar
constitution to, and often identical with, the District Conciliation
Boards.1 National wage agreements came to an end on the
insistence of the owners after the struggle of 1926, but the workers,
compelled by exhaustion to accept district agreements, have not
ceased to demand a return to national regulation. The strength
of this demand is based partly on the general trade union principle
of extending the scope of collective agreements, on a desire to
reduce wage inequalities and to increase the power of the Miners'
Federation, and on the relation of national wage regulation to the
miners' programme for national ownership and control.2 The
opposition of the owners to national wage agreements is no doubt
determined partly by their desire to maintain differences in working
conditions corresponding to variations in economic and mining
conditions from district to district, and by their distrust of anything which would tend towards, or facilitate the establishment
of, national ownership and control.
The system of district agreements restored after the 1926 conflict
was modified by the Coal Mines Act, 1930. This Act provides
not only for regulation of the production and sale of coal and the
reorganisation of the coal-mining industry but also for the constitution of a Coal Mines National Industrial Board to deal with wages
and other conditions of labour.3 The Board of Trade was empowered to constitute this body, which was to consist of seventeen
members. Before appointing the members, except the impartial
chairman, the Board of Trade was required to consult the Mining
Association about six members, the Miners' Federation about six
members, the General Council of the Trades Union Congress, the
Co-operative Union and the National Confederation of Employers'
1
The same, or closely similar bodies, with an impartial chairman, have statutory
powers under the Coal Mines (Minimum Wage) Act, 1912 (see p. 149).
2
A scheme for the unification of mining royalties under national ownership
was devised by the Government for consideration by Parliament in 1937.
3
The Act dealt also with hours of work, certain temporary changes being made
which applied until the Coal Mines Act, 1926, lapsed in July 1931.

METHODS OF NEGOTIATION

113

Organisations about one member each, and the remaining member
was to be appointed after consultation with the Federation of
British Industries and the Association of British Chambers of
Commerce. The owners or the workers in any district may refer
to the National Board any dispute between them about the regulation of wages or other conditions of labour throughout the coal
mines in the district which they have been unable to settle b y
using district machinery. The National Board must then conduct
an enquiry into the dispute and report to the owners and workers
concerned.
Although the National Board has thus no power to regulate
wages and other conditions either nationally or even in settlement
of a district dispute, the colliery owners objected strongly to the
system and, in consequence, the Board of Trade experienced
difficulty in securing members for the employers' side. The
Mining Association refused to suggest names and, with complete
solidarity, each of the other employers' organisations declined to
share in the constitution of the National Board. The chief reasons
given for the refusal of the Mining Association to participate were
that the terms of agreement in any district would be subject to
review by a body the majority of which would be drawn from
competing districts, and that District Conciliation Boards would
be less likely to settle their own differences if these could be referred
to a national body. The Mining Association was unwilling to
discuss wage regulation with the Miners' Federation and maintained
t h a t national negotiations are unsuited to an industry in which
conditions differ so widely in the various districts. 1
Despite the refusal of the employers' organisations to suggest
names, the Board of Trade proceeded to constitute the National
Board b y appointing on the employers' side persons who, though
not representatives of organisations, were willing to serve in their
individual capacity. This evidently weakens the authority of
the Board, which has nevertheless conducted investigations in
several district disputes.
In a temporary settlement of the hours question by legislation
for one year, 1931-1932, a provision was included that wages in
the various districts should not be reduced during the period
1
The Times, 7 Nov. 1930. The coal-owners had suggested t h a t instead of
setting up a Coal Mines National Industrial Board any investigations into the
causes and solution of a district dispute could be conducted b y a Court of Enquiry
under the Industrial Courts Act, 1919.

114

INDUSTRIAL RELATIONS IN GREAT BRITAIN

covered by the Act. Thus, during this year the Government was
responsible for the maintenance of wages throughout the industry.
In the summer of 1932 this responsibility ceased and was replaced
by a guarantee of the employers to the National Government that
they would not reduce wages for a further period of one year.
Subsequently, wages have tended to rise. It is of interest to note
that during negotiations with the coal-owners and coal-miners in
1932 the National Government declared its intention of ratifying
the International Labour Convention on Hours of Work in Coal
Mines, provided the chief coal-producing countries of Continental
Europe would also ratify, and this declaration of policy facilitated
the Government's task of maintaining peace in the industry.
International agreement providing for simultaneous ratification
of the Convention has not yet been reached.
The position in the coal-mining industry has been reviewed
somewhat extensively because of the interest in the struggle over
district or national wage regulation, and because this industry
easily holds the record for losses in industrial disputes. There has
been no national mining stoppage since 1926, but serious strikes
have taken place in several districts, particularly South Wales,
Nottinghamshire and Scotland. Among the chief causes of these
district disputes are wages and hours of work, especially in the
application of the " spread-over " system of distributing permissible
hours over a fortnight in other ways than by shifts of 7% hours a
day. In South Wales and Nottinghamshire bitter disputes have
arisen because of recognition by some colliery companies of so-called
Industrial Unions formed after the 1926 stoppage. Recently, agreements have been reached with a view to solving the difficulties
arising from the existence of rival unions in these districts.
Railways
The system of joint relations for the traffic grades of the railways
differs from that in other strongly organised industries, being a
development of a scheme embodied in legislation (the Railways Act,
1921) which applied methods voluntarily agreed upon by the
companies and the unions.1 The parties were, however, free to
terminate the scheme, or to make changes, and considerable modi1
The system of negotiation between the railway companies and the unions of
railway shopmen (including those employed in railway carriage and wagon construction and repair, and in the signal, telegraph and other non-traffic departments) presents no special features.

METHODS OF NEGOTIATION

115

fications were introduced by agreement in 1935. The system is
more complete than that in many other industries, and ensures that
the community shall be safeguarded as far as possible from stoppages of an essential service.1 Also, being mainly modelled on
the recommendations of the Whitley Committee, the system
resembles that of Joint Industrial Councils. It differs from the
system of district councils in coal mining, its chief negotiating
bodies being national in scope.
The methods used for dealing with questions affecting all railway
companies are distinct from those for questions affecting only one
company. Questions of labour conditions, including wage rates
and hours of labour, which affect all companies, are examined by a
joint meeting of representatives of the four companies into which
British railways were grouped under the Act of 1921 and of the
three railway trade unions (the National Union of Railwaymen,
the Associated Society of Locomotive Engineers and Firemen,
and the Railway Clerks' Association). The agreement incorporated
in the Act of 1921 provided that if the joint meeting failed to reach
agreement, the questions in dispute were to be referred to a Central
Wages Board, which had sixteen members, eight of whom represented the companies, four represented the National Union of
Railwaymen, while the other two railway trade unions each had
two representatives on the Board. Finally, differences which the
Central Wages Board was unable to compose were to be referred
to a National Wages Board. This body included not only representatives of the parties directly concerned but also a number of
other persons. It was composed of seventeen members, six of
whom were representatives of the companies, six were from the
railway trade unions (i.e. two from each of the three unions), four
represented the interests of railway " consumers " or users, and
there was an impartial chairman nominated by the Minister of
Labour. The consumers' representatives were nominated by four
of the bodies invited to suggest names for the representation of
outside interests on the Coal Mines National Industrial Board,
namely the General Council of the Trades Union Congress, the Cooperative Union, the Association of British Chambers of Commerce
and the Federation of British Industries. The National Wages
Board was required to announce the result of its investigation
1
The machinery of joint relations in other essential public services, e.g. gas
and electricity, is also highly developed.

ii6

INDUSTRIAL RELATIONS IN GREAT BRITAIN

within twenty-eight days from the date upon which any question
was referred to it, and there was agreement between the railway
companies and the trade unions that no stoppage should take place
during this period.
A number of important questions were successfully settled by
this machinery, but the National Wages Board failed to reach
any agreement on a proposal made by the railway companies
towards the end of 1932 for a general reduction of wages. There
was a complete deadlock in which the independent chairman was
isolated, and his recommendation for much smaller reductions than
those claimed by the companies was rejected by the unions. The
companies did not attempt to enforce their claim and a stoppage
was avoided, but in March 1933 they gave the required twelve
months' notice to terminate their obligation to submit disputes
to the Central and National Wages Boards. However, they stated
their willingness to continue their participation in the other conciliation machinery incorporated in the Railways Act, 1921, and
expressed themselves prepared to consider with the unions the
setting-up of a new national system for wage regulation. Their
action was based on the view that the existing machinery had
proved defective, and not on a desire to depart from a regular
system of collective negotiation.
In the discussion of new machinery, the unions rejected a proposal
of the companies for a tribunal, composed wholly of independent
members, which would deal only with major issues, sit in private,
and make obligatory determinations; they expressed preference
for a tribunal on which they and the companies would be represented. Finally, at the beginning of 1935, the two parties agreed
to a compromise according to which chief responsibility for settling
disputes rests upon the representatives of the companies and the
unions in joint discussions, but in the event of a breakdown on a
major question the issue is referred to an impartial tribunal, the
decisions of which may, however, be rejected.
The Central Wages Board is replaced by the Railway Staff
National Council, and the National Wages Board by the Railway
Staff National Tribunal.1 The membership of the National Council
is similar to that of the former Central Wages Board, consisting
of eight representatives of the companies, four representatives of
1
The agreement also makes provision for local and sectional conciliation
machinery.

METHODS OF NEGOTIATION

117

the National Union of Railwaymen, and two representatives
nominated by each of the other two unions. The function of the
Council is to consider questions of salaries, wages, hours and other
standard conditions of service within the scope of the national
agreements in operation. Such questions are not normally to be
carried beyond the Council, but issues involving the interpretation
of a national agreement not settled by the Council may by consent
of the parties be referred for decision by the (impartial) chairman
of the National Tribunal, when a representative of each side may
sit as assessor.
Matters of major importance may be referred to the Railway
Staff National Tribunal, which consists of a chairman appointed
by agreement between the companies and the unions, or, failing
agreement, by the Minister of- Labour after consultation with the
parties. In addition to the chairman the Tribunal includes two
other impartial members, one nominated by the companies and
one by the unions.1 For the hearing of any issue each railway
union which is a party to the issue may nominate not more than
one representative as an assessor, and the railway companies
acting jointly may nominate not more than the same number in
all.2 No issue is to be referred to the Tribunal which has not previously been considered by the National Council, and there must
be agreed terms of reference to the Tribunal. The Tribunal's
hearings may be in public if the parties agree or if the Tribunal
itself so decides. Decisions of the Tribunal, together with the facts
and arguments submitted by the parties, are published. They
are not binding on the parties, but it is hoped that in practice they
will be accepted. It is agreed that in no circumstances shall there
be any withdrawal of labour or any attempt on the part of the
employees to hamper the proper working of the railways until
any matter in dispute has been submitted through the proper
channels to the higher management, or until the machinery of
negotiation has been fully utilised. Since the Tribunal was constituted in 1935, it has been successful in settling several major issues,
and the effect of its decisions in 1936 and 1937 has been to restore
by stages all the cuts in wages made at the time of the depression
in 1931, as well as to introduce other improvements in working
conditions.
1
No director or official of any of t h e railway companies and no official or member
of any of the railway unions is eligible for appointment.
2
Assessors do not sign the decisions of the Tribunal.

Ii8

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Labour matters which affect only one railway company are
dealt with by representatives of the company and of the three
railway unions. There is also a system of local, sectional and general
joint councils which deal with the application of decisions reached
by the National Council and National Tribunal, and with efficiency
and economy in the operation of the railways and the welfare of
the workers. In dealing with questions of efficiency, economy and
welfare these councils have entered the wider field of joint relations
proposed by the Whitley Committee.1 This work also bears a
practical resemblance to that which the much discussed UnionManagement Co-operation has developed duñng recent years on
the Baltimore and Ohio, the Canadian National and other North
American railways.
The local councils, which correspond to the Works Councils of
the Whitley Scheme and are called Local Departmental Committees,
are formed for each department or group of grades which has more
than seventy-five permanent workers at any station or depot.
The Committees consist of not more than four representatives of
the railway company and not more than four representatives
elected by the workers in the department or group of grades. In
these, and also in the sectional and general councils, the workers'
representatives are not appointed by the trade unions but are
elected by the whole body of workers concerned. The subjects
considered by Local Committees include methods of improving
efficiency, introduction of labour-saving appliances, welfare of the
workers, and the most convenient arrangement of working hours.
On each railway the various grades of workers are grouped into
not more than five sections, and for each group a Sectional Railway
Council is established. Each Council consists of not more than
twelve representatives elected by the workers and not more than
the same number of representatives of the company. The Sectional
Councils deal with matters similar to those treated by Local
Committees, including co-operation to secure increased business,
efficiency and economy, together with the establishment of principles for recruitment and tenure of service, and the application of
national agreements. Each railway also has a general council known
as the Railway Council, which deals with the same matters as
Sectional Councils provided the matters are of common interest
to more than one section of workers or are referred to it after con1

See p p . i34-!35-

METHODS OF NEGOTIATION

119

sideration by a Sectional Council. Railway Councils consist of not
more than ten representatives of the workers, i.e. two from each
Sectional Railway Council, and not more than ten representatives
of the company.
Road

Transport

In Britain to-day, road transport, whether of passengers or
goods is mainly by motor vehicles, and the present section deals
with this form of transport. The industry is a new one and its
growth has been rapid. Unlike the other industries here reviewed,
the employers' organisations and trade unions represent only a
small part of the industry, collective agreements have only a
limited application, and working conditions, especially in some
sections of goods haulage, are unsatisfactory. In these circumstances
and in view of the contribution which good conditions of work
would make towards increasing public safety on the roads, and also
of unfair competition with the railways, the Government has endeavoured to stimulate the development of organisations and of
machinery for collective bargaining, and also to secure improvements by legislative measures.
Considerable progress has been made in improving working
conditions in the road passenger transport industry, both by
legislation and voluntary agreements. The former severe competition of bus companies has been replaced by regional monopolies
as a result of amalgamations, and this has facilitated the better
regulation of working conditions. The process of amalgamation
received further impetus when in 1928 the railway companies were
granted road powers by legislation and entered extensively into
partnership with the bus companies. In 1929 the railway companies agreed to grant to their road transport workers conditions
of service somewhat similar to those of workers on the railways.
Important provisions for regulating the working conditions of
drivers and conductors of road passenger vehicles were included
in the Road Traffic Act, 1930. The Act set up Traffic Commissioners
for the licensing of public service vehicles (passenger transport),
introduced regulations to prevent excessive hours and to ensure
satisfactory conditions of work for road transport employees,
and provided that the wages paid and the conditions of employment observed by the holder of a licence shall not be less favourable
than those which would have to be paid and observed under the
" fair wages " clause of a Government contract. Any question

120

INDUSTRIAL RELATIONS IN GREAT BRITAIN

concerning this provision, if not otherwise disposed of, is referred
by the Minister of Labour to the Industrial Court for settlement.1
The Act also included regulations to prevent excessive hours among
employees engaged in the road transport of goods.
The system of licences, an important object of which was to
prevent an unnecessary increase in the number of road vehicles
competing for traffic, was extended to the haulage of goods by
the Road and Rail Traffic Act, 1933.2 The Act introduced three
classes of carriers' licences, " A " licences for public carriers, " B "
licences for limited carriers, i.e., those who carry goods either in
connection with their own trade or for hire and reward, and " C "
licences for private carriers limited generally to carrying goods only
in connection with their own trade. The observance of fair wages
and conditions of employment which had been applied by the 1930
Act to road passenger transport was extended to drivers and attendants employed by goods haulage undertakings holding " A " and
" B " licences, and any questions in dispute are similarly referred
to the Industrial Court for settlement.
As, owing to lack of organisation and collective agreements,
the wages and conditions of work varied widely not only from district
to district but also between undertakings in the same area, it was
recognised that observance of the " fair wages " obligation would
be facilitated by the existence of comprehensive machinery to
establish standards of labour conditions for the industry. With this
object in view the Minister of Labour consulted representatives
of the employers and workers, and agreement was reached to set
up a National Joint Conciliation Board for the Road Motor Transport Industry (Goods) consisting of representatives of the two
sides, with an independent chairman.3 After consultation with
district conciliation boards, the Board reached agreement on rates
of wages, a 48-hour guaranteed week, overtime rates, subsistence
allowances and payment for holidays. The Board, however, was a
voluntary body, its determinations had no statutory authority, and,
in the absence of strong organisations of employers and workers,
the provisions of its agreements were widely ignored. Holders of
1

An account of the Industrial Court is given on page 151.
This followed a Conference on Road and Rail Traffic in 1932, which was
presided over by Sir Arthur Salter.
3
The Board was set up for England and Wales but a corresponding joint board
for Scotland was constituted. For undertakings with " C " licences joint negotiations
were undertaken in various localities, notably London, for the purpose of regulating
working conditions.
2

METHODS OF NEGOTIATION

121

" A " and " B " licences also complained that they were subject
to unfair competition from many holders of " C " licences, who were
not subject to the " fair wages " condition, and among whom least
progress had been made towards satisfactory regulation of working
conditions by voluntary methods.
In these circumstances the need for more authoritative machinery
became evident, and in 1936 the Ministers of Transport and Labour
appointed a Committee under the chairmanship of Sir James Baillie
to review the position. The Committee recommended the institution
of a Central Board somewhat similar to the National Joint Conciliation Council but with three independent members and with
provisions for giving statutory force to its determinations.1 This
scheme would apply to holders of " A " and " B " licences throughout
Great Britain.2
The most difficult problem is that of " C " licences which represent
about 67 per cent, of all vehicles in the industry. Many drivers and
attendants of such vehicles spend part of their time on other kinds
of work, and this adds to the difficulties of introducing effective
regulation of their conditions of employment. According to the
information available to the Committee the wages in this section
were " even lower than the minimum rates fixed by trade boards ",
and normal hours of work in nearly all cases were " very considerably in excess of the 48-hour week ". The Committee, therefore,
recommended that for " C " licence holders engaged in retail
distribution a trade board should be set up, unless negotiations
then in progress resulted in the institution of adequate machinery.
For other sections under " C " licences the Committee recommended
that the " fair wages " condition should be applied, whether wages
were fixed by collective agreements or otherwise. Disputes would
be referred to the Industrial Court or other tribunal, and an
inspectorate would assist in securing observance.
The Government is considering these recommendations, and if
effect is given to them the whole of the road (goods) transport
industry would be required to observe conditions defined by
Parliament. The machinery, whether in the form of collective
bargaining, trade board or joint council, would be based on representation of the employers' organisations and trade unions, with the
addition of impartial persons where appropriate. All the wage rates
1

The Central Board would be advised by Area Boards.
R o a d transport under the railways was excluded from the scheme, as this
branch is already operating under effectively working machinery.
:

122

INDUSTRIAL RELATIONS IN GREAT BRITAIN

fixed would have binding force, except on those with " C " licences
in non-retail trade, which, however, would, tor the first time,
be required to observe the " fair wages " standard.

Shipping 1
The present machinery for negotiation and regulation of working
conditions in the Merchant Marine dates from December 1919,
when the National Maritime Board was reconstituted.2 The object
of the Board and of its District Panels is to secure closer co-operation
between the employers and the employed along the following lines :
(1) the prevention and adjustment of differences between
shipowners, and masters, seamen and apprentices;
(2) the establishment, revision and maintenance of a national
standard rate (or rates) of wages and approved conditions
of employment; 3
(3) the establishment of a single source of supply of sailors and
firemen jointly controlled by employers and employed.
This last provision is of special interest, being unique in British
industrial relations. In its application it has ensured the elimination
of abuses formerly associated with the recruiting of seamen, and is
effective as a means of co-ordination. The shipowner has the right
to select his own crew provided he uses the jointly controlled supply
office. Equal rights of registration and employment must be secured
to all seamen, and seamen have the right to select the ship in which
they will serve.
The Board consists of five panels representing each of the chief
categories of persons employed in the Merchant Marine, namely,
masters, navigating officers, engineer officers, sailors and firemen,
and catering department personnel. There are also District Panels
at each important port. Each panel consists of twelve representatives on each side, those on the employers' side being elected by the
Shipping Federation and the Employers' Association of the Port
of Liverpool jointly, and those on the employees' side generally
by the appropriate association or union, i.e. the Mercantile Marine
1

This section is based on information given in The National Maritime Year Book.
The Employers' Association of the Port of Liverpool made certain reservations
in respect of rulings made by and taken over from the old Board to which they
had not been parties.
3
The rates generally apply only to vessels, the crews of which are engaged in
the United Kingdom on ordinary Board of Trade articles.
2

METHODS OF NEGOTIATION

123

Service Association, the Marine Engineers' Association,1 the
Amalgamated Engineering Union, and the National Union of
Seamen. The Panels sit separately and independently to determine
matters appertaining to their own grade, but when sitting simultaneously they constitute the National Maritime Board which meets
at least once in six months, and ottener when in the opinion of
either side of any panel a question has arisen which it is desirable
should be submitted to the whole Board. There are two chairmen
of the Board, one elected by and from either side of the Board,
and they take the chair alternatively; the same practice operates
in each Panel. No resolution shall be regarded as carried unless
it has been approved by a majority of members on each side of
the Board or Panel, and a majority vote on either side shall be
regarded as binding on all the members of that side.
The functions of Panels include adjusting differences and disputes
not settled by District Panels, preparing rules to secure observance
of decisions of the Board, and framing recommendations on any
action they consider should be taken by Government Departments
or other authorities. When there is disagreement in a Panel the
question shall be referred to the Board for decision, if either side
of the Panel so desires. If, however, both sides agree, the question
is referred to an independent person. Where this course is taken,
a full statement of the points in difference is prepared, and this
is submitted for opinion to a barrister nominated for one year by
the President of the Bar Council. The barrister has power to call
witnesses, but neither side shall be legally represented before him.
Also the barrister's opinion or recommendation is not binding
upon either side.
The Panels settle the composition and functions of the respective
District Panels.2 At various ports the District Panels appoint
one or more representatives of each side of each Panel as Port
Consultants. The duties of these Consultants are to secure the
prompt manning of vessels, and to settle any differences which
arise in this connection. Any differences connected with engagements or discharges are referred in the first instance to the Port
Consultants concerned, but the Consultants have no power to
1
For the twelve representatives of the Masters on their panel, only six are
nominated by t h e Mercantile Marine Service Association, and six, who shall be
sea-going Masters, are elected by ballot among such Masters.
3
For sailors and firemen the District Panels (or District Maritime Boards)
may be divided into Sectional Panels to deal respectively with passenger liners,
cargo liners and foreign-going general trading vessels, and home trade vessels.

124

INDUSTRIAL RELATIONS IN GREAT BRITAIN

alter or amend any rules, scales or principles formulated by the
National Maritime Board.
Any difference which the Port Consultants are unable to settle
is referred to the District Panel, and, if necessary, to the appropriate
Panel of the National Maritime Board. No stoppage of work or
lock-out shall take place until any difference or dispute between
shipowners and seamen has, if necessary, passed through the whole
of this procedure. Also no strike pay or assistance, direct or indirect,
shall be afforded by either organisation concerned or by any official
or member of such organisation to any person or persons failing
to observe the agreed procedure for settling disputes.
Iron and Steel
Unlike coal mining, the iron and steel industry has long enjoyed
relative freedom from serious industrial disputes, and has preserved
a record of pacific industrial relations which few other big industries
can challenge. This has been facilitated by the system which has
been in operation for many years of adjusting wage rates in many
branches of the industry by sliding scales to changes in the selling
prices of typical products. A highly developed system of negotiation,
conciliation and arbitration has long been established.
The present machinery provides for conciliation in all disputes.
If a dispute arises in any works an attempt is first made to effect
a settlement by means of a conference between the management
and the men concerned. If this fails the matter is referred to a
neutral committee consisting of persons from other works. If the
committee is unable to find a solution, the dispute may be examined
by a more representative conference of employers and workers, or
may finally be submitted to arbitration. Questions affecting more
than one works are dealt with by local, district or national conferences according to their scope and, if unsettled, are referred to
arbitration.
There are also conciliation and arbitration boards in various
districts which endeavour to prevent or settle disputes by conciliatory methods. These boards usually consist of one employer
and one worker representative from each works; in thus taking
the works as basis and not the employers' and workers' organisations, the boards diner from joint machinery in most other industries. In addition to having a chairman and vice-chairman
selected from amongst the members representing the employers
and the workers, the board may have an impartial president who

METHODS OF NEGOTIATION

125

attends special meetings on request and is accorded power to
decide upon any dispute which the board has been unable to settle.
Engineering 1
The operation of systematic methods of negotiation in the
engineering industry extends over a period of more than thirty
years. The problems which have menaced industrial peace have
included not only those of wages and hours of labour but also
the functions of management in workshop control. It is in this
industry that the shop stewards' movement has had its greatest
development and the powers of shop stewards and also of works
committees in relation to those of the management are now
regulated by an agreement of June 1922 which terminated the
lock-out of that year. Joint relations are also complicated by the
large number of trades in the industry and the combination of
the workers, not into a single organisation, but into many separate
unions. Thus, the terms of the important agreement of June
1922 were signed by or on behalf of forty-six unions. Frequent
changes in machinery and methods of work, including the use of
less skilled men on machinery, have raised problems which have
been difficult to solve.
Since the war the chief questions of interest have been dealt
with nationally rather than locally. General alterations in wages,
in the length of working week and in some other general conditions
of work, are considered nationally by direct conference between
the Engineering and Allied Employers' National Federation and
the various unions. The first national wages agreement was in
1917 ; but in this and subsequent agreements the rates to be paid
vary in different localities, being based upon rates which originated
in local settlements. The present standard of hours of work
—forty-seven per week—was originally fixed by national agreement in 1918. A scheme to provide annual holidays with pay
was introduced by national agreement in 1937. General principles
have been established by national agreement to regulate overtime,
payment by results and other matters.
For dealing with other differences, including local and district
wage questions, an agreement called " Provisions for Avoiding
Disputes " has been in force ever since the settlement of a general
1
See Thirty Years of Industrial Conciliation, published by the Engineering and
Allied Employers' National Federation, Dec. 1927.

126

INDUSTRIAL RELATIONS IN GREAT BRITAIN

dispute on hours of labour and workshop control in 1898. The
present scheme was originally adopted in 1914 and renewed in
1922. It provides that an endeavour shall be made by the management and workmen directly concerned to settle any question
which may arise between them. If they fail to do so, deputations
of workmen shall be received by the employers concerned by
appointment without unreasonable delay; the workmen may be
accompanied by their trade union organiser, in which event a
representative of the employers' association shall also be present.
If agreement is not reached, either party is competent to bring
the matter to a Local Conference between the local employers'
association and the local representatives of the union, to be held
within seven days unless otherwise mutually agreed. Should the
question still be unsettled, either party has the right to bring the
matter before a Central Conference regularly held on a fixed day
each month. There shall be no stoppage of work, either partial
or general, until the whole procedure outlined has been exhausted.1
During the thirty years from 1898 to 1927 about 2,200 questions
were jointly discussed in Central Conference and nearly 6,000
wage movements dealt with; during the last ten years the Conference has continued to function on a similar scale. The number
of stoppages which have taken place after the whole scheme of
consultation has been applied has been very small.
It is appropriate to mention here a scheme outside the field
of collective bargaining which has been adopted in several districts
for the main purpose of improving relations between employers
and employed in the engineering industry by personal acquaintance
and discussion. The scheme originated in Manchester where, in
1918, the Manchester Engineering Council was instituted to provide
facilities for personal intercourse, discussion, investigation and the
formulation of constructive proposals on questions of interest to
the industry. Membership is open to all sections of the engineering
industry, including employers, trade union leaders, managers,
foremen, draughtsmen, clerical staff and men of any rank or
status from the workshops. The Council was instituted in the
belief that employers and workers have sufficient interests in
1
The methods of dealing with disputes in the shipbuilding industry are almost
identical with those in engineering, with the addition t h a t if the Central Conference is unable to reach agreement, a Grand Conference is held between the
Shipbuilding Employers' Federation and all the unions which are parties t o the
agreement.

METHODS OF NEGOTIATION

127

common to make joint discussion fruitful and likely to lead to
better understanding. It undertakes no negotiations and members
participate in its work only as individuals, and not as delegates
of other organisations. As evidence of the relations established it
is of interest to note that, during the lock-out of 1922, it was
possible to hold meetings between the men who were locked out
and the employers who locked them out, and to discuss the issues
with good temper and a fair degree of detachment. The Manchester
initiative led to the formation of similar councils in Sheffield in
1927, and in London in 1928. The councils arrange for lectures
followed by discussions on questions of interest to the industry.
They have also drawn up reports on specific questions, including
apprenticeship, works committees, the manning of machines and the
causes of, and practical proposals to remedy, industrial depression.
Cotton

As in the engineering industry, general changes of wages and other
questions affecting the whole industry, or the whole of the spinning
or the weaving section, are discussed directly between the central
employers' and operatives' organisations. 2
Joint rules for the settlement of local and district disputes have
been in operation for nearly fifty years in the spinning section of
the industry and for a still longer period in the weaving section.
The local organisations of employers, and also of workers, have
maintained considerable autonomy. The present rules provide
that local matters in dispute shall be referred to a local joint meeting
of representatives appointed by the local employers' association and
b y the local operatives' association. Failing agreement, the matter
shall be brought before one. or more central joint meetings consisting of representatives of central associations of employers and
operatives. The joint rules provide that questions in dispute shall
be considered without delay. No strike or lock-out shall be declared
until the whole procedure has been followed. In the weaving
section of the industry an interesting rule provides that joint
central meetings of representatives of the employers' and operatives'
associations shall be held at regular intervals during a strike or
1
The methods here described are mainly those in operation in Lancashire, t h e
chief centre of this industry.
2
Wages are based on detailed piece price lists, some of which were established
many years ago ; until recently the wages of weavers were based on a list adopted
as early as 1853, but in 1934 negotiations were conducted which led t o the adoption
of a new schedule of rates superseding t h e old list.

128

INDUSTRIAL RELATIONS IN GREAT BRITAIN

lock-out. Many hundreds of local disputes are settled every year
by local meetings, only a small percentage being referred to central
meetings.
In recent years the industry, which has experienced severe
economic depression, has suffered from several serious stoppages,
and during the years 1929 to 1932 the disputes in this industry
caused much greater losses in working time than those of all other
industries together. Among the chief issues involved have been
wage rates, the observance of the forty-eight-hour week and other
agreed conditions, and reorganisation of the industry, including
proposals for an increase in the number of looms which a weaver
should operate. The terms of settlements of disputes in 1932
provided for new conciliation machinery which includes persons
of independent status. This machinery is used in the event of a
breakdown between the two parties. The " more looms to a
weaver system " was then considered by a joint body with an
independent chairman and agreement was reached upon the
conditions to be observed in a limited application of the system,
including the additional wages to be paid to the operatives. In
1936 the trade unions in the cotton spinning section of the industry
gave notice to terminate the clauses of the 1932 agreement which
provided for the setting-up of the conciliation machinery to decide
questions not settled by local and central joint meetings of employers
and operatives. In the weaving section, however, the agreement
on the use of conciliation machinery in the event of a breakdown
between the two parties remains in force.
The adverse economic conditions of the industry were responsible
not only for severe disputes between the employers' organisations
and the trade unions, but also for the payment of lower wages
and the working of longer hours in many firms than those fixed
by collective agreements. The number of breaches of agreed
conditions increased. Considerable numbers of the employers
concerned had not been members of the employers' organisations
or withdrew from them in order to be free to introduce lower
conditions, while many workers were willing to accept these conditions
rather than risk losing their jobs. With such undercutting in wages
and hours there was danger that the whole structure of collective
agreements and standardisation of working conditions would be
undermined and the industry find itself in a competitive chaos.
With a view to preventing this disintegration proposals were
considered by representatives of the employers' organisations and

METHODS OF NEGOTIATION

129

trade unions in the manufacturing (weaving) section of the industry
for the conditions fixed by collective agreements to be made legally
binding upon all firms. Support was forthcoming for this project
and, after the scheme had been urged upon the Government by
both manufacturers and weavers, the Cotton Manufacturing
(Temporary Provisions) Act was passed by Parliament in 1934.
This measure enables statutory effect to be given to rates of wages
agreed between representative organisations in the industry, with
the object of preventing a minority of employers and workers from
offering or accepting employment at wages lower than those provided
for in the collective agreements.
The Act is restricted in scope to the weaving side of the industry,
and its effect is to enable the Minister of Labour, afte*- investigation
b y a board appointed by him, to issue an Order extending wage
agreements to employers who are not members of the appropriate
organisations, provided organisations representing the majority of
employers and operatives jointly apply for the issue of such an
Order. 1 The Minister will issue an Order only if the board is
satisfied that the organisations which are parties to the agreement
are representative, and is unanimous in considering it expedient
that an Order be made. The rates of wages fixed by an Order
are a condition of the contract of every employed person, and any
employer paying lower wages is liable to a fine of ¿10. The
enforcement of an Order is left to those in the industry. In the
application of the Act, Orders have been issued extending the scope
of various representative wage agreements, the first Order being
issued in 1935. 2
Building
In the building industry, which is distributed in each town and
district, the system of negotiation differs from that in the localised
1
A board shall consist of an impartial chairman and two other impartial
members, and each organisation party to the application is entitled to appoint
six of its members as assessors.
2
The Act was passed in the first instance for three years. In the wool textile
industry in which collective bargaining had broken down during the depression,
t h e trade unions demanded statutory regulation of their wages by the method of
trade boards, owing to the absence of collective agreements, but the Minister of
Labour did not support this solution. I n 1936, however, in consequence of t h e
failure of the employers' and operatives' organisations to reach agreement, of
growing unrest, and of representations by both sides the Minister of Labour
appointed a board to enquire into wages and hours. The recommendations of
the board provided a basis on which the organisations in the industry were able to
reach agreement, with the anticipation of satisfactory relationships for the future.

130

INDUSTRIAL RELATIONS IN GREAT BRITAIN

cotton industry because of the necessity for a network of joint
committees covering the whole country. Major questions of wage
rates, hours and conditions of labour involving money payments
are regarded as national issues and are reserved for consideration
by a joint national body, called the National Wages and Conditions
Council. This body, which was set up in 1921, consists of representatives of several employers' organisations and of the trade
unions. It has greatly simplified wage negotiations, avoided much
waste of time in local negotiations, reduced the risks of conflicts
and introduced greater stability by classifying the various towns
into a small number of grades. For each grade wage rates are
fixed, by occupation, which apply to all towns in the grade.
Any local disputes which arise in the administration of agreements of the Council are dealt with by local and regional joint
wages committees. Disputes other than those involving the application of decisions of the Council are considered in turn by local
joint conciliation boards, district joint councils, regional joint
councils, and, in the last resort, by the National Conciliation
Board.1
Boot and Shoe
Among important British industries, boot and shoe manufacture
has one of the best records of industrial relations. The statement
was made in 1929 that the industry had " enjoyed industrial peace
for thirty-four years. During this period there had not been a
general stoppage of work due to a trade dispute, and cessations of
work due to individual disputes between Federated Employers
and the National Union of Operatives had been few in number
and short in duration ".2 The industry has since continued to
maintain its high standard of industrial peace. The organisations
have built up very complete machinery for joint relations and
in its operation have shown mutual goodwill and understanding.
As in many other industries general questions, including wages,
1
A Joint Industrial Council was established in the building industry for several
years, but ceased to operate in 1921. I t may be noted here t h a t the building
industry and the pottery industry had already evolved schemes for joint relations
similar to the Whitley Committee's recommendations before the Committee's
proposals were published.
2
Article in Manchester Guardian Commercial, by Miss R. TOMLINSON, Secretary
of the Federated Associations of Boot and Shoe Manufacturers and Joint Secretary
of the National Joint Industrial Council for the Boot and Shoe Industry.

METHODS OF NEGOTIATION

131

hours, overtime rates and proportion of boys to adults, are discussed
directly and adjusted uniformly on a national basis; they are dealt
with in a National Conference between the Federated Associations
of Boot and Shoe Manufacturers and the National Union of Boot
and Shoe Operatives, and an impartial chairman is called in when
there is disagreement. The Conference has set up a Joint Standing
Committee consisting of three representatives of the employers,
three representatives of the workers, and the impartial Chairman
of the Conference to deal with the interpretation of national
agreements.
The detailed application of the national agreements and the
establishment of piece rates to give an earning capacity 25 per cent.
above the minimum weekly rates fixed in the agreements are
undertaken b y local boards of arbitration and conciliation. These
boards, on which employers and workers in the area are equally
represented, also deal with disputes upon matters of local concern.
The system of local boards was established by agreement after an
acute dispute of six weeks' duration in 1895. The agreement, in
which minor amendments have been made, is still in force. I t
provides that no strike or lock-out shall be entered into b y any
body of workmen who are members of the National Union or any
manufacturers represented on any local board. Any disputes or
grievances which arise are first considered b y the employers and
workers directly concerned; then, if necessary, they are investigated
b y the local manufacturers' association and the local branch of the
union, and if these should fail to adjust them, the matter is referred
to the local board. Finally, they may be submitted to impartial
arbitrators or umpires.
An interesting feature of the agreement is the system of monetary
penalties for breach of the clause prohibiting strikes and lock-outs. 1
The penalties may be claimed if a strike or lock-out takes place
and work is not resumed on the fourth day from notification of the
stoppage. A guarantee fund of £1,000 from each side is vested
in trustees and in the event of an " unconstitutional " strike or
lock-out the amount of penalty is fixed by an impartial umpire
and paid by the trustees to the aggrieved party. The number of
such fines imposed during the whole period since 1895 averaged only
about one in three years, and the amount of an average fine has
been about £64.
1
This does not apply to stoppages arising from failure of t h e national organisations to secure a national agreement.

132

INDUSTRIAL RELATIONS IN GREAT BRITAIN

It is convenient to mention here that, in addition to the machineryoutlined above, a National Joint Industrial Council was set up in
1919. In view of the existence of long-established methods for
regulating wages, hours and other working conditions it was decided
that the old machinery should be maintained and that these questions should be excluded from the Council's field of activity. Among
the subjects which the Council has discussed during recent years
are a scheme for the provision of holidays, the Factories Bill,
oversea tariffs, Merchandise Marks Acts, British mark of origin,
and the elimination of shoddy footwear.
The operation of the machinery for conference and conciliation
in the boot and shoe industry involves frequent meetings of employers and operatives in which mutual understanding has developed. The machinery " had stood the test of time. It has helped
to steer the industry through the many difficulties common to other
industrial ventures, such as the displacement of hand labour by
machinery, the providing for a wide variety of manufactures carried
on under varying conditions in different localities and the problems
attaching to export trade and to foreign competition ".1

JOINT INDUSTRIAL COUNCILS

Joint Industrial Councils, though part of the voluntary machinery
for negotiation between employers and workers, are a less spontaneous development than most of the systems discussed in the
preceding section. They are based on the recommendations of the
Whitley Committee which was set up in October 1916 to make suggestions for securing a permanent improvement in the relations
between employers and employed.2 The Committee considered that
an essential condition was adequate organisation on the part of
both employers and workers. A distinction was drawn between
industries where organisation was strong and those where it was
weak. A system of Joint Industrial Councils was proposed for the
former, and trade boards, which are discussed in the next section
of this chapter, for the latter.
1

From Miss TOMLINSON'S article already quoted.
The Committee was originally appointed as a sub-committee of the first
Cabinet Committee on Reconstruction ; though generally known as the " Whitley "
Committee, its official title is the " Committee on Relations between Employers
and Employed."
2

METHODS OF NEGOTIATION

133

Joint Industrial Councils, which consist of representatives in
equal numbers of employers and of workers in any industry, differ
from the systems of negotiation evolved before the war in some
of the well-organised industries. Instead of being ad hoc bodies
of varying composition, they are permanent organisations with
defined constitution and functions agreed upon by the two sides.
When working according to the Whitley Committee's recommendations they meet at regular and frequent intervals and not merely
occasionally to consider matters in dispute, and the subjects with
which they deal are much wider than wages, hours and conditions
of labour. The main features of their activities were included in
the proposals of the Whitley Committee, and a model constitution
was drawn up by the Ministry of Labour. The Ministry of Labour
also brought the scheme to the notice of employers' and workers'
organisations in the various industries and offered to give assistance to any industry which wished to consider the establishment
of a Council. It was understood, however, that each industry
would adapt the scheme to its own needs, and, in practice, there
are considerable differences between the Joint Industrial Councils
in various industries.
The Whitley Committee envisaged a comprehensive system
of regular consultation between employers and workers throughout
British industry, with facilities for voluntary conciliation and
arbitration whenever the representatives of employers and workers
in any industry were unable to settle their own differences. The
plan for each well-organised industry included a National Joint
Industrial Council representative of associations of employers and
workers in the industry throughout the country, District Councils,
similarly representative, to deal with matters affecting the industry
in particular districts, and Works Committees representative of
the management and the workers in particular establishments.1
Thus each industry would have a triple organisation in the workshops, the districts, and nationally. The scheme was, however,
entirely voluntary and many important industries ignored the
proposals, while others gave them only a partial application.
1
The Committee issued five reports, the first dealing with Joint Industrial
Councils, including District Councils, for well-organised industries, the second
mainly with trade boards for industries where organisation is weak, and t h e third
with Works Committees; t h e subject of the fourth report was conciliation and
arbitration, and the final report gave a general summary of the Committee's
recommendations.

134

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Before indicating the extent to which effect has been given to
the Whitley Committee's proposals a fuller account must be given
of the principles advocated by the Committee or by the Government in its support of the scheme, especially with reference to
National Joint Industrial Councils. The Committee were convinced " that a permanent improvement in the relations between
employers and employed must be founded upon something other
than a cash basis. What is wanted is that the workpeople should
have a greater opportunity of participating in the discussion about,
and adjustment of, those parts of industry by which they are most
affected ". The Committee thus desired that there should be found
means of enlisting the co-operation of labour on the constructive
side of industry. This could be secured through the proposed
Joint Industrial Councils, the general object of which would be
" the regular consideration of matters affecting the progress and
well-being of the trade from the point of view of all those engaged
in it, so far as this is consistent with the general interest of the
community". Underlying the whole scheme was the promotion
of industrial harmony and efficiency.
The interests of trade unions and employers' associations were
to be safeguarded, as the Joint Industrial Councils were to be
composed only of representatives of these organisations. Agreements
reached by the Councils would carry the same binding force as
other collective agreements, but thus would not possess the force
of law. The Government, in a letter to trade unions and employers' associations sent out by the Minister of Labour in October
1917, explained that the proposal to set up Joint Industrial Councils
" indicated no intention to introduce an element of State interference which had hitherto not existed in industry; in fact the
Councils would be autonomous bodies and would in effect make
possible a larger degree of self-government in industry. The scheme
was certainly not intended to promote compulsory arbitration".
It maintained for the organisations of employers and workers
full responsibility for reaching agreements and thus avoided the
difficulty often experienced under systems of compulsory arbitration
that the early joint negotiations for settling a dispute may become
perfunctory and unreal. The Government's statement also served
to assure the trade unions that there would be no attack, either
direct or indirect, upon the right to strike as a last resort in an
industrial dispute, to which they attach great importance as an
ultimate safeguard of their position. To encourage the industries

METHODS O F NEGOTIATION

135

to set up Councils the Government stated." that the Councils will be
recognised as the official standing Consultative Committees to the
Government on all future questions affecting the industries which
they represent, and t h a t they will be the normal channel through
which the opinion of an industry will be sought on all questions
with which the industry is concerned. I t will be seen, therefore,
that it is intended that Industrial Councils should play a definite
and permanent part in the economic life of the country . . ."
For the attainment of the various objects indicated, especially
the improvement of industrial relations, the Whitley Committee
recommended t h a t the Joint Industrial Councils should give
systematic consideration to many other matters than those hitherto
treated b y representatives of employers' and workers' organisations
in collective negotiations (wages, hours and other conditions of
labour). They specified the following subjects as being among
those suitable for consideration:
(1) The better utilisation of the practical knowledge and experience
of the workpeople.
(2) Means for securing to the workpeople a greater share in, and
responsibility for, the determination and observance of the
conditions under which their work is carried on.
(3) The settlement of the general principles governing the conditions
of employment, including the methods of fixing, paying and
readjusting wages, having regard to the need for securing to the
workpeople a share in the increased prosperity of industry.
(4) The establishment of regular methods of negotiation ' for issues
arising between employers and workpeople, with a view both to
the prevention of differences, and to their better adjustment
when they appear.
(5) Means of ensuring to the workpeople the greatest possible security
of earnings and employment, without undue restriction upon
change of occupation or employer.
(6) Methods of fixing and adjusting earnings, piecework prices, etc.,
and of dealing with the many difficulties which arise with regard
to the method and amount of payment apart from the fixing of
general standard rates, which are already covered by (3) above.
(7) Technical education and training.
(8) Industrial research and the full utilisation of its results.
(9) The provision of facilities for the full consideration and utilisation
of inventions and improvements designed by workpeople, and
for the adequate safeguarding of the rights of the designers of
such improvements.
(10) Improvements of processes, machinery and organisation and
appropriate questions relating to management and the examination of industrial experiments, with special reference to co-operation in carrying new ideas into effect and full consideration of the
workpeople's point of view in relation to them.
( n ) Proposed legislation affecting the industry.

