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INTERNATIONAL LABOUR OFFICE

STUDIES AND REPORTS
Series A (Industrial Relations) No. 39

COLLECTIVE AGREEMENTS

GENEVA
1936
Published in the United Kingdom
For the INTEBNATIONAI. LABOUB OFFICE (LEAGUE OF NATIONS)

By P . S. KING & SON, Ltd.
Orchard House, 14 Great Smith Street, Westminster, London, S.W. 1

IMPBIMEBIES RÉUNIES S . A . ,

LAUSANNE

,70t

CONTENTS
Page
GENEBAL INTRODUCTION

PART I
COLLECTIVE AGREEMENTS EV PRACTICE
Introduction

CHAPTER I : Structure of Collective Agreements
Scope and Validity in Time
Standard Forms of Agreement

8
8
10

CHAPTER I I : Wages

Wage-fixing
Time Rates
Groups of Workers
Regulation of Wages
Remuneration based on Output
Sliding Scale of Wages
Wages in Kind
The Payment of Wages
Dates and Place of Paying Wages
Guarantees of Wage Payment
Payment of Wages when Work is Interrupted

12
12
12
15
18
25
26
28
28
29
31

CHAPTEE I I I : Hours of Work
The Limitation of Hours of Work
Definition
Fixing of Limits
Exceptions
Holidays with Pay and Public Holidays
CHAPTER TV : Individual
Relationships
Workers
Engagement of Workers
Dismissal
The Worker's Obligations
The Employer's Obligations
Special Categories of Workers

between Employers

36
37
37
38
41
45
and
48
48
51
55
56
57

CONTENTS

Page

CHAPTER V : Collective Industrial

Relations

Mutual Recognition of Organisations
Institutions on an Occupational Basis
Enforcement of the Agreement
Collective Bargaining

61
62
63
67

PART I I
THE LEGISLATION

CONCERNING

COLLECTIVE

AGREEMENTS

Introduction

Historical Development of Legislation
Plan of Study

71
74

A. — Methods of Drawing up Collective Agreements :
CHAPTER I. Trade Unions as a Basis for a System of Collective
Agreements
I.
II.

Occupational Groups as Contracting Parties
Trade Unions as Contracting Parties
Protecting the Right of Contract of the Unions . . .
The Regulation of Competitive Bargaining . . . . .
The Obligation to conclude Collective Agreements .

CHAPTER I I :

Collective Agreements on an Occupational Basis

. .

CHAPTER I I I : Conciliation and Arbitration as a Basis for Collective
Agreements
I . Voluntary Conciliation a n d Arbitration as a Basis for
Collective Agreements
II. Compulsory Arbitration as a Basis for Collective Agreements
Compulsory Arbitration limited to Public Services . .
Voluntary Arbitration with Compulsion as an Exception
Generalised Compulsory Arbitration
Fixing of Collective Labour Conditions by the Labour
Courts .

77
77
78
79
82
92
93
105
105
106
107
108
112
118

B. — The Legal Effects of Collective Agreements :
CHAPTER I : Conditions of Validity of Collective Agreements
Conditions of Substance
Conditions of Form

. . .

121
121
122

CONTENTS

VII

Page

CHAPTER I I : Legal Nature and Scope of Collective Agreements . .
I. Regulation of Relations between Parties to Agreements .
n . Regulation of Working Conditions by Collective Agreements
Departure from the Provisions of Collective Agreements
prohibited
Waiver of the Rights conferred by Collective Agreements
Exceptions to the Principle . .
Position of Collective Agreements under Labour Law
CHAPTER I I I : The Contents of Collective Agreements
I. Contents settled by Voluntary Negotiation
Voluntary Regulation of Working Conditions by Collective Agreements
Voluntary Regulation of the Parties' Rights and Obligations
II. The Contents of Agreements prescribed by the Authorities
Compulsory Regulation of Working Conditions by Collective Agreements
Wages and Hours of Work
Other Conditions of Employment
Compulsory Regulation of the Rights and Obligations of
the Parties to Collective Agreements
CHAPTER IV : The Scope of Collective Regulation
I. Scope of Legislation concerning Collective Agreements .
Restriction of the Scope of Legislation concerning
Collective Agreements
Extended Scope of Legislation concerning Collective
Agreements
The Scope of Legislation concerning Collective Agreements in Countries with a Federal Constitution.
I I . Scope of Collective Agreements
The Validity of Collective Agreements in Time . . .
Territorial and Occupational Scope of Collective Agreements
. . . . . . . . . .
Scope of Collective Agreements with reference to Persons
CHAPTER V : The Application of Collective Agreements
I. Measures of Supervision
II. Penalties

124
124
125
125
126
127
130
137
139
139
141
144
144
147
156
160
165
165
166
168
169
170
171
179
182
190
190
191

PART H I
THE PLACE OF COLLECTIVE AGREEMENTS TN THE ECONOMIC
STRUCTURE OF THE COMMUNITY
Introduction
CHAPTER I : Collective Agreements and State Regulation

199
. . . .

201

Vili

CONTENTS
Page

CHAPTER I I : Standardisation

of Working Conditions

206

CHAPTER I I I : State Intervention in Periods of Economic Crisis . .

213

CHAPTER I V : Incorporation of Collective Agreements in the National
Economic Structure
United States of America
Germany
Italy
,
U.S.S.R

217
220
228
235
241

PART IV
COLLECTIVE AGREEMENTS AND INTERNATIONAL LABOUR
CONVENTIONS
I.

Collective Agreements and the Ratification of International •
Labour Conventions
255
II. Conditions necessary to permit the System ot Collective
. Agreements to be utilised as a Means of applying International Labour Conventions
257

CONCLUSIONS

265

APPENDICES :
I.
II.
III.

Report of the Committee on Collective Agreements in
Agriculture, submitted to the International Labour Conference a t its Seventeenth Session
Statistics concerning Collective Agreements
List of Laws concerning Collective Agreements . . . .

273
275
278

GENERAL INTRODUCTION

The subject of collective agreements is no new one for the
Organisation, which has had to deal with it on several occasions.
At the First Session of the International Labour Conference, in
1919, the question arose in connection with the application of
the Hours of Work (Industry) Convention. Articles 2 (b) and 5
of that Convention provide for certain arrangements for the application of the Convention being made by collective agreement.
This precedent was followed in a number of subsequent Conventions.
In 1927, at its Tenth Session, the International Labour Conference adopted a resolution, submitted by the Italian Government
delegate, requesting the Governing Body to consider the desirability of placing on the agenda of an early Session of the Conference the question of the " general principles of contracts of
employment ". This expression included both collective agreements and individual contracts of employment.
The problem came up again in 1928, but this time it was
restricted to one branch of the economic system. The Conference,
at its Eleventh Session, instructed the Office to supplement its
information concerning collective agreements in agriculture with
a view to the discussion of the question at an early Session of
the Conference. The Office prepared a report, which was submitted
to the Conference at its Seventeenth Session.1 The special Committee appointed by the Conference to study this report proposed
that the Governing Body be invited to consider the possibility
of putting this question on the agenda of a future Session of the
1

Cf. INTERNATIONAL LABOUR O F F I C E : Collective Agreements

Studies and Reports, Series K (Agriculture), No. 11. Geneva, 1933.
1*

Agriculture.

GENERAL INTRODUCTION

Conference. 1
The Governing Body subsequently referred the
matter to its Committee on Agricultural Work.
At a meeting held on 29 September 1934, the Committee on
Agricultural Work decided to urge the Governing Body — if it
decided to submit the question of collective agreements in general
to the 1936 Session or some later Session of the Conference —
to include agriculture in the scope of the question, since the Office
had already prepared a report on the subject and t h a t report
had been discussed by a Committee of the Conference in 1933.
The question was again brought before the Conference at its
Nineteenth Session, and it remains before the Organisation in a
peculiarly urgent form. I t will be remembered t h a t the Conference
adopted a Draft Convention concerning the reduction of hours
of work to forty a week and also a Resolution concerning the maintenance of the workers' standard of living.
According to Article 1 of the Forty-Hour Convention, each
Member of the International Labour Organisation which ratifies
the said Convention declares its approval of :
(a) The principle of a forty-hour week applied in such a manner
that the standard of living is not reduced in consequence ; and
(b) The taking or facilitating of such measures as may be judged
appropriate to secure this end. . . .
The Resolution concerning the maintenance of the workers'
standard of living is as follows :
The Conference,
Having adopted a Draft Convention declaring its approval of the
principle of the forty-hour week,
Considering that the application of this principle should not as a
consequence reduce the weekly, monthly or yearly income of the workers,