136 INDUSTRIAL RELATIONS IN GREAT BRITAIN
The scheme for Joint Industrial Councils when submitted to
organisations of employers and workers in the summer of 1917
was favourably received. It failed to satisfy the aspirations of the
workers for industrial self-government, pursuing instead the more
modest purpose of outlining practical methods for applying modern
views of the proper relations between employers and employed,
including trade union recognition, greater facilities for conciliation,
and regular joint consultation upon economic and industrial problems as well as upon working conditions. Failure of the scheme to
satisfy the ultimate aims of labour was indicated by five members
of the Whitley Committee in a note to the Committee's Final
Report ; they recognised that the scheme would be likely to promote
industrial peace and progress and gave their hearty support to it,
but they expressed the view it could not effect a complete identity
of interests between capital and labour, and that it could not be
expected to furnish a settlement for the more serious conflict
of interest involved in the working of an economic system primarily
governed and directed by motives of private profit.1
The application of the Whitley scheme varied widely in the
different industries. By many of the great well-organised industries
it was not applied, mainly because other machinery which was
considered to be no less satisfactory for negotiation and conciliation
was already in operation, had been tested by experience, and could,
if desired, be adapted to undertake the new functions included in
the scheme of Joint Industrial Councils. Thus the coal-mining,
iron and steel, engineering, shipbuilding, and cotton textile industries did not establish Joint Industrial Councils, while that constituted in the building industry broke down after a brief existence.2
Among industries which have set up Councils are printing, paper
making, flour milling, boot and shoe, pottery, quarrying, mercantile
marine, dock labour, and various branches of the chemical industry.
There is a Council for the wool (and allied) textile industry, but
its meetings have been infrequent during recent years as the result
mainly of disagreement between the two sides about wage rates.
Other branches of the textile industry which have formed Joint
Industrial Councils include silk, hosiery, and carpet manufacture.
As already stated, an agreed system of Joint Councils for the rail1

Final Report, note signed by Mr. J. R. CLYNES, Mr. J. A. HOBSON, Miss A. SUSAN

L A W R E N C E , Mr. J. J. MAJLLON and Miss M O N A W I L S O N .
2
Sectional Trade Councils were, however, formed for painting and decorating,
plastering, and plumbing.

METHODS OF NEGOTIATION

137

ways was given statutory form in 1921, but modified by agreement
in 1935. In addition, Councils have been set up in a number of
small industries. Whitleyism has also been given considerable
application in public utility services and in public administration,
both local and central, Councils being established, for example,
in the gas, tramway, waterworks and electricity supply industries,
for the local authorities' non-trading services (manual workers),
for the industrial establishments of the Admiralty, War Office,
Air Ministry, and other Government departments, and for the
administrative and legal departments of the Civil Service. 1
The industries and services which set up Councils included
many in which trade unionism " had only recently attained a
widespread influence ". For these, the system " promised to
confirm the war-time gains in the way of recognition and standard
rates and conditions. Perhaps for this reason the most active
propagandists of Joint Industrial Councils in the trade union
world were certain officials of general labour unions, which had
brought in hundreds of thousands of unskilled and semi-skilled
workers to unionism for the first time ".2
During the first four years of the scheme's application (1918 to
1921 inclusive) seventy-three Joint Industrial Councils were
formed, while in less organised industries thirty-three Interim
Industrial Councils were set up on somewhat similar lines ; fourteen
of the Interim Councils were soon reconstituted as Joint Industrial
Councils. A considerable number of Joint Industrial Councils
ceased to function, especially during the early years, but most of
those which became well established have continued in operation.
The chief causes of the breakdown of Councils have been wage
conflicts, weakness of organisation of employers and workpeople,
and divergence of interests between different localities, between
different sections of an industry and between large and small
undertakings. In recent years the number of national Joint
Industrial Councils has been about fifty, twenty of which have
district or local joint bodies associated with them, and there are
also certain other bodies constituted in accordance with the

1
Details of the application of the Whitley scheme to t h e end of 1922 are given
in a Report on the Establishment and Progress of Joint Industrial Councils, 19171922, prepared by the Ministry of Labour. No similar comprehensive enquiry
has since been made, b u t the Ministry of Labour Gazette gives d a t a on the activities
of the various Councils.
8
H E N R Y CLAY: The Problem of Industrial Relations, p. 160.

138

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Whitley plan.1 It was estimated in 1925 that about three million
workers were covered, and probably the present number is fairly
close to this figure. An Association of Joint Industrial Councils
and Interim Reconstruction Committees has been formed for the
exchange of experience and the discussion of problems of common
interest.
The recommendation of the Whitley Committee that National
Councils should be completed by District and Works Councils has
not been extensively adopted. District Councils have been formed
to supplement the National Councils mainly in the central and
local Government and public utility services, e.g. electricity supply.
They have been established in relatively few branches of private
industry; for localised industries they are often unnecessary. As
is indicated in a later chapter, Works Councils have been formed
in a number of individual undertakings; they have, however, little
or no organic relation with District and National Councils.
The constitution and size of the National Councils vary according
to thé requirements of each industry. Usually the Councils
consist of representatives of trade unions and employers' associations; foremen and technical staffs are rarely represented, in
consequence mainly of opposition by the trade unions.2 Councils
range in size from less than twenty to more than sixty members.
Usually Councils have equal numbers representing employers' and
workers' organisations respectively, but where the numbers are
unequal no difficulty arises as voting is by sides. Meetings are
frequently attended by a liaison officer from the Ministry of Labour.
Wide variation is found in the work undertaken and in the
success of the various Councils. Few of them have dealt in
practice with the whole or a large part of the field of consultation
outlined by the Whitley Committee. Many of them have confined
their attention almost entirely to wages, hours and other conditions
of employment, which ordinarily form the subjects of collective
bargaining. This has been due in part to the unstable economic
conditions of the post-war years and the consequent necessity
for frequent consideration of changes in wage rates. On these
questions of wages, hours, and working conditions the system
1
These other bodies include four Interim Industrial Reconstruction Committees, three sectional trade councils in the building industry and nine district
councils in industries for which no national council has been formed. Among the
National Councils are included five Councils for Government industrial establishments and one for the administrative and legal departments of the Civil Service.
2
The Council in the pottery industry includes three honorary impartial members.

METHODS OF NEGOTIATION

139

" has widened the basis of collective bargaining and has instituted
permanent and systematic means for the review of wages and working
conditions. In a large number of cases steps have been taken for the
standardisation of wage rates and of hours throughout the industry.
Various principles have been adopted, including the grading and classification of establishments and localities, and the adjustment of wages
on cost-of-living scales, in some cases based on the rates of wages already
in operation in the various districts ".1
Complaints are not infrequent that employers who disagree with
a decision of their Council on wages, and also on other questions,
fail to apply the agreed provisions, even withdrawing from the
employers' organisation so as to be unfettered; other employers
who have not joined the organisation are, of course, free to establish
lower standards. To meet these difficulties proposals have been
made that decisions of any Council which represents the great
majority of employers and workers in an industry should, if the
Council so desires, be given legal force and apply to the whole of
the industry. The Whitley Committee itself considered that it
might be desirable at some later stage for the State to give the
sanction of law to agreements made by the Councils. These
proposals have been supported by the Association of Joint Industrial
Councils, though not by all the Councils themselves. The Trades
Union Congress General Council has indicated agreement upon
the general application of wage rates, but legislation for giving
effect to the proposals has not up to the present been enacted,
there being no strong support for, though there is growing interest in, the compulsory application and extension of agreements.
In several industries the Joint Industrial Councils do not fix
rates of wages. This is true of some of the most effective Councils,
including those in the boot and shoe, pottery, and printing industries. Industries which exclude wage-fixing from the scope of the
Councils have used previously existing joint machinery for this
purpose. 2 Some Councils faced with acute wage problems have
avoided a breakdown of the Council by the relegation of wagefixing to other machinery, the Council being maintained for the
discussion of subjects about which there was less danger of conflict.3
Certain Councils have dore very useful work on other questions
1

Survey of Industrial Relations, p. 298.
In the event of a breakdown, reference is sometimes made to the Joint Industrial Council. Thus, a t the beginning of 1931 a wage dispute in the pottery industry
was referred to the Council and was finally settled by decision of its three honorary
members.
3
Survey of Industrial Relations, p. 299.
2

140 INDUSTRIAL RELATIONS I N GREAT BRITAIN
than wages and hours, among them being economic conditions,
unemployment, foreign competition, compilation of statistics
showing the economic position of the industry, prevention of
waste, research into industrial problems, methods of wage payment,
education, training and apprenticeship, paid holidays, welfare,
health and safety, improvements ' of working conditions (lighting,
heating, ventilation). The various subjects are dealt with by
committees. Thus, for example, the Pottery Council has a Research
Committee which has made enquiries with a view to the improvement of working conditions, especially those related to the worker's
health, by such methods as prevention of dust and elimination
of smoke; this Council has also set up a Statistical Committee
which has made valuable compilations of data relating to the
industry. Several Councils, e.g. the Flour Milling Council, have
set up committees which conduct investigations on prevention of
accidents and industrial diseases; in this work they are often
assisted by representatives of the Home Office. Committees on
apprenticeship and technical education are fairly numerous. Of
special interest is the adoption of a Group Pension Scheme by
the Flour Milling Council at the end of 1930. 1
As an indication of the recognition by some Councils of the
close harmony of interests between employers and workers,
reference may be made to a report adopted in 1928 b y the Council
in the printing and allied trades. With a view to improving the
position both of employers and workers by increasing the earning
capacity of the industry and creating greater demand by reductions
in the cost and improvements in the quality of printing, the Report
recommended t h a t :
(1) Employers should be urged to improve the efficiency of their
works by scrapping old and installing new machinery and adopting
improved methods of organisation and production of every kind.
(2) Modern time-saving machinery and other methods to reduce
the cost of production are beneficiai to all concerned. Employees
should co-operate with the employers in the use of these methods.
(3) Employers are recommended, when time-saving machinery is
introduced, to endeavour to retain all their employees by transfer
to other duties.
1
This scheme is designed to embrace t h e whole industry. I t is effected by
insurance and is applicable to male employees of both large and small firms. I t
safeguards the benefits of employees who transfer from one employer t o another
within the scheme and it makes provision for pensions in respect of past service.
The pension is based on contributions of one shilling per week b y t h e firm and
equal contributions by the member. The annual pension payable a t the age of
sixty-five is a t the rate of £i for each complete year of the worker's membership-

METHODS OF NEGOTIATION

141

(4) Employees should be encouraged to make suggestions, through
Works Advisory Committees, for improving methods of working
and factory amenities, and should be suitably rewarded for
suggestions adopted.
These proposals represent an attitude b y workers to improvements in methods of production which differs considerably from
that often attributed to them; it also shows recognition by the
employers of the importance of avoiding unemployment due to
rationalisation. These various indications of the activities of some
of the more progressive Councils serve to illustrate the possibilities
of the system where applied under favourable conditions.
It must be emphasised that the Councils from the start have been
working in a period of great economic difficulties. They have
kept collective arrangements in being which otherwise would have
disappeared. Membership of the Councils has enabled personal
relations to be developed which have been an effective safeguard
against breakdown. To sum up, Joint Industrial Councils have
been successful in securing the systematic regulation of wages and
other conditions of labour in a number of industries where methods
of negotiation h a d previously been chaotic. By this means, and
also by the consideration which some Councils have given to a wider
range of problems, a considerable contribution has been made
towards industrial peace and welfare.

STATE REGULATION OF MINIMUM W A G E S

It is appropriate t o examine in this chapter the methods of
intervention by the State in the regulation of minimum wages,
as the systems introduced in Great Britain approximate closely to
collective bargaining and provide extensive opportunities for
consultation and agreement between representatives of employers
and workers. In fact, they are largely designed to encourage the
development of joint negotiation. Intervention is of recent date,
the earliest legislation in modern times being the Trade Boards
Act, 1909. This was followed in 1912 by the Coal Mines (Minimum
Wages) Act. During the war, in addition to regulation of the
wages of munition workers, a system of wage-ñxing was introduced
for workers in agriculture and this system has been renewed with
certain modifications by the Agricultural Wages Act, 1924. Also
a second Trade Boards Act extending the system introduced in

142

INDUSTRIAL RELATIONS IN GREAT BRITAIN

1909 came into operation in October 1918. The present section
gives a review of these various systems.1
Trade Boards
The trade boards system is the most important as well as the
oldest example of State wage intervention in Great Britain. The
1909 Act was passed after more than twenty years of agitation for
the suppression of " sweating ". The demand for legislation to
prevent the worst abuses became more insistent from 1906 when
the Anti-Sweating League was formed and engaged in effective
propaganda. A comprehensive enquiry into earnings and hours,
conducted by the Board of Trade in 1906, gave reliable information
about the various trades and showed that exceptionally low wages
were being paid in some branches of industry. In 1907 Mr. Ernest
Aves, on behalf of the Board of Trade, who later became Chairman
of Trade Boards, visited Australia and New Zealand to study the
systems for fixing minimum wages which had been applied for
several years in these countries in accordance with legislative
provisions. In 1908 a Committee of the House of Commons
reported in favour of legislation for the setting-up of boards to fix
minimum wages in certain sweated trades. Finally, in 1909, the
Trade Boards Act was passed on the lines of the Committee's
recommendations. Under this Act the Board of Trade (after 1917
the Ministry of Labour) was empowered to set up a board to fix
minimum wages in any trade in which the rate of wages was
" exceptionally low as compared with that in other employments ".
In the first instance the Act was applied only to four trades in
which sweating was considered to be specially serious, namely,
ready-made and wholesale bespoke tailoring, paper-box making,
machine-made lace and net finishing, and chain making. In 1914
boards were established in four more trades: shirt making, sugar
confectionery, tin box, and hollow-ware trades. About half a
million workers were employed in the eight trades to which the Act
was applied.2
1
No account is given of provisions for t h e introduction of the fair wages clause
in Government and other public contracts, or of the temporary war-time system
for regulating wages in munition trades.
2
This total includes workers in Ireland. Originally both the 1909 Act a n d the
1918 Act applied t o Ireland as well as to Great Britain. When t h e Irish Free State
and t h e legislature of Northern Ireland were constituted, the Irish Free State
continued to apply the Acts without modification, b u t in Northern Ireland certain
changes were made by t h e Trade Boards Act (Northern Ireland) passed in 1923.

METHODS OF NEGOTIATION

143

During the war, wage conditions and methods of wage regulation were abnormal in a great part of British industry, and wage
orders issued by the Ministry of Munitions were applied to
many of the workers in industries covered by trade boards. In
preparation, however, for the return to peace conditions, the
Whitley Committee made recommendations in favour of an extension of the scope and purpose of the trade boards. As already
indicated, they drew a distinction between industries in which
employers and workers were well organised and those in which
organisation was weak and, for the latter industries, they proposed
that the trade boards system should be used to provide a regular
machinery for negotiation and decision on questions dealt with in
the well-organised trades by collective bargaining. This recommendation implied a considerable change from the use of the
system merely to prevent sweating in certain trades with exceptionally low wages.
In 1918 an Act was passed amending the 1909 Act on the lines
of the Whitley Committee's recommendations. It empowers the
Minister of Labour to set up a trade board in any trade in which
he is of opinion that " no adequate machinery exists for the effective
regulation of wages throughout the trade, and that accordingly,
having regard to the rates of wages prevailing in the trade or any
part of the trade, it is expedient that the Acts should apply to that
trade ". Thus, instead of the criterion of " exceptionally low
wages " laid down in the earlier Act, emphasis is placed upon the
absence of adequate machinery for wage regulation. During the
three years which followed the passing of the 1918 Act there was
a large increase in the number of trades covered by the legislation,
but after the end of 1921 comparatively few changes have been
made. At the end of 1936 forty-seven trade boards had been set
up in trades or branches of trades covering more than 1,000,000
workpeople; approximately 70 per cent, of the workpeople were
females.1
Contrary to the systems established by minimum wage legislation
in certain other countries, where home-workers only or female
workers only are covered, the British Trade Boards Acts apply
1
Report of the Ministry of Labour for the Year 1936. The number of trades
covered by the system is somewhat less than the number of boards, for, whereas
most trades have only one board for the whole of Great Britain, a few trades have
one board for England and Wales and another for Scotland. The number of
establishments on trade board lists a t the end of 1936 was 89,148.

144

INDUSTRIAL RELATIONS IN GREAT BRITAIN

both to males and females whether working at home, in workshops,
or in factories. Each trade has its own board which usually applies
to the whole country. A board consists of representatives in equal
numbers of employers and workers in the trade, together with a
few impartial persons, one of whom presides; the number of
impartial members must be less than one-half of the total number
of representative members. Boards vary considerably in size,
some trades requiring a large membership so that different types
of work and different districts may be represented. The average
membership is about forty; in practice, each board has only three
impartial members. Members are appointed by the Minister of
Labour. In trades where there is some degree of organisation, the
employers' associations or the trade unions are asked to nominate
representatives for appointment by the Minister of Labour. In
addition, there are often representatives of unorganised sections
of trades who are selected by the Minister. At the end of 1936
nearly 87 per cent, of representatives of employers and over
72 per cent, of representatives of workers on trade boards had
been nominated by the trade organisations concerned.1
Each board is required to fix a general minimum time rate of
wage. Lower rates may be fixed for juveniles and adult learners.
A board may also fix lower rates for workers who are unable on
account of an infirmity or physical injury to earn the rate which
would otherwise be applicable to them; permits to work at such
lower rates are usually issued if, after enquiry, circumstances justify
them. Special rates above the general minimum may be fixed
for different classes of workers in a trade. Boards may fix the
normal number of weekly hours and the overtime rates of wages
to be paid for excess hours, and other conditions of labour may
also be regulated. When rates of wages are proposed by a board
they must be communicated to employers and workers, and two
months are allowed during which objections may be made. The
board may then proceed to fix the rates or make new proposals.
The rates do not become effective until they have been confirmed
by the Minister of Labour. The Minister may refer a rate back
to the board for reconsideration or ask the board to consider a
rate, but he cannot fix rates. Rates confirmed by the Minister
become legally binding, and employers paying lower rates are liable
1
District trade committees may be appointed by a board chiefly to advise it
on local conditions; they are constituted on similar lines to the boards.

METHODS OF NEGOTIATION

145

to fine or imprisonment as well as to payment of arrears of wages
due to the workers.
The Minister of Labour is responsible for the enforcement of
the Trade Boards Acts and a special staff of inspectors has been
established, which, in recent years, has numbered more than sixty
officers. During 1936 the number of establishments inspected was
17,971, and the number of workers whose wages were examined
was 211,251. These numbers represented about 20 per cent, of
the total number of firms and of workers covered by the Acts.
Arrears of wages amounting, in 1936, to ¿24,167 were paid on behalf
of 5,711 workpeople employed in 2,117 establishments, or 11.8 per
cent, of the total number of establishments inspected; in the great
majority of cases of underpayment, the arrears of wages due were
obtained without recourse to legal proceedings. In only nineteen
cases were criminal proceedings undertaken against employers or
their agents for various infringements of the Acts, and there was
no case of civil proceedings. The workers themselves can initiate
proceedings to obtain payment of wages due.
The conclusion regarding compliance expressed in 1926 by
the Committee on Industry and Trade is still valid.
The
Committee stated that, " generally, it may be said that there is
little difficulty in securing compliance among the larger employers
and that the great majoiity of workers employed in trade board
trades receive at least the minimum. Among the smaller employers,
compliance is certainly deficient, but this deficiency is less serious
as it affects a comparatively small number of workers ".l The
opinion is widely held that the trade boards system has been successful in " abolishing the grosser forms of underpayment and
regularising wages conditions ", that it has afforded protection to
the good employer against sweated wages paid by his less scrupulous
rivals, and has provided a stimulus to improvements in working
methods. 2 In several years indeed, the minimum rates fixed by
various trade boards have been distinctly higher than those fixed
for similar grades of skill by collective bargaining in some of the
highly organised unsheltered trades. This has been due, to a large
extent, to more favourable economic conditions.
It is generally agreed that the operation of the Trade Boards
1

Survey of Industrial Relations, p . 293.
These conclusions were expressed already in 1922 by the Cave Committee:
Report to the Minister of Labour of the Committee Appointed to Enquire into the
Working and Effects of the Trade Boards Acts, London, 1922.
10
2

146

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Acts has resulted in an improvement of industrial relations in the
trades covered. One of the reasons for the great extension of
application of the Acts in the early post-war years was to provide
facilities for effecting settlements by negotiation. The Committee
on Industry and Trade stated that " the fact that a trade board
is in operation must have an important influence on the relations
between employers and workpeople in a trade. In the first place,
a body of badly paid workers find that the trade board will secure
them a reasonable minimum rate of wages. While strikes on a
large scale are beyond the capacity of such workers, sporadic
outbursts, which in the aggregate may not be negligible, are likely
to occur among them, and the existence of a trade board tends to
reduce or even extinguish the likelihood of such outbursts ". The
Committee also pointed out the value of the opportunities afforded
by the regular meetings of the trade boards for full discussion with
the employers by the leaders of the relatively weak organisations
of workers. Such contacts have been found " to conduce to the
amicable settlement of differences ". 1
Although the trade boards system has achieved valuable results,
it has not been free from criticisms. These were especially frequent
in 1921 when the post-war boom gave place to industrial depression
with rapidly falling prices. Many of the boards were then new
and were not working smoothly; there was delay, also, in adjusting
wage rates to the new levels of prices. In view of the complaints,
the Government appointed a Committee, under the chairmanship
of the Rt. Hon. Viscount Cave, to enquire into the working and
effects of the Acts. The Committee reached the conclusion that
the system was beneficial, but that certain defects should be
remedied. One of the chief features which they considered to be
unsatisfactory was the fixing of wage rates for various grades of
skilled workers considerably above the rates for unskilled workers
and the enforcement of these rates by criminal proceedings. The
Committee recommended that the minimum rates fixed for ordinary
workers in the lowest grade in a trade should be thus enforced as
a protection against sweating; the rates should approximate to
the subsistence wage and be within the capacity of the trade to
pay. The Committee were, however, opposed to the use of criminal
proceedings to enforce the payment of higher rates. Certain of
the Committee's recommendations have been applied in the adminSurvey of Industrial

Relations, pp. 291 and 292.

METHODS OF NEGOTIATION

147

istration of the 1909 and 1918 Acts, but the more fundamental
proposals, including that dealing with the enforcement of higher
rates than those fixed for the lowest grades of workers, could not be
effected without amendment of the legislation.1 A Government Bill
to give effect to the Committee's recommendations was introduced
into the House of Commons in 1923, but was not proceeded with.
Many difficulties of the early post-war years have been largely
overcome with accumulation of experience in the operation of the
system. Proposals to extend the application of the system still
encounter opposition in some industries, but in others there is
recognition by many employers that regulation has advantages
over unrestrained competition in labour standards. After the
initial difficulties of formation of a new board have been overcome,
the system usually works smoothly and with considerable elasticity
of procedure. Although relying ultimately on statutory authority,
the boards have developed individuality, and the Ministry of
Labour's task is to guide and advise rather than to control their
operations.
Minimum Wages in Agriculture
Among low-paid occupations in Great Britain must be included
agricultural labour, which also is weak in organisation. Instead,
however, of applying the Trade Boards Acts to agriculture, special
legislation has been passed providing for the setting-up of machinery
to fix the wages of agricultural workers. The present system has
evolved from a war-time measure (the Corn Production Act, 1917)
which, in addition to regulating cultivation, established an Agricultural Wages Board for England and Wales to fix minimum rates
of wages which were enforceable at law. In 1921 the fixing of
legally enforceable minimum wages by a single national body,
advised where necessary by district wages committees, gave place
to a system of voluntary conciliation committees in the various
districts, the rates of wages in any district being legally binding
only if the committee exercised its right to secure their registration.
This voluntary system was not very effective and came to an end
in 1924, when the present system was introduced by the Agricultural
Wages (Regulation) Act.
1
See Administration of the Trade Boards Acts, igog and lgi8 (Cmd. 1712, issued
in 1922). The Trade Boards Act (Northern Ireland), 1923, is based on the recommendations of ah Advisory Committee on the application of the Trade Boards
Acts t o Northern Ireland, which resemble those of the Cave Committee.

148

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Under this Act, which applies only to England and Wales, the
Minister of Agriculture and Fisheries is required to set up an agricultural wages committee in each county or group of counties;
actually nearly fifty committees have been set up. Each committee
is required to fix minimum rates of wages for time work in its
area, and may also fix minimum piece rates and special rates for
overtime. As far as practicable the rates fixed shall be such that
an able-bodied man's earnings will be " adequate to promote
efficiency, and to enable a man in an ordinary case to maintain
himself and his family in accordance with such standard of comfort
as may be reasonable in relation to the nature of his occupation ".
In specifying this basis for fixing wages the Act differs from the
Trade Boards Acts which give no indication as to the principles
to be applied.
The composition of the committees is almost identical with that
of trade boards; they consist of representatives in equal numbers
of employers and workers, together with two impartial members
appointed by the Minister and a chairman selected by the committee. In providing for the fixing of rates independently by a
large number of separate county committees, the system differs
from that under the Corn Production Act by which a single central
body fixed agricultural wages in all districts ; it also differs from the
trade boards system under which, with very few exceptions, a single
board in each industry fixes wages in all districts throughout the
country. Provision is, however, made by the Agricultural Wages
(Regulation) Act for co-ordination of the work of the committees.
A Central Agricultural Wages Board is set up, consisting of representatives of employers and workers, together with a number of
impartial persons not exceeding one-quarter of the total membership
of the Board; in practice there are eight members representing
employers, eight representing workers and five impartial members.
The rates of wages fixed by the committees do not become effective
until confirmed by the Board, which may refer any rate back to
a committee for reconsideration and may fix or vary a rate where a
committee has failed to do so within a given period. Employers
who pay wages at rates below those in force are liable to fine and
payment of arrears of wages due to the workers. A staff of inspectors has been appointed to ensure the payment of the minimum rates
fixed.1
1

A Report of Proceedings under the Agricultural Wages (Regulation) Act, 1924,
for the year ended 30 September 1936, states t h a t the number of complaints

METHODS OF NEGOTIATION

149

The Coal Mines (Minimum Wage) Act.
The institution by legislation of a system for fixing minimum
wages for coal miners had a different origin and purpose from trade
boards and the machinery set up in agriculture. When the Coal
Mines (Minimum Wage) Act was passed in 1912 the miners were
amongst the highly paid and strongly organised bodies of workers
in the country. The demand for the fixing of a guaranteed minimum
time wage came from the Miners' Federation. Originally the
demand was made to provide a safeguard to piece workers operating
in abnormal places where extraction of coal was difficult. The
normal practice had been to fix special piece rates for such work,
but these were not always adequate and a miner might find at the
end of a week that his output entitled him to receive only very
low earnings.
The demand of the Miners' Federation for a guaranteed time
wage as a safeguard against unduly low earnings of piece workers
was, however, enlarged in 1911 and the early months of 1912
to a demand for minimum guaranteed time rates for all grades
of underground workers, without any reference to abnormal workplaces. Negotiations with the coal owners for the application
of the proposed minima by collective agreements broke down, and
in March 1912 the Miners' Federation for the first time called a
national strike. During the six weeks' conflict which ensued the
Government made various attempts to secure a settlement and
finally the passing of the Coal Mines (Minimum Wage) Act met in
part the miners' demands and contributed largely to the termination
of the dispute. Like other British minimum wage Acts, this
measure, which applies to underground miners, provides for the
constitution of representative bodies. Minimum rates are to be
fixed in each district by a joint district board. The Board of
Trade can recognise as a joint board any body of persons which
fairly and adequately represents the coal miners and employers
of the district and is presided over by an impartial person. In
fixing any minimum rate, boards are required to take into consideration the average daily rate of wages paid to workmen of the class
for which the minimum rate is to be fixed. The rates maybe
uniform for a whole district or may vary according to the special
alleging underpayment showed a tendency to rise every year. This was probably
due to the fact t h a t workers were becoming more alive to t h e facilities available
for obtaining what is due to them, and not to any growing laxity by employers
with regard to their obligations.

150

INDUSTRIAL RELATIONS IN GREAT BRITAIN

circumstances of particular groups of mines. Workers who fail to
observe the conditions laid down by a board regarding regularity
and efficiency of work forfeit the right to the minimum rates,
except where failure was due to causes outside their control. As
under the trade boards system and in agriculture, the ordinary
minima do not apply to workers handicapped by age or infirmity.
No special provision is made for enforcement, presumably on the
ground that the strength of organisation in the industry is an
adequate safeguard against non-observance.
In the first years of their operation the joint district boards
were effective in raising the wages of a considerable number of
workmen, chiefly unskilled time workers and also individual piece
workers. There was considerable lack of uniformity in the working
of the system in different districts, no method of co-ordination
being provided. The system was affected by the outbreak of war
and it has subsequently been neglected; the minima have not
generally been kept up to date and the rates fixed by collective
agreements in most districts have been higher than those fixed in
accordance with the Act. Suggestions are sometimes made that
the machinery should be restored, but they have hitherto received
no strong support. The miners are still, however, favourable to
the application of the minimum wage principle by legislation, and
in recent years the Miners' Federation has demanded new legislation
for fixing minimum wages, with a view to " pegging " wages while
securing reduction of hours.
STATE CONCILIATION AND ARBITRATION

State intervention in industrial disputes is limited in Great
Britain to the provision of facilities for voluntary conciliation
and arbitration and the conducting of investigations into the
causes and circumstances of disputes. Except temporarily for
munition work during the war the principle of compulsory arbitration has not been applied, being opposed both by the trade unions
and also by employers' organisations. The policy of the State is
to leave the trade unions and employers' organisations to reach
agreement by their own systems of negotiation, but to offer assistance if a breakdown occurs or appears imminent.
It was not until the closing decade of the nineteenth century
that a system of State intervention was introduced. A period of
serious industrial unrest and disputes led to the appointment in

METHODS OF NEGOTIATION

151

1891 of a Royal Commission to enquire into questions affecting
industrial relations. The Commission reported in favour of legislation for the promotion of conciliation and arbitration, and the
Conciliation Act, 1896, was passed to give effect to its recommendations. By this Act the Board of Trade was empowered: to enquire
into the causes and circumstances of a difference; to take such
steps as might seem expedient for bringing the parties in dispute
together under an impartial chairman with a view to an amicable
settlement; on the application of either employers or workmen,
to appoint a conciliator; on the application of both parties, to
appoint an arbitrator. In 1916 the powers which the Act conferred
upon the Board of Trade were transferred to the newly formed
Ministry of Labour. The Act remains in force, but since the passing
of the Industrial Courts Act of 1919 has rarely been applied.
As has been indicated in a previous section, the Industrial Courts
Act is based on recommendations of the Whitley Committee. In
addition to conferring upon the Minister of Labour powers of
conciliation and arbitration somewhat similar to those exercised
under the Act of 1896, two new features were introduced, namely,
a permanent Industrial Court and a system of Courts of Enquiry.
With regard to arbitration, whether by the Industrial Court or
otherwise, the Act provides that the fullest opportunity shall
have been given to any existing joint machinery in organised
industries before a dispute is referred to arbitration. If such
machinery fails to effect a settlement the Minister of Labour may,
with the consent of both parties, refer differences to arbitration
by the Industrial Court, by one or more arbitrators, or by a
Board of Arbitration consisting of employers and workpeople
with an independent chairman.1 This offers wide choice so that the
machinery of arbitration may be the most appropriate to the
circumstances of each dispute. The Court consists of persons
appointed by the Minister of Labour, of whom some must be
independent persons, some must be persons representing employers,
and some must be persons representing workmen; one or more
women must be appointed.2 Awards are not compulsory, being
subject to acceptance by the parties, but are rarely rejected.
1
From 1908 onwards the Board of Trade had maintained panels of independent
persons and of representatives of employers and workers from which to select
members for Courts of Arbitration.
2
The Industrial Court evolved from t h e Committee on Production set up during
the war to ensure maintenance of the fullest productive power of employees in
engineering and shipbuilding work for Government purposes. The Committee,

152 INDUSTRIAL RELATIONS IN GREAT BRITAIN
The permanence of the Industrial Court ensures the accumulation
of experience by the investigation and settlement of a large number
of disputes. It enables improved methods of investigation to be
evolved and contributes to the development of certain principles
which, having been found of value in settling various disputes,
may be applied to new disputes presenting similar features.1
The second new feature of the Act is the provision that the
Minister of Labour may, whether or not a dispute is referred to
him, appoint a Court of Enquiry to make an investigation and
report on any matters connected with or relevant to the dispute
which he may refer to the Court. A Court may consist of one or
of several persons. In conducting its investigations a Court may
require persons who appear to have relevant information to furnish
such particulars as the Court may require and, where necessary,
to give evidence on oath, though there is no penalty for failure to
do so. Any report of a Court of Enquiry must be laid as soon as
possible before both Houses of Parliament and may also be published
by the Minister of Labour; confidential information may not,
however, be disclosed.
The chief value of these Courts of Enquiry is to ensure the compilation of an impartial statement of the facts for the information
both of the parties in dispute and of the public. The Courts also
use the facts they have compiled as a basis for recommendations
or conclusions which closely resemble awards; such recommendations or conclusions have no binding force, although they frequently
influence the terms of settlement.
In order to indicate the extent to which the systems of investigation, conciliation and arbitration under the Acts of 1896 and 1919
have been applied in practice, figures are tabulated below of the
number of cases, including disputes settled without a stoppage,
which were dealt with by the Board of Trade and the Ministry of
Labour during the period from 1896 to 1936. The number of cases
was small during the earlier years, the annual average between
1896 and 1909 being only twenty-six. The abnormal conditions
during the war years are reflected in the exceptionally high figures
in the course of its work, recommended the prohibition of stoppages of work a t
undertakings producing for Government purposes; this was accepted by the
Government and the Committee then sat as an arbitration tribunal, its functions
on production being transferred to t h e Ministry of Munitions.
1
See an address by Sir WILLIAM MACKENZIE, who was for several years President
of the Court, delivered a t a Conference on Systems of Fixing Minimum Wages
and Methods of Conciliation and Arbitration organised by the League of Nations
Union, Feb. 1927 (Towards Industrial Peace, London, 1927).

METHODS OF NEGOTIATION

153

NUMBER OF CASES UNDER THE CONCILIATION ACT, 1 8 9 6 , AND THE
INDUSTRIAL COURTS ACT, I 9 I 9 , DURING THE YEARS 1 8 9 6 TO I 9 3 6
Number of
Year
cases
2
26
1896-1909 .
2
82
1910-14 . .
1915 • • •
397
1,412
1916 . . .
1917 • • •
2,474
1918 . . .
3.583
1919 • • •
1,323
920
1920 . . .
272
1921 . . .
103
1922 . . .
167
1923 . . .
252
1924 . . .
i Reports of the Ministry of Labour for the Year 1031
2 Annual average.

Number of
cases

Year
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
to 1936.

257
137
103
103
94
84
96.
77
52
69
80
90

for that period; in addition many disputes were dealt with under
temporary legislation during the war.
The extent to which the different methods available after the passing of the Industrial Courts Act have been applied is indicated by
NUMBER OF DISPUTES TO WHICH D I F F E R E N T METHODS W E R E APPLIED
UNDER T H E CONCILIATION ACT AND THE INDUSTRIAL COURTS
DURING THE YEARS I 9 2 0

Arbitration settlements
By the
By ad hoc
By single
Boards of
Industrial
arbitrators Arbitration
Court

Year

192I
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
Totals

TO I 9 3 6

. .

54°
122
37
"3
143
165
104
82
52
39
43
35
28
26
30
29
35
1,623

73
19
9
14
7
8
5
6
10
14
6
7
3
3
6
10
9
199

15
7
8
6
12
8
4
1
5
3
3
6
1
1
4
1
85

ACT

Conciliation
settlements 2
286
123
48
33
83
73
24
14
42
38
31
48
45
22
29
41
45
1,025

Courts of
Enquiry
3
1
1
1

7
3

l Compiled from Reports of the Ministry of Labour. Disputes settled without a stoppage of work are
included. The number of cases under the Conciliation Act was very small. In addition, cases under the
Road Traffic Act, 1930, were dealt with, the number disposed of in 1936 being 35.
8 Including in some years a few settlements providing for reference to arbitration which are also included
under Arbitration Settlements.

154 INDUSTRIAL RELATIONS IN GREAT BRITAIN
the second table above. This shows that arbitration by the Industrial
Court and settlement by conciliation have been the methods chiefly
adopted. After 1920 the reference of disputes to single arbitrators
became relatively infrequent. The power of the Minister of Labour
to set up Courts of Enquiry has been sparingly used : the disputes
to which this method has been applied have, however, usually
been important.
It should be added that in the administration of the two Acts
the Ministry of Labour has a staff of officials who are specialists
in the problems of industrial relations. This includes a Chief
Conciliation Officer of the Ministry in each important industrial
region who undertakes conciliation within his area and keeps
the Ministry informed of any development which may lead to a
dispute. Action taken by the Ministry's officials is effective in
securing the settlement oí many differences before they have
reached a critical stage and, in this way, the need for recourse to
the Industrial Court, to other methods of arbitration, to formal
conciliation or to Courts of Enquiry is frequently avoided.

CHAPTER V

WORKS COUNCILS
IN the previous chapter a description was given of machinery for
collective relations between employers' and workers' organisations
covering many establishments, but nothing was said about relations between the management and workers of individual factories.
This second aspect of individual relations forms the subject of the
present and the two following chapters. It is within each undertaking that the foundations of industrial peace must be laid,
many problems outside the scope of collective agreements call for
solution, while detailed application of the provisions of collective
agreements to the conditions of each establishment is necessary.
The rapid growth in the size of industrial undertakings and the
consequent practical impossibility of direct personal contact being
maintained between the higher management and the general body
of employees have created the need for organised joint relations
within the undertaking. The satisfaction of this need has been
attempted in Great Britain, as in other countries, by the settingup of the regular machinery of works councils or committees.
The Biitish development differs from that in several countries
of continental Europe in being entirely voluntary, no legislation
on'the subject having been enacted; nor is there any considerable
support for compulsory measures. It is also unlike that in the
United States of America; the British works councils run parallel
with a strong trade union movement which largely controls the
selection of workers' representatives, whereas in many industries
in the United States trade unions were, until recently, almost
non-existent and works councils formed the only machinery for
joint relations between employers and workers. Furthermore the
somewhat neutral attitude towards works councils adopted by
the British trade union movement is very different from the
bitter hostility shown by the American workers' organisations to
" company unions ", which they regard as instruments of the
employers to prevent or hinder the advance of trade unionism.
In the following sections of this chapter an account is given
of the development of works councils in Great Britain, special

156 INDUSTRIAL RELATIONS IN GREAT BRITAIN
reference being made to the recommendations of the Whitley
Committee, some of the main features of the constitutions of
works councils are described and their chief functions and results
are reviewed. A summary is given in Appendix VI of the constitutions and functions of works councils in several well-known
undertakings.
DEVELOPMENT

Consultation about working conditions between the management
and workers of individual factories has long existed in British
industry. Usually this was quite unsystematic, consisting merely
of the occasional presentation of specific complaints by a deputation of the workers to one or more representatives of the management. Even for this purpose, however, the woikers in a number
of undertakings found it convenient to maintain informal works
committees. In establishments where there were many trade
unionists the shop stewards took a leading part in these committees and deputations; the pit committees in the coal-mining
industry and the activities of the shop stewards and works committees in the engineering industry are outstanding examples of
the extension of trade union activities into individual undertakings.
These early developments showed wide variety of type and methods,
an absence of regular meetings and a narrow range of activities.
During the war rapid progress was made in the establishment
of systems of consultation between management and workers.
This was due largely to the need for joint discussion of the many
changes which were being made in methods of work and systems
of wage payment. Shop stewards or committees of workers were
elected in many establishments to protect the workers' interests
and even to demand greater control over workshop conditions.
Some of these bodies of workers' representatives were associated
with the trade unions, but others were independent and showed
signs of revolt against them. On the side of management a
growing need was felt for more systematic consultation with the
workers. This found expression in frequent meetings of representatives of the management with the workers' committee, and in a
few establishments regular constitutions were adopted for joint
committees of management and workers.
These developments and a growing recognition of the possibilities
of regular machinery for joint consultation within individual
undertakings led to attempts to accelerate progress and to give

WORKS COUNCILS

157

guidance by making suggestions for the constitution and functions
of works councils, while avoiding any element of compulsion.
In 1917 the Whitley Committee recommended the establishment
of joint works councils, representative both of management and
workpeople, as part of a triple scheme of organisation in the
workshops, the districts and nationally to secure improved industrial
relations; the Committee was of the opinion that the complete
success of works councils depended upon their being linked up
and acting in close co-operation with district and national ind astrial councils. 1 About the same time, on the recommendation of
the Whitley Committee, the Ministry of Labour conducted an
enquiry and published a report on the origin, constitution and
practice of works committees, with special reference to the influence
of war developments. 2 The Ministry next published a model
constitution and functions of works councils which could be
applied with modifications to meet the requirements of each
industry and establishment ; 3 also the services of officers of the
Ministry were available to advise firms about the setting-up of
works councils, but action was taken only with the approval of
the joint industrial council concerned. Beyond this policy of
encouragement, suggestion, advice and guidance the Government
did not go.
The Whitley Committee emphasised that " there are many
questions closely affecting daily life and comfort in, and the success
of, the business, and affecting in no small degree efficiency of
working, which are peculiar to the individual workshop or factory ",
and agreed that the purpose of a works council is to establish and
maintain a system of co-operation in all these workshop matters.
The Committee favoured the setting-up of joint councils of management and workpeople and not merely committees of workpeople
only. They gave special attention to the relation of works councils
to trade unions and employers' associations, strongly deprecating
the establishment of works councils without the co-operation of
these organisations. They also expressly stated t h a t the success
of works councils would be very seriously interfered with if the
idea existed t h a t such councils " were used or likely to be used
b y employers in opposition to trade unionism". It was agreed
1
See First and Third Reports of the Whitley Committee; the Third Report
(Cmd. 9085) deals only with works councils.
2
Industrial Reports No. 2, March 1918.
3
Industrial Reports No. 4, Jan. 1919.