1
The following passage from t h e report of the Committee to the Conference
should be noted :
" The Committee noted the general accuracy of t h e description of the facts
concerning collective agreements in agriculture given in the report. At t h e same
time, attention was drawn to the fact t h a t t h e ' Conclusions ' of the report took
account almost exclusively of the importance of those collective agreements which
result from a free bargaining between organisations of employers and workers or of
agreements or guiding principles serving as a basis for individual contracts drawn
u p under the auspices or with the assistance of public authorities, b u t t h a t they
did not sufficiently note other forms of collective regulation where State action or
State initiative played a large part and which in certain circumstances can be
considered a t least as efficacious. "
I n view of these comments, the present report deals not only with collective
agreements in the strict sense, but also with the other forms of collective regulation
to which the Committee drew the attention of the Conference.

GENERAL INTRODUCTION

whichever may be the customary method of reckoning, nor lower their
standard of living,
Invites Governments :
(1) To take appropriate measures in order to ensure that any
adjustment of wages and salaries should be effected as far as possible
by means of direct negotiations between employers' and workers'
organisations concerned ; and
(2) After consultation with the organisations of employers and
workers concerned, to take or facilitate appropriate measures to enable
either of the parties concerned, if agreement between them cannot be
reached, to submit the dispute to bodies competent to deal with wage
questions, such bodies being set up, where they do not exist, for the
purpose ; and
(3) To furnish to the International Labour Office periodic reports
upon the measures they have taken for the introduction of the fortyhour week and for the maintenance of the standard of living of the
workers.
These texts show t h a t the procedure recommended to States
for giving effect to the principle of maintaining the workers'
standard of living is based, in the main, on collective agreements
or some similar method of regulation. This fact lends greatly
increased importance to a comprehensive and detailed study of
the problem of collective agreements.
Therefore, at its Sixty-ninth Session, in J a n u a r y 1935, the
Governing Body of the International Labour Office decided to
submit to the International Labour Conference a report on collective agreements. According to this decision the report to be
prepared by the Office was intended not to provide the necessary
background of information for the drafting of a Convention
or Recommendation in the traditional manner, b u t rather to
give a general survey of the main aspects of the problem on
which the discussion might concentrate.
With this end in view, the report has been divided into four
parts.
The first deals with the practical problem. The part played
by collective agreements or similar regulations in different countries and in various industries is analysed.
The second p a r t is devoted to the legal aspect of the problem :
the various methods of regulating conditions of employment
collectively and the effects of such regulation.
I n the third p a r t the social and economic problem is analysed
and the place of collective agreements in the economic system
is examined.

GENERAL INTRODUCTION

The fourth part deals with the possibilities that collective
agreements offer, in conjunction with national labour legislation,
of facilitating the ratification and application of International
Labour Conventions.
The conclusions of the report suggest certain problems specially
suitable for discussion, and possibly for action at some future
date, by the International Labour Organisation.1

1
The International Labour Office is indebted to Mr. J . H . Eichardson, Professor
of Industrial Relations a t Leeds University, for valuable collaboration in t h e preparation of the present Report.

PART I
COLLECTIVE AGREEMENTS Di PRACTICE

INTRODUCTION

In many countries conditions of employment, which for long
were governed by individual contracts of service, are now fixed
on a collective basis — most frequently by collective agreements.
The collective agreement originated and developed in Great Britain
during the nineteenth century, spreading to thè Continent of
Europe and to some countries in other Continents towards the
end of that century and the beginning of the present one. The
movement gained greatly in strength and in depth immediately
after the war. Since then, while it has continued to progress in
some countries, it has done so much more slowly in others, mainly
as a consequence of the economic depression ; in the last year
or two, however, it would seem to be advancing with renewed
vigour, especially in the United States of America, and more
recently in France, Luxemburg and Belgium.
In some countries the extension of the movement has been
helped by the spread of State intervention in social affairs, by
the development of trade unionism and of social organisation.
Moreover, State intervention has led to the adoption of certain
methods of fixing working conditions that also substitute collective
regulation for the individual contract and supplement, or even
take the place of, collective agreements. One example is the
fixing of minimum wages — a method that is primarily employed
in occupations where the collective agreement is still unknown
but that is also sometimes more generally applied. Again, conci-

COLLECTIVE AGREEMENTS IN PRACTICE

liation and arbitration have certainly facilitated the conclusion
of agreements for certain occupations, but at the same time
arbitration awards, especially where arbitration has been made
compulsory, have largely taken the place of voluntary agreements.
Mention may also be made of the rulings of labour courts, the
decisions of mixed committees and the institution of collective
labour rules by the State. There are thus numerous collective
methods in existence, and even in countries in which their application is comparatively restricted the problem is being widely
discussed. The first point to be considered therefore is : what
is the real extent and importance of the collective regulation of
conditions of employment a t the present time ?
I t would be rather difficult to reply to this question by means
of figures, for there are comparatively few countries t h a t publish
statistics of collective agreements, and the available statistics
are not easily comparable ; the statistics on other collective methods
are not much more* numerous or more detailed. 1 A general survey
of the quantitative importance of collective agreements and
similar measures is thus practically impossible, but it is perhaps
easier to assess their qualitative importance. I t has therefore
been thought more useful to examine the texts of the existing
collective agreements, arbitration awards, etc., with a view to
deducing therefrom their real practical significance in determining
conditions of employment.
But even this method is subject to certain limitations : it is
impossible, at any given* moment, to state exactly what are the
conditions of work obtaining in the various industries and occupations of a great number of countries, and it is equally impossible
to grasp the dynamic aspect of the movement b y demonstrating
the progress made in these collective agreements and regulations
within a given period. The more modest aim of the present survey
will be to discover the various subjects dealt with by the system
of collective regulation of working conditions and the various
forms of the system.
Even within these limits it is impossible to claim t h a t the
survey will be complete ; it will be merely a general analysis,
illustrated by numerous examples taken from collective agreements, arbitration awards and similar decisions, wherever these
texts seem in some respect particularly typical of the methods
adopted.
1

Cf. Appendix I I : Statistics of Collective Agreements.

INTRODUCTION

Some indications will first of all be given as to the external
structure of collective agreements and similar decisions ; the
main problems constituting the substance of the agreements will
then be examined ; in conclusion, the attempt will be made to
deduce from that study what practical functions can be considered
as peculiar to the various collective methods of regulating working
conditions. In this way, the practical value of these collective
methods will be made clear.

CHAPTER I
STRUCTURE OF COLLECTIVE AGREEMENTS

Before proceeding to consider the material substance of
collective agreements and other similar texts, it will be well to
make a few brief comments on their scope, their validity in time
and certain of the more typical forms of regulation. It is true
that the agreements themselves make mention of the parties,
the scope of the agreement, etc., but these points do not form part
of the substance of the agreement ; they are conditions attached
to it. In many cases, too, these matters are settled by legislation.
The following pages contain merely a few general remarks, intended
to facilitate the study of the substance of the agreements.
SCOPE AND VALIDITY rsr TIME

In the case of actual agreements, the scope is often identical
with the contracting parties. It is sufficient to note that a collective
agreement may bind a single employer, a group of employers or
one or more employers' associations and, generally speaking, one
or more trade unions of workers. In the case of other methods of
regulation, there is of course no question of contracting parties.
The scope of the regulations is defined with reference to the
occupations, the persons and the area covered. Very often the
undertakings to which the scheme applies are enumerated in the
text or in a schedule. The trade to be covered within the undertakings is either made clear by the nature of the contracting trade
union or is specified in the text.
In voluntary agreements the scope as regards persons is also
often identical with the contracting parties ; it may be determined
positively by an enumeration of the categories of persons concerned,
or negatively by the exclusion of certain groups. In current practice,
wage rates are the normal basis for defining the groups of persons