158 INDUSTRIAL RELATIONS IN GREAT BRITAIN
that works councils should not interfere with any matters settled
by district and national agreements and that certain questions,
e.g. wage rates and hours of work, should be settled by such
agreements.
The Committee considered that works councils would fail in
their main purpose if they existed only to smooth over grievances.
" They should always keep in the forefront the idea of constructive
co-operation. . . . Suggestions of all kinds tending to improvements should be frankly welcomed and freely discussed." The
successful utilisation of works councils in any undertaking should
be regarded as of equal importance with its commercial and scientific
efficiency, and one of the partners or directors or other responsible
representative of the management would be well advised to devote
a substantial part of his time and thought to the good working of
the council.1
The ambitious and comprehensive plan outlined by the Whitley
Committee for works councils in the various undertakings linked
up with district and national Joint Industrial Councils into a complete network of joint relations failed of realisation. Reference has
already been made in the previous chapter to the limited development of Joint Industrial Councils. Progress up to the present
time in the formation of works councils has been much more meagre,
although figures are not available to show the number of councils
in existence at various dates. From 1918 and 1920 was the period
of most rapid development. In a report on Joint Industrial Councils
published by the Ministry of Labour covering the years 1917 to
1922, the statement was made that probably considerably over
1,000 works councils had been formed.2 Many of these councils
have, however, ceased to function. In 1925 the Committee on
Industry and Trade stated that the decline in the number of works
councils would appear to have been fairly rapid since 1920 and
that it was probably true to say that they have only survived in
establishments in which there is a very definite desire on the part
of both management and workpeople to make them a success.3
The decline was attributed to a gradual termination of the special
conditions of war time which had necessitated many important
adjustments of working conditions to the particular circumstances
1

Third Report of t h e Whitley Committee.
Report on the Establishment and Progress of Joint Industrial Councils, J9J7-J922,
p . 81.
3
Survey of Industrial Relations, p. 305.
2

WORKS COUNCILS

*59

of individual establishments. Since the war attention has been
directed mainly to general questions, especially wages, which have
been settled not by negotiation within the separate establishments
but by national or district agreements.
It should not be concluded, however, that works councils have
ceased to be of any significance in Great Britain. The Committee
on Industry and Trade, while noting the decline between 1920 and
1925, was able to state that a large number of works councils
had survived the difficult conditions of the period, and t h a t
many of them had been successful in fulfilling the objects
which the Whitley Committee had in view, and also in other
directions. Special mention was made of the maintenance of works
councils set up in the engineering industry in accordance with the
provisions of an agreement reached in 1919 between the employers'
federations and the trade unions and also of Local Departmental
(Joint) Committees in the railway service set up by agreement
between the companies and the unions following the Railways
Act of 1921. 1 Since 1925 there does not appear to have been any
outstanding movement either of expansion or of decline, and a
number of works councils can now look back over a period of nearly
twenty years of successful operation. This is particularly true of
councils in certain large firms in various industries; as already
indicated, the need of such firms for regular machinery for joint
consultation is greater than that of small firms where the higher
executives are in more intimate and frequent contact with their
workers.
CONSTITUTION

The Ministry of Labour's report on works committees published
in March 1918 showed great variety in composition and method of
election of their members. It will be recalled t h a t the committees
were usually representative of the workers only and that they
formed deputations to meet the management when questions arose
requiring joint discussion; joint committees with regular constitutions were rare.
" In some works the representatives were elected by the whole of
the employees voting as one constituency. More frequently, each
Department or Shop formed a separate constituency and returned a
proportion of the total number of members. Occasionally election was
by occupations or trades. In some works the Committees were elected
1

Ibid., pp. 305-306.

i6o

INDUSTRIAL RELATIONS IN GREAT BRITAIN

by the shop stewards of the various Trade Unions represented in the
works. In other cases, all the members of a Union in the works elected
a certain number of representatives. In certain cases, the method of
election appeared to be by the 1members of each branch of a Union
employed in the establishment."
The variety illustrated by the above quotation has been largely
maintained up to the present time, although a tendency towards
greater uniformity has operated in consequence of the publication
of a model constitution by the Ministry of Labour and some
exchange of experience between firms. It is useful to review the
model constitution suggested by the Ministry as it indicates all
the chief constitutional problems; this review is given in relation
to the practice of existing councils, many of which show features
corresponding closely with those of the model.
As already stated, the Ministry favoured the establishment of
joint councils and not merely committees of workers only. Many
joint councils have in fact been set up, but in some firms .committees
of workers only are elected and recommendations are discussed
with the management by a small delegation or commission. Somewhat similarly a few firms have adopted the system of a workers'
advisory committee with meetings at regular intervals, presided
over by a representative of the management, to whom proposals
are submitted for the consideration of the management. In proposing joint committees the Ministry did not suggest that management
and workers should be represented in equal numbers. This would
not be practicable in all works ; also, as the Ministry recommended
that decisions should be reached only by agreement between the
two sides and not by a majority vote, equality of numbers would
be unnecessary. The Ministry had already pointed out in its report
on works committees that management has the executive power,
and, unless impressed by the representations of the members of
the committee or by the sanction which lies behind them, such
representations will not lead to executive action. The report had
further indicated that works councils operate by consultation,
and that it would be a mistake to think in terms of voting or to
think that even if there is voting its result is a formal decision by
a majority vote; the method should be discussion for the removal
of misunderstanding, and action will ensue if unanimity is reached
between the two sides.
Report on the Establishment

and Progress of Joint Industrial

Councils, p . 66.

WORKS COUNCILS

i6i

The number of representatives on each side should vary according
to circumstances, but the Ministry suggested that two, three or
four members representing management would be adequate, while
the workers might have five to twelve members according to the
size and complexity of the particular works. Each side should
have the right to bring in representatives of any departments
affected by a question under discussion and not directly represented
on the council. In practice in large works with a number of departments and grades of workers requiring separate representation,
councils considerably larger than those proposed have been established; two or three of the largest councils have sixty or more
members.
If the works council is to consist of management and workers
it becomes necessary to draw a line of demarcation between the
two. On this question the model constitution gave no guidance.
The chief grade about which doubt is sometimes entertained is
that of foremen, but in practice these are usually classified on the
side of management. In a few firms, however, the works council
consists of management (excluding foremen) and representatives
of the workers, and a committee of foremen is set up for separate
relations with the management.
The representatives of management, according to the Ministry
of Labour's model, would be appointed by the firm, which should
maintain a constant nucleus made up of such individuals as the
managing director, the works manager and, where there is such
an official, the labour or welfare superintendent. Nomination is
the usual practice, although in some works councils part of the
management's representatives are elected b y the different grades
of management. The selection of workers' representatives presents
greater difficulties. In the Ministry's model constitution it was
suggested that the workers' representatives should normally be
trade union members. This proposal was made partly, no doubt,
in order to secure the co-operation of the trade union movement,
b u t also to ensure cohesion of policy and uniformity of structure
between the works councils and the district and national Joint
Industrial Councils, which were based solely upon the representation
of organisations. It was recognised, however, that in some circumstances, e.g. in factories where the workers are not strongly
organised, it might be found necessary not to limit the workers' side
to trade unionists. In practice there is little relation between works
councils and Joint Industrial Councils, and the constitutions of
u

i62 INDUSTRIAL RELATIONS IN GREAT BRITAIN
some, though not all, works councils make no provision in favour
of trade union representation. In many firms, each worker, whether
trade unionist or not, who has been employed by the firm for a
specified period (for example, a year) has the right to vote for the
workers' representatives on the council and is also eligible for
election. Nevertheless, the trade unionists if fairly numerous in
any works are usually able to manage the nominations and elections
so that they secure many if not all the seats on the workers' side.1
In the Ministry's model constitution it was suggested that the
workers' representatives should normally be elected by departments, due allowance being made for the various sections of workers
engaged in any department. In large complex works where this
method might result in a council of unwieldy size the recommendation was made that departmental committees should be set up
to discuss matters affecting each large department, and that the
workers' representatives in these committees should elect representatives to the works council.
Difficulties arise in securing adequate representation of different
classes of workers—craftsmen, semi-skilled and unskilled workers,
men and women. Experience has shown that it is generally
advisable that male workers should be represented by men and
female workers by women ; a few firms have set up two works
councils, one for men and the other for women. It has sometimes
been found desirable for representatives to be elected by trades
or crafts irrespective of the department in which they work. Where
exceptional difficulty has been experienced in bringing skilled and
unskilled workers together into the same council a separate body
has been set up for each group, but this is rare.2 Difficulties have
sometimes been overcome by the adoption of a system of proportional representation. In some firms a separate committee independent of the works council is set up for the clerical and technical
staff.
On various other constitutional questions the normal practice
of works councils corresponds closely with the provisions of the
model constitution. Thus elections are normally by ballot.
1
The Ministry of Labour suggested that the recognised district official of any
trade union concerned might attend any works council meeting in an advisory
capacity, b u t this has not normally been adopted.
2
The Ministry of Labeur was of the opinion t h a t such a system obstructs very
considerably t h a t joint representation of common interests and desires which
should find expression in a works council, and t h a t it tends to concentrate the
attention of each body on points of divergence of interests.

WORKS COUNCILS

163

Members usually hold office for a year and are eligible for re-election.
In a few councils, however, the period is two or even three years;
one or two of these councils, with a view to ensuring continuity,
arrange that only a proportion of the members shall retire at the
end of each year. Meetings are held at regular intervals; in large
works the councils as a general rule meet only quarterly, but
sub-committees and departmental committees usually meet once
a month. Almost always provision is made for special meetings
to be called, for example on the request of one side of the council.
Meetings are usually held during working hours and the workers'
representatives are paid at their ordinary rate of earnings for the
time spent at the meetings. Opportunities are often provided for
the workers' side of the Council to hold private meetings. Provision
is generally made that the agenda for any council meeting shall be
drawn up at a suitable interval before the meeting, and that no
other item shall be discussed unless both sides agree to its introduction ; this tends to ensure adequate preparation and to avoid the
expression of hasty and ill-considered opinions.
Certain large undertakings with a number of separate factories
have supplemented the activities of the councils in the various
factories by holding inter-factory conferences at regular intervals
attended by representatives from each works council. These
conferences deal with matters of common interest and serve to
co-ordinate the activities of the several councils.
The foregoing has indicated the difficulty of some of the constitutional problems and the various solutions which have been
reached. This variety is due partly to the different circumstances
of the undertakings. Sometimes the main lines of the constitution
were drafted by the management and submitted to the workers
for approval before instituting the scheme. A more satisfactory
method has been for the constitution to be drafted jointly by a
committee of management and workers; in one firm such a drafting
committee sat for nearly a year before agreeing upon a scheme. The
position and attitude of foremen have sometimes constituted
a serious problem, as often foremen have considered that they
would be criticised by the workers' representatives in the council
and their authority weakened. With a better understanding of
the purpose and methods of works councils this difficulty has
usually been surmounted. It has not always been found possible,
however, to overcome constitutional and other difficulties; in a
number of firms the management, though desiring to set up a

IÔ4 INDUSTRIAL RELATIONS IN GREAT BRITAIN
works council, has been compelled to relinquish the idea because
the trade unionists concerned were opposed to representation of
unorganised workers or held the view that their own interests were
best safeguarded by direct relations between the union officials
and the management.
FUNCTIONS

If there have been constitutional difficulties in the organisation
of works councils, there have also been differences of opinion about
their powers and activities. In early discussions they were regarded
by some workers' unions as a step towards a greater democratic
control of industry, but the interest shown by these unions declined
when it became clear that executive power almost always remained
with the management and that the councils were consultative bodies
with advisory powers only. Even with this safeguard, the attitude
of management in the different firms which have established councils
varies considerably about the range of subjects with which they
should deal. In many firms their activities are restricted in practice
to the settlement of grievances and the consideration of questions
of safety and certain aspects of welfare. In other firms, however,
including those in which the most successful councils are found,
the range of activities is much wider and covers most if not all
the subjects suggested by the Ministry of Labour in its model
constitution.
The functions specified in the model constitution were prefaced
by a general statement that the object of a works council is to
provide a recognised means of consultation between the management and the workers. The consultation should give the workers
a wider interest in and greater responsibility for the conditions
under which they work, ensure the application of the provisions
of collective agreements, and prevent friction and misunderstanding. It was emphasised that anything done by a works
council must be consistent with the principles and provisions of the
collective agreements in the industry. In accordance with this
recommendation the fixing of standard rates of wages and hours
of labour would be excluded from consideration by works councils.
The following functions were specified; they are given here as
an indication of the activities which have in practice been undertaken by Councils in the more progressive firms. The list was
not meant to be exhaustive as, in addition to these activities

WORKS COUNCILS

165

suitable for works councils in any industry, there are other functions
which arise in some industries only.
1. The issue and revision of works rules.
2. The distribution of working hours; breaks; time-recording, etc.
3. The method of payment of wages (time, form of pay ticket, etc.) ;
explanation of methods of payment; the adjustment of piecework prices, subject to district or national agreements; records
of piece-work prices ; deductions, etc.
4. The settlement of grievances.
5. Holiday arrangements.
6. Questions of physical welfare (provision of meals, drinking
water, lavatories and washing accommodation, cloakrooms,
ventilation, heating, lighting and sanitation; accidents, safety
appliances, first-aid, ambulance, etc.).
7. Questions of discipline and conduct as between management and
workpeople (malingering; bullying; time-keeping; publicity in
regard to rules ; supervision of notice-boards, etc.).
8. Terms of engagement of workpeople.
9. The training of apprentices and young persons.
10. Technical library; lectures on technical and social aspects of the
industry.
IT. Suggestions for improvements in method and organisation of
work; the testing of suggestions.
12. Investigation of circumstances tending to reduce efficiency or
in any way to interfere with the satisfactory working of the
factory.
13. Collections (for clubs, charities, etc.).
14. Entertainments and sports.
15. The provision of facilities for the employees' side of the works
council (or of a departmental committee, if any) to conduct its
own work.
In several undertakings one of the directors gives to the works
council at regular intervals a detailed review of the state of trade
with special reference to the prosperity and prospects of the undertaking. The workers' representatives, and through them the
general body of workers, are thus brought into contact not only
with questions of productive organisation but with the broadei
national and international economic factors which affect the markets,
selling price and profitableness of the firm. The Committee on
Industry and Trade, in referring to this practice of periodical
reviews, stated that it would be a wise policy for the management
to take the works council into its confidence to the utmost extent
possible, and expressed the opinion that nothing would be so
likely " to foster a better understanding of the problems and
difficulties of business enterprise and to evoke a spirit of loyal

i66

INDUSTRIAL RELATIONS IN GREAT BRITAIN

co-operation in the works. This view was strongly supported by
evidence tendered to us ". 1
In a few firms certain administrative powers have been conferred
upon the councils. Thus in one or two firms the councils are
responsible for the workshop rules, for dealing with certain breaches
of discipline, and for the administration of funds established for
the benefit of the workers. This extension from consultative and
advisory functions to administrative duties, in which responsibility
is shared by management and workers, represents a distinct step
towards a higher status for the workers.2

SUMMARY AND RESULTS OF EXPERIENCE

The period of most widespread interest in works councils was
during the war and the early post-war years. As already stated,
many councils were then formed, and the Whitley Committee
recommended that they should constitute an essential part of a
comprehensive system of industrial relations. From about 1921,
however, with the return of more normal conditions, interest
declined rapidly, few new councils were formed and many of those
which had been set up during the three previous years ceased to
operate.
Firms with works councils now in operation represent only a
small part of British industry, although in most businesses there
are recognised methods, by deputations of workers or otherwise,
for exchange of views between management and workers. Some
works councils deal only with a few trivial matters; others provide
a valuable means for the removal of grievances and for improving
welfare and working conditions. A few councils, however, especially
those in large progressive firms, have a wider scope and include
other activities which are definitely constructive.3 Also, although
most councils have only advisory functions and final decisions for
1

Final Report.
Mr. B. Seebohm Rowntree states that it is the policy of his Company " to
give as much control t o the workers as is consistent with full efficiency ". (The
Human Factor in Business, p. 136.)
3
For example, in Studies on Industrial Relations, I, published by the INTERNATIONAL LABOUR OFFICE, Studies and Reports, Series A (Industrial Relations),
No. 33, Geneva, 1930, a section on the London Traffic Combine describes the
undertaking's comprehensive and effective system of councils which is operated
in agreement with the trade unions and deals with a wide range of important
questions.
2

WORKS COUNCILS

167

executive action rest with the management, in one or two firms
executive functions of some importance have been transferred to
the councils.
The constitution and functions of works councils are well summarised in the following quotation from the Final Report of the
Balfour Committee on Industry and Trade which had made investigations into the working of twelve successful councils selected as
being representative of different types of industry and establishment.
They state:
" Within the selected sample we found a wide variety of form and
constitution, from the fully organised joint Works Committee with its
secretariat and office, to the Committee consisting solely of workpeople's
representatives, with or without an employer as chairman, including a
combination of the two methods in the form of a large Shop Committee
consisting solely of workpeople's representatives meeting by themselves,
but electing a smaller number of delegates to constitute the workpeople's
side of a joint Works Committee. As a rule no importance was attached
to numerical equality, questions being generally settled by agreement
between the two sides. In most cases the workpeople's representatives
were elected by ballot in the various departments of the works, and
sometimes, but not always, membership was confined to trade unionists. . . .
In all cases meetings were held at regular intervals, and
this regularity was generally considered to be essential to success. The
nature of the questions dealt with varied widely ; but broadly speaking
it covered the whole range of ' industrial welfare ' and questions affecting
workshop amenities and grievances, without, however, trenching, as a
rule, on the fixing of wages and hours."
There has been little support for works councils either b y the
trade unions or the employers' organisations. In the engineering
industry, railway transportation and in one or two industries in
which Joint Industrial Councils have been set up, the trade unions
have been parties to agreements by which works councils have
been established. Their usual attitude, however, has been one of
watchful and even suspicious neutrality, while sometimes they
have shown definite hostility. The apathy shown has been due
to the belief that, under the present system of industrial control,
works councils can exercise little power and that they often deal
only with trivial details. Few works councils have been formed
as a result of trade' union initiative. Where, however, the management of a firm has proposed the setting-up of a works council,
the trade unions have frequently, though not always, refrained
from opposition and have sometimes given their support when
they have been satisfied that no attempt would be made to undermine the trade union position. There is also wide recognition in

i68

INDUSTRIAL RELATIONS IN GREAT BRITAIN

the trade union movement that works councils would form an
essential part of a system in which workers' control of industry
would be greater than at present.
Employers' organisations have also been apathetic towards
works councils and consequently the initiative for their formation
has rested largely with the management of individual firms. Where
no works councils have been set up, the usual attitude of the
management is that the results likely to be obtained would not
provide an adequate return for the time, cost and energy involved
in their operation. Also, there is not frequently an unwillingness
to set up regular machinery which might, in fact, interfere with
the complete executive freedom of the management.
In firms which have established works councils, the degree of
success is related to the keenness of the interest shown by management and workers, but especially by management. Where apathy
has been shown the results have been meagre, but where
there has been determination on both sides to make the councils
a success valuable results have usually been obtained. The Balfour
Committee on Industry and Trade expressed the opinion that the
most essential conditions for a successful works council " are not
the perfection of its proper constitution, still less its observance
of uniform rules, but the existence of a sufficiently wide field of
questions within its competence to provide material for regular
meetings, and the presence in the works of persons who are keenly
interested in promoting co-operation and good feeling. Perfunctory meetings at irregular intervals, with unattractive agenda and
slender practical results, will quickly lead to failure ". 1 The
Committee found that one of the commonest reasons for the failure
of councils which had ceased to exist was the want of sufficiently
important functions and subjects for consideration. Even where
interest is adequate, difficulties are frequently encountered during
the first year or two of a council's activity, largely upon questions
of scope and method, but subsequently the machinery works more
smoothly as experience accumulates and as mutual understanding
develops between the two sides.
The general verdict of the management of a number of large
firms where works councils have been in operation for several
years—and the verdict appears to be supported by the workers—
is that, although many of the results are intangible, the councils
1

Final Report.

WORKS COUNCILS

169

have made a valuable contribution to the improvement of relations,
and that both welfare and efficiency have increased. Works
councils are superior to the system of occasional consultation
between management and a deputation of workers, as the latter
tends to be restricted largely to complaints and grievances whereas
works councils provide a basis also for constructive activities.
Questions of discipline and complaints are settled more systematically and in accordance with principles of justice consistently
applied. Esprit de corps is developed, the management have a
recognised channel for the explanation of their problems and for
making known any changes which they propose in conditions and
methods, and the workers can make their points of view known
to the management. Grievances can be dealt with openly at an
early stage instead of smouldering under the surface. The councils
thus act as a most efficient safety-valve. They exercise a restraining
influence both on managers and men because of the knowledge
that unsatisfactory practices would come out for discussion in the
full light of day. Works rules and discipline often become a matter
of mutual concern and joint responsibility.
Many of the councils have offered a means whereby the workers'
representatives can secure an insight into problems of business
administration and a wider outlook which is of value both to the
worker and to the firm. This insight, together with information
supplied at regular intervals about the state of trade and the
prosperity of the undertaking, has tended to create interest in
improved methods and to act as a check upon hasty and illconsidered action by the workers. With a better understanding of
the conditions of business success, a greater sense of responsibility
has developed among the workers; this has enabled some firms to
increase the number and importance of the questions in which
control is shared between management and workers. 1 Also many
useful suggestions have been made b y the workers for the elimination of waste and for improvements in tools, productive methods
and organisation.
I t must be repeated t h a t these results on the constructive side
have been obtained by only a small minority of works councils
and that most firms are satisfied if the councils provide effective
means for dealing with grievances and are successful in matters
1
See, for example, B. SEEBOHM ROWNTREE : The Human Factor in
P- 154-

Business,

170

INDUSTRIAL RELATIONS IN GREAT BRITAIN

of welfare and recreation. Nevertheless the fact that a number
of councils have contributed during a period of fifteen years or
more to an improvement of industrial relations within the factory
and that several councils have been able to show valuable constructive results is leading to some increase of interest in the
system.

CHAPTER VI

INDUSTRIAL WELFARE
THE attitude towards industrial welfare work in Great Britain is
at present in a state of transition. Some years ago many employers took a narrow view of its scope and purpose. They
regarded it as being limited to a few measures for the convenience
and comfort of workpeople, and their point of view was paternalistic and almost philanthropic. More recently, however, investigation and experience have shown that there is an intimate
relation between working conditions and the workers' efficiency,
and many progressive employers now recognise that welfare work,
widely interpreted, is an essential part of business management.
Its scope has, therefore, been greatly enlarged and it is now sometimes defined so as to be almost synonymous with labour management. 1 There is growing support among British business men for
the conclusions reached in The Human Factor in Business, published in iç;2'5, by Mr. B. Seebohm Rowntree, who had been
Director of the Welfare Department at the Ministry of Munitions
during the war. He claims that the cost of welfare schemes is
more than compensated by improvements in industrial relations
and efficiency, and that, far from being an expensive luxury, the
development of wide measures of welfare is a necessity under
modern conditions if a business concern is to attain the greatest
success.2 " As industry becomes every day more mechanised,
standardised and repetitive, the need for welfare work, that is
the humanising of conditions of employment, becomes more
necessary." 3 On the other hand, the trade union movement is
suspicious of certain types of welfare and of some of the motives
for which they are introduced.
Industrial welfare in its widest sense is considered in Great
1
Certain questions, e.g. the use of wage incentives, which are usually regarded
as outside the scope of industrial welfare, are, however, important parts of labour
management.
2
The Human Factor in Business, p p . 171-173.
3
H O M E O F F I C E : Welfare and Welfare Supervision in Factories, p. 4. Welfare
Pamphlet No. 3.

172

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Britain to include any arrangements of working conditions, organisation of social and sports clubs, and establishment of funds b y
a firm, which contribute to the workers' health and safety, comfort,
efficiency, economic security, education and recreation. Frequently
the workers are consulted about and participate in the operation
of the schemes. To specify in greater detail, the following subjects
are included within the scope of welfare work: x
i.

Activities within the Factory
(a) General well-being of the worker—supply of drinking water,
messrooms and canteens, protective clothing, cloakroom, washing
and sanitary conveniences, changing rooms and baths (for some
industries and occupations), general amenities.
(b) Health—ventilation, removal of dust, heating, lighting, medical
supervision.
(c) Prevention of fatigue—length of working day, rest intervals,
facilities for sitting, labour-saving appliances.
(d) Safety—prevention of accidents, first-aid and ambulance.
(e) Fitting the worker to the work—selection, training, transfer and
promotion.

2. Activities outside the Factory
(a) Education and recreation—lectures, clubs, sports.
(è) Financial—benevolent, thrift and pension schemes.
It is proposed to deal with some of the above subjects in this
chapter and to reserve others for treatment in the following chapter
on " Labour Management ". It must be emphasised, however,
that in the present stage of development in Great Britain any
division of subjects between " Industrial Welfare " and " Labour
Management " is largely arbitrary. There is also a close connection between the subject-matter of these two chapters and that
of Chapter V (Works Councils) since in many undertakings those
responsible for labour management use the councils as a means
for consulting representatives of the workers before introducing
changes in working conditions and other matters affecting the
workers; also welfare schemes are frequently operated by or in
association with works councils. I n the present chapter accounts
are given of statutory welfare requirements, and of voluntary
measures for promoting the general well-being of workers (i (a)
above), for facilitating social, educational and recreational activities
and for establishing benevolent, thrift, pension and other schemes
which provide financial benefits (2 (a) and (b) above). Labour
1

See the range of subjects given in Home Office Welfare Pamphlet No. 3.

INDUSTRIAL WELFARE

173

co-partnership and profit-sharing are included with the financial
schemes. The following chapter deals with voluntary methods
adopted by management, often on the basis of experiment and
scientific investigation, for the selection and training of workers,
improvement of health and safety, and the prevention of fatigue
(1 (b), (c), (d), and (e) above). It also gives an account of research
in these subjects, and of exchange of experience between labour
managers. The Institute of Labour Management, which was
known until 1931 as the Institute of Industrial Welfare Workers,
is described in that chapter among organisations which facilitate
such exchange of experience. On the other hand, the Industrial
Welfare Society is dealt with in the present chapter, although
many of the problems of labour management are included within
the range of its activities.1
I
Statutory Requirements
Statutory welfare consists of legislative provisions to secure
minimum standards of health, safety and well-being of workers, and
these are mainly defined in the Factories Act, 1937. This Act,
which consolidated and amended earlier legislation, lays down
minimum requirements for temperature, ventilation, lighting,
sanitation, cleanliness, removal of dust or fumes, and space per
worker, adequate means of escape in the event of an outbreak of
fire, and the fencing of dangerous machinery and other equipment
in factories and workshops. Among special requirements for the
employment of women is the provision, the application of which
is limited to London and Scotland only, that women shall not be
employed within four weeks after giving birth to a child; this is
a much lower standard than that set by the Draft Convention of
the International Labour Organisation. The Act also empowers
the Home Office to issue special regulations for dangerous trades,
it prohibits the use of white phosphorus in the manufacture of
matches, and prohibits the employment in any factory of women
and young persons in certain processes connected with lead manu1
The title of the Society's periodical is Industrial
Management.

Welfare and

Personnel

174

INDUSTRIAL RELATIONS IN GREAT BRITAIN

facture. A number of the regulations are designed to reduce the
risk not only of accident but of industrial disease, e.g. anthrax
(from hides, skins, wool and hair), lead poisoning, and silicosis
(from cutlery grinding, etc.). The use of special protective clothing,
gloves, gauntlets, goggles or respirators is required in various
occupations.
The welfare section (Part III) of the Factories Act, 1937, requires
certain arrangements to be made for the well-being of factory
workers. An adequate and conveniently accessible supply of
wholesome drinking water shall be provided. Other amenities to
be provided include suitable washing facilities (from 1 July 1939 1),
cloakroom accommodation, and seats for female workers. The
Home Secretary may make special regulations requiring additional
arrangements to be made for the welfare of workers employed in
special classes of work. The Act also requires the provision in all
factories of adequately stocked and readily available first-aid boxes
or cupboards, with a trained person in charge.
Various Acts of Parliament apply the provisions of the International Labour Conventions on night work of women and young
persons, minimum age (fourteen years) for admission of children to
industrial employment, minimum age for employment of children at
sea, minimum age for employment of young persons as trimmers
and stokers, and compulsory medical examination of children and
young persons employed at sea.
The Home Office is responsible for ensuring the application of
the statutory welfare provisions mentioned above, and the Home
Secretary is given wide powers to restrict, modify or extend the
provisions of the Factories Act. The factory inspectorate has
succeeded in securing a considerable measure of co-operation by the
employers, with the result that, under previous legislation, higher
standards of health, safety and welfare have been progressively
attained. Co-operation is effected both in the daily contracts between
inspectors, employers and workpeople in the factories and in consultations between the inspectorate and representative employers and
workers in the trades concerned when special regulations are being
framed. In several industries the Joint Industrial Councils have
taken an active part in promoting improved standards and in
securing better compliance with statutory provisions.
1
For persons employed in processes in which lead, arsenic or any other poisonous
substance is used or in which there is liability to an affection of the skin the provision
of washing facilities is required after r July 1938.

INDUSTRIAL WELFARE

175

Miners' Welfare Fund
Mention must be made of the special statutory arrangements for
the welfare of workers in the coal-mining industry. The Mining
Industry Act, 1920, provided for the establishment of a Fund,
derived from a compulsory levy of iif. a ton of coal output, to be
used for " purposes connected with the social well-being, recreation,
and conditions of living of workers in or about coal mines, and with
mining education and research ". Subsequently the basis of revenue
was changed to its present one of a levy of y2d. a ton of coal output
together with a levy of one shilling in the pound on all mining
royalties. The Annual Report for 1936 showed that between 1921
and the end of 1936 the Fund had received a total of £15,976,000,
and that all but about £500,000 had been allocated for specific
schemes.
The Fund is administered by a Central Miners' Welfare Committee appointed by the Board of Trade. The Committee is
representative of the Mining Association and the Miners' Federation,
with an independent chairman ; it is advised by District Committees,
twenty-five in number, consisting of representatives of the owners
and management of the coal mines in the district, and an equal
number of representatives of workmen in and about such mines.
Under the Mining Industry (Welfare Fund) Act, 1934, the Miners'
Welfare Committee is required to make two preliminary appropriations each year from the proceeds of the output levy : (1) such
sum as will, together with the proceeds of the levy on royalties
for each year, amount to £375,000, which is used for providing
pithead baths, with accommodation for drying men's working
clothes, and canteens; and (2) a sum of £20,000, which is applied
to research into methods of improving the health and safety of
workers in and about coal mines. The remainder of the income
of the Fund is divided in the proportion of four-fifths for District
Funds, to be used locally, and one-fifth for the General Fund.
The General Fund has been used mainly for research on health and
safety and for higher mining education.1 More than one-half of
the amounts assigned for district expenditure have been used for
recreation purposes, chiefly the provision of sports grounds and
social institutes. Most of the remainder available for the districts
has been used for health purposes, mainly the provision of convalAn annual grant is made to the Safety in Mines Research Board.

176 INDUSTRIAL RELATIONS IN GREAT BRITAIN
escent homes, hospitals, ambulance and nursing services, and a
small proportion has been spent on junior education.1
The provision of pit-head baths demands special consideration.
In this matter British practice has hitherto been less advanced
than that in some other countries. The need for adequate
provision has, however, long been recognised, but until recent
years progress was slow. The inadequacy of accommodation was
indicated by data published by the Royal Commission on the Coal
Industry (1925). The Commission's Report stated that up to
the end of December 1924 only some thirty pits had been equipped,
or were about to be equipped, with bath accommodation for miners.
" On the basis of ten men to one shower-bath, the accommodation
so far provided is sufficient for a maximum of 20,000 men, or
roughly 2 per cent, of the total number employed." 2 Up to the
time of the Royal Commission's enquiry the Miners' Welfare
Committee had regarded the general establishment of pit-head
baths as being beyond their scope, but had allocated nearly £116,000
for the installation of baths in selected places in the hope of encouraging their provision elsewhere. The Royal Commission expressed
their conviction that the effect of the general establishment of pithead baths upon the health and comfort of the miners, upon the
well-being of their wives and families, and therefore upon the
general contentedness of the mining population, would be so
considerable as to make this a subject which should engage immediate and effective attention. They recommended that the work
should be undertaken by the Miners' Welfare Fund which should
be increased by a contribution from mining royalties.3
Effect was given to this recommendation by the Mining Industry
Act, 1926, which provided that the proceeds of a special levy called
the Royalties Welfare Levy of one shilling in the pound on the
rental value of rights to work coal and of mineral way-leaves should
be paid to the Miners' Welfare Committee and used for the present
to establish pit-head baths and facilities for drying clothes.4 This
1
Details of expenditure from the Miners' Welfare F u n d are given in the Annual
Reports of the Miners' Welfare Committee. U p to the end of 1936, ¿5,300,000
of the whole Fund had been allocated for indoor and outdoor recreation, ¿3,400,000
for convalescent homes, hospitals, ambulance and other health services, and
about ¿2,000,000 for education and research.
2
Report of the Royal Commission on the Coal Industry (1925), Volume I, p. 205
(Cmd. 2600).
3
Ibid., p p . 208-209.
4
This levy'is included at t h e beginning of this section as p a r t of the revenue of the
Miners' Welfare Fund.

INDUSTRIAL W E L F A R E

177

has resulted in much progress. During the years 1927-1936, a total
of more than ¿4 million had been spent on pit-head baths ; and by
the end of 1936 baths had been completed or were under Construction for the accommodation of over 300,000 miners. It is intended
to accelerate the rate of construction so that by the end of 1944
pit-head baths will have been provided for practically all the workpeople employed in the industry.

II
Voluntary Welfare
While in very many firms welfare activities are limited largely
or entirely to the minimum of legal requirements, in others voluntary
measures, often far in advance of statutory standards, have been
introduced which contribute to the health, well-being and economic
security of the workers and to the improvement of relations between
workers and management. Successful welfare schemes had already
been instituted b y a small number of firms during the nineteenth
century, but no great progress was made until the years of the
war when abnormal conditions necessitated special measures for
the welfare of workers. Some war-time welfare measures were,
indeed, compulsory, being taken in compliance with Orders issued
by the Home Office for the health and comfort of munition workers,
especially women and juvenile workers. Voluntary measures were,
however, taken by large numbers of firms, mainly as a result of
advice and assistance given by the Welfare Department of the
Ministry of Munitions and by the Home Office. Encouragement
was provided by allowing the employer to charge much of his welfare
expenditure against excess profits, and by other methods of financial
relief. Many firms undertook capital expenditure (e.g. for canteens,
clubs, recreation grounds) and appointed supervisors to look after
the welfare and comfort of workers in the factories and to provide
opportunities for social activities and recreation during the workers'
leisure time.
With the return to peace-time conditions and the advent of trade
depression at the end of 1920, voluntary welfare suffered a marked
setback. But the experience which had been gained during the war
had shown progressive employers that welfare was not merely
of value during exceptional circumstances but also that under
12

178 INDUSTRIAL RELATIONS IN GREAT BRITAIN
normal conditions it could make a valuable contribution to industrial
efficiency. Thus the Committee on Industry and Trade stated
that : " It is one of the beneficial legacies of war-time experience
that there is a more widespread and intelligent appreciation of the
social and economic importance of factors which diminish fatigue
and enhance the fitness of the worker and improve the amenities
of the workplace." x Consequently during recent years progress
has been resumed and the principles underlying welfare work have
been steadily gaining acceptance.2
Although the activities of the Welfare Department of the Ministry
of Munitions were terminated shortly after the war, the State,
through the Home Office, has continued to encourage employers
to introduce or extend voluntary welfare work.3 Systematic efforts
in this direction have also been made by the Industrial Welfare
Society, the Institute of Industrial Welfare Workers (now the
Institute of Labour Management), the Industrial Health Research
Board and the National Institute of Industrial Psychology. In
several industries the Joint Industrial Councils have given considerable attention to industrial welfare, and their recommendations
have resulted in an extension of welfare work in many firms.4
Detailed figures are not available to show how far these efforts have
been successful. In 1926 the number of firms which were known
by the Industrial Welfare Society to have schemes in operation
was about 1,30o.5 Since then considerable progress has been made.
In his Annual Report for 1929 the Chief Factory Inspector stated :
" In spite of trade depression and other adverse circumstances, a
great deal of progress is reported in the provision of welfare amenities.
This progress is most marked in the case of new firms or firms
moving from congested town areas into the country, or from the
City of London into the suburbs." 6 After 1929 progress was
interrupted for the five years of the world depression in consequence
of the inability or unwillingness of many firms to undertake the
necessary costs, but since 1934 the advance has been resumed.
Among firms which have introduced welfare schemes there is
1

Survey of Industrial Relations, p. 26.
Home Office Welfare Pamphlet No. 3, p . 3, and Survey of Industrial
Relations,
p . 190.
3
See Welfare Pamphlets issued by the Home Office.
4
The position during the years 1917 to 1922 is indicated in the Report on the
Establishment and Progress of Joint Industrial Councils, published in 1923. Subsequent developments are reviewed in the annual reports of the various Councils.
5
Survey of Industrial Relations, p. 191.
6
Cmd. 3633, p . 54.
2

INDUSTRIAL WELFARE

179

wide variety in the number and types of schemes adopted. In
many firms welfare work is limited to a few measures for the convenience of workers, e.g. a room where they can eat their midday
meals, cloakroom, washing and sanitary accommodation. In some
firms, however, especially those employing large numbers of workers,
most or all of the schemes described in the present and the following
chapter are in operation. Certain firms " appear to aim at the
creation of a model community in which the workpeople shall
find full scope for their physical, mental and moral development.
Not only are the best possible arrangements made for the comfort
of the workpeople inside the factory, and the work organised so
as to involve the least possible strain, but all such matters are
being considered in consultation with the representatives of the
employees." 1 Outside the factory facilities are provided for a wide
variety of social, educational and recreational activities. These
firms endeavour to secure from their workers " something of the
same kind of loyalty that attaches to a college ".3 They are, of
course, very exceptional, but their initiative and the results of
their experience are of great value in pointing out the lines along
which progress may be made.
The cost of welfare schemes in different firms gives some indication
of variations in the extent to which measures have been adopted.
Information is available for only a few firms. Data obtained by
the Industrial Welfare Society from twelve firms show an average
running cost for welfare of £1 per worker per annum. This covered
such items of expenditure as the salaries of the welfare supervisor
and the ambulance-room attendant, the groundsman's wages and
the firm's contributions to the benevolent fund and education
scheme. It did not include allowance for capital expenditure, or
the workers' contributions (often 2d. to /\d. per worker per week)
to the schemes. A cost of £1 per worker per annum would represent
less than 1 per cent, of the total wages bill. The cost in the twelve
firms ranged from 10s. or less to £2 or more per worker per annum. 3
In firms which have developed elaborate and complete schemes
of welfare along the lines indicated in the preceding paragraph the
cost is considerably greater. Some firms contribute an amount equal
to as much as 8 or 10 per cent., or even more, of their wages bill
1

Survey of Industrial Relations, p . 192.
Ibid., p . 192.
INDUSTRIAL W E L F A R E SOCIETY : The Introduction
p . 36.
2
3

of a Works Welfare

Scheme,

i8o

INDUSTRIAL RELATIONS IN GREAT BRITAIN

towards the cost of their welfare schemes. The costs are highest in
firms which have established old-age pensions, sickness benefit
schemes and paid holidays. Thus, Mr. B. Seebohm Rowntree has
estimated that a sum equal to between 3 and 4 per cent, of the
total wages and salaries bill of Messrs. Rowntree and Co., Ltd., is
necessary to cover the annual cost of its financial schemes which
afford to the workers a substantial measure of economic security
against sickness, invalidity, unemployment, old age and death; *
to this should be added the cost of many other welfare schemes
introduced by this firm. The cost of a week's annual holiday with pay,
which a considerable and growing number of firms and industries
have introduced, is about 2 per cent, of the annual wages bill. 2 On
the subject of the costs of industrial welfare it is relevant to quote the
following passage from a speech by His Majesty the King, when as
H.R.H. the Duke of York he was President of the Industrial Welfare
Society: " To-day the question for employeis is not whether they
can afford to adopt this or that form of welfare work, but rather
whether they can possibly afford to do without it."

ARRANGEMENTS FOR THE GENERAL W E L L - B E I N G OF W O R K E R S

Many arrangements for the general well-being of workers are
directly related to health or to recreation, education and social
activities, and these are dealt with either in the next section of this
chapter or in the following chapter. Attention is here directed to
various other arrangements made for the well-being and convenience
of the workers. Along broad general lines it is becoming increasingly
recognised that, as the worker must spend so much of his lifetime
in the factory and as he is subconsciously influenced by his surroundings, efforts should be made, as far as possible, to introduce reasonable brightness and attractiveness in place of the drab depression
so often found in factory buildings. For obvious reasons the best
results have been obtained in new buildings in rural and suburban
areas, but even in old city factories improvements have often been
made. External surroundings as well as internal appearance have
been made more pleasant, and the phrase " The Factory in a
Garden " which has been used in describing one works might also
1

B. SEEBOHM ROWNTREE: The Human Factor in Business, p. 126.
In addition to a week's holiday with p a y each year, many firms pay their
workers for six public holidays each year.
2

INDUSTRIAL W E L F A R E

i8i

be applied appropriately to others. 1 Several undertakings with large
factories in suburban areas have not merely given an attractive
internal and external appearance to the works itself, but have
taken the initiative in the development of model communities, with
a high standard of housing and provision of extensive facilities
for social activities, education and recreation. The best-known
and most complete of these " industrial " communities associated
with the undertakings are Bournville, developed by Cadbury Bros.,
Ltd., and Port Sunlight by Lever Bros., Ltd.
To assist in the organisation and management of arrangements
for the convenience and well-being of workers within the undertaking and for leisure-time activities, several hundreds of firms,
employing more than 400 or 500 workers, have appointed welfare
supervisors or superintendents.
In large undertakings several
persons are appointed for this work, some being responsible for
welfare inside the factory, others for recreation and social activities,
some deal only with welfare for men, others for women, and still
others for youths and girls.
Leisure-time activities are reviewed in the next section. The
provisions most frequently made for the convenience of the worker
qua worker include cloakrooms, canteens, drinking water, washing
arrangements, and rest rooms. The best cloakrooms are fitted
with a separate hanger for each worker, heat can be turned on so
that damp outdoor clothing is dried, and methods or organisation
and control are adopted to prevent pilfering. As already stated,
drinking water must be provided in all factories; at present the
ordinary tap is much more frequent than vertical or oblique jets or
fountains, which are preferable as cups or glasses are not required.
Wash-bowls or troughs, which become obligatory in 1939, are already
fairly common and in some firms hot and cold water are supplied.
Where many workers take their midday meal at the works it is
convenient if washing accommodation is located near or on the
way to the canteen. Reference has already been made to pit-head
baths for coal miners. A small but growing number of manufacturing
firms also provide baths for persons engaged on specially dirty
processes. Experience has shown that such provision, together
with accommodation for the worker to change into clean clothes
before going home, reacts favourably upon his self-respect and upon
1
The description has been applied to the factory of Cadbury Bros., Ltd., at
Bournville.

i82

INDUSTRIAL RELATIONS IN GREAT BRITAIN

the type of worker who will undertake this class of work, and is
a relief from the domestic point of view. A growing number of
firms, especially among those employing considerable numbers
of women, provide rest rooms for the use of workers who are
temporarily unwell. These rooms are frequently near to the ambulance room or works surgery and are supervised by trained nurses.
Turning now to the question of canteens or dining-halls, these
are not merely convenient for the workers but conduce to efficiency
by avoiding the fatigue often involved to the worker in rushing
home for a midday meal and by ensuring a reasonable standard
of nutrition and a hot meal, which is particularly desirable in cold
weather. The amount of accommodation required depends not
only on the number of workpeople employed but also their habits
and the distance of their homes from the factory. Some large
works provide midday meal accommodation for several thousands
of workpeople. In some factories a separate room is provided
for each sex, while others have one room for adults and another
for juveniles. There is growing recognition that the rooms should
be bright and comfortable so that the worker may secure the
maximum rest and recreation during the meal interval. With
this object, rooms are often simply but attractively decorated and
furnished, small tables for four, six, or at the most eight people
are replacing the long benches, while instead of forms without
backs, comfortable chairs are being introduced. Music is sometimes
provided, by radio or otherwise, during the meal, while in several
works concerts or lectures are given periodically in an adjoining
room before work is resumed. Experience has shown that an open
space, especially a garden or lawn, near the canteen, is much
appreciated for walking, or even for a short game after the meal.
Canteens or dining-halls are provided and maintained by the
companies.1 They are often suitable for use also for concerts,
dancing and other social activities in the evenings. The firm
usually pays for equipment, lighting and heating, while some
firms pay a subsidy towards running expenses. Generally, prices
are charged to the workers to cover the cost of food, cooking arid
service, cleaning, breakages, and, in many firms, the salary of
the manageress. In other words the food is served at cost price,
and some firms claim that the workers can obtain a good meal
1
In a considerable number of works t h e canteens were constructed out of excess
profits during the war.

INDUSTRIAL W E L F A R E

183

at as low, or even lower cost than in their own homes. About
gd. to is. is a usual price for a meal consisting of meat, vegetables
and pudding. Some firms make a small reduction to workers
who take weekly tickets. Workers usually are not required to
take the full meal, but may make purchases to supplement food
which they have brought from home. Meals which the workers
bring with them are usually heated free or for a nominal charge,
and free boiling water is supplied.
In addition to supplying meals or refreshments at the midday
interval, many canteens provide tea and biscuits or other similar
refreshments during a rest pause in the morning and afternoon.
These may be served in the canteen or brought round the workrooms on trolleys, and a small charge is usually made. Food may
also be supplied in the evenings for persons working overtime and,
frequently, refreshments are provided for sports and social meetings.
Canteens are usually managed by the firm, sometimes with the
assistance of a workers' advisory committee which makes suggestions
about prices, kind of food, etc., and which, in certain firms, is
accorded an opportunity to examine the accounts. 1
RECREATION, SOCIAL ACTIVITIES AND EDUCATION

The activities here described differ from those reviewed in the
previous section in being leisure-time facilities outside the working
day. Their object is to meet the needs of the workers for recreation
and amusement and to promote harmony and good fellowship
among them. They vary widely according to the policy and size
of the firm, whether it is located in an urban, suburban or rural
district, and whether it is near to, or remote from, the workers'
homes. The general practice of large numbers of firms is to review
existing facilities offered by public bodies or voluntary associations
in the neighbourhood, and, if these are inadequate, to co-operate
with the workers in meeting their needs. In this way overlapping
and duplication are avoided. Also, the firm endeavours only to
give a lead in meeting the real needs of the workers instead of
offering facilities for which there is no great demand, and which
might even be resented as an attempt to interfere with the workers'
free use of leisure time. The workers are usually closely associated
1
Pamphlets on factory canteens and messrooms have been issued in the Home
Office Welfare Series.

i84

INDUSTRIAL RELATIONS IN GREAT BRITAIN

with representatives of the management in the organisation of
these leisure-time activities and contribute to current expenses.
Capital expenditure is almost always borne by the firms, and many
of them regard this as a form of " prosperity sharing " supplementary or alternative to ordinary profit-sharing by money
payments.
Sport
The most characteristic of the leisure-time arrangements made
by British firms is the provision of facilities for outdoor recreation.
In several thousands of firms playing-fields are provided and
teams organised, some of them having begun these activities
before the close of the nineteenth century. In a number of firms
the facilities are limited to the provision of a football ground and,
perhaps, one or two tennis courts and a bowling green, but in a
considerable number of large undertakings the opportunities are
much more extensive. The range of facilities is indicated in part
by the area available for games, this being only a few acres in some
firms but extending to more than ioo acres in others, equipped
with a large pavilion, dressing-rooms and shower-baths, and laid
out to meet the requirements of the various games. In one of the
most complete schemes (Cadbury Bros., Ltd.), there are nearly
twenty football pitches, a similar number of cricket pitches, nine
or ten hockey pitches, more than forty tennis courts, several
bowling greens, together with an open-air swimming bath, and
facilities for athletics and net-ball, while fishing, cycling, harriers,
rambling, and other activities are organised. On a Saturday afternoon this firm has nearly a hundred teams, comprising a total
of 650 to 1,000 players from among the workers, engaged in the
various games; in one year, apart from casual games, 221 teams
took part in 2,218 matches, involving over 2,000 players.1 The
Gas Light Sports Association, organised for a number of undertakings in the gas and light industry in the London area, has about
forty works and office clubs with nearly 8,000 members, including
a large playing membership. These and many other organisations
act in accordance with the motto " Players, not spectators ", and
a valuable method of ensuring a large number of participants has
been the organisation of inter-departmental competitions. Inter1
See The Factory and Recreation,
Bournville Works.

issued by the Publication

Department,

INDUSTRIAL W E L F A R E

185

works football and other competitions are also organised in many
districts as well as matches with other clubs within easy travelling
distance, and these games and also the inter-departmental competitions are valuable in the development of esprit de corps.
The ground and pavilion are provided and maintained b y the
firm, which also usually makes an annual contribution to current
expenses and, in the larger undertakings, may pay the whole or
part of the wages or salaries of groundsmen, the club secretary
and other persons employed to organise the various activities.
Membership, which is voluntary, involves the payment of contributions, the proceeds being used mainly for the provision of equipment. A practice in many firms is for a small contribution, e.g. Y2d.
or id. per week, to be made to a general sports fund ; in some firms
the contribution is based on earnings, e.g. id. per £1 received in
wages. Not infrequently the contribution covers membership both
of the sports club and of a social club or institute for indoor amusements. Usually, in addition to the general contribution, each
member makes a special contribution of id. or 2d. per week to the
sports sections (football, cricket, tennis, etc.) in which he or she
actively participates. In a number of large firms separate clubs,
with different rates of contributions, are organised for men, women
and girls, and youths.
Sports clubs are usually managed along democratic lines. In
many medium-sized and large firms a central committee decides
upon general policy and finance and co-ordinates the work of the
separate sports sections; it consists of representatives of the
management together with representatives of the workers elected
by the separate sections. Sometimes the control of general policy
is undertaken b y a committee of the works council. Separate
committees largely or entirely elected b y members specially
interested are set up for the organisation of each sport.
In addition to sports, many firms provide facilities for other
outdoor activities. One of the chief is the offer of allotments at
low rents and the encouragement of the allotment holders b y
co-operative purchase of seeds and other requisites, b y awarding
prizes for the best plots, and by holding vegetable, fruit and flower
shows with prizes for the best exhibits in various classes of produce.
In some firms several hundred allotments are rented to the workers.
Week-end camps and other excursions are organised especially for
youths, these being facilitated in firms working a five-day week
or having a whole Saturday free once a month. Holiday camps

i86

INDUSTRIAL RELATIONS IN GREAT BRITAIN

and tours, including visits abroad, are also arranged by some
firms.1
Social

Activities

Indoor recreation and social activities are often organised in
close association with, or along similar lines to, outdoor games.
In some firms social activities are few, being limited mainly to
an occasional dance or concert held in the works canteen. In
many large firms, however, social clubs with a wide varitty of
activities are organised. Well-equipped and furnished club premises are usually provided in or near the works, or sometimes in
a central position easily reached from the workers' homes. These
often include a hall suitable for concerts, lectures and dances, a
refreshment counter, a billard-room, reading-room and library
mainly of fiction and.other popular literature. The cost of the premises and their maintenance, and part of, or all, the cost of furniture,
equipment and management are borne by the firm. Membership
is voluntary; those workers who participate are usually required
to pay a small regular contribution to general expenses and special
contributions of 2s. or 3s. a year for each sectional activity in
which they join. Responsibility for organisation is shared by
representatives of management and workers.
Among the chief activities are concerts, dances, whist drives,
billiards and other games. In some firms special societies are
formed for music (choral and instrumental), dramatic art, folk
dancing and photography. Classes in dress-making, cookery and
nursing are often organised for girls, and in woodworking, metalworking and other crafts and utility hobbies for boys. Exhibitions of arts, crafts and hobbies are held in some undertakings.
Opportunities are frequently given to the workers' families and
sometimes friends to attend or take part in various activities.
In certain large firms one or more full-time supervisors are appointed
to assist in the work of organisation.
Education
Turning now to the provision of educational facilities, it is
intended to deal here with general education only, leaving voca1
Many firms grant an annual holiday of a week or more during the summer. I n
an increasing number of firms paid holidays are accorded, the duration being
sometimes determined by length of service. Some firms reduce the payment if a
worker's attendance or time-keeping has been unsatisfactory during the year.

INDUSTRIAL WELFARE

187

tional training schemes for consideration in the next chapter.
The former is mainly, though not entirely, a voluntary leisuretime activity, whereas much vocational training is done during
working hours. It is impossible, however, to separate completely
these two branches of education, and the present review should
therefore be read in conjunction with the account given of vocational training. Schemes which are designed to widen the general
outlook may be of a vocational value equal to or greater than
narrowly specialised courses of instruction. In practice the two
branches are frequently organised in close association. Educational courses are often arranged in connection with social clubs
and, indeed, some of the classes and societies mentioned in the
preceding paragraph might have been included equally well among
educational facilities.
There is among considerable numbers of British workers a keen
appreciation of the value of education and a desire to take
advantage of any facilities offered. " This straining towards
culture (for want of a better word) on the part of the worker is
real, and side by side with the story of industrial disputes must
be read the story of his efforts in this direction, for they are active
in many places. Industry itself can help him greatly, and he has
learnt not only to trust but value its overtures through the facilities
it is providing." 1 Firms assist the worker by advice, encouragement to use educational courses in the neighbourhood, and by
organising classes to supplement these courses. The development
of definite educational work in industrial and commercial undertakings is one of the objects of the Association for Education in
Industry and Commerce. While certain types of vocational
training, e.g. apprenticeship, have a long history, one need go
back for little more than half a century to find the earliest efforts
at imparting a broader education within the confines of a factory.
" Nor was it before the beginning of the present century that
any great interest was aroused in this type of education, or any
great importance attached to it. At the present time there are
perhaps one hundred British firms which can claim to carry on
systematic educational work, but the number having a distinct
Education Department is certainly much smaller." 2 On the
1

Work and Play, issued by the Bournville Publication Department, p. 43.
Education in the Factory : An Account of the Education Schemes of Cadbury
Brothers, Ltd., by R. W. FERGUSON, B . S C , A.R.C.S., issued by the Publication
Department, Bournville Works.
2

i88

INDUSTRIAL RELATIONS IN GREAT BRITAIN

other hand, many more firms give encouragement especially to
their young workers to pursue courses of study, e.g. by paying
fees for successful attendance at evening classes.
Firms with the most developed educational schemes appoint
a full-time education adviser, sometimes with assistants, for the
purposes indicated above, as well as to organise vocational training.
A few firms have even erected and maintain school buildings.
Suggestions of the workers about educational work are sometimes
made through a committee of the works council. In outlining
the facilities offered by various firms a distinction must be drawn
between those for young persons and those for adults; classes for
young persons may be divided into day courses and evening
courses. Some firms arrange that all their employees under
sixteen or eighteen years of age shall attend school during the
day-time for one or two half-days per week, and wages are paid
for this time at the usual rates; the subjects taught usually include
arithmetic, English language and literature, manual work and
gymnastic exercise. Evening classes in similar subjects are
organised for their junior employees by some firms, sometimes
with separate courses for youths and girls, but the practice is
much more common to encourage attendance at evening schools,
technical and commercial colleges in the district. This often
brings the firm into association with the local education authorities.
Many firms return the fees to students who have attended 75 or
80 per cent, of the meetings of specified classes and whose work
has been satisfactory. Prizes are also offered, scholarships are provided to cover part of, or all, the cost of full-time attendance at
colleges and universities, and fees are returned to candidates who
have been successful in public and professional examinations.
Mention may also be made of camp schools and educational tours
which a few firms have organised.
For adult workers the educational facilities usually consist of
popular lectures held monthly during the winter, and smaller
groups for the study of such subjects as history, economics,
literature and psychology along the lines of Workers' Educational
Association classes. In a few firms arrangements are made for
selected workers to attend summer and week-end schools and
conferences organised by such bodies as the Co-operative Union,
the Workers' Educational Association, and the League of Nations
Union.

INDUSTRIAL W E L F A R E
Works

189

Magazines

Mention may be made of the practice adopted by several hundred
firms to publish works magazines on subjects of interest to their
workpeople. These include personal news about employees,
information about the sports, social and educational activities of
the works, summaries of works council affairs, and data about
the regulations and financial position of savings, pension and other
funds. Photographs are often a prominent feature. Usually the
workers are encouraged to contribute articles and illustrations.
Some magazines also review the business situation and technical
matters, and are used as an advertisement to customers as well
as for the interest of the workers. Management m a y use the
magazine as a suitable means of making certain communications
to the workpeople. Magazines are usually issued monthly or
quarterly. The costs of printing and publication are borne largely
or entirely by the firm. In some firms no charge is made, but
in others the workers pay id. or 2d. per copy.
*

The activities described in the foregoing sections, though limited
to a minority of firms, nevertheless represent a considerable
contribution to the utilisation of the workers' leisure. Against
the objection that the workers continue to meet the same people
with whom they are associated during the day's work may be
set the advantage of providing facilities which would not otherwise
be available ; there is also ease of organisation, and often convenience
on account of nearness to the workers' homes. Although it is
impossible to measure the value of these activities there is ample
evidence that they are appreciated by the workers, while there is
a wide measure of agreement that the firms benefit by greater
efficiency and improved relations.
FINANCIAL SCHEMES

Five chief types of financial schemes are here described:
(1)
(2)
(3)
(4)
(5)

Labour co-partnership and profit-sharing;
Pension schemes; •
Savings schemes;
Sickness and benevolent schemes;
Unemployment benefit schemes.

ico

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Labour co-partnership and profit-sharing schemes, which are dealt
with in some detail, differ from pension, savings, unemployment
benefit and benevolent schemes. They are designed to contribute
towards the improvement of industrial relations by associating the
worker directly with the prosperity of the firm. They provide
for a better sharing by the workers in the prosperity of their firm
than is possible where only standard wages common to all firms
in the industry and district are paid. They also serve as savings
schemes if the interest payments or shares in profits are accumulated
instead of being paid out year by year to the workers. The main
object of the other schemes described in this section is to reduce
to a greater or less extent the economic insecurity of the worker.
They provide for old-age pensions, encourage systematic saving
for superannuation, and afford some safeguard against hardships
resulting from sickness, invalidity and unemployment. They
supplement the measures of State insurance.
Labour Co-Partnership and Profit-sharing 1
Schemes of profit-sharing or co-partnership have been established
in a few of the more progressive firms in many different industries.
The schemes have been introduced almost invariably on the
initiative of the firms, though frequently in consultation with their
workpeople. During the twenty years immediately preceding the
great depression there was an almost uninterrupted growth in the
number of firms practising profit-sharing or co-partnership, and
also in the number of workpeople entitled to participate. The
numbers of firms and of workpeople, however, represented only a
very small fraction of the total numbers in the country, while,
1
This section is based mainly on data given in the Ministry of Labour's Report
on Profit-sharing and Labour Co-partnership in the United Kingdom, published in
1920 (Cmd. 544), in the Survey of Industrial Relations of the Committee on Industry
and Trade, in articles on the subject published annually in the Ministry of Labour
Gazette and in publications of the Industrial Co-partnership Association. Profitsharing may be defined on the lines adopted b y t h e International Congress on
Profit-sharing in 1889, as the payment, in accordance with an agreed scheme,
of a share fixed in advance, and not variable year by year at the discretion of the
employer, of the profits of an undertaking to a substantial proportion of its ordinary
employees, in addition to their wages. In labour co-partnership the worker receives
a share of profits and in addition acquires some share in the capital and control
of t h e undertaking in which he is employed. The Industrial Co-partnership
Association considers t h a t the workers may share in control in one or both of
the following ways: (1) by exercising ordinary rights and responsibilities as a
shareholder, (2) by the formation of a co-partnership committee of workers, having
a voice in the internal management.

INDUSTRIAL W E L F A R E

191

owing to the depression, there was a distinct decline between 1930
and 1936.
Propaganda is undertaken in favour of profit-sharing and copartnership b y the Industrial Co-partnership Association, the
activities of which are mainly supported by individual employers
and firms, though a few workers' leaders participate. Employers'
organisations have not declared their attitude to profit-sharing
and co-partnership. Individual employers who have initiated
schemes have done so chiefly in the hope of securing improved
relations with their workers by a harmonising of the interests of
capital and labour. Most, though not all, employers seem to be
satisfied that this object has been to some extent attained. Those
who anticipated a considerable and permanent stimulus to increased
exertion by their workers have often been disappointed; the initial
stimulus tends to wear off in time, and the workers come to regard
the bonuses as a right. Also the bonuses are usually too small
and remote from the efforts of the individual employee to give
an important stimulus to output; workers often lose interest in the
scheme if profits, and therefore bonuses, decline. Many schemes
do, however, seem to increase goodwill b y satisfying, in part at
least, the sense of social justice.
The general attitude of the trade unions is one of indifference
or opposition, and hostility has been expressed in resolutions
adopted b y the Trades Union Congress. The main ground for
the opposition of organised labour is that they believe the schemes
to be designed to undermine trade union solidarity by strengthening
the bonds which attach the worker to the firm in which he is employed. The trade unions recognise that their policy of establishing
standard rates of wages to be paid b y all firms in a given industry
and district often enables the most efficient firms to make large
profits. Hitherto, however, they have directed their attention
towards political methods of dealing with large profits through the
channels of taxation rather than towards schemes of profit-sharing
and co-partnership, which would confer differential benefits
according as the workers are employed in prosperous or in struggling
firms.
At the end of 1936 the number of schemes in operation in
businesses other than co-operative societies was 266; 1 of these,
1
The number of co-operative societies which had schemes in operation was 152,
with over 42,000 workpeople, of whom 39,700 participated, or were entitled t o
participate, in the benefits.

192 INDUSTRIAL RELATIONS IN GREAT BRITAIN
19 were started before 1901 and 31 more were started during the
first decade of thé present century, while 176 schemes dated from
1919 or later. About 371,000 workpeople were employed in the
business concerned, but only about 220,000, or about 60 per cent.
of the workpeople, participated, or were entitled to participate,
in the benefits.1 In 1913 the number of schemes in operation
was 152, with about 73,000 workpeople entitled to participate;
the number of workpeople thus nearly trebled during twenty-three
years.
The total amount of bonus distributed, or credited, in 1936
under 211 schemes for which information is available was
¿2,228,300, and 178,300 employees were entitled to participate.
The average amount of bonus was £12 gs. lid. per employee;
this represented an addition to earnings of 6.3 per cent. In 1913,
the average amount of bonus was £5 5s. ud. per head, or 5.9 per
cent, of earnings.
In each year during the decade from 1927 to 1936 a considerable
proportion (from one-seventh to one-third) of schemes failed to
earn sufficient profits to yield a bonus. On the other hand, some
schemes show exceptionally good results. The South Metropolitan
Gas Company has paid during forty years a total of over £1,000,000 ;
the workers own about £750,000 of the Company's capital and elect
three of themselves as directors. Messrs. Clarke, Nickolls and
Coombs, a firm of confectioners in London, have distributed about
£750,000 in a period of forty years, or an average of over 15 per cent.
added to earnings each year. Messrs. Lever Brothers have distributed over £2,500,000 in twenty years. Messrs. J. T. and J. Taylor,
a textile firm at Batley, in Yorkshire, have paid out about £800,000
in forty years and the employees own more than half the capital
of the undertaking.
Many schemes—more than one-half of the schemes started—
have been discontinued, most of them after an effective duration
of under ten years. Among the chief causes of termination are
failure of the firm to make adequate1 profits, changes of management, and dissatisfaction of the employers owing to the apathy
of their workers. The state of trade seems to have an effect both
on the inauguration and on the termination of schemes, periods
1
Participation is sometimes limited to employees who are able and willing to
deposit savings with t h e firm, or to purchase shares in the undertaking; in some
schemes participation is restricted to persons who have attained a certain age, or
who have been in the employment of the firm for a minimum number of years.

INDUSTRIAL W E L F A R E

193

of good employment being favourable to the establishment of new
schemes.
The gas industry is the only one in which profit-sharing and
co-partnership schemes have been introduced by a large proportion
of the chief companies. I n this industry, too, few schemes have
been terminated and some have been in operation for over twenty
years. This unique situation is due in part to the special conditions
of the industry, which has a local monopoly; it is, however, also
due to the success of the South Metropolitan Company's system,
which was introduced in 1889, and the extension of this system
to other companies. Other industries which have a considerable
number of schemes and of workers participating include metal,
engineering and shipbuilding, textiles, food and drink manufacture,
chemicals, and insurance, banking, and other financial businesses.
Recently a number of schemes have been introduced in the electricity supply industry, especially in London.
Of all schemes in operation at the end of 1936, 152 were profitsharing and 114 were co-partnership. The most usual type of
profit-sharing scheme (95, or almost 36 per cent, of the total of
266 schemes at the end of 1936) provides for a cash bonus based
on profits or dividends. Co-partnership schemes encourage employees to acquire capital in the undertakings in which they work
and may accord them the right to participate in control. Forty-six
of these schemes provide for the issue of shares free, or for their
purchase b y employees on specially advantageous terms ; this type
of scheme is often voluntary, and only a minority of employees
(about 20 per cent.) have participated. In other co-partnership
shareholding schemes, including many of those introduced b y gas
companies, a proportion of profits is reserved for the workpeople
and either invested wholly in the capital of the firm, or part is
capitalised and part distributed in cash or paid into a provident
fund. Sixty-eight schemes of this type were in operation at the
end of 1936. I n the great majority of undertakings the capital
held by the employees is only a very small proportion of the total
capital. Consequently the voting power of employees at a shareholders' meeting is almost negligible in all but a very small number
of undertakings; quite frequently employees' shares do not carry
voting rights.
The influence and control exercised b y the workers in profitsharing a n d co-partnership schemes is almost invariably small,
and shareholders' meetings have provided little opportunity for
13

194

INDUSTRIAL RELATIONS IN GREAT BRITAIN

the workers to learn about the economic problems of the undertaking. A more satisfactory method is the holding at regular
intervals of meetings of employees, at which the bonus is declared
and a review given of trade conditions and prospects ; many British
firms with profit-sharing or co-partnership schemes have adopted
this practice, and some schemes usefully supplement it by setting
up representative committees of workers which perform certain
administrative functions in the working of the schemes.
Pension Schemes
The schemes here described are those which provide for the
regular payment of life pensions according to an established scale
to workers on retirement from the service of their firm. Several
of the oldest of these schemes date from the closing years of the
nineteenth century and others were introduced early in the present
century before old-age pensions were provided under State legislation. Since the war there has been a considerable increase in the
number of schemes, and at the present time probably about 3,000
firms have introduced pension systems. While many of the schemes
apply only to the non-manual staff, a growing number are for
manual workers, the number of such workpeople covered, being
considerably more than half-a-million. Some of the schemes apply
to only small numbers of workpeople, but many firms employing
several thousands of workpeople have introduced pension schemes
for the main body of their manual workers.1 Thus the pension
funds of one well-known manufacturing firm have a membership of
over 10,000 workpeople, the total amount accumulated in the funds
is about £2,000,000 and the firm and the workpeople each contribute
about £44,000 per annum. The State encourages the formation of
pension funds by exempting them and the contributions of the firm
from taxation. Most schemes are set up by private trust deeds and
are self-contained, but some firms operate their schemes in association with an insurance company, while the Flour Milling and
Wallpaper Manufacturing Industries have established schemes open
to all firms in these industries. A review is given below of the chief
features of pension schemes, based on an analysis of the systems in
operation in many well-known firms; special attention is given to
conditions of membership, contributions, and pensions. In Appen1
For example, Imperial Chemical Industries, Limited, which had previously
operated schemes for the staff and foremen, introduced a workers' scheme in 1937.

INDUSTRIAL WELFARE

195

dix VIII summaries are given of the provisions of several funds
which illustrate different systems.1 '
Membership
Membership of pension schemes is usually voluntary. Workpeople
wishing to join are required to indicate their desire to do so by
filling up a prescribed form. Some firms have one pension scheme
open to all persons employed, whether male or female, wage earners
or salaried staff; directors of the company are usually excluded,
though in some funds directors promoted from the ranks may be
members. Frequently firms have established two separate funds,
one for men and the other for women. Again, some firms have
three funds, for salaried staff, male wage earners, and female wage
earners respectively. Another arrangement is that of separate
pension schemes for salaried staff and male wage earners, and no
provision for pensions for female wage earners. Still other systems
are found, including funds for salaried staff only. In the present
section no account is given of funds limited to salaried staff only,
or of the separate funds for salaried staff in firms which have also
set up funds for wage earners.
Where separate funds for men and women wage earners are set
up or where women are excluded altogether from the schemes, the
chief reasons are that women's contributions and pensions are at
a lower rate than men's in consequence of their lower earnings, and
that large numbers of women leave their employment between the
ages of twenty and thirty on marriage. In some firms a savings
fund instead of a pension fund is established for women; other
firms pay pensions to the comparatively few women wage earners
who remain in their service to pensionable age, but make the payment directly out of revenues instead of setting up a pension fund
which would involve considerable administrative work.
Contributions
Usually pensions are paid from a fund to which the worker and
the firm each make equal contributions. In a few schemes the
contributions are unequal, while in some schemes the workers only
make regular contributions but the firm pays amounts adequate to
1
Other examples are given in an article by A. D. K. Owen on " Employees'
Retirement Pension Schemes in Great Britain ", International Labour Review,
J u l y 1935 ; see also The Exit from Industry, a report issued in May 1935 by P . E. P .
(Political and Economic Planning).

IQ6

INDUSTRIAL RELATIONS IN GREAT BRITAIN

maintain the solvency of the fund and pensions are paid according
to a scale considerably higher than would be covered by the workers'
contributions alone. Non-contributory schemes are rare. When
schemes are being started firms frequently make special payments
so that their older workpeople may receive pensions, although
these workpeople have not paid much in contributions.
Two main systems of contributions may be distinguished. Under
one system, the contributions are equal for workers of different
age and the amount of the pension varies according to the number
of years of contribution. Thus in one firm the worker pays is.
per week and the pension payable at sixty-five years of age is £i
per annum for each year of service. Under the second system the
amount of the pension is fixed and the contributions vary according
to the age at which the worker joins the scheme. For example,
the pension in one firm is £1 per week, and if a worker joins at
twenty years of age his contribution is 8d. per week and the firm
pays a similar amount; if a worker is older when he joins the fund
the rate of contribution is higher. Whichever system is applied,
the worker is usually required to make contributions for a minimum
period, which is usually fifteen to twenty-five years. In some
schemes the amount of contribution, and also the rate of pension,
varies according to the worker's wages; the contribution is sometimes a given percentage of the wage.
The amount of contribution varies considerably in the different
schemes. In one firm the men contribute 3d. per week and the
firm 5¿. per week to the men's fund, while the women contribute
2d. per week and the firm 2d. per week to the women's fund. In
several other firms the member's contributions are 3d. or qd. per
week. Considerably higher contributions are paid in some firms,
the weekly payment in several schemes being is. or is. 3d., or even
is. 6d. or 2s. or more per week. The highest rates of contribution
apply to the better-paid workers in schemes where the rate varies
according to the wage, or to workers who are thirty to forty years
of age when they start contributing to a scheme with a fixed pension.
Pensions
For men the usual age from which pensions are payable is sixtyfive, but in some firms the age is sixty. For women the pensionable
age is frequently sixty or sixty-five, but in a few firms it is fifty-five.
Frequently retirement with an adjusted pension is allowed at
any time within five years of the usual pensionable age. In some

INDUSTRIAL WELFARE

197

firms retirement is compulsory at the pensionable age, but in others
it is optional.
As already indicated the amount of pension may differ according
to the length of period during which contributions have been made,
or may be of fixed amount involving a high or low rate of contribution according to the age of members when they join the fund.
The amount of pension varies considerably in the different firms,
being dependent upon the aggregate of contributions for each
member. In some firms the maximum pension for men at the
age of sixty-five after forty years or more of contributions is 14s. or
15s. per week; in others the pension is £1 per annum for each
year of service, while in another the pension is approximately
one-half of the wage. Several firms pay a maximum pension for
men retiring at sixty or sixty-five years of age of between £z and
£1 10s. od. per week. A pension in proportion to the aggregate of
wages paid to the worker during the whole of his service is the basis
adopted in one scheme. For women the pension is often less than that
for men, in several firms the maximum being about 10s. per week.
Other Provisions
Most schemes include regulations about the payments to be
made if a member dies or withdraws from the service of the firm
before reaching pensionable age. The usual practice is for the
member, or the representative of a deceased member, to receive
the amount of his own contributions together with 3 or 4 per cent.
compound interest. Under a few schemes the representative of a
deceased member is entitled to receive both the member's and the
firm's contributions with compound interest. In one scheme,
however, no payment is made in respect of the contributions of a
deceased male member. In another firm a member who leaves the
service before sixty-five may receive immediately the refund of
his own contributions, together with 3 per cent, compound interest
or he may decide to wait for a pension at sixty-five, based on his
own contributions plus 3 per cent, compound interest if his service
is less than seven years but including the firm's contributions also
if he has completed seven years' service. Some schemes provide
that total or partial incapacity for work after a fixed period, e.g.
ten years, of membership of the pension fund shall entitle the
member to receive a pension based on the joint contributions of
the member and the firm.
Several schemes include a provision that, if a member in receipt

ig8

INDUSTRIAL RELATIONS IN GREAT BRITAIN

of a pension dies before his own contributions and those of the
firm have been exhausted, either the difference is paid to his dependants, or the pension is paid to them for a fixed period. A few firms
have a Widows' Benefit Fund separate from the Pension Fund,
from which pensions are paid to the widows of workers dying during
service or of retired members who had been receiving a pension.
The amount of the widow's pension is based on the actual or
prospective pension of the husband. The payment of a widow's
pension is subject to certain restrictions as to age on marriage,
age at time of husband's death, and length of period during which
the husband has paid contributions to the Pension Fund; in one
or two schemes the entire cost of widows' pensions is borne by the
firm, whereas in others the worker also contributes.
The cost of administering pension schemes is borne by the firm.
Many firms require no medical examination before a worker becomes
a member of the Pension Fund.
It is impossible to indicate at all exactly the results of pension
schemes. The firm provides a convenient unit for organising
pensions schemes; the worker is encouraged to make provision for
his old age and is safeguarded from making contributions to outside
funds which are not infrequently badly managed. Many firms
claim that the provision of pensions results in better morale and
loyalty. Little effect upon labour turnover has been noted except
perhaps that turnover is reduced among men over about thirtyfive or forty years, of age. The termination of the services of the
older workpeople is facilitated; an income for life is provided, and
firms no longer need to consider retaining the services of aged
workers as a form of " charity ".
Savings Schemes
Many firms encourage thrift among their workers by establishing
funds in which regular savings may be accumulated. Some schemes
are intended as a means of accumulating a considerable sum which
is paid to the worker on retirement ; the accumulated savings may
either supplement a pension or be a partial alternative. Other
schemes are for specific objects, the chief of which are saving for
holidays or for the purchase of his home by the worker.1 Even
1
Sometimes clothing clubs are instituted and the workers' contributions,
together with interest and possibly a bonus, are paid out once a year, for example
a t the beginning of winter, for the purchase of clothing.

INDUSTRIAL WELFARE

199

in firms where the system of paid holidays is in operation, funds
have sometimes been established in which the workers can accumulate sums to supplement the amounts paid by the firm.
Savings schemes are voluntary; usually the worker authorises
the firm to make regular deductions of a specified amount each
week from his wages and an individual account is kept for each
worker; within limits the worker is free to decide the amount to
be deducted. In some schemes, however, the worker is required
to make deposits of £1 or multiples thereof. Firms rarely add
amounts to the workers' contributions, though with few exceptions
they bear the full cost of administration.1 Workers' representatives
frequently participate in the work of administration. Some firms
guarantee the rate of interest on deposits, but others pay the actual
rate which the invested deposits have earned. Four or 5 per cent.
is the rate usually guaranteed, but sometimes it is as high as 8 per
cent. In most firms deposits can be withdrawn at any time on due
notice being given, but payments from holiday savings funds are
made only once a year, just before the holiday begins.
Many different systems are in operation. In some firms the
savings fund is set up under a trust deed, and the deposits are
invested in trustee securities. In other firms the system of stock
purchase is adopted; workpeople who join the scheme are given
facilities to purchase stocks or shares in the company at specially
favourable prices and easy conditions of payment. One firm
combines the system of share purchase by employees with a form
of profit-sharing according to which dividend at double the rate
declared on the ordinary shares is paid to them whenever the ordinary dividend is not less than 5 per cent. Many firms encourage
their employees to purchase National Savings Certificates issued
by the Government and offer favourable conditions for payment.
Another method is to give facilities and specially advantageous
terms to workers for the payment of the premiums on life insurance
policies.2 A frequent practice is for money to be advanced to the
worker at low rates of interest for the purchase of his house, the
loan being repaid by regular instalments. Many pension schemes
1
Some firms, which may also have instituted savings schemes, pay quite
independently a lump sum (sometimes ¿ioo) on retirement after a specified period
of service, the cost of the benefit being borne by the firm.
2
Some firms p a y the annual premiums on life insurance policies for their workpeople. Provision is made by this means for the workers' dependants, although
the workers themselves are not required t o make savings for payment of the
premiums.

200 INDUSTRIAL RELATIONS IN GREAT BRITAIN
serve as savings funds when they provide for payment of the workers' contributions together with interest and sometimes an amount
added by the firm to workers or their representatives in the event of
retirement or death before pensionable age; this is especially true
of schemes for women's pensions, because of the large number of
women who retire to be married or for other reasons before reaching
pensionable age. One firm has a savings scheme for women
under thirty-five years of age, but when this age is reached membership is automatically transferred to a pension scheme.
Works savings schemes, especially those in which regular deductions are made from wages, have undoubtedly been of advantage
to the worker. Without the encouragement and regularity of
the scheme, workers would save less and would be likely to lose
some of their savings by unwise investment. That the schemes
are appreciated is indicated by the very large number of workers
who voluntarily participate in them and by the large amounts,
totalling many thousands of pounds in some firms, which are
accumulated.
Sickness and Benevolent Schemes
Sickness and benevolent schemes have a long history in many
British undertakings. They originated in ad hoc collections of
money by workpeople to help one of their fellows in distress. The
method of making collections was, however, unsystematic, it did
not give a reasonable guarantee that assistance would be forthcoming, and it suffered from the defect that popular workpeople
would receive larger benefits than others equally deserving. In
order, therefore, to make the relief of necessitous cases less precarious, regular funds were established by the workpeople from which
grants were made according to circumstances, and at the end of
each year any unused amount was distributed to the members in
proportion to their contributions. A further development was
the institution of sickness funds from which benefits were paid
according to a fixed scale to all members absent from work as a
result of sickness or accident ; the workers knew exactly the amounts
they would receive in the event of such absence. Frequently the
companies have encouraged the formation of these schemes, often
by bearing the cost of administration and sometimes by making
contributions to the funds. Each of the methods outlined above
is found in some British firms. In the present section sickness and
other schemes which provide benefits according to a fixed scale
are first described, and an account is then given of benevolent

INDUSTRIAL W E L F A R E

201

schemes under which grants are made of amounts which vary
according to the circumstances of the beneficiary. Appendix I X
gives the chief provisions of the sickness benefit schemes of a number
of well-known firms.
The sickness benefit schemes of most firms are based on weekly
contributions b y the workpeople, by authorised deduction from
wages. The workpeople almost invariably participate in the management of the scheme, sometimes through the works council. In
many schemes the firms make no direct contribution to the fund,
but bear the cost of administration. In some schemes, however,
the firms make considerable contributions. Thus one firm contributes a sum equal to 50 per cent, of the amount expended in
sickness benefit and administration, with a maximum of 16s. gd. per
member per annum. A few firms bear the whole cost of sickness
benefit schemes. Where the workpeople make contributions,
membership is voluntary. Age limits for membership are fixed
in some schemes, for example, over sixteen and a half years and
under forty years; in some schemes evidence of good health must
be furnished by applicants for membership. Frequently separate
funds are set u p for men and women respectively, with different
rates of contribution and scales of benefit; special arrangements
are often also made for juvenile workers. In several firms the
men are divided into two grades according to occupation or earnings,
and for one grade the contributions and benefits are higher than
for the other. In one or two firms a maximum rate of contribution
is fixed, but workers may pay smaller amounts with correspondingly
lower rates of benefit. The amount of contribution varies considerably. For men the rates range, with few exceptions, from
3d. or 4¿Ü. per week to i s . per week, a frequent rate being (yd. per
week. For women, the usual range is from 2d. per week to 6d. per
week. Generally, workpeople make no contribution during periods
of absence owing to illness.
The sickness benefits vary considerably both in their amount
and the number of weeks during which they are paid. They are
usually independent of amounts received under the National Health
Insurance and Workmen's Compensation Acts, but in a few sickness
schemes the benefits are related to these amounts. Thus one firm
has undertaken to make up the benefits under the Acts to a total
of 80 or 90 per cent, of the worker's full weekly wage for a period
of thirteen weeks. Another firm reduces the benefits by any
amounts received in compensation by workpeople absent as a result

202

INDUSTRIAL RELATIONS IN GREAT BRITAIN

of an industrial accident. The figures below show the scales of
benefit in operation for adults in several firms where the benefits
are largely or altogether independent of those received under the
Acts. The rates of contribution are also given.
Frequently benefits are not paid for the first two or three days'
absence. Some schemes require membership for a period of three
or six months before benefits are payable. Frequently a provision
is introduced that a member who has been absent and has drawn
benefits for the whole of the specified number of weeks shall not be
entitled to further benefits for twelve months. 1 A member who
has drawn benefits for part of the specified period and is again on
the fund before the expiration of twelve months is often entitled
to draw benefits only for the remainder of the period. Usually
RATES OF CONTRIBUTION AND SCALES OF BENEFIT OF
SEVERAL SICKNESS BENEFIT SCHEMES
Scales of benefit
Scheme
No.

Sex of
member

Male
Female

3
4

5
6

Male
Female
Male
Female

Member's
weekly
contributions!

4<2.

4¿.
1 5 . Od.

6d.
6d.
2d.

225. od. for i s t 26 weeks

14s. od. for i s t 26 weeks

24s. od. for 16 weeks
gs, od. for 16 weeks
12s. od. for 26 weeks 2
8s. od. for i s t 6 weeks

Male

6d.

15s. od. for i s t 8 weeks

Female

3d.

7s. 6d. for i s t 8 weeks

Male
Female
Male
Female

3d.
3d-

1 os. od. for 13 weeks
ios. od. for 13 weeks
I2S. od. for 26 weeks
12s. od. for 26 weeks

—

Reduced weekly rate

Full weekly r a t e

u s . od. for further
26 weeks 3
js. od. for further
26 weeks 3

—
—
—

4s. od. for further
6 weeks
js. 6d. for further
4 weeks 4
5s. od. for further
4 weeks

—
—
—

1
Contributions by the firm, other than costs of administration, are made only as follows: Scheme i,
50 per cent, of cost of scheme up to a maximum by the firm of i6s. gd. per member per annum; Scheme 5,
the firm makes an annual grant which covers about one-fifth of the benefit; Scheme 6, the whole cost is
borne by the company.
2 Maximum.
3 Victims of accidents receive reduced rates or no benefits according to the amount received in accident
compensation. The firm pays certain auxiliary sickness benefits.
4 These benefits are paid to men in Class 1 ; the benefits to men in Class 2 are one-third less, the contribution
being similarly lower.

1
A few firms have a special fund for assisting members suffering from longcontinued illness who have exhausted their sickness benefits.

INDUSTRIAL WELFARE

203

benefits are not paid if the sickness or accident is the result of the
worker's own excess or misconduct. Arrangements are generally
made for workpeople in receipt of benefits to be visited by a representative of the scheme. Other safeguards against abuse of the
scheme are introduced. While in receipt of benefit workpeople
are not to undertake work or otherwise act in a way which would
be likely to retard their recovery; one scheme provides that they
shall not frequent public-houses, while several schemes require
them to be at home at an early hour in the evening. Some schemes
arrange that any surplus in the fund at the end of each year, after
carrying a reserve forward, shall be divided among the members.
A few funds provide that members who leave the service of the
firm shall receive a proportion, e.g. 50 per cent, of their contributions less any benefits received, provided there is a sufficiency of
funds.
Some sickness benefit schemes also pay funeral benefits. In
some firms, however, special arrangements are made for the payment of such benefits. The cost is sometimes borne by the firm,
but in a number of firms funds are built up from contributions by
the workpeople. Some schemes provide for the payment of funeral
benefits in respect not only of the death of members but also of
members' wives. Benefits in respect of adults range from £8 or
£10 to as much as £40.
Closely related to sickness benefit funds are schemes which
provide for free treatment at the hospitals. These are often based
on regular contributions of id. or 2d. per week by the members
together with sums paid by the firm. Membership is voluntary.
The benefits often include free treatment for the worker's wife and
children as well as for himself. Very many firms which have no
scheme of regular weekly contributions organise the raising of
funds for the hospitals by means of collections. In return the
hospitals give preference to the workpeople in obtaining entrance
to the hospitals. A few large firms maintain their own hospitals.
Some firms have their own convalescent homes, the land and
buildings being usually provided by the firm while the workers
contribute to the cost of maintenance. Many firms assist their
workers to meet the cost of medical attention, convalescent treatment and surgical appliances.
Benevolent schemes for providing assistance according to circumstances where workpeople are in special difficulties owing to
sickness or other causes have been instituted by a large number

204

INDUSTRIAL RELATIONS IN GREAT BRITAIN

of firms. In some schemes the necessary funds are provided and
administered by the firm. In others the firm gives facilities for the
establishment of a fund based on collections among the workpeople;
the fund is often managed by a works committee which makes
grants to alleviate cases of proved distress among the workpeople.
Many schemes are based on regular voluntary contributions by the
workers (e.g. id. per week), together with subsidies by the firm.
Representatives of the workers take a large part in the work of
administration. In making grants under any type of benevolent
scheme, the financial circumstances of the worker and the number
of dependants are taken into consideration.
Unemployment Benefit Schemes x
The schemes reviewed here provide benefits additional to those
paid under the State unemployment insurance system. In some
schemes the employers and trade unions are associated, while in
others benefits according to an established scale are paid from funds
maintained by employer's contributions alone; another system is
for the firm to give a guarantee to workers who have been in its
service for a certain number of years that they shall receive the
whole or a specified part of their wages during periods of short time
or unemployment. About twenty schemes covering 60,000 or
75,000 workpeople were known to be in operation recently. Some
of them were affected by the change made for reasons of economy
in the autumn of 1931 in the State system. The change involved
the application of a " means test " to workers who had exhausted
their right to benefits under the State scheme and who then appealed
to the Public Assistance Committees for financial aid; this method
has been continued in the present unemployment assistance scheme.
The adoption of the means test by the State has resulted in firms
ceasing to pay additional benefits usually after twenty-six weeks
which would be likely to reduce the amount of public assistance
granted.
A system of additional unemployment benefits was introduced
in 1921 by the Joint Industrial Council of the Match Manufacturing
Industry. The employers and trade unions are thus associated
in the scheme, which covers almost the whole of the industry. Each
of the six firms covered undertakes to set aside 1 per cent, of the
1
This section is based on an article on " Employers' Additional Unemployment
Benefit Schemes in Great Britain", by MARY B. GILSON and E . J. RICHES,
International Labour Review, March 1930.

INDUSTRIAL W E L F A R E

205

amount paid in wages until a joint fund or pool has been accumulated equal to 5 per cent, of wages, or £25,000, whichever is the
greater sum, and this fund shall be maintained. Persons over
eighteen years of age who have been regularly employed in the
industry for a continuous period of six months immediately before
becoming unemployed and who are members of trade unions
represented in the Joint Industrial Council are entitled to benefit.
The weekly rate of benefit for men is 9s. and for women 5s. ; a
supplement of is. 6d. is paid in respect of each dependent child.
The number of weeks during which these benefits are paid depends
on length of continuous employment after reaching eighteen years
of age; one week's benefit is paid for each two months up to two
and a half years of such employment, and one week for each
complete year be3^ond two and a. half years' employment. In
addition each eligible worker contributes 2d. per week to his trade
union, and unemployment benefits of 6s. per week are paid in
respect of this contribution. I t is provided that the total benefit
from the State, the firm and the trade union shall not exceed the
average wage of the worker. I n consequence of membership being
limited to members of trade unions over eighteen years of age,
about one-half of the workers are eligible.
The Bradford Dyers' Association, Ltd., introduced into a working
agreement with the trade unions as early as 1907 a provision under
which dismissal benefits were paid for a period of twenty weeks.
The system was terminated at the instance of the unions some years
before the State scheme was introduced. Benefits have, however,
been paid on an ex gratia basis, usually at the rate of £1 per week
for twenty weeks, to men displaced on account of reorganisation,
closing of works, surplus, etc., the cost being borne equally by the
unions and the Association. The Joint Industrial Council for the
Flour Milling Industry has instituted a scheme for the re-settlement
of operatives displaced b y developments in the organisation of the
industry. A number of individual firms operate similar schemes.
Apart from schemes based upon association between the firms
and the trade unions, some ten firms have introduced independent
unemployment benefit schemes. Most of the firms are in chocolate
and confectionery manufacturing or in stationery and other paper
products. All the schemes were established during or after the
1921 depression. Several of them provide benefits paid by the
firms alone, in others the firm and the workers both contribute
and in one scheme only the workers contribute. I n some schemes

2o6

INDUSTRIAL RELATIONS IN GREAT BRITAIN

the benefits are paid out of the ordinary resources of the firm,
while in others a special fund is maintained. One firm has
established a considerable fund from which payments are made
to workers on short time, but any balance in the fund at the end
of each year is distributed to all adult employees in amounts
proportionate to their length of service; the scheme thus operates
as a form of prosperity sharing.
A chief purpose of some of the schemes is to augment short-time
earnings during periods of seasonal shortage of work. In some
schemes workers on short-time or temporarily unemployed are
guaranteed payments at full rate or three-quarters of the full
rate for a large part of the normal week (e.g. forty, forty-two, or
forty-three and a half hours in different schemes), less the amount
of any State benefit received; for temporary unemployment the
number of weeks during which the guarantee operates is sometimes
limited, e.g. to twelve weeks. Other schemes specify a scale of
payments to workers on short time or temporarily unemployed
which varies according to sex, number of dependants, and age
(adult or juvenile) ; some of them provide that payments under
the scheme together with any unemployment benefits received
from the State and from trade unions or other societies shall
not exceed a given proportion, e.g. 75 or 80 per cent., of full-time
earnings.
Most of the schemes provide also for the payment of substantial
dismissal benefits if dismissal is due to lack of work or other causes
beyond the workers' control.1 In many schemes the amount of
benefit varies according to the number of dependants of the worker,
higher amounts are paid to men than to women, and juveniles
receive lower rates than adults. For adult male workers without
dependants the full weekly benefit ranges from js. 6d. in some
schemes to about 20s. in others, in one scheme the full benefit
is 50 per cent, of average weekly earnings. In most schemes the
full rates of benefit are paid for periods which range from six weeks
in some firms to thirteen weeks in others, and half rates for a
further similar period. Reduced benefits are often paid to workers
who have been employed by the firm for less than a specified period
(e.g. two years). In several schemes the number of weeks during
which benefits are paid varies according to length of service.
1
A number of firms which have not established additional unemployment
benefit schemes pay a lump sum to workers discharged because of lack of work.

INDUSTRIAL WELFARE

207

Joint committees of representatives of the firm and the workers
take part in the administration of many of the schemes described
above. Firms reserve the right to terminate the schemes, though
some have undertaken that they will give three or six months'
notice of their intention to exercise this right. Although yet of
very limited application the schemes represent an attempt to
supplement the benefits paid under the State scheme. In those
firms which pay benefits in proportion to earnings the skilled
worker receives amounts more adequate for the maintenance of
his standard of living than the flat-rate scale which applies under
the State scheme to skilled and unskilled workers alike. The
schemes also have the advantage that they offer some inducement
to the firms as far as practicable to stabilise their employment
by reducing the amount of short time and the number of dismissals.