STRUCTURE OF COLLECTIVE AGREEMENTS

covered by the agreements. Exemptions may be general or may
be governed by special provisions. Casual workers and domestic
servants are often among the general exceptions. Sometimes
apprentices are also excluded, but they may, as will be seen later,
be covered by the agreements and even be subject to certain
special rules.
The territorial scope is regularly specified ; it may be local,
regional, provincial or national. But the substance of the regulations does not permit of general conclusions being drawn as to
the practical importance of each of these types. 1
The duration of the validity of the agreement depends on
the date.of coming into force and the date of expiry. In so far
as the matter is not settled by legislation, the agreements or other
texts usually — in some countries compulsorily — contain provisions on this subject. The date of the agreement or decision
is practically always given, but that date does not necessarily
coincide with the coming into force of the regulations, which may
be, and sometimes is, fixed for a later or for an earlier date.
The text generally fixes the date of coming into force, but the
date at which its validity expires is not always stated. In the
case of collective agreements, a distinction must be made between
those for an indefinite and those for a definite period. In the case
of other methods, the question is a legislative one ; the regulations
very often remain in force until they are repealed.
If a collective agreement is for an indefinite period, the parties can terminate it at will, generally subject to a certain period
of notice, which varies from a few weeks to a few months. In
some cases notice of termination of the agreement can take effect
only at certain fixed dates ; in other cases notice cannot be given
until the agreement has been in force for a certain minimum
period.
Many agreements are drawn up for a specified number of
months or years ; the more general the agreement, the longer
the period usually is. Basic agreements and those laying down
general principles are normally concluded by large organisations
or federations for a long period, whereas wage agreements, for
example, are often of much shorter duration. But no general
rule can be enunciated on this point.
Often even a short-period agreement automatically remains
in force indefinitely or for a fixed period (e.g. one year) unless
1

But cf. below, p . 206 : " Standardisation of Working Conditions " .

COLLECTIVE AGREEMENTS IN PRACTICE

notice of withdrawal from the agreement is given a certain time
before the original date of expiry.
Notice of termination must be given in the prescribed manner
(in writing, by registered letter, etc.). Sometimes the notice
of termination or even the intention to terminate the agreement
must be communicated to a joint board responsible for instituting
fresh negotiations between the parties.
STANDARD FORMS OF AGREEMENT

Originally, the collective agreement was drawn up at the conclusion of a dispute to regulate some of the questions at issue :
wages, hours of work, etc. ; in course of time, however, it has
become more stabilised and of more general apphcation. These
tendencies are reflected in the various typical forms of agreement,
and also to some extent in the other methods of regulation.
Although ad hoc agreements of limited scope are still to be
met with, collective agreements tend more and more to lose their
connection with any open dispute and simply to regulate in general
all the conditions of employment in some occupation and govern
the collective relationships between the parties. The forms
vary ; very often a single agreement deals with all the questions
affecting a given occupation at any one time. But, as the agreement
must always be adapted to the march of economic and social
development, it needs many changes and additions. There are
thus often quite a number of agreements in force for one and the
same occupation. Again, certain questions are sometimes purposely
left to be dealt with by special agreements, either because they
concern only a small group of persons (e.g. apprentices) or because
they are of limited scope (e.g. holidays with pay). But there
are sometimes disadvantages in such a system. On the one hand,
the multiplicity of texts and the risk of contradictory provisions
it entails may create uncertainty as to the validity of the various
clauses ; on the other hand, the whole collective system may be
called in question whenever the whole agreement has to be revised
merely in order to alter one single point. Consequently, as this
method of regulating working conditions developed, the need for
certain differentiations made itself felt.
One method of differentiation is to separate wages, which
are subject to frequent variations, from other conditions and
deal with them in special agreements. There will then be general
agreements and wage agreements side by side. Some countries