THE INDUSTRIAL WELFARE SOCIETY

The Industrial Welfare Society, presided over for many years
by H.M. the King when he was H.R.H. the Duke of York, was
formed in 1918 by Robert R. Hyde, the Director of the Society,
and by various employers who were of the opinion that the welfare
work undertaken during the war by the Ministry of Munitions
should be continued on a voluntary basis and should, under peace
conditions, be guided by industry rather than by a State department. The Society endeavours to retain for industry the responsibility for, and the direction of, industrial welfare work. It exists
for the purpose of focusing attention upon and developing the
various activities (industrial, educational and recreational) within
the scope, in the widest sense, of industrial welfare. It also serves
as a clearing-house for information.
The membership of the Society consists largely of industrial
firms, although individuals may also be members. The Society
supplies member firms with information about the different phases
of welfare work. It discusses with employers the welfare schemes
which would be applicable to their own particular works and
circumstances. Assistance has been given along these lines to
many firms in the establishment or development of practical
schemes. The Society will arrange for the services of a professional
or other expert to advise its members on welfare matters. It
advocates that in each firm there should be a responsible person

2o8

INDUSTRIAL RELATIONS IN GREAT BRITAIN

in charge of all personnel work, whether a director, manager, or
welfare supervisor, and it will recommend persons qualified for
positions as labour managers, welfare supervisors, canteen
managers, etc.
A monthly publication—Industrial Welfare and Personnel Management—is issued in which articles of general interest to management
are a regular feature.1 Studies have been prepared giving detailed
information about specific welfare schemes, including their cost,
methods of financing, and regulations which have been found by
experience to give good results. Each year since 1920 the Societyhas organised a conference on welfare work which is usually attended
by representatives from between 100 and 200 firms. At more
frequent intervals conferences are held for discussion and exchange
of experience on special subjects.

It is appropriate to end this chapter by summarising the conclusions upon welfare work expressed by the Director of the
Industrial Welfare Society, on the basis of evidence collected from
upwards of 400 firms. He claimed that welfare work is increasing
both in volume and scope; that it is regarded by progressive
employers as an integral part of management; that, although its
value cannot be estimated in terms of cash, it has a beneficial
effect both directly and indirectly upon productive capacity and
efficiency; and that it results in better health, better adjustment
of the worker to his work, greater interest and effectiveness, reduced
labour turnover and improved industrial relations.2

1
This publication is also the official organ of the British Industrial Purchasing
Officers' Association and the British Works Management Association.
a
Paper read by R. R. H Y D E before the Royal Society of Arts.

CHAPTER VII

LABOUR MANAGEMENT
SYSTEMATIC study of the problems of labour management is a
recent development in British industry. Most, if not all, of the
problems themselves are as old as industry. While factories
remained small the employer was able to maintain close contact
with his workpeople and to apply a co-ordinated if unscientific
policy. The growth of large-scale undertakings and changes in
methods and conditions of work, including reduced hours of labour
and increased wages, have compelled attention to be directed to
determining the most appropriate system of labour management
and scientific means for ensuring the most efficient use of labour.
Labour management " is now coming to be regarded as of very
great importance to the success of any undertaking. . . .
Business is not exempt from laws which regulate other forms of
human association and requires for its success good intelligent
leadership ".1
The types of labour management still predominant in British
industry are: (i) the departmental system, in which each departmental manager is responsible for his own labour policy; (2) the
so-called " line and staff " system, which resembles military organisation, with the managing director or works manager in a position
of supreme authority in labour as in other matters and with all
departmental and other officials subordinate to him. Each of
these methods has certain disadvantages and, in endeavouring to
avoid them, a few large undertakings have introduced a third
system called the functional system. Under this system in its
most developed form one of the directors undertakes responsibility
for labour policy and any expenditure involved, and a labour or
employment manager is appointed to give effect to the policy.
The labour manager stands in a similar relation to the labour
problems of the factory as does the production manager to problems
of output and the engineer to the machinery. Increased interest
is being shown in this functional type of organisation.
1

Survey of Industrial Relations, p. 192.
14

210

INDUSTRIAL RELATIONS IN GREAT B R I T A I N

Among the chief subjects within the scope of labour management
are: (i) recruiting and selection of workers, including application
of vocational selection tests; (2) training of workers, including
instruction of apprentices and learners and training for promotion ;
(3) health, safety, general welfare of workers, including the observance of statutory requirements; (4) consultation with workers,
including the functioning of works councils, suggestion schemes,
and investigation of grievances; (5) labour turnover; (6) the determination of methods and rates of remuneration. The last of these
is a particularly important subject, and includes time studies which
provide the necessary basis for many " incentive " systems of
payment. Where the functional type of organisation has been
introduced some firms make the labour manager responsible for
wages and time studies, while others include it among the responsibilities of the production manager. One firm at least charges the
production manager with responsibility for time studies, and the
labour manager is required to ensure that the relative wages of
different categories of workers are fair and in accordance with
agreements. In other respects also there is considerable variation
between firms as to the work delegated to the labour or employment
department. In some large undertakings specialists are appointed
for various branches of the work; they include works doctors,
nurses, welfare supervisors, educational, psychological and timestudy experts.
Many of the subjects which fall within the scope of labour management have already been reviewed in the two previous chapters
on works councils and industrial welfare respectively. 1 The present
chapter deals with vocational selection and vocational training
(including apprenticeship), health and safety (other than statutory
requirements), and suggestion schemes. It also gives an account
of various organisations which are conducting research work and
which arrange for exchange of experience between persons engaged
in labour management.
Systems of wage payment, and time studies associated with some
of these systems, are not discussed as they would require detailed
treatment beyond the scope of the present volume. However, it
may be noted that a comprehensive enquiry conducted by the
1
" Labour or employment management has come to be regarded in many
quarters as the central activity to which other branches (of industrial welfare) are
subsidiary and round which they group themselves." (Home Office Welfare
Pamphlet No. 3, p. 14.)

LABOUR MANAGEMENT

211

Board of Trade in 1906, supplemented by more recent data for coal
mining, showed approximately 72 per cent, of the workpeople
covered by the returns to be on time work and 28 per cent, on piece
work or other systems of payment by results. 1 In the exporting
industries the proportion of piece workers is considerably higher
than in industry as a whole; thus the 1906 enquiry showed t h a t
40 per cent, of workers in the chief exporting industries were on
piece work. Since 1906 there has been a tendency in some industries,
e.g. engineering, to apply more widely the various systems of
payment by results, but time work remains predominant in British
industry and is favoured by many trade unions.
Payment by results is rare in some industries; thus in building,
public utilities and railway transportation, 95 per cent, or more of
the workpeople are on time rates. A large proportion of workers
in the textile and clothing industries are paid on piece rates. In 1906
in the cotton textile industry between 60 and 70 per cent, of the
workpeople were paid by results; the iron and steel, engineering,
and shipbuilding industries were in an intermediate position with
about 25 to 35 per cent, paid by results ; in printing and paper, chemicals, and the food, drink and tobacco group, time work was more
important, only about 15 to 20 per cent, being paid according to
output. 2 In coal mining, according to an enquiry in 1924, approximately 40 per cent, were paid on an output basis. In most industries
some occupations are predominantly on piece rates, e.g. textile
weavers, and hewers in coal mining. Unskilled general labourers
are usually employed on time wages, and therefore, among skilled
and semi-skilled workers engaged in the manufacturing processes,
the proportions paid b y results would be higher than those indicated
above.
Almost every method of payment by results has some application,
but the straight piece-work system, including group piece work,
predominates. 3 In many industries the conditions of payment by
results and often the rates themselves are fixed by collective agreements, and labour managers or others in the undertakings are free
1
The results are published in detail in a series of volumes; a summary is given
in Survey of Industrial Relations, pp. 105-122. Agriculture is not included.
2
These various percentages are those shown by the 1906 enquiry, but are
probably still fairly representative, except for some of the metal trades.
3
I t m a y be mentioned here t h a t the Bedaux System, which mainly limits itself
to determining standard outputs, without considering the rates of pay or the
premiums for output above standard, has been introduced by a number of large
British firms during recent years.

212 INDUSTRIAL RELATIONS IN GREAT BRITAIN
to introduce or modify the systems and rates only within defined
limits. Sometimes, however, the limits are wide, for example,
where the agreement merely ensures a guaranteed time minimum
and fixes the percentage above the time wage which workers on
piece rates should earn.
VOCATIONAL SELECTION AND TRAINING

Selection
The usual method of selecting workers to fill vacancies is by
à brief personal interview and a preliminary trial following recommendation or direct application.1 For skilled workers a trade
test may be set to supplement enquiry about previous experience.
Growing interest is being shown in the application of systematic
tests of ability, especially to juveniles. A number of firms now use,
along with the interview, a series of physiological and psychological
tests to determine such qualities as general intelligence, reaction
time, rhythm and co-ordination of hand and eye.2 Sometimes there
is also a medical examination. The tests applied in different firms
are based on careful studies of the type of work and the most
suitable qualities required. In some firms the tests have been established after investigation and advice by the National Institute
of Industrial Psychology (see page 226). Before tests are used for
selecting workers their appropriateness is determined by applying
them to workers already employed, and the results of the tests are
compared with the actual performance of the workers in their jobs
in the factory.
Selection of workers is usually undertaken by the manager or
the heads of departments, but in firms where labour or employment
managers have been appointed selection is made by them in consultation with the heads of departments. A number of firms have
established separate employment departments for men and women.
Where systematic selection tests are applied these are supervised
by the regular employment staff. A few firms, however, have set up
psychological departments which frame and apply selection tests
1
Employers are assisted in securing suitable workers by the employment
exchanges and the trade unions. For juveniles, special Juvenile Employment
Bureaux have been established by t h e local education authorities and over 170
Juvenile Advisory Committees have been formed.in locahties throughout Great
Britain t o assist in giving vocational guidance to juveniles and in placing them in
suitable employment.
2
One firm uses the tests to select about double the number of persons required
and the final selection from these is made b y the method of interview.

LABOUR MANAGEMENT

213

as well as undertake various other duties. Messrs. Rowntree and
Company's psychological department, which was set up in 1922,
consists of two fully trained industrial psychologists, one engineer
who specialises on movement study, and several clerical assistants.
In 1929 this firm made an investigation into the value of the psychological department, and in balancing the estimated savings against
the cost it was found that the department had paid its way several
times over.1 Among the advantages claimed by firms which apply
selection tests are greater accuracy in choosing the most suitable
workers, shorter time required to train workers, increase in efficiency
and earning capacity, greater contentment among the workers
and lower labour turnover. Up to the present, tests have been used
much more widely for the selection of juveniles than of adults.
Training
Very large number of applicants selected for industrial employment receive no systematic training and they gain experience in
haphazard fashion by assisting and observing other workers. But
in many occupations skill is acquired by apprenticeship, and
employers are now giving greater attention to training for semiskilled work. There is also the question of training for foremanship.
These aspects of training are reviewed below. First, however, it
is of interest to give an account of the system of initiation schools
which' a number of firms have introduced.
The object of the initiation school is to make easy for young
workers the transition from school to factory life. The system
has been introduced by several large firms which recruit a considerable number of juveniles when they become available for employment at the end of each school term. Instead of being put immediately to work in a department the first few days or even the
first week of employment is spent in classes, and instruction is given
about the works and industrial life. A tour of the works is made,
an account is given of the sources of the raw materials used, and
the chief processes are explained. A description is given of the
organisation of the works, the chief rules, safety precautions against
accidents, and the welfare activities in which the worker is entitled
to participate. Use is made of the cinematograph for purposes
of illustration.
1
Statement made by a representative of the firm at the Discussion Meeting of
t h e International Industrial Relations Association, held in Upper Bavaria in 1929.
(Report of the Meeting, p. 106.)

214 INDUSTRIAL RELATIONS IN GREAT BRITAIN
Apprenticeship or an equivalent system of learnership is still
the chief method of training juveniles for skilled work in a number
of industries.1 It has been estimated from the results of a special
enquiry conducted by the Ministry of Labour in 1925-1926 that
there were then 315,000 boy apprentices and 110,000 boy learners
in Great Britain, or about one-fifth of the male workpeople under
twenty-one years of age in industrial occupations were either
apprentices or were employed under some form of training substituted for or alternative to apprenticeship.2 Only 30 per cent.
of employers took boys for some recognised system of training.
The chief industries in which apprenticeship and learnership are
important are building and woodworking, engineering, shipbuilding,
printing, pottery manufacture in North Staffordshire, glass manufacture, certain public utility services and industrial work in
various Government departments. On the other hand, apprenticeship and learnership are rare or non-existent in the chief occupations of mining, quarrying, brick and tile manufacture, iron and
steel, chemicals, textiles, paper-making, and the distributive
trades. 3 In these industries juvenile workers usually begin on
light jobs; they gain experience by observing the experienced
workers and are promoted as vacancies occur.
In the industries in which apprenticeship is usual, the burden
of training apprentices is borne to a greater extent (in relation to
their size) by the smaller than by the larger firms.4 There is also,
in some industries, much variation in different parts of the country.
Thus in the building, woodworking and allied trades, according
to the Ministry of Labour's Report, only 15.7 per cent, of the
employers in London who supplied information had any boys in
training as against 63.5 per cent, in Scotland and nearly 60 per
cent, in the northern counties of England; also in London there
1
In apprenticeship the employer contracts t h a t the trade shall be taught to the
worker, and the worker contracts to serve throughout a specified period of years.
Under the system of learnership the relationship is less formal, b u t the worker is
engaged for a recognised period of years and is given definite facilities for learning
a branch or process of the industry.
2
Report of an Enquiry into Apprenticeship and Training for Skilled Occupations
in Great Britain and Northern Ireland, IÇ2J-ZÇ26.
The enquiry covered firms
employing nearly 3,000,000 workpeople. The Report, which consists of seven
volumes, was briefly summarised in the Ministry of Labour Gazette, Nov. 1927,
Feb., March and July 1928.
3
Apprenticeship is usual in wallpaper manufacture. In the clothing industry
there is very little apprenticeship, but juveniles are usually trained under a more
or less definite system of learnership for a period of years.
4
Ministry of Labour's Report.

LABOUR MANAGEMENT

215

was only one boy in training to every seven journeymen, as
compared with one to every 2.4 journeymen in the northern
counties.
The Ministry's enquiry showed that apprenticeship proper has
changed and is changing its traditional forms. There is a distinct
tendency for the substitution of an oral agreement for a written
indenture. The traditional apprenticeship of seven years beginning
at the age of fourteen is giving place to five years beginning
at the age of sixteen. Of the boys who each year enter some
definite form of industrial training about 27,000 start at fourteen years of age, 15,000 at fifteen, and 30,000 at sixteen.
By far the most common method of training is still the timehonoured one of attaching an apprentice to a skilled workman,
but employers in increasing numbers are introducing schemes for
more systematic instruction. A few companies (e.g. in engineering,
shipbuilding and railway service) have established technical
classes on their own premises, and special teachers are appointed
in some large firms to instruct apprentices. A small number of
companies insists upon apprentices and learners supplementing their
practical workshop training by attendance at technical or trade
classes, but in more firms time off without loss of pay is granted to
attend classes a t technical schools and colleges and at the universities, attendance is encouraged by refunding evening class and other
fees if satisfactory progress is shown, and prizes or merit bonuses
are awarded. Facilities for technical instruction provided by* the
local educational authorities are readily accessible from most,
though not from all, works. In addition to measures taken by
the firms one or two Joint Industrial Councils have formulated
schemes for the training of apprentices. 1 A number of trade
unions have also shown interest in the training of apprentices,
while many unions have made rules regulating conditions of
employment of apprentices, e.g. age of starting, length of apprenticeship, and ratio of apprentices to journeymen.
There has been a tendency in some industries during recent
years for apprenticeship and learnership to decline relatively in
importance. Thus in industries in which the rates of wages of
skilled workmen have fallen to low levels and prospects are poor
owing to prolonged trade depression, boys are somewhat reluctant
1

For example, the Joint Industrial Council for the Printing and Allied Trades
s evolved a scheme.

2i6

INDUSTRIAL RELATIONS IN GREAT BRITAIN

to undertake long periods of training and are attracted by the
relatively high wages paid after short periods of training in semiskilled occupations in many industries. The increasing specialisation of process and the greater use of automatic and semi-automatic
machinery have resulted in a growing number of workers being
able to acquire adequate experience after a period of training
extending over a few weeks or months.
In many works these semi-skilled jobs are still learned by
assisting and observing the experienced workers, and the acquisition of the best methods is a matter of chance. But there has
been an increase in the number of firms which have introduced
systematic training. This is often based on movement study, the
most convenient movements and arrangement of materials being
analysed and then taught to new workers either by special instructors or more usually by experienced workers with ability to
teach others. Instructional workshops equipped with machines
are sometimes provided and new workers are taught the processes
in these training rooms instead of in the factory proper; the
practical training is supplemented by theoretical instruction.
Systems for training foremen and forewomen and workers
considered suitable for promotion to these grades of responsibility
are in operation in a number of firms. The training occupies an
hour or two a week during a period which varies from three months
in some firms to two years in others; also in some but not in all
of these firms the training takes place during working time. A
main purpose is to broaden the general outlook, and therefore
the training is not narrowly vocational. It consists of lectures,
discussion groups and visits to other factories. The lectures may
include general subjects, e.g. elementary economics, psychology,
history and hygiene; they also cover more specialised subjects
such as the firm's policy and administrative methods, factory
organisation, processes of manufacture in the industry, costing,
elimination of waste, labour management, rate-fixing, the Factory
Acts, and social insurance. No guarantee of promotion is given
to workpeople selected for training, but they are given first
consideration when vacancies occur.
HEALTH AND SAFETY

Increased attention has been directed during recent years to
working conditions conducive to the health of the workers, and

LABOUR MANAGEMENT

217

progress has been made in the improvement of conditions and in
the application of measures for accident prevention. Reference
has already been made to statutory requirements, but many
undertakings have gone far beyond the minimum standards
prescribed by legislation. There is, however, need for an extension
of the practices introduced by the most progressive firms. The
losses which industry suffers from sickness among the workers is
insufficiently recognised. It is true that the amount of time lost
from sickness partly reflects the general state of health of the
community and that the responsibility of the public health authorities is involved, but there is no doubt that a considerable improvement could be effected if appropriate methods were adopted
throughout industry.
The importance of the problem is shown by the fact that in
England and Wales alone the number of weeks for which sickness
and disablement benefits were paid during recent years among
an average of over 16 million persons covered by the National
Health Insurance Acts was between 25,000,000 and 30,000,000
per annum, or the equivalent of about 3 per cent, of full working
time ; * in 1935 the number of persons covered in Great Britain and
Northern Ireland was 18,882,550, and the total benefits amounted
to £31,767,000. In addition to the time lost as a result of sickness,
account must be taken of the reduced productivity of workers
who, though sick, remain at work. Some years ago an official
statement was made by the Chief Medical Officer of the Ministry
of Health that the loss of time due to sickness, most of which is
preventible, probably costs the country not less than ten times
more than that which it loses owing to strikes and labour disputes.2
During the years 1927-1937, with the smaller losses from disputes,
the proportion was very much higher.
Industry can make an important contribution towards improvement by applying the principles established by the scientific
investigations of the Industrial Health Research Board and other
bodies, and much loss and dislocation of work could be avoided.
These- principles have received considerable application in a
number of firms. Among the chief measures adopted are improvements in ventilation, heating, humidity standards, lighting, and
elimination of dust, reduction of fatigue by avoiding unduly long
1
Annual Reports on the State of Public Health by the Chief Medical Officer of the
Ministry of Health. Benefits are not paid for the first three days.
2
Annual Report for 1923.

2i8

INDUSTRIAL RELATIONS IN GREAT BRITAIN

hours, introduction of rest pauses especially in repetitive work,1
provision of seats, arrangement of work and design of machinery
to avoid awkward postures and to eliminate unnecessary movements, and special measures in certain occupations (e.g. the use
of suitable spectacles to reduce eye-strain among workers engaged
upon fine work). Measures for the prevention of industrial diseases
encountered in certain occupations have also been applied.
Many large firms employ fully qualified doctors and nurses,
and have established well-equipped works surgeries. In some
firms the doctor is on full time, while in others he is on part time,
attending at the v/orks each morning or on certain days each week.
Some of the most complete schemes include a full-time doctor,
an assistant woman doctor and several trained nurses. On the
preventive side, the doctor makes suggestions for improvements
in working conditions which will conduce to better health. He
also examines the sickness records of the works, gives advice
to individual workers who wish to consult him, and he or one of
his staff attends cases of accident or illness in the works; initial
or emergency treatment only is given and cases involving absence
from work are referred to outside doctors or to the hospitals.
The medical staff in some undertakings, including many in the
food industries, examines most or all applicants for employment.
A dental department is organised.in a number of undertakings;
in several large firms this consists of one or more full-time dental
surgeons, nurses and dental mechanics. Thus, one undertaking
employs three whole-time dental surgeons, five dental nurses and
a dental mechanic and has four dental surgeries, two waiting rooms
and two recovery rooms ; treatment is compulsory for all employees
under eighteen years of age, and the services of the department are
available for other employees. In some firms a dentist is employed
part time, visiting the works each morning or on one or two days
each week. A few firms employ an oculist and an optician who
visit the works on one or two days each week. Ultra-violet ray
clinics have been introduced in a number of works. Such elaborate
schemes are limited to a small minority of big undertakings, but
in many other firms an ambulance room, equipped for the rendering
1
The practice is extending of introducing a rest interval of five or ten minutes
in the middle of the morning and afternoon, especially for workers engaged upon
repetitive work. A change of posture is encouraged, while opportunity to obtain
a cup of tea or other light refreshment is offered. Experience has shown t h a t in
certain kinds of work the introduction of rest intervals is usually followed by some
increase in output, notwithstanding the shorter time worked.

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2ig

of first-aid in cases of sickness or accident, is provided, with a
trained nurse in charge; also firms which employ large numbers of
women often provide a rest room for the use of those temporarily
indisposed.
Medical services are usually provided free for all juvenile workers
and sometimes for adults, although a small charge is made for
medicine. In the dental departments adults are charged amounts
which cover the cost of material and labour, but juvenile workers
are often treated free or at very low rates. Where spectacles are
required these are supplied at wholesale prices. In some large
works the cost to the firm of the medical and dental departments
totals several thousand pounds per annum, but it is claimed that
the expenditure is fully justified b y the reduction in the amount of
sickness and improvement in efficiency.
On the question of industrial accidents, increased attention has
been given both to preventive measures and also to improving
the first-aid treatment given to victims of accidents. It is now
increasingly recognised that, in addition to Government regulations
and improvements in the fencing of dangerous machinery, much
voluntary effort is required by management and workers in the
individual undertakings. Many firms undertake systematic education of their workpeople with a view to diminishing the number of
accidents. Frequently a member of the staff is responsible for
maintaining a high standard of working conditions which will
contribute to safety. Safety-first committees are set u p consisting
of representatives of the higher management, foremen and workers.
These committees meet regularly to discuss suggestions for improving standards of safety, and frequently they enquire into any
accidents which have occurred. Safety-first posters are displayed
in various parts of the works and propaganda campaigns are undertaken at intervals. The National Safety-First Association, which
was formed in 1919, undertakes industrial safety propaganda,
including the issue of literature and the organising of conferences. 1
This voluntary organisation supplements the work undertaken by
the Home Office and the Mines Department.
Reference has been made earlier to the establishment of ambulance rooms for giving first-aid to victims of accidents. Workers
are encouraged to attend at the ambulance room for the dressing
of minor injuries so that septic poisoning may be avoided. A
I t works in close association with the Industrial Welfare Society.

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widespread practice, even where ambulance rooms are not provided, is for an ambulance brigade to be formed in the works.
Members of the brigade are regularly instructed in first-aid and give
emergency treatment when accidents occur. First-aid boxes are
placed in suitable positions throughout the works and representatives of the ambulance brigade are responsible for keeping up
the necessary supply of dressings and other appliances.
SUGGESTION SCHEMES

Many firms, both large and medium sized, have introduced
suggestion schemes and this practice is extending. Some of
the schemes date from about the beginning of the present century.
The purpose is to encourage the workers to make any suggestions
for improvements in machinery, organisation, methods of work,
and quality of products, for elimination of waste of time, energy
or materials, and for increasing the health, safety, and well-being
of the workers. Workers in any undertaking are, of course, free
to make such suggestions, but experience has shown that few are
made unless there is systematic encouragement and a clear indication that suggestions will be welcomed, together with organised
methods for their communication and examination.1
In most schemes blank forms are provided on which the workers
make their suggestions. The forms may then be placed in boxes
provided for the purpose in each department or in some other
convenient place in the works, or they may be addressed directly
to the management. Arrangements are often made for assistance
to be given to the worker, if necessary, in expressing his idea. Provision is made that suggestions shall be considered without delay,
usually within one to four weeks ; in some works they are examined
by the management alone and in others by a committee on which
both management and workers are represented. Frequently the
name of the worker making the suggestion is not disclosed to the
committee, a number being used for identification purposes.
In almost all schemes the firms make money awards for successful
suggestions. The amounts of awards are based upon such criteria
as the saving in money, time or materials likely to result from the
application of the idea, or upon its novelty, ingenuity or the greater
1
A memorandum on suggestion schemes prepared by t h e Industrial Welfare
Society gives an account of various methods.

LABOUR MANAGEMENT

221

convenience to which it leads.1 The amount of the award may be
fixed by the committee or the decision may rest with a director.
Experience has shown that there should be no limit to the amount
of award, otherwise the workers will suspect that the firm is endeavouring to secure valuable ideas without making adequate payments. Occasionally an award of £100 or more has been paid,
but usually the amounts range from a few shillings to two or three
pounds. Supplementary awards are sometimes made if the value
of the idea proves to be greater than had been anticipated. In some
works provision is made for arbitration if a worker considers that
an award is too small. Accepted suggestions are noted on the
workers' record cards and are taken into consideration in making
promotions or granting wage increments. Frequently the nature
of successful suggestions, the name of the worker and the amount
of the award are posted in the department or published in the works
magazine; in one firm at least the awards are made publicly at a
social function. Protection of patent rights is provided for in
many schemes.
In some firms the number of awards is about one-third of the
number of suggestions made; more usually the proportion is one
in six or seven, while sometimes it is still smaller. It has been
found valuable to explain to the workers concerned the reasons
why suggestions have been rejected, to thank them for putting
forward the idea and to invite them to make further suggestions.
It is not usual to give monetary rewards to foremen and other
supervisory categories, as the making of suggestions is considered
to be a regular feature of their work. Sometimes the introduction
of suggestion schemes has not been welcomed by foremen, on the
grounds that their authority might be weakened and that a criticism
of their efficiency was implied. This difficulty has, however,
been overcome by regarding the making of many suggestions by
his workpeople as a point in the foreman's favour, and by closely
associating the foremen with the operation of the scheme. Generally
speaking, suggestion schemes have proved of value, especially in
large-scale industry, by providing opportunities for the workers
to exercise their initiative and to show intelligent interest in
promoting the efficiency of the undertaking and in its working
conditions.
1
I n determining the value of a suggestion, allowance must be made for the cost
of any necessary installation which the firm must bear in giving effect to the idea.

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INDUSTRIAL RELATIONS IN GREAT BRITAIN

RESEARCH AND EXCHANGE OF E X P E R I E N C E

During recent years, and especially since the war, British firms
have shown growing interest in scientific methods of dealing with
the problems of labour management. Research has been undertaken both by individual firms and by public and private bodies,
while many facilities have been developed for exchange of experience
between persons regularly engaged in the practical work of labour
management in the factories. In these ways considerable progress
has been made in determining the methods which are likely to give
the best results both in productive efficiency and in improved
relations.
Reference has already been made to the activities of the Industrial
Welfare Society, the Industrial Co-partnership Association, and
the National Safety-First Association, all of which compile data,
disseminate information and organise conferences upon various
aspects of labour management. Descriptions are given below of
the work of the Industrial Health Research Board, the National
Institute of Industrial Psychology, the Institute of Labour Management, and Management Research Groups. All these bodies
except the first are voluntary organisations, while only one of
them—the Institute of Labour Management—dates from before
the war.
Dissemination of information and exchange of experience are
also facilitated by other bodies. The Home Office, though primarily
interested in the observance of statutory measures, is able through
the daily contacts between its inspectors and employers in the
factories, to extend knowledge about the most appropriate methods
of dealing with many problems of health, safety and other working
conditions. The Home Office Industrial Museum established in
London is a permanent exhibition of up-to-date methods for
promoting industrial safety, health and welfare. Since 1919 a
series of conferences for works directors, managers, foremen and
forewomen has been held usually each half-year at Balliol College,
Oxford, to discuss problems of business and labour management.
The conferences were started on the initiative of Mr. B. S. Rowntree
with a view to promoting better industrial relations and a better
understanding of methods of business and labour management.
The average attendance has been about one hundred, and the
discussions have covered a wide range of practical questions.

LABOUR MANAGEMENT

223

In the academic field, research and instruction in industrial
psychology and other problems of labour management have long
been undertaken in the universities, and university professorships
have recently been endowed by Sir Montague Burton in Leeds,
Cardiff and Cambridge to deal with these and other aspects of
industrial relations. Various problems of labour management
have been included in the programmes of conferences on industrial
relations and allied subjects organised by the National Industrial
Alliance, 1 the Industrial Christian Fellowship and other religious
organisations, and the Association for Education in Industry and
Commerce.
The Industrial

Health Research Board

The Industrial Health Research Board, originally called the
Industrial Fatigue Research Board, is a Government body established at the end of 1918. It consists mainly of scientists,
representatives of industry (including labour) and Government
officials. Its chief object is to carry out systematic research into
the relations of hours of work, other working conditions and
methods of work to the human body, having regard both to the
preservation of health among the workers and to industrial efficiency. In other words, the Board's main concern is to determine
what conditions of labour are favourable to the worker's health
and will result both in increased production and in decreased
sickness, labour turnover, lost time and accidents. It also
endeavours to educate public opinion in industry so as to ensure
the fullest practical application of the results of its research work.
The Board, which is now under the control of the Medical Research
Council, continues work on industrial health and production
begun by the Home Office and carried on during the years 1915
to 1917 by the Health of Munition Workers Committee. An
attempt made in 1921 to terminate its work on grounds of economy
was unsuccessful, owing to protests raised especially by Labour
Members in the House of Commons.
In its earlier work the Board conducted separate researches
in certain industries, including iron and steel, tinplate, cotton,
silk, linen, boot and shoe, pottery, laundry and glass. Among
1
An outline of the work of the National Industrial Alliance is given in
Appendix X.
2
See Survey of Industrial Relations, pp. 171-178, and Annual Reports of the
Board.

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INDUSTRIAL RELATIONS IN GREAT BRITAIN

the problems dealt with were movement study, the comparison
of different shift systems, and the influence of hours of work and
ventilation on output. The conclusions reached, even though
tentative and liable to be modified by further research, were
published immediately on completion of any investigation. The
objects of this method were to enable the Board to acquire knowledge of the human factor over a wide field of industry, to discover
the problems deserving of closer investigation, and to educate
opinion in the various industries to recognise the importance of
industrial health research. Later, the Board adopted its present
method of selecting for detailed study certain general problems of
interest not to a single industry but to many industries. The types
of problems are largely determined by the state of industrial
technique. This is indicated by the following quotation on the
subject of industrial fatigue taken from the Board's conclusions
in its Eleventh Annual Report i1 " The study of industrial fatigue
in heavy work, which was among the first investigations undertaken by the Board, has now reached a stage which has in their
opinion shown conclusively the fallacies of long hours and the
benefits of suitable environmental conditions and of scientifically
imposed rest pauses. The fatigue with which the Board is now
more concerned is the mental state produced by hours of monotonous work in an industrial world of progressively mechanised
production ".
Among the general problems investigated are:
(i) hours of work, and particularly their arrangement within
the working day and week; rest pauses in heavy work and
in repetitive work; shift systems;
(2) the personal factor in accident causation ;
(3) the design of machinery in relation to the requirements of
the operator;
(4) manual dexterity, including the effects of training; vocational guidance and selection;
(5) the effects of monotony in work; incentives;
(6) the relation between illumination and efficiency in fine
work ; the relief of eye-strain by the use of special spectacles
for fine work;
(7) the effects of noise and vibration, of heating and ventilation.
Report for the year ended 30 June 1931, p. 5.

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225

Although the Board gives major attention to general problems,
the needs of particular industries are not neglected, and investigations on specific problems are undertaken at the request of Government departments and industrial associations. Among investigations of special interest to particular industries and occupations
which have been completed during recent years are :
(1) a study of telegraphists' cramp;
(2) the relation of atmospheric conditions to the working
capacity and accident rate of miners ;
(3) fan ventilation in a weaving shed ;
(4) effect of artificial humidification upon sickness rates of
cotton weavers;
(5) sickness among operatives in Lancashire cotton spinning
mills (with special reference to workers in the cardroom);
sickness of London Transport Workers;
(6) investigation into the sickness experience of printers. 1
The various problems are studied partly by full-time paid
investigators who conduct researches and experiments in the
factories or other working places, and partly by laboratory
researches under academic direction for which financial grants are
made. The Board frequently invites representatives of the employers and workers in any industry in which investigations are
being conducted to serve on an advisory Committee ; the members
of these Committees assist the Board by obtaining the co-operation
of undertakings in the industry, by making suggestions on technical
aspects, and by criticising the results before publication. The
Board has been granted facilities for investigation in various
Government undertakings (under the Admiralty, War Office, Air
Ministry and Post Office). Some of its researches have been
conducted in collaboration with the Department of Scientific and
Industrial Research and other bodies. 2
The results of the investigations are published in special reports.
It is not within the scope of this study to describe the
conclusions reached. Many of them " involve no revolutionary

1
This investigation was conducted at the request of the Joint Industrial Council
for the Printing and Allied Trades, and the Newspaper Proprietors' Association
of London.
2
Until 1921 the Board was under t h e joint control of the Department of
Scientific and Industrial Research and of the Medical Research Council.

226

INDUSTRIAL RELATIONS IN GREAT BRITAIN

change in factory organisation, and in some cases do little more
than place upon a scientific and statistical basis empirical practices
adopted by individual workers and by enlightened firms ". 1
But the methods and working conditions of a large part of British
industry fall much below the practices which have been proved by
experience and experiment to give the best results. The Board
is therefore endeavouring in the interests of health and efficiency
to secure by means of publicity in the various industries a more
widespread adoption of the conlcusions reached.
The National Institute of Industrial Psychology
The National Institute of Industrial Psychology is a voluntary
organisation founded in 1921 for the study of industrial psychology
and the practical application of its results.2 Its general aim is to
reduce waste of human energy and to increase contentment
throughout industry. If this object is to be attained, the worker
must have the satisfaction of doing the work for which he is best
fitted, by his aptitude and abilities, in an atmosphere of understanding and goodwill. The Institute, therefore, gives attention
to vocational guidance and selection ; it further seeks to eliminate
conditions, both physical and mental, which cause needless strain,
fatigue or friction, and to substitute conditions which promote
co-operative activity. As its work developed the Institute found
it necessary to extend its activities beyond a narrow application
of physiological and psychological science. It is not enough merely
to make such changes as the introduction of reliable methods of
vocational selection and the elimination of bad movements or
posture, bad lighting and ventilation. The workers' psychology
is affected by the general efficiency of organisation and morale
in an undertaking, and the Institute gives consideration to these
broader aspects.
The scope of the Institute's work includes :
(1) Elimination of unnecessary movements; determination of
the most advantageous arrangement of hours of work and
1

Tenth Annual Report of the Board, 1929.
The Institute has been financed partly by donations from firms and individuals
and the subscriptions of its members, and partly by grants from various funds,
including the Carnegie United Kingdom Trust Fund and the Laura Spelman
Rockefeller Memorial. Firms which invite the Institute to conduct investigations
and make recommendations on their behalf pay for these services, while individuals
who ask it for vocational guidance are charged a fee.
2

LABOUR MANAGEMENT

(2)
(3)
(4)

(5)
(6)
(7)

227

rest ; planning the lay-out of plant ; co-ordination of processes
in production; reduction of monotony and increase of
interest.
Methods of wage payment and other incentives.
Efficient and scientific vocational guidance and selection.
Determination of conditions which tend toward the maximal
health, comfort and well-being of the worker, and toward
the best relations between management and labour.
Factors influencing the sale of products (e.g. advertisement,
salesmanship, designing).
Provision of training courses for managers, foremen and
investigators; lectures for employers and workers.
Research work in industrial psychology and physiology and
the publication of results.

Although the Institute, like the Industrial Health Research
Board, conducts research into fundamental problems common to
many undertakings and industries, it gives special attention to
the needs of particular firms and of individuals (by vocational
guidance). The Institute has a staff of trained investigators and,
at the request of individual firms, conducts detailed enquiries in
the undertaking and makes recommendations on the basis of
actual observation, collection of data and experiment. Such
investigations have been carried out in factory and office on behalf
of several hundred industrial concerns, many of them important
and well-known firms, in a wide range of industries, including coal
mining, gas manufacture, building, engineering, motor-car manufacture, textiles, clothing, food preparation, the distributive trades,
and transportation. The investigators have the advantages that,
not being members of the firm's staff, they are free from the suspicion
of bias, they approach the problems with fresh minds unfettered
by the traditional methods of the firm, and they bring to their
work experience of methods which have proved successful in other
undertakings. 1
There is evidence to show that many of the investigations have
resulted in increased output, reduced waste, less fatigue (physical
and mental) and greater interest by the employee in his work,
increased earnings, and improved industrial relations. It is of
1
A number of the Institute's investigators and trainees have been appointed t o
posts in industrial undertakings.

228

INDUSTRIAL RELATIONS IN GREAT BRITAIN

interest to note that, as is indicated in Annual Reports of the
Institute, the human factor is not restricted to working conditions,
movement study and the like in their narrower sense, but enters
into nearly all the wider aspects of industrial reorganisation, and
" with the modern developments of rationalisation the Institute's
services are in increasing demand for the organisation of productionplanning departments, personnel departments, and office routine,
for the maintenance of esprit de corps, for the determination of the
best lay-out, routine and equipment, and not merely for the
improvement in lighting, ventilation, posture, training, etc ".1
The Institute's work in vocational guidance is chiefly concerned
with adolescents, assistance being offered to educational authorities,
teachers and parents. The advice given to individuals is based
upon careful consideration of: (i) the child's achievements, (2) facts
supplied by parents, (3) psychological tests. The Institute, in
collaboration with the Industrial Health Research Board, has
conducted researches into the problems of vocational guidance.
Other subjects into which researches have been carried out by the
Institute include methods of occupational analysis, performance
tests of intelligence, tests of mechanical ability, tests of manual
dexterity, and tests of attention. The results are published in
special reports or in the Institute's monthly journal. On the
educational side the Institute and the Industrial Health Research
Board are associated with the teaching of industrial psychology
in the School of Economics of the University of London. The
Institute also, by lectures and publications, spreads knowledge of
the subject and indicates the practical value to employers, managers
and workers of the results of research.
The Institute of Labour Management 2
The movement which led to the formation of the present Institute
of Labour Management began before the war in Welfare Conferences
held in 1909 and 1913. Following the second Conference an
organisation known as the Welfare Workers' Association was
founded in 1913 with the chief object of maintaining contact
between persons engaged in industrial welfare work in the various
undertakings. 3 During the war, largely as a result of the Ministry
1

Annual Report, 1930.
This section is based on information communicated by officers of the Institute.
3
Among other objects were the keeping of a record of factories in which welfare
work was undertaken, and the maintaining of a register of possible recruits to the
profession.
2

LABOUR MANAGEMENT

229

of Munitions requiring the appointment of women to supervise the
working conditions of women and girls in Government and controlled
factories, the number of welfare workers increased rapidly and
contact was established between them for exchange of experience
in several industrial centres. In 1917 the original Association
constituted itself into a professional body, full membership being
restricted to welfare workers. Two years later the Association,
the members of which were mainly women welfare supervisors,
amalgamated with two bodies consisting only of men engaged in
industrial welfare work. A further development took place in 1924
when the amalgamated society was incorporated as a professional
body under licence from the Board of Trade with the title of the
Institute of Industrial Welfare Workers.
In 1931 there was an important development of policy when
the title was changed to the Institute of Labour Management.
This change was due in part to the fact that many employers
placed a narrow interpretation upon the expression " industrial
welfare work ", and consequently welfare supervisors were often,
in practice, limited to a few functions including responsibility for
canteens, first-aid, rest rooms, social and sports clubs. On the
other hand, there was a growing tendency for firms to set up labour
or employment departments responsible for the firm's labour policy,
and performing such functions as the selection and training of
workers, application of works rules and discipline, supervision of
working conditions, health, safety, social and welfare services, and
joint consultation in works councils. In factories where a broad
interpretation had been given to welfare, the welfare superintendent,
through acquiring a specialised knowledge of the firm's labour
problems, was frequently the best-qualified person to undertake
labour management, and was gradually recognised by the employer
to be responsible for the administration of labour policy. In view
of these changes, the Institute adopted its new title so that it
would not only be free from the danger of a narrow interpretation
of welfare work, but would also include within its scope the wider
aspects of labour management. It is too early yet to draw final
conclusions as to the effects of the change in name, whether many
of those now employed as labour managers will become members
of the Institute, and whether employers will recruit the staffs of
their labour departments from those who have undertaken the
training and attained the qualifications required for membership
of the Institute, but progress has been made in these directions.

230 INDUSTRIAL RELATIONS IN GREAT BRITAIN
Although for historical reasons its membership still consists
largely of welfare supervisors, the Institute is officially constituted
as a professional association of men and women engaged in labour
management (industrial welfare work, staff management and
employment administration).1 Its chief objects are to promote and
develop the science of labour management ; to foster and maintain
investigations and research into the best means and methods of
applying the science of labour management in the interests of
industry and all engaged therein; to extend, increase and disseminate knowledge and exchange information and ideas in regard
to all questions relating to labour management; to take steps to
secure that those who contemplate undertaking labour management and desire to become members of the Institute shall have
received or shall receive special training.
Through the Institute, an endeavour is made to formulate a
common policy, to work out a technique, and when necessary
to take united action on matters concerned with developments
and improvements of labour management. For many years regular
meetings and conferences have been held nationally and also locally,
branches of the Institute having been formed in the chief industrial regions; these meetings and conferences have provided
opportunities for frequent exchange of experience. A journal,
now called Labour Management (formerly Welfare Work), has been
issued monthly since 1920. The Institute serves as a bureau of
information and also as an employment bureau for its members.
Management Research Groups
The formation of Management Research Groups began in the
year 1926. Their object is " to enable business men to exchange
ideas on their common problems, and to benefit in a practical way
from each other's experience, with the least possible expenditure
of time and effort ".2 Their promoters were of the opinion that
organised co-operation by exchange of experience would lead to
improved industrial efficiency, higher profits, higher wages, better
1
The scope of the work undertaken is defined t o include the selection, training
and supervision of employees, research into all matters concerning employment,
and knowledge of the laws afiecting employment in general, and the trade or
industry in particular. I t also includes attention to working conditions, health
safety and general well-being of the employees, and all schemes of co-operation
between employer and employed.
2
Management Research Groups : What they are and how they work, General
Series, No. i, July 1927. The present section is based mainly on this publication
and on information supplied by officials of the organisation.

LABOUR MANAGEMENT

231

industrial relations, and a higher standard of living for the community. These consequences would follow from the wider application
of up-to-date methods of management which had been found to
give good results in certain firms. The success obtained along these
lines by the Manufacturers' Research Association, which had been
formed in Massachusetts, U.S.A., shortly after the war, exercised
a considerable influence upon the formation and development of
Management Research Groups in Great Britain.
In 1926 three groups of firms were formed to exchange experience
and collaborate in the collective study of most phases of management.
By the summer of 1931 there were ten groups, and most of them have
subsequently met regularly. In order to ensure maximum freedom in
the exchange of information, groups generally consist of businesses
not directly in competition with each other. A convenient number
of firms in a group is from about ten to fifteen. It has been
found desirable that the firms in any group should be approximately
similar in size; for example, so different are many of the management methods appropriate to firms with more than 5,000 workers
from those suitable for firms employing less than 500 workers that
representatives of such firms would find less value in exchange
of experience than in discussing problems with representatives
from firms of roughly their own size. One of the original groups
consisted of companies employing not less than 1,500 persons;
in other groups most of the firms are smaller, one group, for example,
consisting of firms employing under 500 persons. Most of the groups
are made up of firms in the same locality, experience having shown.
that, for convenience and economy, a radius of about 100 miles
gives a suitable area; at least one group, however—that consisting
of the largest firms—includes undertakings in widely separated
localities throughout England. The work of the various groups
is co-ordinated by a central headquarters in London, but as the
whole idea is free and spontaneous co-operation, any group may
remain entirely autonomous and make its own secretarial arrangements independently of the Central Office.
As already indicated, the groups discuss almost all problems
of management, including finance, production, marketing, selling,
office management and higher control. Considerable attention has
been directed to the problems of labour management. Among
the subjects on which there has been discussion and exchange of
experience are: the functions of labour management; methods of
selecting workers, including psychological tests; the training of

232

INDUSTRIAL RELATIONS IN GREAT BRITAIN

workers; methods of wage payment; hours of work; suggestion
schemes; labour management problems resulting from rationalisation; prevention of accidents; internal social services, including
pension funds, sickness and accident funds, thrift and holiday funds,
medical service, works councils, education, canteens, social clubs,
and recreation.
In studying any question the groups do not follow a standardised
procedure. Naturally, however, when labour matters are discussed
the firms are represented by their labour or employment managers
or others responsible for their labour administration. Information
is collected from each firm by means of questionnaires, and meetings
are held at frequent intervals. If any firm has obtained good results
from an experiment, a representative of the firm describes the
methods adopted, while a visit to the works may be arranged to
see the scheme in actual operation.1
No attempt is made to formulate final conclusions on any subject.
Each firm forms its own opinions and makes whatever practical
use it desires of the data and methods reviewed. It would be difficult
to attempt a detailed appreciation of results, but there is obviously
much value in the regular contacts established between the specialists òf various firms, in the pooling of information, and in the
stimulus to a wider application of methods which individual firms
have found to be successful.

1
There is, of course, no obligation upon any firm to disclose any information
which t h e y wish t o keep private.

CHAPTER VIII

CO-OPERATION IN NATIONAL ECONOMIC COUNCILS
EXPERIMENTS in the establishment of permanent national machinery representative of employers and workers in all the chief
industries for the joint consideration of general industrial and
economic subjects of mutual interest have been more tentative
in Great Britain than in certain continental European countries.
Several early attempts to institute national councils were premature
and did not achieve much success, while little use is at present being
made of machinery established in 1929 for co-operation between the
General Council of the Trades Union Congress, representing the
workers, and the Federation of British Industries and the National
Confederation of Employers' Organisations, representing the
industrialists. The Economic Advisory Council, set u p b y the
Prime Minister in 1930 to advise the Government, bears some
resemblance to certain advisory bodies abroad; it is, however, a
small body and is not designed to relieve Parliament of the burden
of technical, economic and industrial questions. In view of the
congestion of Parliament and the large and growing proportion of
the time it devotes to industrial and social questions, proposals
are sometimes made for the institution of a more representative
body than the Economic Advisory Council—even for an industrial
parliament—but up to the present these proposals have not
received extensive support.
The early attempts to institute national bodies widely representative of employers and workers were concerned mainly with
industrial unrest and the development of more effective means of
settling disputes, rather than with broader economic questions.
Thus in 1911, following serious strikes by railwaymen, seamen
and dockers, the Government set up an Industrial Council to
supplement and strengthen the conciliation machinery operated
by the Board of Trade in accordance with the Conciliation Act
of 1896. The Council consisted of twenty-seven persons—thirteen
employers' representatives, an equal number of workers' representatives and an impartial chairman. It had a brief uneventful

234

INDUSTRIAL RELATIONS IN GREAT BRITAIN

existence and disappeared during the abnormal conditions of the
war years.
During the war two voluntary organisations were established
for the improvement of relations between employers and workers,
and in '1925 they amalgamated to form the National Industrial
Alliance. A sketch of the objects and activities of this body is
given in Appendix X.
NATIONAL INDUSTRIAL CONFERENCE,

1919

The menace of exceptional industrial unrest shortly after the
conclusion of the war led the Minister of Labour, in February
1919, to call a National Industrial Conference, consisting of
representatives of the great employers' organisations and trade
unions, of Joint Industrial Councils and trade boards, together
with members of the Government. The Conference was thus
representative of the whole of British industry, ranging from
industries in which employers and workers were highly organised
to those with only weak organisations. The object of the Conference was to examine the causes of, and to suggest remedies for,
industrial unrest. A committee of the Conference reviewed and
reported upon a wide range of questions, including not only hours,
wages, employment and unemployment, but also the best methods
of promoting co-operation between capital and labour. Some of
the chief conclusions on conditions of labour were: 1
(1) the establishment by legal enactment of the principle of
a maximum normal working week of forty-eight hours;
this was to be subject to certain exceptions, especially
that higher or lower maxima might be applied in any
trade by collective agreement;
(2) the establishment by legal enactment of minimum timerates of wages, to be of universal applicability; extension
of the trade boards system, and the application of minimum
time-rates fixed by collective agreements to all employers
in the trade concerned;
(3) organised short time, regulated by joint representative bodies
in each industry, has considerable value in periods of
depression ; Government housing schemes and State development of new industries should be undertaken to increase
Survey of Industrial

Relations, pp. 307-309.

NATIONAL ECONOMIC COUNCILS

235

the demand for labour; Government orders should be
regulated with a view to stabilising employment;
(4) more adequate unemployment, sickness, infirmity and oldage benefits; the wider application of the system of unemployment insurance and its extension to under-employment.
Several of these recommendations have been put into effect
either in the administration of legislation already enacted or
by new Acts of Parliament. Thus the recommendation on
Unemployment Insurance has been applied, other systems of
social insurance have been improved, the trade boards system
has been more extensively applied, and Government housing
schemes have been undertaken on a large scale. These measures
have contributed greatly to social welfare during post-war years.
The Conference also reached important conclusions on questions
of relations and co-operation between organised employers and
organised workers. Remarkable progress had been made during
the war years in the recognition of trade unions by the employers.
This was due mainly to the great increase in numbers and strength
of the trade union movement, to trade union recognition by the
Government, and to the frequent joint consultations which took
place during the war years between the Government and the
representatives of organised employers and workers. Therefore,
whereas before the war employers in not a few industries had
refused to recognise the trade unions, the Conference readily
agreed that the basis of negotiation between employers and workpeople should be full and frank acceptance of employers' organisations and trade unions as the recognised organisations to speak
and act on behalf of their members. The Conference further
recommended that a permanent National Industrial Council
should be established to advise the Government on national
industrial questions. It was proposed that this Council should
consist of 400 members, of whom one-half should be elected by
employers' organisations and one-half by trade unions, and should
be presided over by the Minister of Labour. No steps were taken
to p u t this ambitious-scheme into operation.
TURNER-MELCHETT CO-OPERATION AND ITS SEQUEL

Several years of exceptional industrial unrest passed before
another attempt was made to establish a system of national

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INDUSTRIAL RELATIONS IN GREAT BRITAIN

consultation. The enormous losses suffered by British industry
from the coal stoppage and General Strike of 1926 compelled
consideration to be given to the possibilities of improving industrial
relations and of finding more peaceful methods of adjusting
differences. A conciliatory attitude was manifested at the 1927
Trades Union Congress in Edinburgh and a resolution was passed
which stated that no section of the community was more desirous
of industrial peace than the workers. In moving this resolution
a willingness was expressed to meet the employers in conference
and to hammer out solutions to problems. A few weeks later
the National Confederation of Employers' Organisations in one
of its occasional public statements referred to the resolution of
the Trades Union Congress and indicated its own desire to contribute towards the promotion of industrial peace. Shortly
afterwards, in November 1927, the late Lord Melchett (then
Sir Alfred Mond), in association with about twenty other prominent industrialists, invited the General Council of the Trades
Union Congress, the Chairman of which was then Alderman
(now Sir) Ben Turner, to enter into discussions covering the entire
field of industrial reorganisation and industrial relations. The
invitation expressed the view that the movement towards industrial
co-operation had recently received a great accession of strength,
that common interests of employers and workers were more
powerful than the apparently divergent interests which seemed to
separate, and that full and frank co-operation would contribute
to the restoration of industrial prosperity and the corresponding
improvement in the standard of living of the population. Although
the industrialists who issued this invitation did so in their personal
capacity and not in any way as the representatives of employers'
organisations, the General Council agreed to take part in discussions
with them and a Conference on Industrial Reorganisation and
Industrial Relations was arranged.
It is interesting to note that the initiative for this Conference
came from industry and not, as for the 1911 Council and the 1919
Conference, from the Government. The General Council's action
in co-operating with the industrialists was criticised at the Trades
Union Congress both in 1928 and 1929 by a minority who held
that to collaborate with the " enemies of Labour " was a serious
menace to the interests of the working-class movement. A large
majority, however, supported co-operation on the grounds expressed
by the General Council that, thereby, the unions would have a

NATIONAL ECONOMIC COUNCILS

237

voice as to the way industry is carried on, that in the application
of its ultimate policy of industrial control the movement would
find more use for an efficient industry than for a derelict one,
and that the unions could use their power to promote and guide
the scientific reorganisation of industry as well as obtain material
advantages from the reorganisation.
During 1928 and 1929 the Conference discussed a wide range
of subjects and issued a series of reports embodying its conclusions
on trade union recognition, victimisation, rationalisation, methods
for the prevention of disputes, unemployment, and the gold
reserve in relation to industry. It also favoured the establishment
of a National Industrial Council, the employers' side of which would
consist of representatives of the National Confederation of Employers' Organisations and of the Federation of British Industries,
and not, as in the Conference, of individuals who were responsible
to no organisation and were merely expressing their own personal
opinions. It was considered that the Council should:
(1) hold regular meetings once a quarter for general consultation
on the widest questions concerning industry and industrial
progress ;
(2) establish a Standing Joint Committee for the appointment
of Joint Conciliation Boards;
(3) establish and direct machinery for continuous investigation
into industrial problems.
The proposal for setting up a Council along these lines was
approved by the Trades Union Congress in 1928, and the Conference then invited the National Confederation of Employers'
Organisations and the Federation of British Industries to participate
with the Trades Union Congress in the establishment of the proposed
National Industrial Council.
The two employers' organisations did not accept the proposal,
but suggested instead that some other method of consultation
might be evolved, and, as a result of negotiations in 1929 between
them and the General Council of the Trades Union Congress, a
scheme for the joint discussion of a wide range of subjects of mutual
interest was agreed upon. Recognising that it would be impracticable for two series of discussions on the same range of topics to
proceed simultaneously, the Conference on Industrial Reorganisation and Industrial Relations then decided that its own work should

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INDUSTRIAL RELATIONS IN GREAT BRITAIN

be terminated and in a final report expressed the hope that the
new machinery would not only take its place as an integral,
permanent feature of the industrial system, but would justify
itself by the contributions it would make to the solution of the
grave economic problems with which industry is confronted. The
Conference concluded its report by stating its conviction that the
fullest consultation between the representatives of organised
employers and organised labour is essential to the welfare of British
industry and its future prosperity.
Before outlining the method and results of this more formal
consultation, it is of interest to summarise the chief conclusions
of the " parent " Conference, even though, on the employers' side,
they carry the authority only of individuals and not of organised
employers.
The report on trade union recognition regarded the Trades
Union Congress, representing the affiliated trade unions, as the
most effective organisation and as the only body which possesses
the authority to discuss and negotiate on all questions relating
to the entire field of industrial reorganisation and industrial
relations. It also recognised that industry in this country had
benefited by the progressive increase in the volume of negotiations
which had taken place between employers and representatives of
trade unions, and by the enormous growth of joint machinery for
such negotiations. This had proved so beneficial that it should be
encouraged and extended. Towards this end the Conference
considered that it is definitely in the interests of all concerned in
industry that full recognition should be given to all bona-fide trade
unions as the appropriate and established machinery for the discussion and negotiation of all questions of working conditions,
including wages and hours, and other matters of common interest
in the trade or industry concerned. The Conference was of the
opinion that negotiations between employers and workmen are
facilitated by workmen being members of a trade union, and also
by employers likewise being organised. The report was thus
reminiscent of the Whitley Committee's conclusions.
On the question of victimisation, which was especially acute in
1927 after the conflicts of 1926 and has been a frequent cause of
industrial friction, the Conference considered that it is most
undesirable that any workman should be dismissed or otherwise
penalised on account of his membership of a union, on account
of his official position in a union, or on account of any legitimate

NATIONAL ECONOMIC COUNCILS
trade union activities. Where a prima-facie case is established
that a workman has been dismissed or otherwise penalised for trade
union membership or activities, some appeal machinery should be
provided for the investigation and review of such a case.
The report on rationalisation endorsed the definition adopted
by the World Economic Conference at Geneva in May 1927,1 and
welcomed the tendency towards rationalisation " in so far as it
leads to improvements in the efficiency of industrial production,
services and distribution, and to the raising of the standard of
living of the people ". Emphasis was laid upon the need for safeguards to ensure that the interests of the workers do not suffer by
the adoption of those measures of rationalisation which tend to
displace labour or to modify in undesirable ways the conditions of
work. On the other hand,, it was recognised that various practices
and rules, including those established by trade unions, may hamper
the progress of rationalisation; with a view, therefore, to ensuring
adequate adaptability and elasticity in industry, it was suggested
that the trade unions and employers should consider the advisability
of making agreed experimental variations from these practices
and rules.
In considering methods for the prevention of disputes the
Conference recognised the beneficial work which is being carried
on by existing joint machinery and favoured the improving or
strengthening of this machinery wherever possible. It regarded
the application of the element of compulsion as unacceptable and
undesirable. It proposed that the existing machinery should be
supplemented by a system of Joint Conciliation Boards.2 In the
event of failure to settle a dispute within any industry the matter
would be referred, on the application of either party, to a Joint
Conciliation Board for investigation and report without undue
delay. In order to facilitate the investigation it was thought
desirable that both parties should arrange that no stoppage of
work or alteration in conditions should take place pending the
report of the Board. The personnel of the Boards should not
be permanent, but should in each case consist of the representatives
1
The Geneva Conference had defined rationalisation as " the methods of
technique and reorganisation designed to secure the minimum waste of either
effort or material. I t includes the scientific organisation of labour, standardisation
of both material and products, simplification of processes, and improvements in
the system of transport and marketing."
'These Boards were to be appointed by a Joint Standing Committee of t h e
National Industrial Council which the Conference proposed should be set u p .

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INDUSTRIAL RELATIONS IN GREAT BRITAIN

most suitable for dealing with the particular industry or matter
tending towards dispute.
On unemployment an interim report only was issued, the principal
recommendations of which were : an enquiry into the consolidation
of existing pensions and insurance funds should be set up by the
Government; funds for assisting emigration should be largely
increased, and a scheme of settlement extending over a period of
twenty years should be set up; unemployment in the mining
industry should be considered as a special case and relief measures
and schemes continued at an accelerated rate ; export credits should
be extended; augmented pensions should be made available to
workers of sixty-five and over who cease work; the Government
should create and maintain a development fund capable of financing
important national schemes, and further extension of constructional
schemes of a permanent character should be undertaken ; rationalisation should be pressed forward as rapidly as possible, in consultation with trade unions as to the best method of dealing with
displacement, and with assistance for displaced labour, where
possible, from a labour reserve fund constituted by firms or industries out of profits; serious consideration should be given to the
question of raising the school-leaving age ; a Government enquiry into
currency and banking policy should be undertaken immediately.
On the subject of the gold reserve in its relation to industry,
the Conference doubted whether it is practicable or desirable
that the credit policy of the country should be determined more
or less automatically by gold movements, as in pre-war days.
Greater flexibility and international co-operation on the lines of
the plan proposed at the Genoa Conference, 1922, were advocated
with the objects of economising the use of gold, regulating its
distribution, and preventing undue fluctuations in its value.
Turning now to the consultations between the National Confederation of Employers' Organisations, the Federation of British
Industries and the General Council of the Trades Union Congress,
it had been recognised from the beginning of the Turner-Melchett
discussions that the preferable course would be for more formal
representation of the employers. There was, however, the difficulty,
which was indicated in the invitation originally sent by Sir Alfred
Mond and his colleagues to the General Council of the Trades Union
Congress, that there was no single existing organisation of employers
which could undertake discussions both on labour questions and on
broader economic and commercial questions. As has been seen,

NATIONAL ECONOMIC COUNCILS
the National Confederation deals with the former and the Federation
of British Industries with the latter. This difficulty appears to
have been one of the reasons why the employers' organisations
did not accept the proposal of the Turner-Melchett Conference for
the setting up of a National Industrial Council. I t also made
necessary the introduction of a special mechanism, which is
described below, when the scheme of formal consultation was finally
arranged.
The chief features of the scheme, which was unanimously
adopted by the three organisations in December 1929, are as
follows :
(1) The Trades Union Congress, Confederation, or Federation
of British Industries can propose as subjects for discussion
any matter within their respective provinces which is of
common interest to British industry, it being understood t h a t
these discussions will not invade the provinces or trespass
upon the functions of the individual constituents of the three
organisations.
(2) Having regard to the separate spheres and functions of the
two employers' organisations, these bodies will set up an
allocation committee the sole function of which will be to say
whether any given subject proposed by any of the three
organisations is one which concerns the responsibility of the
Confederation or the Federation or both. If an organisation
declines to discuss any subject proposed, it will give its
reasons to the organisation which proposed the subject.
(3) Unless otherwise agreed upon, all discussions and correspondence arising out of the scheme shall be confidential to
the three organisations, and when a subject has been discussed no action shall be taken on any conclusions reached
until these conclusions have been specifically approved by
the organisations concerned.
(4) As some indication of the types of subjects in regard to
which the machinery could operate, the following illustrative
list was drawn up: unemployment, industry and finance,
taxation of industry, social services, education and industry,
delegated powers of Government departments, inter-Empire
trade, international trade (mainly tariff questions), trade
facilities, insurance of export credits, general international
labour questions, industrial and commercial statistics.
16

242

INDUSTRIAL RELATIONS IN GREAT BRITAIN

Discussions under this scheme have been few, they are ad hoc,
taking place when agreement is reached on a subject. No provision
is made for regular meetings or for a permanent staff such as were
features of the National Industrial Council proposed by the TurnerMelchett Conference.
Up to the beginning of 1932 four questions had been agreed
upon for discussion, but subsequently the machinery has been
neglected. Of these questions, three concerned the Federation
of British Industries and the Trades Union Congress General
Council, and only one the National Confederation and the General
Council. In 1930 the question of industry and finance, with
reference to the work of the Macmillan Committee,1 was discussed
by the General Council and the Federation and the two bodies
were in substantial agreement; no joint statement of conclusions
was, however, issued and each body gave its evidence independently
before the Committee. The same two organisations also examined
the subject of Commonwealth trade and a joint memorandum
was submitted to the Government immediately before the opening
of the Imperial Conference in the autumn of 1930. This memorandum emphasised the paramount importance of measures being
taken to increase inter-Commonwealth trade. It specially recommended that the Imperial Conference should set up adequate
machinery for economic consultation between the various parts
of the Commonwealth. This machinery, which should include a
representative Commonwealth Economic Conference to meet at
regular intervals and a permanent Economic Secretariat, should
conduct investigations with a view to the formulation of a constructive Commonwealth economic policy and should facilitate its
practical application. The Imperial Conference, London, 1930, and
the further Conference in Ottawa in 1932 gave partial effect to
the proposed development; but the suggestion for the setting up
of a permanent Economic Secretariat was not adopted. In 1931
arrangements were made for discussions to take place between
the Federation and the General Council upon the general position
of the British film industry, with special reference to the working
of the Film Quota Act.
The single subject jointly discussed by the National Confederation
1
This Committee was set up to enquire into banking, finance and credit, paying
regard to t h e factors, both internal and international, which govern their operation, and to make recommendations calculated to enable these agencies to promote
t h e development of trade and commerce and the employment of labour.

NATIONAL ECONOMIC COUNCILS

243

and the General Council was the grave problem, proposed by the
General Council, of the displacement of labour arising from reorganisation of British industry and the fact that in many cases
adequate provision is not being made to tide over the transition
period.
The existence of a system for consultation between the three
great bodies of employers and workers is of value in itself, though
its operation has produced no outstanding results. The mechanism
is, however, available for use when needed.
ECONOMIC ADVISORY COUNCIL

The Economic Advisory Council differs widely both in purpose
and structure from the system of co-operation between the Trades
Union Congress General Council and the two great employers'
organisations. The Council was set up, in accordance with a decision
of the Government announced in January 1930, to advise the
Government in economic matters and to study developments in
trade and industry and in the use of national and imperial resources,
the effects of legislation and fiscal policy at home and abroad, and
all aspects of national, imperial and international economy with
a bearing on the prosperity of the country.1 With the approval
of the Prime Minister the Council may initiate enquiries and advise
upon economic matters, including proposals for legislation. The
Council is a permanent body and its reports are presented to the
Cabinet.
The Prime Minister is chairman of the Council, which includes
more than twenty other members. Several of these are Cabinet
Ministers and the remainder are other persons chosen by the Prime
Minister in virtue of their special knowledge and experience in
industry and economics. These other persons are appointed as
individuals and there is no representation of employers, workers,
or any other interests as such. This limits the contribution which
the Council might make to the improvement of industrial relations.
Industrialists and labour are, however, both represented on the
Council by individuals who thus co-operate in advising the Government. The Council may also invite the assistance, as advisers or
as members of any committees which may be appointed, of persons
1
The objects and organisation which are summarised in this section are given
in Treasury Minute dated 27 January 1930, appointing an Economic Advisory
Council, Cmd. 3478.

244

INDUSTRIAL RELATIONS IN GREAT BRITAIN

who have expert knowledge of industrial, labour or other conditions.
The Council has a small staff of officials.
A body of this kind could evidently serve a useful function in
making recommendations based upon economic rather than upon
political considerations. Any action which may result from the
advice tendered is, however, determined by political interests,
since it is taken on the sole responsibility of the Government. Also
the public have no means of appreciating the extent of divergence
between the recommendations of the Council and the action taken
by the Government, as the work and reports of the Council are
usually confidential.1 Because of the confidential character of the
Council's activities, it is not possible here to give an account of
the investigations which it has undertaken or to indicate the nature
of its recommendations. The Council has no doubt discussed
many important economic questions, but there is no means of.
judging its effectiveness when consulted, while on many important
issues the Government has not sought its advice. Its methods
largely preclude it from influencing public opinion, and at present
it seems to be used even less than in the years immediately after
its formation.

1
The results of various investigations for which the Council has been responsible
have been published. One of these was an enquiry by a delegation into industrial
conditions in the iron and steel industry in France, Belgium, Luxemburg, Germany
and Czechoslovakia. There is the report of a committee on the cotton industry
suggesting the remedies which Lancashire should adopt t o secure an improvement
for the cotton trade. A report on industrial research and development drawn
up by a committee of t h e Council has also been published.

CHAPTER IX

CONCLUSIONS
A REVIEW of industrial relations in Great Britain during the last
thirty or forty years shows many changes and contrasts. Some
industries have been storm centres of unrest, and industrial conflicts
have been frequent and severe. Other industries, no more fortunate
in their economic conditions, have preserved an untarnished record
of industrial peace. Industrial warfare, which had been exceptionally severe during the five years before the war, was resumed with
redoubled violence in the five years from 1919 to 1923. A lull in
1924 and 1925 was followed by the catastrophe of 1926 when, in
this one year, the aggregate of time lost, chiefly in the General
Strike and the nine months' stoppage in the coal-mining industry,
was considerably greater than during the whole of the fifteen years
from 1905 to 1919.1 Then, in marked contrast with pre-war and
early post-war years, the period from 1927 to 1937 was remarkably
free from serious conflicts, and the aggregate duration of strikes
and lock-outs if spread over all workpeople in the country represented a loss of working time to British industry of little more than
one day in five years, or an average of less than two hours each
year.
For an understanding of British industrial relations it is necessary
to take into account the changes in economic conditions during
the present century and the effects of these changes on the temper
and attitude of employers and workers in different industries.
During the period from 1900 to 1920 prices were rising and pressure
by the trade unions was usually effective in securing increases in
money wages and other successes. Indeed, the conflicts of 1910
to 1914 were the result partly of the pressure of rising prices upon
the workers' standards of living and partly of the spread of Socialist
ideals and enthusiasm, and growth of organisation among the
workers. The war years were marked by growth in prestige of the
1
The aggregate loss in working days during the five years 1910 to 1914 was
about 80,000,000, and during the five years 1919 to 1923 was about 178,000,000.
The aggregate in the year 1926 was 162,000,000.

246

INDUSTRIAL RELATIONS IN GREAT BRITAIN

trade union movement, almost complete recognition, agreement to
many of its demands, and Government promises of improved
conditions. During the years 1919 and 1920 prices were still rising
and the trade unions secured many increases in money wages during
these years, as well as important reductions in hours of labour.
For twenty years, therefore, trade unionists, leaders and rank
and file together, had enjoyed success. Many gains could be claimed,
though some were only nominal, for example, the adjustment of
money wages to changes in the cost of living. Membership also had
grown steadily for two decades and in 1920 had reached the remarkable figure of over 8,000,000. The movement was full of enthusiasm
and confidence.
Then came a reversal of economic trends. A period began which
was marked by deflation, falling prices, persistent severe unemployment, world economic crises, and a painful transition of British
industry to new conditions of world trade. Even before the war
there were indications that British exports would be likely to
encounter increasingly severe competition from growing industries
abroad and that Britain's commanding position of the nineteenth
century was rapidly passing. The onset of this change had, indeed,
been largely responsible for the resistance offered by employers to
the demands of the workers during the years 1910 to 1914. But
the pre-war difficulties were small compared with those after the
war, including extravagant currency fluctuations abroad, deflation
at home, high tariffs and other barriers to British trade abroad,
and the necessity for rationalising the basic industries, reducing
the size of some, and developing new industries. It is not surprising
that both trade unionists and employers found difficulty in adjusting
their policies and methods to such fundamental changes. Leaders
on both sides had experienced only rising prices and reasonable
prosperity and their technique of negotiation and the psychology
of their followers required modification.
The economic depression fell with much greater force upon
industries competing in world markets than upon those sheltered
from foreign competition. Workers in many unsheltered industries
were unwilling without a struggle to allow their wage rates and
standards of living to fall considerably below those of workers in
sheltered industries, and this partly explains the greater severity
during the early post-war years of conflicts in unsheltered industries.
In some unsheltered industries the changed conditions were quickly
recognised and peaceful adjustments were made. But it was not

CONCLUSIONS

247

until after the disasters of 1926 that the necessity of going to great
lengths of mutual concession in order to avoid conflicts was at
last realised throughout almost the whole of British industry.
The changes in temper and policy after 1926 are indicated by the
contrast between the business depression of 1921, which was
attended by conflicts of exceptional severity, and the still deeper
depression of 1930-1933, which was marked b y few important
disputes, and losses from stoppages were small.
The events of 1926, like those of the world war, proved that
both sides must be permanent losers in any conflict of more than
very short duration. In that year 162,000,000 working days were
lost, trade unions expended £5,500,000 in dispute pay, and losses
of trade and wages were enormous. Persistent unemployment,
reduced business profits and declining trade union membership
in recent years have also contributed to a greater determination
to solve differences by peaceful means. This determination has
been especially evident in the coal-mining industry, which for
many years had been the main storm centre of British industrial
relations. Apart from conflicts in this one industry the record of
relations would, in view of the wide changes in economic and
industrial conditions, have been remarkably good. This industry,
which had enjoyed steady expansion for several decades up to 1913,
found itself after the war with a volume of capital and labour capable
of producing coal in considerable excess of market requirements.
A long period of difficulty and depression was inevitable, but it
was not until after 1926 that there was a real determination to
avoid the additional losses and misery resulting from conflict.
During the years 1927 to 1933 economic conditions in the coalmining industry remained severely depressed and standards of
living low, but conflicts were reduced to comparatively small
proportions.
Even more noteworthy has- been the maintenance of a high
standard of industrial relations, including the peaceful settlement
by negotiation of many demands for increases in wages, during
the years of recovery from 1934 to 1937. These have been years
of increased wages and no great stoppages of work. The question
arises whether the more peaceful relations of the last ten years will
be maintained. No answer to this question can be hazarded, although
signs are not wanting of a desire on the part of both employers
and workers to avoid the attitudes and conflicts of the early postwar years.

248 INDUSTRIAL RELATIONS IN GREAT BRITAIN
To concentrate upon past conflicts and the magnitude of losses
from disputes would convey a false impression of British industrial
relations. Even in the most disturbed years only a small minority
of workers and employers are involved in stoppages. Agreements
are continually being reached by conference and negotiation and,
as described in Chapter IV, elaborate machinery for joint relations
and conciliation has been set up in most of the well-organised
industries. It is true that machinery alone affords no guarantee
of industrial peace. The early post-war experiences of the coalmining industry, which has a comprehensive system of district
joint conciliation boards, prove that machinery will inevitably
break down if the will to maintain peace is absent. But regularly
constituted machinery of negotiation is essential and can greatly
facilitate the reaching of agreements.
The formation of great national organisations of employers and
workers has led to the establishment in recent years of national
machinery for negotiation. This has various advantages. Policy
can be co-ordinated, general principles applied, and, while conditions
of work can be adjusted according to the special circumstances of
each district, a wider view is possible than when negotiations are
conducted independently in each area. Also arrangements are
usually made for regional disputes to be referred to national boards;
these boards are more likely to find a basis for settlement than the
immediate disputants, whose judgment may be warped because of
personal grievances and questions of prestige.
National organisation, however, has its own dangers. Failure
to settle a difference may involve the stoppage of a whole industry
throughout the country. In considering the number of great
national disputes shortly after the war it should be remembered
that national negotiation and determination of conditions is a recent
development, and it is significant that, except in the textile
industries which are highly localised, there has been no great
industry-wide stoppage since 1926. Evidently the importance of
responsible leadership is greatly increased when great organisations
are formed. Those whose experience had been based upon local
negotiations, where a stoppage at a few establishments or even of
a whole district was on a relatively small scale, did not immediately
adjust themselves to the conditions and responsibilities of
national leadership. But there are indications of the growth of a
larger sense of responsibility and a greater willingness to face the
facts. This results in a narrowing of the margin of difference

CONCLUSIONS

249

between the two sides until, except where some vital principle is
involved, maximum gains to either side from a conflict are more
than counterbalanced by the inevitable losses involved. Also the
general experience seems to have been that such a narrowing of
the margin of difference follows from the closer association of the
workers with economic questions and industrial management.
The establishment of national unions and systems of negotiation
has contributed to an increase in strikes not recognised by the
trade unions concerned. In 1936 more than one-half of the number
of strikes and about one-half of the total number of working days
lost were the result of unofficial strikes. The workers in a factory
or locality may consider that their demands are not adequately
supported by the national union, and they t r y to enforce their
demands by independent unofficial action, often in violation of
agreements between the national union and the employers' organisation on the procedure to be followed for settling disputes. Or
they may be influenced by agitators who disagree with the policy
of conciliation and negotiation pursued by the union. Any considerable extension of such revolts against the authority of the
unions would weaken the trade union movement and endanger
the whole system of collective agreements by which working
conditions are so widely regulated. It is improbable, however,
that the recent wave of unofficial strikes will assume serious
proportions, and in the strongly organised industries there is a
high standard of discipline and also respect for collective agreements
by the rank and file of the trade union movement. 1
There is still scope for improving the machinery for negotiation
in various industries. Also a valuable development would be for
industries to agree as a last resort to submit to impartial investigation and arbitration differences which the interested parties had
1
On this question the Report of the Ministry of Labour for the Year 1936 stated
t h a t the smoothness with which adj ustments in working conditions were generally
made affords further evidence of the effectiveness of the various forms of joint
machinery and of the resolve of employers' and workpeople's organisations t o
use constitutional methods of settlement. There can be no doubt t h a t the existence
of constitutional machinery maintained wages during the depression a t a higher level
t h a n would otherwise have been possible and stimulated other means of reducing
costs. The desire to obtain higher wages as soon as economic conditions improved
gave an opportunity t o irresponsible elements t o encourage unconstitutional action.
The year was, however, marked by a strong resistance t o unofficial methods, and
this was probably due to a recognition of the fact t h a t such methods tend t o
destroy organisation and machinery built up by many years of effort, and indeed
t h a t unconstitutional action is sometimes adopted with t h a t object.

250

INDUSTRIAL RELATIONS IN GREAT BRITAIN

been unable to settle between themselves. It would be far too much
to expect that such submission would succeed in preventing all disputes, but the magnitude of the issues involved is now so great
that reference to some wider tribunal than a meeting of the disputants themselves is desirable and should be effective in preventing
many conflicts. In encouraging this development it would be
necessary to avoid the danger evident in some systems of compulsory arbitration that the disputants, knowing there is a further
tribunal, might make only perfunctory attempts to agree among
themselves. To be effective, under British conditions, responsibility
for reaching agreement must mainly rest with the parties concerned,
their own efforts being, however, supplemented by a final outside
review. Already facilities of this kind are offered by the Industrial
Court, but hitherto the great organised bodies of employers and
workers have not adequately used its machinery. The number of
industries is, however, increasing in which agreements have been
reached that in the last resort the parties shall submit matters in
dispute to a committee or board consisting not only of representatives of employers and workers in the industry, but also of several
impartial persons.
Within the undertakings, developments are taking place which
cannot fail to make a contribution to industrial peace. The
bullying foreman has largely disappeared. More consideration is
being given to the human factor, for reasons not of paternalism
but of productive efficiency. This is indicated by increase in the
number of labour managers, growth of welfare work, and greater
interest in the results of scientific research into problems of industrial
health and psychology. The growing size of undertakings and the
amalgamation of businesses have made necessary the co-ordination
of labour policy and the establishment of principles which can be
applied consistently to large numbers of workers. The appointment of labour managers who are leaders of men is essential if
the growing gulf between the heads of large-scale enterprises and
the workers is to be bridged. This is the more necessary as the
type of worker demanded in industry is steadily changing. The
day of " brawn and muscle " is over, and modern industry needs
alert, active men who can adapt themselves to changes in technique.
But these workpeople are more sensitive to their treatment and
to the conditions under which they work, and they are quicker
to demand their rights. The modern manager of a labour force
must make proper allowance for these changes. With such men

CONCLUSIONS

251

"he can no longer be a dictator, or afford tobe tactless". 1 There
is no doubt that a wide extension of the methods of human management adopted by a number of progressive British firms would
greatly reduce friction and suspicion and remove many of the
underlying causes of conflict.
The diminution of poverty which has resulted from improvement
of the real wages of unskilled workers and from the establishment of comprehensive schemes of social insurance may be expected
to reduce discontent and unrest. As a consequence of the organisation by the State of systems to make provision for the worker
in sickness, unemployment and old age and for his children's
education and welfare, some of the anxieties which in the past
increased the risks of dispute between employers and workpeople
have been greatly diminished and transferred to another field.
The recent steady extension by individual undertakings and whole
industries of paid annual holidays is another indication of the
trend of social progress. It is true that there is still much dissatisfaction among the workers about the great inequalities in the
distribution of the national income, and also about the methods
by which industry is controlled. They welcome, however, the
increase of educational facilities which give opportunities to the
children of workers with small incomes to advance to posts of
responsibility in industry, commerce and the professions. The
gradual breaking down of the privileged position of birth and
wealth is doing much to remove the sense of injustice among the
workers and to diminish the intensity of the class war.
In other ways the status of the worker has been considerably
improved in recent years. An advance has been made by wide
recognition of the trade unions. Within some factories the system
of works councils gives the worker an influence in determining
his labour conditions, and this system might be given wider application. In the larger questions of national industrial and financial
policy both workers and employers are directly or indirectly brought
into consultation. The results of the Turner-Melchett scheme of
co-operation in the discussion of broad economic issues have been
meagre, but the maintenance of closer relations between the great
organisations of employers and workers would usefully supplement
the comprehensive machinery for negotiation in the various indus1
See Industrial Health Research Board, Sixteenth Annual
30 June 1935.

Report, year ending

252

INDUSTRIAL RELATIONS IN GREAT BRITAIN

tries. The growing importance of public regulation of industry
in the interests of the community is tending to reduce hostility
among the workers to the present economic system, and to satisfy
in part their aspirations by ensuring that industry is organised
and operated not merely in the interest of the shareholders but
also of the workers and consumers.
To summarise, very comprehensive machinery for negotiation
and conciliation of disputes has been developed in Great Britain,
largely by voluntary agreements between organised employers and
workers. Various improvements in this machinery could usefully
be made. Also the methods of labour management, industrial
welfare, and joint consultation about working conditions introduced
by progressive firms merit much wider application. They would
contribute to the development of better temper and greater harmony
between employers and workers, which is essential if the former
scale of conflicts is not to be renewed. Without improvement in
temper the most elaborate and complete systems of machinery
will be ineffective.
Considerable changes of outlook are taking place. The old spirit
of bitterness and violence of the nineteenth century resulting from
low standards of working conditions, unwillingness of employers
to recognise organisations of workers, and often their determination
to destroy the unions, is giving place to better mutual understanding.
More reliable data are being brought under review during negotiations, there is a greater willingness to face the facts, and, in
consequence, the margin of difference between the two sides is
being narrowed. Experience of the heavy losses to employers and
workers caused by national conflicts is teaching the lesson that
the technique of negotiation of pre-war days, when break downs
usually involved only local stoppages, is not appropriate under
present conditions. Above all, there is growing recognition of the
common interests of employers and workers in the prosperity of
British industry, especially in view of the intensity of post-war
international competition. It is upon these common interests both
within the undertakings and in the wider field of collective relations
that the foundations of industrial peace must be built.
Many of the problems which gave rise to acute differences and
severe conflicts in the past now present little difficulty. But the
progress of industrial and economic evolution is continually bringing
new problems in its train. Among those which will continue to
be of outstanding importance in the future is rationalisation in its

CONCLUSIONS

253

widest aspects, including industrial reorganisation, mechanisation,
and the relation between industry and finance. Closely associated
with the rationalisation of industry are the problems of industrial
relations involved in the formation of cartels, trusts, and monopolies, both national and international, and in the progress of
economic planning. There is the question of the functions of
employers' organisations and trade unions in branches of industry
in which the community has undertaken partial or full responsibility
and in which the Government or the local authorities determine
policy and participate in economic organisation and the regulation
of working conditions. Support for the extension of State systems
for the regulation of labour standards wherever voluntary methods
are inadequate is increasing. In some industries the problem
of giving statutory authority to the provisions of collective
agreements is debated. The possibilities of future depressions of
trade are gravely considered and there is growing demand that
industry and the State should take systematic measures to reduce
instability of employment. Although these great issues involve the
possibilities of conflict between employers and workpeople, they
nevertheless provide a field for the development of closer
co-operation.

254

APPENDIX I

SHORT BIBLIOGRAPHY

BOARD OF TRADE.

(i) G e n e r a l
Statistical Abstracts for the United

COMMITTEE ON FINANCE AND INDUSTRY.
COMMITTEE ON NATIONAL E X P E N D I T U R E .

Kingdom.

Report (June 1931).
Report (July 1931).

POLITICAL AND ECONOMIC PLANNING. Report on the British Social Service's.
SHIELDS, B. F . The Evolution of Industrial
Organisation.
(2)
BOARD O F T R A D E .

Economic Conditions

Journal.

COMMITTEE ON INDUSTRY AND TRADE.

Efficiency.
Further Factors in Industrial
Final Report.
B A N K OF ENGLAND.

Statistical

Factors in Industrial

and Commercial

and

Commercial

Efficiency.

Summary.

R O Y A L COMMISSION ON THE COAL INDUSTRY (1925).

Report.

BOWLEY, A. L. Some Economic Consequences of the Great War.
The Division of the Product of Industry : An Analysis of the National Income
before the War.
The Change in Distribution of the National Income, 1880-1913.
and STAMP, Sir Josiah. The National Income in 1924.
CLARK, Colin. The National Income, 1924-1931.
National Income and Outlay.
CLAY, H . The Post-War Unemployment
Problem.
COATES, W. H. The Citizen's Purse. Manchester Statistical Society, December 1931.
COLE, G. D. H., and M. I. The Condition of Britain.
LIBERAL INDUSTRIAL ENQUIRY. Report on Britain's Industrial
Future.
LONDON AND CAMBRIDGE ECONOMIC SERVICE.

Monthly

Bulletin.

LOVEDAY, A. Britain and World Trade.
PiGou, A. C , and CLARK, Colin. The Economic Position of Great Britain.
Economic Society Memorandum No. 60 (June 1936).

Royal

R O Y A L ECONOMIC SOCIETY.
Journal.
R O Y A L STATISTICAL SOCIETY.
Journal.

(3) W a g e s a n d W o r k i n g C o n d i t i o n s
MINISTRY OF LABOUR. Abstracts of Labour
Statistics.
Standard Time Rates of Wages and Hours of Labour in Great Britain and
Northern Ireland.
Gazette (monthly).
Report of an Enquiry into Apprenticeship and Training for the Skilled Occupations in Great Britain and Northern Ireland, 1925-1926. Vols. 1-7.
Report to the Minister of Labour of the Committee Appointed to Enquire into
the Working and Effects of the Trade Boards Act (1922).
Report on Collective Agreements between Employers and Workpeople in Great
Britain and Northern Ireland. Vol. 1 (1934).
R O Y A L COMMISSION ON UNEMPLOYMENT INSURANCE. Reports (1931 and 1932).
C H I E F INSPECTOR OF FACTORIES AND W O R K S H O P S . Annual
Reports.

BEVERIDGE, Sir W . Unemployment (1909 and 1930).
BOWLEY, A. L. Prices and Wages in the United Kingdom,
Wages and Income in the United Kingdom since i860.
and HOGG, M. H . Has Poverty Diminished ?

1914-1920.

APPENDICES

255

FISHER, A. G. B . Some Problems of Wages and their Regulation in Great Britain
since 1918.
GILSON, M. B . Unemployment Insurance in Great Britain.
LLEWELLYN SMITH, Sir H . (Editor). A New Survey of London Life and Labour.
RAMSBOTTOM, E . C. The Course of Wage Rates in the United Kingdom, 1921-1934.
Journal of t h e Royal Statistical Society. Part IV. 1935.
R O W E , J . W. F . Wages in Practice and Theory.
Wages in the Coal Industry.
ROWNTREE, B . Seebohm. The Human Needs of Labour.
SELLS, D. M C D . The British Trade Boards System.
WILLIAMS, G. The State and the Standard of Living.
W O L F E , H . Labour Supply and Regulation.
YATES, M. L. Wages and Labour Conditions in British
Engineering.
(4) Trade U n i o n i s m , Labour Policy, and t h e Co-operative
Movement
CITRINE, W. M. The Trade Union Movement in Great Britain.
COLE, G. D. H . Self-Government for Industry.
Organised Labour.
Short History of the British Working-Class
Movement.
CUNNISON, J. Labour
Organisation.
F A Y , C. R. Co-operation at Home and A broad.
FERGUSON, L. B. The Trade Disputes and Trade Unions Act, io.2y.
HENDERSON, A. Trade Unions and the Law.
H I L T O N , J., MALLON, J . J., MAVOR, S., R O W N T R E E , B . S., SALTER, Sir A.,

STUART, F . D. (Joint Editors), Are Trade Unions Obstructive ? An
Inquiry.
LLOYD, C. M. Trade
Unionism.
MILNE-BAILEY, W. Trade Union Documents.
Trade Unions and the State.
MONTGOMERY, B. G. D E . British and Continental Labour Policy.
SLESSER, H . H., a n d BAKER, C. The Law of Trade

and

Impartial

Unions.

TILLYARD, F . The Worker and the State.
T R A D E S U N I O N CONGRESS.

Annual

Reports.

W E B B , Sidney and Beatrice. History of Trade
Industrial
Democracy.
The Consumers' Co-operative Movement.
(5)

Unionism.

Employers' Organisations

In addition to t h e publications mentioned in this section information is given
in t h e constitution a n d rules, annual reports, and journals of various employers'
organisations. Information on policy is available in evidence given b y various
organisations before Royal Commissions and Government Committees and in
statements published in t h e press.
MINISTRY O F LABOUR. Directory of Employers'
Organisations, etc., 1932.

Associations,

Trade Unions,

E N G I N E E R I N G AND A L L I E D E M P L O Y E R S ' NATIONAL FEDERATION. British

Joint

Engineer-

ing Industry.
Realities and Problems.
Thirty Years of Industrial
Conciliation.
FEDERATION OF B R I T I S H INDUSTRIES.

British Industries
Annual Reports.

Manufacturers.

(periodical).

M I N I N G ASSOCIATION O F GREAT BRITAIN.

Historical

Review

of Coal

Mining.

Chapter X X I I I : " T h e History of Organisation in t h e Coal I n d u s t r y " , b y
W. A. L E E .
NATIONAL CONFEDERATION O F E M P L O Y E R S ' ORGANISATIONS.

Hours Convention. A Statement of the Facts (1927).
Statements o n The General Industrial Situation
Insurance (published in 1931).

The

and on

Washington

Unemployment

256

APPENDICES
(6) I n d u s t r i a l R e l a t i o n s

COMMITTEE ON INDUSTRY AND T R A D E . Survey of Industrial
MINISTRY OF LABOUR. Reports (annual).

Report on Profit-Sharing

and Labour Co-partnership

Relations.

in the United

Kingdom

(1920).