STRUCTURE OF COLLECTIVE AGREEMENTS

have endeavoured to systematise agreements by grading them,
sometimes even by legislation. If local agreements are made
subordinate to regional ones, and they in turn to national ones,
the various questions to be settled can be dealt with by different
agreements according to their scope and stability. This method
may produce the same result as the first one, wages being dealt
with in regional or local agreements, while the general, basic
agreements are national or provincial in scope.
A similar result can be achieved by developing the provisions
governing the collective relationships between the parties. On the
one hand, these relationships are usually regulated by general
agreements of long duration which serve as a basis for other
special agreements. On the other, the agreements provide for the
creation of joint committees for a variety of purposes ; they
thereby facilitate the adoption of minor amendments, the settlement of partial disputes, etc., without the necessity for reopening
the whole question of the existence of the agreements. Again,
the agreements may simply regulate collective relationships and
lay down certain principles to be included in future individual
agreements, or they may set up a system of joint bodies to settle
the conditions of work for various branches of industry, groups
of workers and districts.
In the following survey, the connection between these various
standard forms and the actual regulation of different questions
will be brought out.

CHAPTER II
WAGES

The regulation of wages necessitates two sets of clauses : those
dealing with the fixing of wages and those concerning payment.
The fixing of wages may be considered as being peculiarly within
the province of collective agreements ; the payment of wages may
be, and in most countries is, dealt with also by legislation.
WAGE-FIXING

The two forms of remuneration for services are wages in cash
and in kind. Wages in cash are the more important and will therefore be discussed first. Some of the problems connected with
wages in kind will be studied separately later.
Cash wages may be fixed in proportion to the time spent by
the worker at the employer's disposal or to the amount of the
worker's output, or the two factors may be combined. The way
in which collective agreements have dealt with these different
cases will be examined in the fight of a few typical examples.
The question of the actual amount of the wages is naturally
outside the scope of this study.
Time Rates
It is impossible in the present report to consider in what
industries and for what groups of workers time rates are the normal
form of remuneration. I t must suffice to state that it is the form
applied to the great majority of workers, and that in many countries
collective agreements are most widespread in industries where
time rates are the rule, because they can more easily be uniformly
regulated.
Groups of Workers
The purpose of the collective agreement is to guarantee the
same wage to workers doing the same work, but that does not

WAGES

mean that they prescribe uniform wages for alt. It is in the
interests of the employers as well as of the workers to make certain
distinctions, and these are all the more necessary the wider the
scope of the agreement as regards area, occupations or persons.
Territorial distinctions. — Collective agreements usually take
account of the fact that the cost of living varies according as
the worker lives in a rural or an urban area, in a small or in a large
town. It may therefore be provided that the wage should be
increased by a certain percentage when the worker is employed
in a town of over a certain population (e.g. the agreement for
horticulture in Silesia, Germany, 1935). Different rates may be
laid down for the various industrial areas to which the agreement
applies (Czechoslovakia, glassworks). As the system of agreements
develops, the main localities come to be graded into categories
(Ortsklassen) ; wage rates then vary according to the category
in which the place of employment is located.
The grading of localities is apt to give rise to discussion or
even to disputes, so that the drafting or the revision of the list
is often entrusted to special bodies or to joint committees (e.g.
for the building industry in England, the Netherlands and Scotland),
the procedure of which is regulated in detail so as to ensure that
all the relevant factors are taken into account. In Sweden, the
grading established by .the social administrative authorities is
generally adopted in drawing up collective agreements.
Distinctions by undertakings. — As a rule all undertakings
covered by the agreement are subject to its provisions without
distinction. But an exception may sometimes be made for the
benefit of certain employers if the strict observance of the collective
provisions would be likely to cause them economic or financial
difficulties. Such clauses are rare. It is more usual to find texts
applying to a whole industry or branch of industry and grading
the undertakings according to the nature of their work, the
number of workers, and sometimes even the success of the
undertaking, etc., the wage-rates varying for each grade.
Distinctions by groups of persons. — The main distinction is
based on the occupational qualifications of the worker. There
is first of all that between workers and salaried employees. In
many countries these two groups fall under separate collective
agreements because they belong to different trade unions, but