Report on the Establishment

and Progress of Joint Industrial

Councils,

igiy-

ZÇ22.

INTERNATIONAL LABOUR OFFICE. Studies on Industrial Relations:
Reports (Industrial Relations), No. 33. Also I I , No. 35.
AMULREE, Lord. Industrial Arbitration in Great Britain.
ASKWITH, Lord. Industrial Problems and Disputes.
BOWIE, J . A. Sharing Profits with Employees.
CARPENTER, C. Industrial
Co-partnership.
CLAY, Henry. The Problem of Industrial
Relations.
HOBSON, J. A. Conditions of Industrial Peace.
INDUSTRIAL CO-PARTNERSHIP ASSOCIATION.

INSTITUTE OF LABOUR MANAGEMENT.

Co-partnership

I. Studies and

(periodical).

Labour Management

(periodical).

LEAGUE OF NATIONS U N I O N . Towards Industrial Peace. Report on the Proceedings
of a Conference at t h e London School of Economics, February 1927.
MACKENZIE, W. H. The Industrial Court: Practice and Procedure.
RANKIN, M. T. Arbitration Principles and the Industrial Court.
R A F F E T Y , F . W . Partnership in Industry.
R E N O L D , C. G. Workshop Committees.
ROWNTREE, B . Seebohm. The Human Factor in Business.
SEYMOUR, J. B. The Whitley Council's Scheme.
(7) H e a l t h a n d Welfare
COHEN, P . The British System of Social Insurance.
DEPARTMENT OF M I N E S . Miners' Welfare Fund, Reports of Committee.
H O M E OFFICE.

Welfare

Pamphlets.

INDUSTRIAL H E A L T H R E S E A R C H BOARD.

INDUSTRIAL WELFARE SOCIETY.
(periodical).

Annual

Industrial

Reports.

Welfare and Personnel

Management

INSTITUTE OF INDUSTRIAL W E L F A R E W O R K E R S . Welfare Work (periodical published

until 1931 1 ) .
K E L L Y , E . T. (Editor). Welfare Work in Industry.
L E E , John. Principles of Industrial
Welfare.
MARTIN-LEAKE, M., and SMITH, T. The Scientific Selection and Training of Workers
in Industry and Commerce.
M Y E R S , C. S. Industrial Psychology in Great Britain.
NATIONAL INSTITUTE O F INDUSTRIAL PSYCHOLOGY.
NATIONAL S A F E T Y - F I R S T MOVEMENT.

Journal,

a n d Annual

Reports.

Various publications.

VERNON, H. M. Industrial Fatigue and Efficiency.
W E L C H , J. J., and MILES, G. H. Industrial Psychology in Practice.

1
The organisation then changed its title to t h e " Institute of Labour Management " ; see section (6) of bibliography.

A P P E N D I X II

AVERAGE WEEKLY FULL-TIME RATES OF WAGES OF
ADULT WORKERS IN CERTAIN OCCUPATIONS IN SOME
OF THE CHIEF INDUSTRIES, AT JULY 1914
AND 31 DECEMBER 1936 1
Weekly rate of wage
Industry and occupation

Industry and occupation
31 Dec.
1936

July

1914

s.
griculture :
Ordinary labourers . .
ngineering :
Fitters and turners . .
Patternmakers
. . .
Labourers
lipbuilding :
Shipwrights
Labourers
oot and shoe a :
Skilled men
Women
aking :
Table hands
urniture making:
Cabinet makers . . .
French polishers . . .
rinting and bookbinding :
Hand compositors 3 . .
Bookbinders
. . . .

Weekly rate of wage

38 I I
42 I

41
23

7
O

27-3OS.
I7-18S.

68 3
46 8
62

54
36

1914

22 IO

July

0
0

Building :
Bricklayers
Carpenters
Painters
Labourers

40 i
39 II
36 3
27

Electrical installation :
Wiremen

39 4

Railway service :
Engine drivers

. . .

Goods porters . . . .
P e r m ' t way labourers.

22
22

0
0

Tramway service :
Drivers
Conductors

1
31
2 7 10

Road transport :
One-horse carters
39 5
37 5

7 0 11
70
9

. .

Dock labour (per day) :
General cargo workers

35 8

33 11

73 7

Local authorities :
Labourers

1 Twenty-second Abstract of Labour Statistics of the United Kingdom (Cmd. 5556), pp. 82-86. For most
occupations the figures are averages of the time rates recognised by employers' and workers' organisations
in the principal centres. Certain industries (e.g. coal mining and textiles) in which the characteristic occupations are on piece rates are not included in the table.
2
National agreed minimum rates. The pre-war rates were adopted in 1914 to come into force in 1915.
3 Book and job.
* Extra payment was made to drivers performing over a certain mileage per day.
ö Non-trading services.

258

APPENDIX III

FULL-TIME HOURS OF WORK IN VARIOUS INDUSTRIES,
1914 AND DECEMBER 1936
The figures given are weekly hours unless otherwise stated. They represent
t h e usual situation, although in some districts or for some grades of workers in
several of the industries there are minor differences from the figures shown. I n
most industries the reductions shown were made during the years 1919 and 1920.
Full-time hours of work
Industry and class of work
Dec. 1936

Building 1
Coal mining :
Underground work, per shift 2
Surface work
Engineering and shipbuilding . .
Electrical installation
Iron and steel and tinplate:
Shift work, per shift
Day work
Other metal trades
Cotton
Wool
Other textile trades
Boot and shoe
Railway service (traffic grades) .
Other transport services :
Dock labour, per day
. . . .
One-horse drivers
Tramways
Printing
Baking
Furniture making
Pottery
Chemical :
Shift work, per shift
Day work

49%
83
51 to 58
53 or 54
53 or 54

4414-44%
7%
44

47
47

8 or 12
53
53 or 54
55%
55 Vi
54 to 56
52%

47
47
48
48
48
46
48

9 to 10%
56 & over
54 to 60
50 or 51
48 to 60
46 y2 to 54
52

48
48
48
44 to 48
44 to 47
47

53 or 54

8
47

1 Account is taken of both summer and winter hours.
2 In order to obtain the average time underground one winding time should be added to the figures;
in 1936 the average duration of a winding time was about half an hour. A shorter shift was usually worked
on Saturday.
3 Except in Northumberland and Durham.

259
APPENDIX IV

MEMBERSHIP OF TRADE UNIONS,
I913, 1920, I93O, 1935, AND 1936
The statistics tabulated below for the chief industrial groups a t the end of each
of the years 1913, 1920, 1930, 1935 and 1936 are compiled from returns collected
by the Chief Registrar of Friendly Societies, and by the Registrar of Friendly
Societies for Northern Ireland, from trade unions registered under the Trade
Union Acts, and by t h e Ministry of Labour from unregistered unions. They cover
all organisations of employees (salaried and professional workers as well as manual
wage earners) which include among their functions t h a t of negotiating with employers with t h e object of regulating the conditions of employment of their members.
They include a small number (probably less t h a n 50,000) of members of Irish Free
State branches and of other oversea branches of certain unions. The figures for 1936
are provisional.
MEMBERSHIP OF TRADE UNIONS, I 9 1 3 , I92O, 1 9 3 ° . 1935 AND 1936

(ooo's omitted)
Total (males and females)
Group of unions
1936

1930

Agriculture, horticulture, etc. 1 . . .
Mining and quarrying
Metals, machines, conveyances, etc. 1 .
Textile :
Cotton
Bleaching, dyeing, finishing, etc. . .
Other textile
Clothing
Woodworking and furniture 2 . . . .
Paper, printing, etc
Building, public works contracting, etc. x
Other manufacturing industries, and
miscellaneous services 3
Transport and general labour :
Railway service
Water transport
Other transport (road, dock, etc.) and
general labour
Commerce, distribution and finance .
National and local government 4 . . .
Teaching
Totals

21
920
560

210
1,158
1,171

372

91
243

461
I18
255
236
87
227
563

117

293

327
146

618
I94

566
234
113

1,685
4OO
465
I98

4.135

8,339

67
84
108

120

35
612
601

31
629
592

> 559

\ 432

33
679
686

t 429
176
58

167
.55
195
275

204
298

149

145

152

449

417

452

[851

f 911

-1,052

296
480
243

324
519
246

4,825

4,868

5,3o8

159
64
187
306

248
378
227

1 The figures for these industrial groups are exclusive of the membership of the Transjxirt and General
Workers' Union and the National Union of General and Municipal Workers, which are included in " Transport and general labour ".
2 Excluding carpenters and joiners, who are included under " Building ".
3 Comprising the pottery and glass, food, drink and tobacco, leather, chemicals, rubber, brushes, musical
instruments, entertainments and sports, etc.
4 The figures exclude teachers', tramway workers' and general labour unions, for which see " Teaching "
and " Transport and general labour ".
5 A certain number of persons are members of more than one union, but the duplication thus involved
is believed to be negligible.
(Source: Ministry of Labour Gazette, Oct. 1931. and Oct. 1937.)

2Ö0
APPENDIX V

INDUSTRIAL DISPUTES INVOLVING STOPPAGES
OF WORK, 1893 TO 1936
Statistics are given below of the number of disputes, t h e number of workpeople
involved and t h e aggregate duration in working days of all disputes in progress
in Great Britain and Northern Ireland during the period from 1893 to 1936. Disputes
which involved less t h a n ten workpeople and those which lasted less than one day
are omitted except where t h e aggregate duration (that is, the number of workpeople multiplied by t h e number of working days) exceeded one hundred days.
The number of workpeople includes, in addition to workpeople actually on strike
or locked out, those workpeople who, though not themselves on strike or locked
out, were thrown out of work owing to t h e disputes a t the establishments where
t h e disputes occurred.
NUMBER OF INDUSTRIAL DISPUTES, NUMBER OF WORKPEOPLE INVOLVED
AND AGGREGATE DURATION, 1893 TO I 9 3 6
Number of disputes
beginning
in the year

Year

1893-1900l
1901-1910 1
1911
1912
1913
1914
1915

. .
. .

1917
1918
1919
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936

.
.

753
453
872

Total number
of workpeople
involved
(ooo's omitted)

281
220
952

834

1,462

1.459
672

664
447
448

532

276

972

73°

872

1.165
1.352
1,607

1,116
2,59i
1.932
1,801

763
57 6
628
710
603
323
308

552

4°5
613
441

2.734
108

Aggregate duration
in working days
of all disputes
in progress
during the year
(ooo's omitted)
10,050
4,020
10,160
40,890
9,800
9,880
2,950
2,450
5.650
5.880

34.97°
26,570
85,870
19,850
10,670
8,420
7.950
162,230
1,170
I.390
8,290
4,400
6,980
6,490
1,070

302

124

431
422
420

533

389
357

379

471

553

134
271

818

316

1,960
1,830

655

558

13,622

307
490
136

960

Averages of
1893-1936
1

Annual averages.
(Sources: COMMITTEE ON INDUSTRY AND TRADE: Survey of Industrial Relations, and Ministry of Labour
Gazette.)

2ÖI

A P P E N D I X VI

CONSTITUTION AND FUNCTIONS OF WORKS
COUNCILS
Summaries are given below of the constitutions and functions of works councils
which have been set up in several large undertakings. The selection has been made
so as t o illustrate various types of constitution in undertakings in different industries
and districts.
The Bradford Dyers' Association,

Limited

This Association comprises a large number of branch works scattered over a
wide area, chiefly in Yorkshire and Lancashire. I t s system consists of councils
a t various branch works, and quarterly conferences attended by representatives
from each works council.
Works

Councils

These are set up in accordance with agreements between the Association and
the trade unions. The agreements provide t h a t there shall be set up a t each branch
works employing more than fifty employees a works council consisting of not
fewer t h a n five representatives of the workpeople in addition to two nominees
of the unions, and persons appointed by the management as their representatives.
The shop delegates for the time being shall be ex officio t h e two representatives
of the unions, and where there is only one shop delegate he shall be one representative and the other nominee of the unions shall be another employee at t h e works.
A works council shall not discuss any matter of hours, wages, piece-work rates,
etc., which are t h e subject of agreement with t h e unions, and which it shall be
clearly understood are outside the province of the works councils. With these
exceptions any m a t t e r of mutual interest may be discussed by a works council.
Most of the subjects in the Ministry of Labour's list, which is reproduced in Chapter V
of this study, have been dealt with by one or other of the Association's councils.
Some councils give special attention to certain subjects, while other councils interest
themselves in other matters. Among the subjects which have received major
consideration are safety; suggestions for improvements in working conditions and
efficiency (rewards are paid for useful suggestions) ; education ; sport and recreation ;
sick, benevolent, and saving funds.
Quarterly

Conferences

Separate conferences are held for works councils in Yorkshire and for those in
Lancashire, but liaison is maintained between them. The main purpose of the
conferences is t o co-ordinate the activities of t h e works councils. Each branch
works council is entitled to send representatives of management and of workers
to the conferences. The subjects are the same as those dealt with by the works
councils. Also a review of the state of trade, with special reference to the position
of t h e industry, is given by one of the directors.
The detailed work of the conferences is referred to committees.

APPENDICES

2Ó2

Dunlop Rubber Company, Limited,
Joint Factory

Birmingham

Council

The council is set up for the general purpose of securing agreement between
management and workers about wages and general conditions of employment by
full explanation and discussion, thus avoiding the issuing of arbitrary rules and
instructions by the management. It aims at encouraging the closest co-operation,
mutual understanding and confidence between management and workers on all
matters of common interest; it provides constitutional means for the ventilation
of grievances, their removal and the prevention of disputes ; it promotes and fosters
the social welfare of the Company's workers.
The council consists of not more than twenty-four management members appointed
by the directors for such period as the directors shall determine, and a number
of operative members elected by secret ballot, on the basis of one member for each
150 workers, by departmental constituencies. The present numbers are eighteen
management members and forty operative members. The voting power of each
side of the council is equal, whatever may be the number of members of either
side present a t any council meeting.
The chief qualifications for operative members a r e : (a) workers of twenty-one
years of age or over and who have had a t least one year's service with the Company
are eligible; (6) foremen, assistant foremen, charge-hands and other persons having
influence in employment or discharge are not eligible. Workers must be employed
in the voting constituency for which they are nominated. Nominations of candidates signed by three voters in the constituency must be made in approved manner
not later than fourteen days before the date of the election. Operative members
are elected for three years, one-third of the members retiring automatically each
year, b u t being eligible for re-election. Provision is made for the filling of vacancies
on the council. All operatives with at least one month's service with the Company
are entitled to vote.
The officers consist of a chairman and secretary nominated by the Company,
and an operatives' chairman and operatives' secretary elected annually by the
operatives' side of the council from among their members.
The council shall meet every three months, but extra meetings may be held
when necessary upon the requisition of twelve members, or a t the request of the
general purposes committee, or of the directors. The operative members shall
meet not less than once a month. Members of the council are paid for the time
occupied a t meetings or on other joint factory council business, the basis of payment
being the sum lost by them through their absence from work.
Matters for discussion at the regular quarterly meeting should be notified to
the secretaries, in writing, a t least three days before the date of the meeting. No
recommendation shall be regarded as made or resolution passed unless it is approved by a majority of members of both sides of the council, except as indicated
below. Each side of the council or of any committee shall have the right to withdraw temporarily from any meeting for private discussion of any matter under
consideration.
General Purposes

Committee

The committee is set up mainly to provide a recognised channel of communication between the employees and the Company; to secure the largest possible
measure of joint action between them; t o base these relations on mutual understanding and confidence; to consider matters referred to it by the management,
the joint factory council or the operatives; and to present suggestions to the
management. Its functions shall be purely advisory or consultative.

APPENDICES

263

The following are specified as subjects suitable for discussion: (1) welfare and
social subjects; (2) suggestions; (3) working hours; (4) regularity of employment;
(5) output; (6) improvements in methods and machinery; (7) discipline; (8) grievances; (9) wages.
The committee shall consist of not more than twelve management members
appointed by the Company (at present the number is four), and not more t h a n
sixteen operatives selected each year by the operative members of t h e joint factory
council from among their number. The voting power of each side of t h e committee
shall be equal. The committee shall meet once a month, but extra meetings may
be held when necessary on the request of four members. The rules about payment
for time spent a t meetings, the making of recommendations and the passing of
resolutions are similar to those of t h e joint factory council.
Procedure for Dealing with

Complaints

A worker or workers desiring to raise any question in which they are directly
concerned shall first discuss it with their foreman, and, if they so desire, in t h e
presence of their joint factory council representative. Failing settlement within
a reasonable time, the joint factory council representative shall take the matter
up with the shop manager, who shall, if necessary, consult the works manager
within twenty-four hours. Formal records shall be kept of complaints and t h e
settlements reached. If no settlement is arrived at within a time fixed b y t h e
mutual consent of the works manager and representatives concerned, the question
shall then be referred to the general purposes committee and/or the joint factory
council. Should the council fail to reach agreement upon any subject, they may
appoint an arbitrator upon the majority vote of each side of the council, whose
decision shall be final.
No stoppage of work shall take place until the question has been fully dealt
with in accordance with the above procedure, and then only upon a two-thirds
majority vote of one or other side of the council a t a full council meeting, when
a t least twenty-four hours' notice of such a stoppage shall be given in writing. Any
stoppage of work occurring before t h e above procedure has been followed shall
not receive the support of any member of the council or any other employee.
Operative members of the council shall have t h e power to instruct the workers
to cease work when t h e above procedure has been exhausted without a settlement
having been reached.
N.B. — Any employee wilfully breaking the rules of the joint factory council,
including the rules for dealing with complaints, shall be considered t o have voluntarily terminated his or her employment with t h e Company.
Imperial

Chemical Industries,

Limited

Imperial Chemical Industries, Limited (hereafter termed " the Company " ) ,
has a large number of factories in different parts of the country. The basis of its
scheme is the establishment of a works council a t each factory. From these works
councils, representatives are elected t o group councils, which are arranged according
to the main products of each factory (e.g. alkali, dyestuffs, acids and salts, etc.).
Recently, the number of group councils was twelve. Each group elects representatives to a central council covering the whole Company.
Works

Councils

These provide regular and recognised opportunities, (a) for the joint consideration
by management and employees of t h e various problems affecting t h e employees
which arise in the day-to-day activities of the factory; (6) for the management
to make communications to t h e employees and to ascertain the views of t h e employees upon any particular matter.

264

APPENDICES

Their duties include: (a) consideration of matters affecting the well-being of the
employees a t the particular factory (ventilation, lighting, temperature and cleanliness of workrooms, lavatory accommodation, recreation, etc.); (&) consideration
of suggested amendments of works rules; (c) consideration of questions aSecting
time-keeping, output, accident prevention, waste of time or material, discipline,
etc.; (d) examination of grievances; (e) administration of benevolent, holiday,
hospital and other similar funds.
The functions of a works council are generally advisory and decisions are transmitted in the form of recommendations to the factory management. Matters
which, in the opinion of the chairman, are likely to affect another factory are
referred to the group council; also matters upon which a works council fails to
agree may be referred to t h e group council.
Each works council consists of representatives of the management and of the
employees in equal numbers. To secure adequate representation, the employees
at each factory are classified into sections. The employees in each section nominate
candidates, and each trade union representing employees in any section is invited
to make nominations. Persons nominated for each section are submitted to a poll
of the section. Employees' - representatives must have been in the service of the
Company or of one of its constituent companies for not less than five consecutive
years and must be employed at the factory concerned. To be entitled t o vote at
any election, persons must have been employed by the Company continuously
for the whole of the year preceding the date of the election and still remain in its
employment. Directors of each constituent company are responsible for the control
and management of elections. In the event of two candidates receiving an equal
number of votes, the one with the longer service shall be chosen. All representatives
of the employees and also those of the management retire annually, but are eligible
for re-election or re-appointment. A member vacates office by ceasing to be employed at the factory, by resignation, b y the request in writing of two-thirds of
his side of t h e council, or by absence, without reasonable excuse or leave of t h e
council, from two consecutive meetings.
Council meetings are held once a month and as often in addition as the council
may consider necessary. A meeting shall be convened at any time a t the request
of the chairman or of one-half of t h e members. On request, t h e factory management
shall accord reasonable facilities during working hours for separate meetings of
employees' representatives.
The chairman of a council is appointed b y those directors of t h e constituent
company who are delegates of management on the council. Executive directors,
other than those formally appointed as management representatives, shall be
ex-officio members of t h e council, but without voting power.
Group Councils
These deal with problems affecting factories whose major products are similar
and whose employees have thus a direct common interest. Their duties include
co-ordination of the activities of the works councils within the group, discussion
of matters of common interest affecting employees in the group, and serving as a
link between the works councils and t h e central council. Matters which, in the
opinion of the chairman, are likely to affect another group shall be referred to the
central council. If a group council fails to reach an agreed recommendation upon
any matter within its competence, it m a y refer the matter to the central council.
Group councils consist of representatives of t h e management and of the employees
in equal numbers, elected annually from and by the works councils comprising
t h e group. The membership of the different councils ranges from six to thirty-four.
Members vacate office for reasons similar to those which apply to works councils.
Group councils meet twice a year, and at other times as provided for works councils.
The chairman shall be nominated by t h e directors of the Company.

APPENDICES
Central

265

Council

This body discusses matters affecting the employees of the Company as a whole
and is recognised as a n appropriate channel of communication between the directors
of the Company and the employees in the various factories. I t co-ordinates t h e
activities of t h e group councils, considers matters referred t o it by t h e m or by
t h e directors of the Company, and discusses any other matters concerning contentment, security and efficiency throughout the various factories. Its functions are
generally advisory and consultative, its recommendations being transmitted to
t h e directors of the Company.
The council consists of representatives of the management and of t h e employees
in equal numbers, elected annually from and b y t h e group councils. The total
number of representatives is forty-two, the numbers from the various groups
ranging from four t o ten. Members of the executive committee of the Company
are ex-officio members of t h e central council, but without voting power. The central
council meets twice a year, and at other times according to provisions similar to
those which apply t o works councils. A member vacates office if he ceases t o be
employed in t h e particular group of whose group council he is a representative or
for other reasons similar t o those which apply to members of works councils.
General

Provisions

No council in the scheme is competent to discuss any matter which is the subject
of an operative agreement between t h e Company and any trade union, except b y
written consent of t h e trade union concerned. Any council may invite the attendance in a consultative capacity of any non-member who m a y be in a position t o
give information on any matter under consideration or who may desire to make
representations on any matter; within this provision, the power to invite t h e
attendance of a trade union official is vested in t h e workers' representatives on
any council.
Questions are decided b y a majority of votes. Voting is by show of hands unless
a ballot is demanded by one-third of t h e members present. Administrative expenses
are borne by the Company. Minutes are kept of all proceedings under the scheme ;
copies of works council minutes are communicated to t h e secretary of t h e appropriate group council and to the secretary of the central council. Group council
minutes are forwarded to the secretary of the central council and to the secretary
of each works council within the group. Members of all councils are paid reasonable
travelling expenses and for lost time incurred owing t o attendance at meetings
of a council or sub-committee.
Peek Frean and Company,

Limited,

Biscuit

Manufacturers,

London

The system consists chiefly of two bodies: (1) a works committee, the membership
of which consists of some thirty-six elected employees below the grade of foreman
(or supervisor), and to these are added four nominees of the management with
power t o vote; the members elect a secretary from among the employees of t h e
Company and he shall have voting power in t h e committee; (2) a smaller body,
known as the joint council, consisting of representatives of management and an
equal number of representatives of t h e workers appointed by the works committee.
In addition to these two bodies there are two committees of supervisors, one for
men and the other for women.
Works

Committee

Membership is restricted to employees of the Company. Female members shall
be a t least nineteen years of age and have had not less than one year's service
with t h e Company; male members shall be at least twenty-one years of age and

266

APPENDICES

have had not less t h a n three years' service. Managers and foremen are not eligible
for election.
Each different section of the works elects its own members, every worker in a
section being entitled to vote irrespectively of age or length of service; a section
elects one member for every 125 workers or part thereof, with a maximum of
three members per section. 1 Elections are annual by secret ballot. Candidates
for election must be nominated; no nomination is valid unless the nominee has
given his consent in writing and is supported by at least four electors in the section
for which he is nominated. Members are eligible for re-election. A member of the
works committee who is absent from two consecutive meetings without adequate
reason is Hable to lose his seat. The committee is convened by the secretary in
consultation with the chairman as business arises, or on the request in writing of
ten members. Time spent by members on committee work in work hours shall
be paid for as nearly as can be ascertained as if members had remained a t work.
The chairman and vice-chairman are elected by the members from among their
number.
The functions of the works committee are to investigate proposals and make
recommendations t o t h e directors of the Company or the joint council on such
subjects as works rules; hours of work and conditions of employment; wages,
including method and time of payment and the adjustment of rates, b u t excluding
standard rates; discipline; grievances; holidays; conditions of workrooms; safety;
training of apprentices and young persons; constructive ideas and employees'
suggestions for improvements in methods, processes, organisation, etc.
Joint

Council

The functions of the joint council are to investigate proposals and make recommendations to the directors and if desired to the works committee for the effective
carrying out of the objects of the works committee. The joint council shall consider
and report on matters submitted to it by the directors or by the works committee
and on original business introduced by a member; the discussion of original business
shall be postponed on a two-thirds majority vote of the works committee representatives present and voting, in order t h a t the matter may be referred to the next
meeting of the works committee for the ascertainment of its views.
The joint council consists of not less than eight or more t h a n twelve representatives of the management nominated by t h e directors and an equal number of
members of the works committee. The representation of the works committee on
the joint council shall consist of its chairman and vice-chairman and as m a n y
elected members as shall together equal the number of management representatives.
One from each of t h e supervisors' committees shall be elected by them t o the joint
council and shall be included in the representatives of the management nominated
by the directors. The Company's employment manager shall ex-officio take p a r t
in the discussions but shall not vote. The chairman of the joint council shall be
elected by the joint council from among their number; he shall have a casting vote
in addition to his ordinary vote. The secretary of the works committee shall be
secretary of the joint council and shall not vote, b u t may take p a r t in the discussions.
All members hold office until the next general election of the works committee.
Provision is made for the filling of vacancies.
The joint council shall meet in work hours not less frequently t h a n once a quarter.
Time spent by members on joint council work shall be paid on the basis of a full
week's earnings. The joint council has several very active standing sub-committees
1
Sections are free, subject to the approval of the works committee and certain
other restrictions, t o arrange sectional committees as and when they consider
them desirable.

APPENDICES

267

constituted on t h e same principles as t h e council itself (i.e. half management and
half representatives of t h e works committee) ; the present standing sub-committees
deal respectively with suggestions, safety and works rules.
Rowntree and Company, Limited,

Chocolate Manufacturers,

York

The scheme comprises a dozen or more departmental councils and a central
works council. Also shop steward representation is an integral part of the system.
Departmental

Councils

These councils, which deal with matters affecting the department, consist of
approximately equal numbers of t h e administrative staff and of rank and file
workers. The workers' side consists in t h e first place of a shop steward, or, where
more t h a n one union or craft is concerned, two or more shop stewards who are
ex-ofßcio members elected b y t h e trade unionists in the department. The remainder
of t h e workers' representatives (usually t h e great majority) is elected b y ballot
of all t h e workers in the department who have been employed by t h e firm for six
months or more and are over eighteen years of age. Neither membership of t h e
council nor voting is thus confined to trade unionists, b u t in practice trade union
influence ensures t h a t substantially the members elected are trade unionists.
Councils vary in size, the aim being t h a t each defined section of workers shall be
represented. Nearly one-half of t h e councils have a total of twelve members or
less (including both management and workers), several have fourteen, sixteen, or
twenty members and one or two have more t h a n twenty members. The councils
normally meet monthly, or more frequently if necessary; all meetings are held
during working time and workers are paid a t their ordinary rates or average
earnings for time spent at t h e meetings. 1
The Central Council
This consists of twenty-three administrative representatives partly elected by
the different grades of management, and partly ex officio, and twenty-seven worker
representatives elected by t h e departmental councils. Each member is elected
for three years, one-third retiring annually. Meetings are held once a month and
are conducted in accordance with the rules governing public meetings (i.e. formal
proposing and seconding of resolutions, amendments, etc.). They are held during
working time and workers receive their ordinary wage rates or average earnings.
The only limitation upon the subjects which may be discussed is t h a t basic
working conditions fixed b y collective agreement (by the Interim Industrial
Reconstruction Committee) are excluded. A quarterly trade review, including
details of sales and prospects, is given b y one of t h e directors and discussed b y
the council. All decisions of t h e central council and also of departmental councils,
are subject to the veto of the board of directors on the one hand and the trade
union on the other. Approved proposals are carried into effect b y the executive
committee of the council or by one of the special committees appointed by the
council (e.g. the unemployment committee which administers the company's
unemployment scheme, the theft committee which " tries " all cases of theft and
reports monthly to the central council, and t h e appeal committee which hears
appeals from workers who feel t h a t they have been unfairly treated and gives
final decisions). These various committees consist of representatives of management
1
Doubt has been expressed as to the value of the departmental councils and
t h e view has been advanced t h a t some of the councils, especially those on which
girls predominate, have not really been of much use. When, however, in 1925,
t h e question of their abolition was considered by t h e central works council, the
decision was in favour of their continuation (The Human Factor in Business).

268

APPENDICES

and workers. Through them the firm has developed its policy beyond consultation
t o the sharing of control with the workers over certain matters usually determined
solely b y the management. Minutes of the central council meetings are published
in the works magazine, which is distributed t o every worker.
The Stanton Ironworks

Company,

Limited

This Company comprises eight separate establishments (ironworks and collieries)
scattered over several counties in the Midlands. There are three committees at
each establishment: (i) general committee of employees elected by the employees,
(2) executive committee of employees elected b y the general committee, (3) works
committee comprising executive committee of employees and the management.
General Committee
Each establishment is divided into sections for voting purposes, and each section
has allotted to it a specified number of representatives on the general and on the
executive committees. At some of the larger works there are seventy or more
members on the general committee. The general committees are elected annually
b y secret ballot. Every workman is entitled t o nominate candidates a n d to vote
in elections. The committee usually meets once a month in the workers' own time,
b u t on premises provided b y the Company. I t elects t h e executive committee
and prepares the agenda of questions for submission t o the works committee joint
meeting with the management.
Executive

Committee

Generally speaking these committees consist of about one-third to one-quarter
of the number of members on the general committee. Members of the executive
committee are elected b y sections b y the votes of the representatives of each section
on the general committee. Four times a year the eight executive committees in
the Company hold a joint meeting in their own time, but out-of-pocket expenses
are refunded to them.
Works (or Colliery)

Committees

The works committee is a joint committee of t h e management and of the executive
committee of employees. It meets monthly and is normally presided over by t h e
managing director. Other management representatives are t h e departmental
managers who attend each meeting, and representatives from t h e general body
of foremen who sit in rotation so t h a t within t h e course of twelve months each
foreman takes p a r t in a t least one meeting. T h e members of t h e executive committee of employees are paid for t h e hours of their attendance. At least seven
days' notice of any matters which it is desired t o discuss shall be given b y either
side to t h e other.
The subjects dealt with include adjustments of wages, overtime, working conditions, discipline and absenteeism, safety and first-aid, suggestions for obtaining
greater efficiency, rewards for suggestions, housing, allotment gardens, education
and recreation, benevolent fund and pensions.
General Rules
Agreements entered into with the Company by t h e trade unions continue t o
be dealt with by t h e unions, excepting t h e interpretation of an agreement which
will be first dealt with by t h e works committees. The committees at collieries of
t h e Company are an exception and do not undertake t h e interpretation of collective
agreements.
The works committees are t h e first court to deal with any question of grievance
at the works, before the matter is reported to the trade union; no individual

APPENDICES

269

employee shall, however, raise any question at a works committee until his foreman
has had an opportunity to consider the matter.
Rules provide for the method to be adopted if a deputation of employees desires
to interview the management. If the question affects the whole of the works, the
deputation shall consist of the full executive committee. No stoppage of work
shall take place until the executive committee have had an opportunity of discussing
matters with the management.

270

APPENDIX VII

INDUSTRIAL CO-PARTNERSHIP AND PROFITSHARING SCHEMES
Summaries are given below of the chief features of industrial co-partnership
and profit-sharing schemes which have been introduced by several firms. The
schemes selected illustrate different methods, and the firms are in different industries
and districts. The various notes are based on statements issued b y t h e firms or
on publications of t h e Industrial Co-partnership Association.
The Brush

Electrical

Engineering

Company,

Limited

The co-partnership scheme adopted b y this Company came into force in 1926.
Employees share any surplus profit with the shareholders; t h e surplus in any year
is the profit shown after deducting amounts for depreciation and t h e necessary
charges on agreed principles and agreed rates, and a dividend of 10 per cent, per
annum on the shares of the Company. For purposes of distribution of surplus t h e
employees are classified into (1) craftsmen and others on the time wages list;
(2) staff on t h e weekly wages list; (3) staff on t h e salaries list. The surplus profit
is distributed among these three groups and to the shareholders, in proportion
to the total wages, salaries and dividends paid for the year. The employees receive
by far the larger share of a n y surplus, since on the average the total of wages and
salaries is about six times t h e amount of dividends on the ordinary shares.
The part of the surplus due to the employees is divided amongst the individual
employees. Each employee has the opportunity of taking his proportion either
in cash or in fully-paid ordinary shares of t h e Company a t par. No restrictions
are imposed on such shares issued to employees. They rank equally in every respect
with those held by other shareholders and can be kept for permanent investment
or sold.
The management of the scheme is controlled by a Co-partnership Council consisting of eight members and a Chairman; two members are elected b y each of
the three groups of employees mentioned above.
Bryant and May,

Limited

This scheme, which is known as t h e Brymay Co-partnership Scheme, was introduced in 1919 by this firm of match manufacturers. The chief features of t h e scheme
are: (1) The surplus profits which the directors recommend for distribution, after
allowance for depreciation and reserves, the dividend on preference shares, and a
dividend of 10 per cent, free of income t a x on t h e ordinary and partnership shares,
are divided equally up to a total of a sum not exceeding t h e equivalent of a dividend
of 10 per cent, on 1,200,000 ordinary shares of £1 each, between t h e ordmary
shareholders in t h e shape of extra dividends, and t h e employees in t h e shape of
bonus. The amount payable to the employees, however, is limited to a sum equal
to 12% per cent, of the total wages and salaries paid during the year. (2) Opportunity is afforded t o the employees to become co-partners by using the amount
of their bonus, or such part of it as they may wish to subscribe, for partnership
shares.

APPENDICES

271

The total amount payable to the employees is paid to a trustee, who is required
by a trust deed to distribute first among holders of partnership shares such sum
as is necessary to make up the dividend on partnership shares t o the same amount,
but not exceeding 15 per cent, free of tax, as paid on t h e ordinary shares when
such dividend exceeds 10 per cent, free of tax, while t h e remaining amount is
allocated t o all employees who have been for two years or more exclusively engaged
in the Company's employment, other than directors, in proportion to the amount
of salary or wages actually received b y them during the business year in respect
of which t h e distribution is made. 1
The partnership shares, of which 200,000 of £1 each were created a t the inception
of the scheme, carry no interest in the Company's reserve funds. They are issued
to the employees at par, and must be relinquished t o the Trustee a t the par value
on the death of t h e employee, or normally on the employee leaving the Company's
service. Otherwise the shares are not transferable or saleable, and may not be
pledged as security for loans.
An employee who holds fifty or more partnership shares is entitled to attend
and vote a t the general meetings of the Company. The committee of management
of the Trust consists of not more than fourteen persons, of whom one-half are
directors of the Company, or shareholders nominated b y t h e directors, and the
other half are employees or persons appointed by them.
John Mackintosh and Sons,

Limited

The profit-sharing scheme in operation in this Halifax firm of confectioners
and sweet manufacturers was introduced in 1922. Half t h e ordinary shares of t h e
Company are " preferred " and the other half " deferred ". The average of the
rates of interest on these two groups of shares is taken as the profit-sharing rate.
The workers receive a dividend on their wages a t this rate, and it is paid out in
cash. Payments are not, however, made in a lump sum, but are distributed week
by week during t h e following year as a bonus on wages. 2 The sum due t o each
worker is included in the pay envelope, the amount of t h e wage and of t h e bonus
being clearly distinguished on t h e envelope.
Under this scheme there is no prior payment t o capital, the same rate being
paid to t h e worker on his wages as is received by the shareholders.
South Metropolitan Gas Company
The co-partnership scheme established by this Company dates from 1889. The
original scheme provided for t h e payment in cash of a percentage on all salaries
and wages, the percentage rising and falling, like the shareholders' dividends,
proportionately with t h e price a t which gas was sold. Various modifications have
been made, and in 1920 the scheme was incorporated in an Act of Parliament
obtained b y the Company. This provides t h a t surplus profits, after payment of
5 per cent, dividend on the ordinary stock and 6 per cent, on any new ordinary
stock, should be divided in the proportion of three-quarters to t h e consumers,
by way of reduction of the price of gas, and one-fourth equally between capital
and labour, i.e. between the ordinary shareholders in increased dividends, and
t h e employee co-partners of the Company in a uniform percentage bonus on their
salaries and wages.
1
The amount allotted to the salaries or wages of those employees who have been
employed for less t h a n two full business years, or whose work has been irregular or
unsatisfactory, is not paid t o such employees, b u t is transferred to a fund for the
benefit of employees or ex-employees of the Company, their widows or dependants.
2
The share of profit to the permanent staff is paid half-yearly.

272

APPENDICES

A standard price for gas was fixed, and at the end of every year in which gas
has been sold a t a figure below the standard, the amount thus saved to the consumers
is calculated. This sum is then regarded as the consumers' share, and as representing
three-quarters of the surplus profits. If and so far as the balance of the net revenue
account in the opinion of the directors permits, a sum not exceeding one-quarter
of the surplus profits is divided in the manner described above.
One-half of the bonus is invested in the Company's ordinary stock in the name
of trustees until the amount credited to any co-partner is sufficient t o give him
a stock certificate in his own name. The remaining half of the bonus is left in the
Company's hands t o accumulate a t interest, or it m a y be invested in stock with
the trustees, or it may be withdrawn in special circumstances. The trustees are
the employee directors, together with the president and secretary of the Company.
Shareholding employees elect representatives on the board of directors. The
number of employees' directors shall not exceed three, of whom one shall be a
salaried officer, and the other two employees in receipt of weekly wages. The
qualification of an employees' director is to have been for not less t h a n fourteen
years and continuing to be an employee of the Company, and to have held for not
less t h a n twelve months prior to the date of election, and continuing to hold, a
specified amount of stock (¿120 to ¿200) accumulated under the co-partnership
scheme. Voting power in electing employees' directors varies according t o the
amount of stock held.
/ . , T. and J. Taylor,

Limited

This firm, which is one of the older firms in the woollen cloth trade, with works
a t Batley, Yorkshire, introduced its profit-sharing scheme in 1892. For the first
three years the scheme applied to the higher ranks only, but since 1895 it has
included the whole of the employees remaining with the Company t h e full year.
The scheme provides that, after making due allowance for depreciation, any
profit which may remain after paying 5 per cent, on capital is apportioned between
capital and labour according to their respective amounts, i.e. any percentage of
profit received by capital beyond 5 per cent, is also declared on the year's total
wages, and every worker who has been employed during the whole of the year is
credited with a bonus at not less than t h a t rate on his or her year's wages. Double
bonus is given to those not less than twenty-one years of age who have been with
t h e Company a t least five years. For t h e years 1895 to 1914 inclusive, t h e bonus
on wages was not given in cash but wholly in the form of fully-paid £1 shares in
the Company. For subsequent years the bonus has sometimes been given partly
in shares and partly in British Government securities or cash. Such portion of the
total wages paid as has been earned b y workers who have not remained t h e whole
year does not confer bonus on them, b u t the bonus which would otherwise go to
them is carried to the Workers' Benefit Fund.
Bonus shares do not carry votes, b u t they entitle the owner t o the same rate
of dividend as any other shareholder. An employee must have a holding equal
to his year's wages before he can sell any of his shares. He may then, if he wish,
sell any surplus beyond t h a t holding, b u t any shares for sale must be offered first
t o t h e secretary of t h e Company for use in t h e next bonus distribution. Persons
leaving the Company's employment are required to sell their shares within six
months.
The employees of this firm own more than three-quarters of the capital and
thus receive the greater part of the profits.

273
APPENDIX VIII

PENSION SCHEMES IN VARIOUS UNDERTAKINGS
An account is given below of t h e chief features of pension schemes established
by several large undertakings in different industries and districts. The pensions
paid under these schemes are supplementary t o any old-age pensions which beneficiaries may receive from the State. Many firms have separate schemes for manual
workers and salaried staff; where a firm has two schemes, t h a t which applies to
manual workers is described here. The schemes are frequently embodied in trust
deeds. Outlines of other schemes are given in an article on " Employees' Retirement
Pension Schemes in Great Britain ", by A. D. K. Owen, published in the International
Labour Review, July 1935. The problem of works pension schemes is also reviewed
in The Exit from Industry, a report issued in May 1935 b y P.E.P. (Political and
Economic Planning).
Cadbury Bros., Limited
Bournville

Works Pension Fund

(Men)

This Fund, which has 5,000 members, is based on t h e joint contributory principle.
I t is managed under a trust deed and among the seven trustees are two elected
b y the workpeople. Two arbitrators, one appointed by t h e Company and one by
t h e members of the Fund, may be called upon in the event of any failure of agreement. In t h e history of the scheme, however, neither of t h e arbitrators has been
called upon t o act.
Membership. —• With minor exceptions, the Fund is open to all male employees
above the age of sixteen years and under fifty years at t h e time of entering the
Company's service.
Contributions. — The scheme is a joint contributory one: the Company and the
members make equal contributions. The contribution of t h e member varies according to his age at the time of entry. I t ranges from 2 % per cent, of his wage or salary
a t the entry of sixteen, t o 5.4 per cent, at t h e entry age of forty-nine. 2 A t the
entry age of twenty-five t h e contribution is 3 per cent, of wages and it rises by
0.1 per cent, for each year by which the worker's age at entry is increased.
On t h e introduction of t h e scheme, in order t o deal with t h e problem of employees
who, a t its inception, had been in the Company's service for varying periods of
years and for whom no fund had been accumulated from which t o provide pensions,
a Subsidiary Fund was set up t o which the Company made a special grant.
Pensions. — The pension age is sixty years, when any member may retire and
claim his pension; this age is not, however, compulsory and t h e average age of
retirement is now about sixty-one years. T h e annual pension payable t o each
member is a percentage of his aggregate wages in respect of which contributions
have been paid. At the commencement of t h e Fund in 1906 t h e rate was £1 for
every ¿100, b u t increases have been made and the rate in operation in 1929 was
1
Details of the operation of this fund, including statistics showing the number
of members and of pensioners, income from investments, amounts paid in pensions, and t h e total amount of the fund, are given in Pension, Provident, and
Benevolent Funds : an Account of the Schemes in Operation at Cadbury Bros., Ltd.,
Bournville, issued b y t h e Publication Department, Bournville Works. The present
note is based on this publication.
2
These rates apply in respect of wages up t o ¿250 per annum. Special rates are
fixed in respect of wages exceeding ¿250 per annum.

274

APPENDICES

£i u s . 6d. for every £100 of aggregate wages. Thus an employee whose annual
earnings had been ¿200 during forty years' service would receive in pension ¿126
per annum, i.e. £1 u s . 6d. for each ¿100 in the aggregate earnings of ¿8,00o. 1
A system of additional pensions was introduced in 1920 in consequence of t h e
change in the value of money and the inadequacy of the pensions of t h e older
members of the Fund.
Other provisions. — A member who leaves the Company's service for any cause
before reaching pension age is entitled to receive his own contributions together
with compound interest a t the rate of 2 % per cent, per annum. The scheme pays
the accumulated contributions of t h e subscriber with compound interest to his
widow, or representatives, if he dies while in t h e service of t h e firm.2
The contributions of t h e Company are not paid out to people who retire or die
before reaching pension age, b u t remain in the Fund t o be applied t o general
pension benefits.
Bournville

Women's Savings Trust and Pension

Fund

For workers under t h e age of thirty-five years this is largely a savings scheme,
b u t for those over the age of thirty-five it is transformed into a Pension Fund.
Membership. — With certain exceptions membership is open to all women and
girl employees above t h e age of fifteen and under the age of forty-three years a t
the time of entering the Company's service.
Contributions. — The scheme is a joint contributory one, b u t t h e Company's
contributions are at the rate of 50 per cent, of the members' normal contributions.
The Company, however, also guarantees to make the interest up t o 5 per cent.
per annum. The normal scale of contributions varies according t o the age of
subscribers who are earning less t h a n 25s. per week. For those under eighteen
years of age t h e contribution is 6d. per week; between eighteen and twenty-one
years it is cd. per week, and over twenty-one years of age is. per week. For members
earning over 25s. b u t under 30s. per week the normal scale of contribution is is. 3d.
per week. Members earning not less than 30s. b u t under 40s. per week contribute
is. 6d. per week, and for every 10s. in excess of 40s. the contribution is increased
by 3d. per week. Apart from the normal contributions, additional contributions
may be made, but these are not supplemented by payment from the Company.
Pensions. — Pension age is fifty-five years. The pension is based on the contributions and interest standing t o the credit of the subscriber's account at t h e time
of retirement, not including any portion of the Company's contributions. For a
woman who retires a t t h e age of fifty-five years the pension from the normal contributions is a t the rate of £1 13s. qd. for every ¿10 standing to her credit. Thus,
a woman who had been employed b y the Company for forty years a t an average
wage of 30S. to 40s. per week would have standing t o her credit a total of ¿483 3s. 8d.
and the rate of pension would be ¿81 10s. 2d. per annum.
Other provisions. — The members' contributions may be withdrawn plus compound interest at the rate of 5 per cent, per annum by those leaving t h e Company's
service or by their representatives in the case of death before pension age.
1
The number of pensioners in December 1936 was about 650 and the pensions
amounted to about ¿84,000 per annum.
2
There are also benefits from a special Dependants' Provident Fund. This
provides normally for t h e payment on the death of an employee before reaching
pension age of a capital sum t o the widow or other dependant equal t o six months'
wages plus one month's wages for every five years of service above ten, unless this
capital sum is less than would have been payable under the Pensioners' Widows'
Fund.