COLLECTIVE AGREEMENTS IN PRACTICE

in some cases a single agreement may apply to both (Great Britain,
co-operative agreement).
Amongst manual workers there is a fundamental difference
between skilled and unskilled. The first collective agreements
were concluded by skilled workers, and the system then spread
gradually to all other categories. The agreements make allowances
for the existence of these different groups by prescribing different
wage rates for them. Distinctions are made, for instance, between
skilled, semi-skilled and unskilled workers, labourers and
apprentices. Some agreements discriminate between experienced
workers and those, whether adult or younger, who are still being
trained. I n order to prevent disputes, or provide for their settlement if they arise, many agreements appoint joint boards t o grade
the workers or salaried employees concerned.
I n some industries the collective agreements make distinctions
according to the duties or jobs performed by the workers. This
distinction may amount to the same as the preceding one, as
is the case in mines, where only skilled workers are employed
on extraction work. The two systems may be combined, as when
a distinction is made between craftsmen, workers engaged in
production, assistants, etc. In industries embracing many different
trades, very extensive grading may be met with.
Agreements covering salaried employees often have a wide
range of occupational groups (Berufshlassen), such as senior and
junior managing staff, or sales staff, office staff, technical workers,
etc., according t o the branch in question. Lists showing the various
grades and the corresponding rates of salary are often annexed
to or incorporated in the agreements.
• The transference of the worker into another category, his
advancement, or similar measures, effected without his consent
and entailing a reduction of wages, are often expressly prohibited,
except where it is a question of preventing unemployment (e.g.
France, agreements concluded during the summer of 1936).
Other distinctions may be of a personal nature : many agreements have different rates of p a y for the two sexes ; others again
fix the same rates b u t stipulate t h a t output must be the sole
basis for the payment of remuneration. I n agriculture, wages
are often fixed for men, excluding women and children.
As a rule, the rates vary according to the worker's age. A
certain age is considered as the standard for the payment of a
normal wage ; lower rates are paid to younger workers. The
standard age depends on the nature of the work : it is often 18 years

WAGES

for an unskilled worker, whereas for a skilled worker it may be
21 years, or even more if several years of experience are required
before the worker reaches complete efficiency.
Special lower rates of pay may be arranged for workers over
a certain age or of reduced working capacity, as well as for disabled
or infirm persons. Such cases may be settled equitably by
representatives of the two parties. Sometimes the ruling of a
joint committee is required, or the fixing of wage rates may even
be left to direct negotiations between the persons concerned.
Length of service is another factor t h a t may affect wages.
I n reckoning length of service, account must be taken either of
the time worked in the undertaking or of the number of years
spent in a given occupation. Agreements often contain detailed
provisions on this subject, prescribing how the calculation should
be made and what interruptions or periods of work in the occupation
should be taken into consideration (sickness, holidays with pay,
military service, etc.). When a worker, and more especially a
salaried employee, is bound by close ties to the undertaking and
may be considered as in stable employment, rules may be laid
down in the agreement for regular promotion or increments. Joint
committees are sometimes set up to be consulted regarding the
application of these rules or to intervene in the event of a dispute.
The worker's civil status may also be taken into account,
higher rates being paid to a married worker with a family or to
a woman worker with family responsibilities than to an unmarried
person.
Regulation of Wages
The value of the provisions of collective agreements fixing wages
differs according as the rates fixed are minimum or standard rates.
I n the former case, any wage lower than t h a t stipulated in the
text is contrary to the agreement, unless provision is made for
exceptions. I n the second case, the wage actually paid may be
below or above the standard rate (e.g. building industry, Friesland,
Netherlands). As a rule, the exact meaning of the wording of the
agreement is a matter for interpretation. When a minimum wage
is fixed, the payment of a higher wage is usually permitted unless
expressly prohibited. With a standard rate it is exceptional for
the actual wages to exceed or fall below this figure (Great Britain),
but the rate fixed in the collective agreement may merely be an
average intended for guidance and not be strictly binding. On
the other hand, many collective agreements explicitly state t h a t