APPENDICES
Pensioners'

Widows'. Fund

275

Membership. — Membership is open to members of the Men's Pension Fund
who are twenty-one years of age and over.
Contributions. — The contribution payable by each member is one-third of the
subscriber's normal contribution to the Men's Fund. Contributions are deducted
from wages. The Company pays t o the Fund an amount equal to the members'
contributions. The normal pension payable is a t t h e rate of 7 / 8 per cent, of t h e
aggregate wages upon which contributions have been paid.
Pensions. — The beneficiaries are the widows of members of the Men's Fund
who die while in receipt of a pension from the Fund or who, having attained pension
age (sixty), are still in the Company's service at t h e time of their death. The
widows of members who were over sixty years of age at marriage are not entitled
to a pension and a reduction is made in the pension payable t o "widows who are
more than a certain number of years younger t h a n their deceased husbands, ranging
from 97 per cent, of full pension when she is five years younger down to 25 per cent.
when she is twenty-nine years or more younger, 3 per cent, being deducted for
each year within these limits.
Other provisions. — The member, or his representatives, may withdraw his contributions to t h e Widows' Fund plus compound interest a t 2 % P e r cent, per annum
if he leaves t h e service of the Company for any reason before attaining pension
age, or dies while in service before pension age or, being entitled to a pension, is
a bachelor, widower, or marries when he is sixty years of age or over, or becomes
a widower while receiving a pension, or dies without leaving a widow entitled t o a
widow's pension. The member's representatives are also entitled to any balance
of his accumulated contributions and interest in t h e Widows' Fund should his
widow die before receiving in pension an amount equal to such total contributions
and interest.
J. <S> J. Colman, Limited (Carrow Works)
The Carrow Works pension scheme is one of the oldest in the country, being
first established in 1899. I t is administered b y trustees, not less t h a n two being
appointed by the members and the remainder by t h e Company. The quorum is
five trustees.
Membership. — Membership includes male employees aged seventeen or over,
engaged a t Carrow Works, Norwich, in manual labour or as foremen, timekeepers,
firemen, watchmen or caretakers. 2
Contributions. — The Company deducts 4a. per week from t h e wages of contributing members not over sixty-five years of age.
Pensions. — Pensions are payable on retirement at sixty-five years of age or
over. The amount varies according to the age of entry in the Company's service.
The pension for life payable to workmen who entered t h e Company's service a t
the age of seventeen is 145. per week; this consists of 10s. from the Company and
4s. from the Fund of the member's contributions and interest.
Other provisions. — A member leaving the Company's service by reason of total
incapacity arising from ill-health and after completing ten years' membership
1

If a male employee dies before reaching pension age, his dependants benefit
not only from his accumulated contributions and interest, but also from t h e
special Dependants' Provident Fund.
2
The firm established a separate scheme, with pensions normally at sixty-five
years of age, for male salaried staff based on 5 per cent, of salary contributed by
each member and an equal amount paid by t h e Company, and credited to t h e
account of each member a t 3 y2 per cent, compound interest.

276

APPENDICES

receives out of the Fund a reduced pension based on the value of his contributions
plus 3 y2 per cent, compound interest. A member leaving the Company's service
before completing ten years' service or for any reason other t h a n ill-health, and t h e
representative of a member dying in the Company's service under sixty-five years
of age will receive out of the Fund the amount of his contributions plus 3 per cent.
compound interest. Should a member in receipt of a pension die before he has
drawn from the Fund sufficient t o exhaust his contributions with 3 per cent.
compound interest up to the date of his retirement, his representatives are entitled
to receive the difference between such total sum and the total already paid t o
him as pension from t h e Fund.
The Company guarantees interest for the Fund a t the rate of 3 y2 per cent.
Note. — The proportion of women who remain with the firm until the age of
sixty-five has not been sufficient t o justify their inclusion in the scheme, though
on retirement the women receive a pension.
Pilkington
Workmen's

Pension Fund

Bros.,

Limited

This Fund is administered by Trustees, one-half of whom represent the firm
and t h e other half represent the employees.
Membership. — Membership is compulsory for all employees except: (1) workers
who have not completed one year's service; workers who are under twenty-one
years of age; persons who are eligible for the staff superannuation scheme; and
(2) women workers, for whom membership is optional.
Contributions. •— Each member contributes is. 2d. per week and t h e firm contributes an equal amount for not less than forty-eight weeks in each year of employment until the member is sixty-three years of age or until the member retires on
pension, if earlier. The worker is required t o authorise the firm t o deduct his
contributions from his wages. Provisions are made for the payment of arrears
of contribution by a member who has been absent owing to sickness or accident
or for an appropriate diminution in the amount of pension.
Pensions. — Any member may retire on pension on or after his sixtieth birthday
and shall not retire later t h a n his sixty-fifth birthday, unless the firm see fit t o
defer his retirement, which they m a y do at their discretion in exceptional cases.
The rate of pension will vary according to the age a t which contribution started
and t h e age a t retirement. No increased pension shall be obtained b y postponing
retirement after the sixty-third birthday. The following figures indicate the weekly
pensions payable on retirement at the age of sixty-three or over according to t h e
age a t which t h e member began t o make contributions:
Age at which
contributions began

21 years
30 years
40 years

Weekly pension payable on retirement at the age of
63 years or over 1
. Men
Women

27s. cd.
16s. 6d.
8s. $d.

24s. lod.
14s. yd.
js. 3d.

1 A reduced pension is paid if contributions are in arrears.

The complete scale shows t h e pension payable in respect of contributions which
began in each year of age from twenty-one years t o fifty-nine years. Pensions

1
I n addition to this Fund there is a Workmen's Supplementary Pension Fund
provided by t h e Company to supplement t h e pensions of men who were employed
a t t h e beginning of the contributory Workmen's Pension Fund.

APPENDICES

277

are appropriately smaller for members who retire a t sixty, sixty-one or sixty-two
years of age. The pensions for women are smailer t h a n those for men because of
their greater expectation of life.
In the event of a member being compelled to retire after not less t h a n t e n years'
employment and retiring voluntarily before reaching his sixtieth birthday on
account of failure of health or other physical incapacity, such t h a t the member
is permanently incapacitated from doing his ordinary work, t h e trustees m a y give
from a n y age a pension actuarially equivalent to the normal pension a t the age
of sixty years, or alternatively m a y p a y t o t h e member a n equivalent lump sum.
Other provisions. — Where a member has been compelled by failure of health
or physical incapacity to retire before completing ten years' employment he shall
receive back t h e whole of his own contributions together with the firm's contributions in lieu of interest. A member who retires voluntarily or is dismissed shall
be entitled to receive his own contributions together with simple interest a t 4 per
cent, per annum except where there have not been at least two years' contributions
or where dismissal is for dishonesty or gross misconduct, or retirement takes place
t o escape such dismissal, when t h e member's own contributions will be returned
without interest. Any member who dies before reaching his sixtieth birthday or
a woman member who leaves for marriage (provided marriage takes place within
three months of leaving) shall be entitled t o the member's own contributions
together with the firm's contributions in lieu of interest.
If a pensioner dies before having received in pension an amount equal to all
his contributions together with all the firm's contributions, the difference shall
be paid t o his nominee, personal representatives, or next of kin.
The rules of the Fund m a y be modified or t h e Fund wound up if the actuarial
value of the maximum pension under the Fund a t sixty years of age, together with
t h e amount of pension under a State scheme, shall exceed three-quarters of t h e
weekly wage rate of unskilled labour employed by the firm. The rules may also
be adjusted t o ensure the actuarial solvency of t h e Fund, e.g. b y varying t h e
amount of pension or the age a t which pensions become payable. Any dispute
about t h e administration of the Fund shall be referred to an impartial arbitrator.
Rowntree and Company,
Pension

Limited

Fund

Membership. — The Fund is open to all male employees, whether manual wage
earners or salaried staff, between t h e ages of twenty and forty-five and to all female
employees between the ages of twenty-five and forty-five, provided they have
been in t h e service of the Company for six months and are on the regular staff.
Membership is voluntary.
Contributions. — Contributions vary according to age of entry and wages or
salary received. They cannot b e more t h a n t h e greater of t h e following sums:
(a) 2 y2 per cent, of average wages or salary, or (b) a sum not exceeding 5 per cent.
of average wage or salary, which will give a pension : for a man at sixty-five years
of age of 25s. a week or half his average wages or salary, whichever is the greater
amount; for a woman at fifty-five years of age of 155. a week or half her average
wages or salary, whichever is t h e greater amount. The firm's contribution is
proportionate to the members' contributions; it is varied according t o the requirements of t h e Fund.
Pensions. — Pensions are payable: to men a t the age of sixty-five (except
travellers, sixty), but retirement is optional between the ages of sixty and sixty-five
with adjusted pensions; to women a t the age of fifty-five, b u t retirement is optional
between the ages of fifty and fifty-five with adjusted pensions. The amount of
pension is usually 50 per cent, of wages or salary.

278

APPENDICES

Pensions are payable, under certain conditions indicated below, to widows of
employees. Pensions are paid monthly; they may be discontinued if a pensioner
improperly discloses any of the Company's secret processes or recipes, or, without
the consent of t h e directors, enters any occupation or employment competing with
the business of t h e Company.
Other provisions. — In t h e case of a contributor leaving t h e service of t h e Company, or dying before reaching pension age, t h e total accumulation of the subscriptions, together with 2 % per cent, compound interest, will be paid t o t h e
subscriber or the next of kin. This is subject to the provision for a male subscriber
t h a t he does not leave a widow entitled t o widow's benefit. Pensions based on t h e
actuarial value of their own and the firm's contributions are payable to contributors
who have become totally or partially incapacitated for work, and who have contributed to the Fund for an uninterrupted period of not less than ten years. 1
If a subscriber dies after pension age before having received in pension the
total accumulation, together with 2 % per cent, compound interest, the residue will
be paid t o t h e personal representative of the subscriber, except where a male
subscriber leaves a widow entitled t o widow's benefit.
Employees are not subjected to medical examination as a condition of joining the
Pension Fund, b u t all employees are medically examined on entering t h e Company's
service.
Widow's Benefit

Fund

In relation to the above Pension Fund for employees, pensions are paid to all
widows aged fifty and over at the death of the husband, subject to t h e following
limitations: (1) the parties must both of them have been under the age of fifty
a t the date of their marriage; (2) t h e marriage must have preceded t h e death of
the husband by at least ten years; (3) the husband must have been for an uninterrupted period of ten years prior to his death a contributing member and/or pensioner
of the Pension Fund.
If t h e widow is not less t h a n sixty-five years of age a t the time of her husband's
death, her pension will be one-half of t h a t paid to her husband, or which would
have been paid t o him had he reached pension age. If she is less t h a n sixty-five
years of age, her pension will be reduced by one-fiftieth for each year she is below
the age of sixty-five. Only widows over fifty years of age at t h e time of their
husband's death will be eligible for pensions. The minimum pension is 10s. The
husband's accumulations in the Pension Fund are transferred to t h e Widow's
Benefit Fund. If the widow should die before she has received in pension the full
accumulation, the residue is paid t o her legal representatives. Pensions are paid
during widowhood only; a gratuity or bonus of one year's pension is payable on
second marriage.
Members of t h e Pension Fund p a y no additional subscription for t h e Widow's
Benefit Fund, any extra cost being borne by t h e Company. A ¿50 Death Benefit
is paid in respect of male members of the Pension Fund whose wives are not eligible
for a widow's pension, and in respect of bachelors and widowers who are members
of the Pension Fund.
Wiggins

Teape and Company

(191c),

Limited

This firm, together with Alex. Pirie and Sons, Limited, and firms associated
with these two Companies, have three separate pensions funds, for male workers,
for female workers, and for male salaried staff respectively. Entrance t o all funds
1

These small pensions are generally increased from another fund, called the
Invaliditv Fund.

APPENDICES

279

is voluntary. The two funds for workers are described in this note; they were
established in 1927. 1
Wiggins Teape and Alex. Pirie Pensions Fund
Membership. —- Membership is open t o male workers of sixteen years of age
and upwards and under fifty-five years of age (under sixty-four for workers already
in the service of one of the contributing firms when the Fund was started). Workers
who wish to become members are required to make application t o the trustees
of the Fund. Membership m a y be retained in the Fund during absence owing t o
sickness or temporary unemployment for a period of twenty-six weeks, or, at t h e
discretion of the trustees, for a further twenty-six weeks.
Contributions. — The members' rate of contribution is •¡¡d. per week, which is
deducted from the wages, and t h e firms pay $d. per week per member. The
member's contributions cease a t sixty-five years of age.
Pensions. — Every member who leaves the service of a contributing firm at or
after sixty-five years of age with a t least ten years' service is entitled t o receive
a weekly pension during the remainder of his life of an amount calculated according
to t h e length of his service. The maximum pension of £1 per week is payable in
respect of service of forty-eight years or upwards; t h e rate of pension falls b y
degrees t o 10s. per week for thirty-eight or thirty-nine years' service and to a
minimum pension of is. per week for ten to thirteen years' service.
Other provisions. — Any member who leaves the service because of permanent
incapacity or for any other reason is entitled t o receive the aggregate amount of
his own contributions together with compound interest thereon a t 2 % per cent.
per annum. No payment is made in the event of the death of a member. I n special
circumstances the trustees may, if requested in writing by a person in receipt of
a pension, pay a lump sum in cash actuarially equivalent in value to a part n o t
exceeding 50 per cent, of the pension. A committee shall be appointed in respect
of each factory, mill or works of each of the contributing firms. Each committee
shall consist of six persons, of whom three shall be members of the Fund employed
a t the factory, mill or works and elected a t a meeting of the members there employed ; t h e other three persons on any committee shall be appointed by t h e board
of directors of the contributing firm. The chairman shall be one of the three representatives of the firm and shall have a casting vote in case of an equality of votes.
The powers of the committee are determined b y the trustees. Provision is also
made for meetings of the members of t h e Fund.
Wiggins Teape and Alex. Pirie Pension (Female Workers) Fund
Many of the general provisions of this Fund are similar t o those of the men's
fund.
Contributions. — The members' rate of contribution is id. per week and t h e
firms also pay id. per week per member.
1
The Staff Pension Fund, which is for males only, is on somewhat similar lines.
Members contribute 2 % P e r cent, of salary or, if any salary is in excess of ¿500 per
annum, an amount equal t o 2 % P e r cent, on ¿500; t h e firms contribute an equal
amount. Pensions, based on salary and length of service, are payable on retirement at or after sixty-five years of age (or earlier in special cases). Also on retire^nent a lump s u m 4 & p l a e e d 4 o t h e i n e m b e r s ' credit on which ^they receive interest
until death, when the sum is paid t o their representatives. There is a Savings Fund
for female staff and for male staff in receipt of a salary over ¿500 per annum. The
members and t h e firm make equal contributions, each paying 2 y2 per cent, of t h e
salary, or, for male members, of the excess of salary over ¿500; on retirement
or death of a member t h e joint contributions with interest (4% per cent.) are
paid out.

28o

APPENDICES

Pensions. — Pensions, variable with length of service, are payabie on retirement
a t or after sixty-five years of age. The maximum pension of ios. per week is payable
in respect of service of forty-eight years and upwards; the rate of pension falls
b y degrees to 5s. per week for thirty-eight or thirty-nine years' service, and t o a
minimum pension of 2s. per week for twenty-four or twenty-five years' service.
Other provisions. — If any member leaves t h e service of a contributing firm by
reason of permanent incapacity or for a n y other reason, or dies under t h e age of
sixty-five, she or her legal personal representatives shall be entitled to receive the
amount of her own contributions together with 2 % per cent, per annum compound
interest. If a member leaves the service under the age of sixty-five years for the
purpose of being married and is married within three months, she shall be entitled
t o receive, in addition t o t h e amount of her own contributions with compound
interest at the rate of 2 % per cent, per annum, a sum of 10s. for each completed
year of service.

28l

APPENDIX IX

SICKNESS BENEFIT SCHEMES IN VARIOUS
UNDERTAKINGS
Summaries are given below of the general provisions of sickness benefit schemes
established by a number of leading companies. They illustrate especially the varying
rates of contribution and benefit. The schemes described are limited t o those which
p a y benefits according to a fixed scale; no account is given of benevolent schemes
under which workpeople receive benefit according t o their circumstances.
Montague

Burton,

Limited

The object of t h e Employees' Sick Benefit Club established by this Company
is t o provide b y voluntary contributions a fund for t h e mutual relief of its members
during sickness or accident, the benefits received being supplementary t o t h e
operation of t h e National Insurance Act and t h e Workmen's Compensation Act.
The scheme is administered by a committee which includes one or two
representatives from each department of t h e works.
Contributions.—

These are deducted from wages a t the following rates:

MEN.

First Class : 6d. per week.
Second Class : 4a. per week.

WOMEN.
JUVENILES.

3d. per week.
2d. per week.

Members must b e employed for thirteen weeks and have had thirteen
contributions deducted from wages before being entitled to benefit. Members
continue t o p a y their contributions during illness.
Benefits. — Benefits are paid according t o t h e following scale:
MEN.

WOMEN.
JUVENILES.

Fiist Class : 15s. per week for eight weeks and 7s. 6d. per week
for a further eight weeks.
Second Class : 10s. per week for eight weeks and 5s. per week for
a further eight weeks.
JS. 6d. per week for eight weeks and ¡s. per week for a further
four weeks.
5s. per week for six weeks and 2s. 6d. per week for a further four
weeks.

Maternity benefits and death benefits are also paid.
Other Provisions. — Sick visitors are appointed t o visit members who are in
receipt of benefits, and provisions are made t o prevent abuse. Any member who
has received full sick allowance shall n o t be entitled t o any further allowance
for a period of twelve calendar months; a member who has drawn partial benefits
and resumed work shall, if again sick before t h e expiration of twelve calendar
months, be entitled t o draw only up t o t h e full sick allowance less allowances
received for a previous illness.

APPENDICES

282

Members leaving the service of the firm shall receive 50 per cent, of the contributions paid less any benefits received, subject t o there being a sufficiency of
funds.
Cadbury Bros., Limited
Membership. — Membership of the Sick Benefit Scheme of this Company is
voluntary. The fund is open to employees over sixteen and a half years of age.
Rates of Contributions. •— Members sixteen and a half t o eighteen years of age
pay 3d. per week, while those over eighteen years of age pay 4a. per week. Contributions are deducted from wages. No contribution is made during a period of
sickness. The Company contributes a sum equal t o 50 per cent, of t h e amount
expended in respect of sickness and administration, with a maximum of 16s. gd.
per member per annum.
Benefits. — Benefits vary according to the age and sex of members. The rates
during the first twenty-six weeks of sickness are:
Age

Men

I6%-I8

145.

Women
gs.

18-22
Over 22

18s.
22s.

14s.
14s.

Half of the above rates are paid for a further period of twenty-six weeks. Benefits,
therefore, extend over the whole year. The minimum time for which benefit may
be claimed is three days. Where an employee is away owing to accident and is in
receipt of compensation, his sick benefit either is not paid or is reduced in amount.
Other Provisions. — In addition to the scheme outlined above there is a noncontributory Auxiliary Sick Benefit Scheme instituted b y the Company under which
certain members of the Sick Benefit Scheme over eighteen years of age are entitled
t o a benefit of 55. per week in cases of consecutive sickness of more t h a n four weeks
up t o a total of twenty-two weeks in any consecutive twelve months. The members
eligible are married men, single men and women over eighteen years of age with a
person or persons wholly dependent on them, and men and women over t h i r t y
with or without dependants. To qualify for membership the worker must be a
voluntary member of a registered friendly society which does not periodically divide
its funds, or of a registered trade union, and be entitled t o sickness benefit from such
sources of a t least 10s. 6d. per week for men and js. 6d. per week for women, or have
endeavoured to obtain such benefit and been rejected on grounds of age or infirmity.
There is a Juvenile Sick Benefit Scheme for juveniles under sixteen and a
half years of age t o whom benefits are paid by t h e Company. Arrangements
are also made for supplementary benefits for workers absent on account of accidents.
Another scheme provides for additional benefits for workers with more t h a n four
children under fourteen years of age, or under sixteen years of age if remaining
a t school.
Dunlop Rubber Company, Limited
This Company has instituted a scheme of provident benefits, the whole cost of
which is borne by the Company. No contributions are made b y the operatives and
the scheme is administered by the directors. The scheme applies t o all operatives,
both male and female. There are three sections, one providing sickness and accident
benefit, a second providing death benefit, and a third providing superannuation
benefit. The present note is limited to t h e sickness and accident benefit. Workpeople
who have been in the service of t h e Company for six months are entitled to benefit.
Rates of benefit during total disablement are 12s. per week for adults and 6s.
per week for juveniles. These benefits are payable for a maximum period of
twenty-six weeks in any calendar year. A worker who has received twenty-six
benefits in any period of twelve calendar months is required to qualify by six months'
service before being entitled to any further benefit.

APPENDICES
For workpeople
paid. Employees
9 p.m. and 7 a.m.
not to follow any

283

on half-time employment, benefits at half the above rates are
in receipt of benefit are not to be absent from home between
in summer, and between 7 p.m. and 8 a.m. in winter. They are
other occupation while in receipt of benefit.
Peek Frean and Company,

Limited

This Company has instituted two separate schemes, one for men and the other
for women.
Men's Sick Club
This Club provides benefits for members in case of sickness or accident.
Membership is voluntary. All men in the service of t h e firm who are not more
than forty years of age are eligible. Members of the Club share in its management.
Medical evidence as to t h e state of health shall be furnished t o the Management
Committee.
Contributions. — The rate of contribution is 15. per week, which is deducted
from wages.
Benefits.— The rate of benefit is 24s. per week for a period not exceeding sixteen
weeks to members absent from employment because of sickness or accident.
No payment is made for illness of less t h a n two days. Having received sixteen
weeks' benefit a member shall not be entitled to further benefit until after fifty-two
weeks' consecutive work. A member who, having received less t h a n sixteen weeks'
benefit, has resumed work and is again sick shall, unless he has been off the Fund
for fifty-two weeks, be entitled to benefit only for the remaining p a r t of sixteen
weeks. If t h e sickness or accident is the result of the member's own excess or
misconduct, he shall not be entitled to benefit.
Other Provisions. — Members in receipt of benefit are visited regularly by a
representative of t h e Fund. Members who are frequently sick m a y lose their
right t o membership. A member of the Fund in receipt of benefit is required not t o
frequent public-houses, or get intoxicated or undertake any kind of business, or
do anything which may retard his recovery. The penalty is loss of part or t h e whole
of the benefit. Members in receipt of benefit are required to be in their homes
throughout specified hours from evening t o morning.
Women's Supplementary Sick Club
This has been established on somewhat similar unes to the Club for men.
A contribution of 6d. per week is paid and benefits are at the rate of 9s. per week.
Each year any surplus in the Fund, after carrying forward certain sums, is divided
among the members in proportion to their contributions.
Rowntree and Company,

Limited

The Men's Friendly Society, which was established in 1910, took t h e place of an
old Dividing Society which had been in operation for about twenty years.
Cmitribulions. •— The amounts of weekly contribution vary, b u t members may
pay up to 6c?. per week.
Benefits.— For those members who pay contributions a t the rate of 6d. per week
the sickness benefit is 12s. per week for a period of twenty-six weeks. For those
who make smaller contributions the amount of benefit per week is proportionately
smaller.
A Sick Club has also been established for women.
Contributions. — The rate of contribution is 2d. per week.
Benefits. — Sick benefit is paid a t the r a t e of 8s. per week for six weeks and of
4s. per week for a further six weeks.

284

APPENDIX X

THE NATIONAL INDUSTRIAL ALLIANCE
The National Industrial Alliance is a voluntary organisation formed b y the
amalgamation in 1925 of the National Alliance of Employers and Employed and the
Industrial League and Council, which date from the war years. The principal
object of the Alliance is to negative t h e idea t h a t there is an essential and necessary
antagonism between the interests of employers and employed, and t o promote the
acceptance of the fact t h a t the future prosperity of the whole nation can best be
secured by a frank recognition t h a t these two interests are co-relative and. interdependent. Its membership is open t o national and local employers' organisations
and trade unions or federations of trade unions, representatives of firms, and
individuals who are in sympathy with its objects.
The Alliance endeavours to promote goodwill and active co-operation between
employers and employed by setting up joint committees in industrial centres.
Meetings and conferences are arranged for the discussion of current problems in a
friendly atmosphere, while conciliation may be undertaken on t h e invitation of both
parties to a dispute. The Alliance also seeks to extend economic knowledge by
arranging classes conducted under university or other recognised educational auspices. I t considers t h a t a sound knowledge of economics is one of t h e essentials
for industrial peace, that systematic study of t h e subject b y employers and workers
will remove many misunderstandings, that such study will show t h e soundness
of the principle of co-operation in industry, and t h a t t h e faults of t h e present system
can best be remedied b y those who have a practical understanding of economic
principles. A publication called Unity is issued monthly which discusses current
events of mutual interest to employers and employed, including the activities of
Joint Industrial Councils, methods for improving industrial relations adopted by
individual firms, and the work of the International Labour Organisation.

INDEX
Accident prevention, 219
Agricultural Wages Act (1924), 104,141,
147
Agricultural Wages Board, 147
Allied Association of Bleachers, Dyers,
Printers and Finishers, 81
Amalgamated Engineering Union) 61,
63
Amalgamated Society of Tailors and
Tailoresses, 80
Amalgamated Union of Building Trade
Workers, 61
Amalgamation of trade unions, 61, 63
Anti-Sweating League, 142
Apprenticeship, 214-216
Arbitration, 102, 109, n o , 124, 150 et
seq.
Associated Society of
Locomotive
Engineers and Firemen, 115
Association of British Chambers of
Commerce, 89, 113, 115
Association of Joint Industrial Councils, 138, 139
Association of London Master Tailors,
80
Association for Education in Industry
and Commerce, 187, 223
Aves, Ernest, 142
Baillie, Sir James, 121
Balance of payments, 10
Balance of trade, 8, 9
Bedaux System, 211 n
Benevolent
schemes
in
industrial
undertakings, 205
Booth, Charles, 28
Boot and Shoe Manufacturers' Association, 87, 131
Bowley, A. L., 27 n, 28
Bradford Dyers' Association:
— Unemployment Benefit Scheme, 205
•— Works Council Scheme, 261
British Federation of Master Printers,
87
British Iron, Steel and Kindred Trades
Federation, 62
Brush Electrical Engineering Company,
Co-partnership Scheme, 270
Bryant and May, Co - partnership
Scheme, 270, 271
Building Industry, Methods of negotiation, 129

Burton Ltd., Montague, Sick Benefit
Club, 281
Burton, Sir Montague, 223
Cadbury Bros. Ltd., 181, 184
— Pension Funds, 273-275
— Sick benefit scheme, 282
Canteens, 182, 183
Cave Committee, Report, 145 n, 146
Central Wages Board (Railways), 115
Chambers of Commerce, 82
Citrine, Sir Walter, 68 n, 70 n, 71
Civil Servants, conditions of trade
union membership, 59
Clarke, Nicholls and Coombs, Profitsharing Scheme, 192
Clay, H., 137 n
Clynes, J. R., 136 n
Coal Mines Act (1930), 103, i n , 112
— (1931). 104

Coal

Mines

(Minimum

Wage)

Act

(1912), 1 4 1 , 149

Coal Mines National Industrial Board
111-113

Coal

mining, District
Conciliation
Boards, i n , 113
—, Earnings, 26
—, Hours of work, 30
—, International Labour Convention
(Hours), 114
—, Methods of negotiation, 111-114
—, Pit-head baths, 176
Coal-owners' Associations, 80
Coates, W. H., 28 n
Cole, A. S., 210 n
Cole, G. D. H., 60, 65 n
Collective Bargaining, 101 et seq.
—, Machinery for, n o
—, Methods in Building, 129; Coal
mining, 111-114; Cotton, 127;
Engineering, 125; Iron and Steel,
124;
Railway
Transportation,
114-118
—, National, 1, 2, 3, 101, 105, n o , i n ,
125
Collective relations, Development of, 101
Colman, J. and J., Pension Scheme,
275-276
Committee on Industry and Trade,
Reports, 145, 158, 159, 168
Committee on National Expenditure, 38

286

INDEX

Committee on Relations between Employers and Employed (Whitley
Committee), 132 et seq.
Compulsory conciliation and arbitration. Attitude of employers' and
workers' organisations, 74, 150
—, Policy of t h e State, 134, 150
Conciliation 101,109,112,124,150 et seq.
Conciliation Act (1896), 102, 105, 151
Confederation of Shipbuilding and
Engineering Unions, 65
Conspiracy and Protection of Property
Act (1875), 5 6
Contracting-in, 59
Contracting-out, 59
Control of industry, 51, 75, 76, 98, 99,
112, 251

—, Method of co-partnership, 190-194
Co-operative societies, 44
Co-operative Union, 112, 115, 188
Co-partnership, 190-194
—, Definition of, 190 n
—, Representative schemes, 270-272
—, Trade union attitude, 76, 191
Cost of living, 19, 20, 21, 22
— Sliding scales, 105
Cotton industry, Methods of negotiation, 127
Cotton Spinners' and Manufacturers'
Association, 80, 84, 87
Courts of Enquiry, 152
Craft unions, 61
Currency and prices, 19, 20, 21, 22
Dispute pay, 54
Dunlop Rubber Company, Sickness
Benefit Scheme, 282-283
—, Works Council Scheme, 262-263
Earnings, 24-27
Economic Advisory Council, 233, 243244
Economic conditions, 1 et seq.
Economic planning, 252
Education, 42, 43
—, Facilities provided b y undertakings,
187, 188
Emigration, 3
Employers' Organisations, 77 et seq.
—, Contributions, 86, 87
—, Development, 78
—, Management, 87, 88
—, National co-ordination, 89
—, Number, 83
—, Objects, 85
—, Policy, 98
—, Structure and constitution, 83
Employment, 15
Engineering and Allied Employers'
National Federation, 84, 87, 125

Engineering industry, Methods of negotiation, 125, 127
Factories Act (1937), 173
Family Allowances, Attitude of Trades
Union Congress, 75
Federated Associations of Boot and
Shoe Manufacturers, 131
Federation of British Industries, 82, 89,
91, 96, 97, 113, 115, 233, 240-242
Federation of Master Cotton Spinners,
84
Ferguson, R. W., 187 n
First-aid, 165, 219
Five-day week, 33
Flour Milling Employers' Federation,
87
—, Group Pension Scheme, 140
Foreign trade, 7, 8
Foremen, Training of, 216
Funeral benefit schemes in industrial
undertakings, 203
General Federation of Trade Unions, 65
General labour unions, 62
General Strike (1926), 52, 58
—, Action of Trades Union Congress,
72
Gilson, M. B., 204 n
Gold Standard, suspension of, 20, 21
—, Views of Turner-Melchett Conference, 240
Health in Industry, 210-220
—, Dental departments in undertakings, 218, 219
—, Medical departments in undertakings, 218, 219
—, Research in coal-mining industry,
175
—, Work of Home Office, 174
Health insurance, 40
Hogg, M. H., 27 n
Holidays with pay, 180, 186 n
Home Office, Industrial Museum, 222
—, Promotion of industrial health and
safety, 174
Hospital funds in industrial undertakings, 203
Hours of work, 29-35, 234
—, Attitude of employers' organisations, 98, 99
—, Attitude of trade unions, 69, 74
—, in Coal mining, 30; Engineering,
125; Heavy work, 224
—, Statistics of, 258
Housing by industrial undertakings,
199
Hyde, R. R., 207, 208 n
Imperial Chemical Industries, Works
Councils Scheme, 263-265

287

INDEX
Imperial preference, 8
Incorporated Federated Associations
of Boot and Shoe Manufacturers,
87
Industrial accidents, provision of firstaid boxes, 174
Industrial Christian Fellowship, 223
Industrial Co-partnership Association,
190 n, 1 9 1 , 222

Industrial Court, 152
Industrial Courts Act (1919), 105,113 n,
151-154
Industrial disease, protection against,
173. 174
Industrial disputes, 113
—, Methods of settlement, 154
—, State intervention in, 150
Industrial Health Research Board, 178,
217, 222, 223
Industrial Museum, Home Office, 222
Industrial Transference Scheme, 18
Industrial unionism, 50, 61
Industrial Welfare Society, 173, 178
179, 180, 207-208, 2 i 9 n , 222
—, Director of, 207, 208
Industries, Relative importance of,
4- 5
Initiation schools, 213
Institute of Industrial Welfare Workers,
173, 178, 229
Institute of Labour Management, 173,
178, 222, 228-230
International Federation of Trade
Unions, 72
International Industrial Relations Association, 213 n
International
Labour
Conference :
Nomination of British employers'
delegate, 91 ; workers' delegate, 72
International Labour Conventions, on
Hours in coal mining, 114; Hours
in industrial undertakings, 34, 74,
89, 92, 93, 98 ; Minimum age,
174; Night work, 174
International Labour Office, 166 n
International Organisation of Industrial Employers, 91
Iron and Steel industry, Methods of
negotiation, 124
Iron and Steel Trades Confederation,
62
Joint Industrial Councils, 85, 103, 132
et seq.
—, Constitution and size, 138
—, Development of, 137, 138
—, Promotion of welfare work by, 178
Juvenile Advisory Committees, 212 n
Juvenile Employment Bureau, 212 n
Labour colleges, 70

Labour co-partnership, 190-194
—, Attitude of trade unions, 191
—, Definition of, 190 n
Labour Management, 209 et seq.
—, Institute of, 173, 178, 222, 228-230
Large-scale undertakings, Effect of
growth on labour management,
209, 250

Lawrence, A. Susan, 136 n
League of Nations Union, 188
—, Conference on Minimum Wages,
, Conciliation and Arbitration, 152 n
Learnership, 214-216
Leisure time, Facilities for use of, 33,
34, 181 et seq. ;
Educational
facilities, 186-188 ; Social activities, 186; Sport, 184-185
Lever Bros. Ltd., 181
—, Profit-Sharing Scheme, 192
Lock-outs and strikes, 107-109
London and Cambridge Economic Service, 24
London Life and Labour, New Survey
of, 27, 28
London Society of Compositors, 61
Mackenzie, Sir William, 152 n
Mackintosh and Sons, John, Profitsharing Scheme, 271
Mallon, J. J., 136 n
Management Research Groups, 222,
230-232
Manchester Engineering Council, 126
Manufacturers' Research Association
(U.S.A.), 231
Maternity benefit, 42
Means test, 41, 204
Melchett-Turner Conference, 95, 103,
107, 235-243, 251
Melchett, Lord, 236
Migration, 3
Miners' Federation of Great Britain,
65, 66, i n , 112, 149-150
Miners' Welfare Fund, 34, 75
Minimum age for industrial employment, 42
Mining Association of Great Britain,
79, 84, 84 n, 87, 106, 111-113
Mining Industry Act (1920), 175
— (1926), 176
Ministry of Labour, Promotion of conciliation and arbitration, 151-154
—, Trade Board Administration, 142147
Mond, Sir Alfred, 236, 240
National Allied Building Trades E m ployers, 84, 87
National collective agreements, 102, 105,
no

288

INDEX

National Confederation of Employers'
Organisations, 35 n, 82, 83, 85,
89, 90 et seq., 112, 236, 237, 240243
—, Attitude towards Washington Hours
Convention, 92
—, Views on the industrial situation,
93-95
—, Views on unemployment insurance,
94. 95
National economy, 99
National Economy Act (1931), 38
National expenditure, Committee on, 37
National Farmers' Union, 81
National Federation of Building Trades
Employers, 80
National Federation of Building Trade
Operatives, 65, 66
National
Federation
of
Merchant
Tailors, 80
National income, 28
National Industrial Alliance, 223, 234,
284
National Industrial Board (Coal Mines),
104

National Industrial Conference (1919),
82, 91, 103, 234-235
National Industrial Council, Proposals
for, 235, 237, 241
National Institute of Industrial Psychology, 178, 222, 226-228
National J o i n t Industrial Council (Boot
and Shoe Industry), 130 n, 131
National Union of Blastfurnacemen,
62 n
National Union of Boot and Shoe
Operatives, 130, 131
National Union of General and Municipal Workers, 63
National Union of Manufacturers, 89
National Union of Railwaymen, 50,62,63
National Wages Board (Railways),
115

Nationalisation, Attitude of employers'
organisations, 98
—, Attitude of trade unions, 69, 76
Old-age pensions, 41
Open shop principle, 98
Osborne Judgment, 57
Overtime rates, 33
Owen, Robert, 47
Peaceful picketing, 56, 57
Peek Frean and Company, sick clubs,
283
—, Works Council Scheme, 265-267
Pension funds in industrial undertakings, 194-198
—, Contributions to, 195, 196
—, Membership of, 195
—, Representative schemes, 273-280

Piece-work, extent of application, 211
PilkingtonBros., Pension Fund, 276-277
Pit-head baths, 175-177
Population (Great Britain and Northern
Ireland), 2
Prices, wholesale, 19-22
Printing and Kindred Trades Federation, 65, 66
Production, 7
Profit-sharing, 190-194
Profit-sharing, Attitude of t r a d e unions,
76, 191
—, Definition of, 190 n
—, Representative schemes, 270-272
Protective clothing, 174
Psychological tests, 212-213
Public Assistance Committees, 38, 204
Railways Act (1921), 103, n o , 115
Railway Clerks' Association, 115
Rationalisation, 75, 82, 99, 253
—, Definition of, 239
—, Views of Turner-Melchett Conference, 240
Real wages, 22-24
—, International comparisons of, 29
Rest pauses, 218 n, 224
Riches, E . J., 204 n
Road Transport, Methods of negotiation,
119
Rowntree, B. Seebohm, 166 n, 169 n,
1 7 1 , 180, 222

Rowntree and Coy., Pension Fund,
277-278
—, Psychological Department, 213
—, Sickness Benefit Schemes, 283
—, Widows' Benefit Fund, 278
Royal Commission on Coal-mining.
I n d u s t r y (1925), 107
—, on Labour (1891), 101, 151
—, on Unemployment Insurance (1931),
Evidence of National Confederation
of Employers' Organisations, 94, 95
Russian Federation of Trade Unions, 72
Safety-first measures, 219
Salter, Sir Arthur, 120 n
Savings schemes in industrial undertakings, 198-200
Sciare, C , 80 n
Scottish Trades Union Congress, 61
Selection tests, 212
Sheltered industries, Wages in, 24
Shipbuilding Employers' Federation,
126 n
Shipping, Methods of negotiation, 122
Shipping Federation, 81, 87, 88 n
Shop stewards, 156, 160
Sickness benefit schemes in industrial
undertakings, 200-204, 281-283
—, Rates of benefit, 202; Rates of
contribution, 201

289

INDEX
Sliding scales for wage adjustment, 102,
105, 124
Smith, Sir H . Llewellyn, 27 n
Social insurance, 35-36
—, attitude of employers' organisations, 94, 95, 96
—, attitude of trade unions, 74, 75
South Metropolitan Gas Coy., Copartnership Scheme, 192, 193, 271,
272

Stamp, Sir Josiah, 28
Stanton Ironworks Coy., Works Council
Scheme, 268-269
Sterling, Depreciation of, 19
Strikes and lock-outs, 107-109
—, Causes of, 109
—, Methods of settlement, 106
•—, Statistics of, 260
Stock ownership, 190-194, 199
Suggestion schemes, 220, 221
Sweating, Prevention of, 142, 145
Sympathetic strikes, 51, 52, 57, 59
Taff Vale Case, 56
Taylor, J., T. and J., Profit-sharing
Scheme, 192, 272
Time studies, 210
Time work, Application of, 211
Tomlinson, R., 130 n, 132 n
Trade Boards Act (1909), 142
—, Act (1918), 143
—, Act (NorthernIreland, 1923), 142 n,
147 n
Trade Boards System, 81, 142 et seq.
—, Application of, 144, 145
—, Size of boards, 144
—, Whitley Committee recommendations, 143
Trade depression, Effect on trade
unions, 51
Trade disputes, Definition of, 57
Trade Disputes Act (1906), 56
Trade, Disputes and Trade Unions Act
(1927), 52. 58, 59
Trade union amalgamations, 60, 63
Trade union federations, 64
Trade union movement, 46 et seq.
—, Association with Labour Party, 73
—, Development of, 47-52
—, Policy, 73-76
—, Structure, 60
Trade unions. Definition of, 58
—, Finance, 54
—, Legal position, 55-60
—, Membership, 52-54, 259
—, Political funds, 55, 57-58
—, Recognition of, 50, 51, 79, 80, 82,
98, 101-103, 235, 238
Trade Unions Act (1871), 55
Trade Unions Act (1913), 58
Trades Councils, 67-69

Trades and Labour Councils, 67
Trades Union Congress, 49, 50, 52, 63,
65, 69, 236, 237
—, Anglo-Russian Advisory Committee, 72
Trades Union Congress General Council,
70, 71, 112, 115, 236, 240-243
—, Membership, 69
—, Objects, 69, 70
—, Powers, 71, 72
Transport and General Workers' Union,
63
Triple Alliance (1921), 51
Turner-Melchett Conference, 95, 103,
107. 235-243, 251
Turner, Sir Ben, 236
Unemployment, 10-19
—, Effects of, 18
—, Views of Turner-Melchett Conference, 240
Unemployment benefit schemes in industrial undertakings, 204-207
Unemployment insurance, 36-40
—, Report of Royal Commission on, 37
—, Views of National Confederation of
Employers' Organisations, 94-95
—, number of workpeople covered by,
11

United Patternmakers' Association, 61
Unsheltered industries, wages in, 24
Victimisation, Viewsof Turner-Melchett,
Conference, 238
Vocational guidance, Work of National
Institute of Industrial Psychology
226
Vocational selection, 212, 226
Vocational training, 213, 227
Voluntary conciliation and arbitration,
1 0 1 , 150 et seq.

Voluntary welfare work,

177 et seq.

Wage payment, Systems of, 211
Wage rates, 23-24
—, Statistics of, 257
Washington Hours Convention, 34, 74,
89, 92, 98
Webb, S. and B., 46
Welfare Department (Ministry of Munitions), 177, 178, 207
Welfare work, 171 et seq.
—, Cost of, 179, 180
—, Financial schemes, 190-207
—, For workers' leisure time, 183-188
—, Industrial Welfare Society, 173,
178, 179, 180, 207-208, 219, 222
—, Relation to labour management,
—, Scope of, 171, 172
—, Statutory, 173 et seq.
—, Voluntary, 177 et seq.

29o

INDEX

Whitley Committee, 82, 103, 115, 118,
132-139, 157-159
—, Recommendations of, 132, 135, 138,
151. 157
Wholesale Clothing
Manufacturers'
Association, 81, 84 n
Widows' benefit funds, 198
Widows' pensions, 41
Wiggins, Teape and Coy.
(1919),
Pension Funds, 278-280
Wilson, Mona, 136 n
Women workers, Organisation among,
53. 54. 63
Wool (and Allied) Textile Employers,
Council, 81, 84
Woollen and Worsted Trades' Federation, 81, 84
Workers' control of industry, 51, 75,
99, 164, 168
Workers' Educational Association, 43,
70, 188

Workers' Educational Trade Union
Committee, 43
Works magazines, 189
Works councils, 155 et seq.
Works councils, Attitude of employers'
organisations, 168; of foremen,
163; of trade unions, 167
—, Constitution of, 159-164, 261-269
—, Development of, 156-159
—, Functions, 157, 158, 164-166, 261269
—, Relation to trade union movement,
155. 157. 159
—, Results of experience, 166-170
—, Voluntary establishment of, 155
Worsted Spinners' Federation, 84
York, H.R.H. the Duke of, 180, 207