COLLECTIVE AGREEMENTS IN PRACTICE

the rates they mention are fixed or minimum rates. A system of
combined minimum and standard rates is possible (Scotland,
coach-building agreement of 1934).
Wages are usually fixed by the hour, day, week or month.
Longer units of time are rarely met with in collective agreements,
except in agriculture (in Sweden, for example). When work is
performed in shifts, the unit of measurement may be the shift
(in mines). Payment by the month is practically restricted to
salaried employees, although it sometimes occurs in agriculture.
Components of wages. — A distinction must be made between
fixed wages and allowances. The methods of determining the
fixed wage vary. Often separate rates are laid down for various
groups of workers, but it is equally common for one standard rate
to be fixed, with percentages to be added or deducted for certain
groups. Thus the wage of a skilled male worker over the age of
20 is often considered as the standard (100 per cent.), lower
percentages being prescribed for younger or less skilled workers.
On the other hand, the Australian agreements and arbitration
awards take the official basic wage as the standard and prescribe
higher rates for various categories of workers.
The allowance is added to the fixed wage. It may take the form
of a supplement proportionate to wages, in which case, if it is
regularly paid, it may for all practical purposes be considered
along with the fixed wage. The second possibility, which alone
will be dealt with here, is that the allowance is given at the
employer's discretion.
There are several circumstances in which allowances may be
paid. Reasons of service are the commonest. Sometimes the
allowance represents compensation for loss arising out of the
worker's employment — wear and tear of clothing, provision
of tools, etc. A special allowance may be paid for some actual
task, such as an unhealthy or extremely unpleasant job, work
involving travelling expenses, residence away from home, etc.
In this last case the worker usually receives a certain increase
in wages as well as the actual compensation.
A worker or salaried employee who is responsible for supervisory work or work of special responsibility, such as the foreman
of a gang, the head of a group or the manager of a branch, normally
receives a special allowance.
In certain occupations it is customary to pay allowances
for housing, food, light and beating. These allowances take the

WAGES

place of former payments in kind, or they may be a form of compensation to certain groups of workers who do not receive the wages
in kind still paid to others.
Bonuses may be provided, by way of encouragement or
recompense, for workers who are particularly skilled or who
reach a certain output, effect certain savings, etc. Other agreements
prohibit the payment of bonuses, so as to prevent the worker
from being exploited. When bonuses are given as a stimulus,
the question of output enters into the fixing of wages ; the
method is therefore a mixed one and as such will be dealt
with later.
There is also the Christmas box or similar gratuity given at
New Year, when the annual balance is struck or at some such
time. Provision for this is more commonly made in salaried
employees' than in workers' agreements, but examples may also
be found in the latter (e.g. the agreements entered into by
certain municipalities in Czechoslovakia). The amount of this
payment may be a full week's wage or a " thirteenth month's "
salary or a fraction (e.g. one-half) of the weekly wage or a given
fraction of the average annual earnings. It may be payable to
every person in the employment of the undertaking at tbe date
in question, or only to those with a certain length of service (say,
six months or a year). The amount may vary with the length
of service.
Family allowances are based on social considerations. It was
mentioned above that collective agreements may prescribe different
rates of pay for married and unmarried workers. This difference
becomes still more marked when a special allowance is guaranteed
to the fathers of families.
If the collective agreement makes provision for family allowances, the possible beneficiaries are carefully denned. In some
agreements all married persons are entitled to the allowance, and
male or female workers who are widowed or divorced and have
children to support are assimilated to them. There have even been
cases in which persons cohabiting but legally debarred from marrying
can claim an allowance (agreement of 1929 in the Alpine Montangesellschaft, Austria). Often no allowance is payable unless there
are, say, two or more children in the family, the sum varying according to the number (e.g. in some Italian agreements). Very often
the principle is : one household, one allowance, so that even if
several members of a household are working in an undertaking
only one of them can receive a family allowance. It may further

COLLECTIVE AGREEMENTS IN PRACTICE

be stipulated that a worker loses his claim to an allowance if his
wife is engaged in some other occupation or runs a shop, or if he
makes any false declaration.
The agreements may set up mutual aid funds for the payment
of these allowances (Italian agreements of 1934 for the reduction
of hours of work).
In some countries the question is regulated by legislation which
recognises or prescribes the establishment of equalisation funds
organised and entirely maintained by the employers (Australia,
Belgium and France).
Remuneration based on Output
The regulation of remuneration based on output by means
of collective agreements is a question that would repay careful
analysis, but for the reasons already given it must suffice here
to consider only the most typical cases dealt with by such
agreements.
Restrictions imposed by collective agreements. — The system
of piece rates, as is well known, is often condemned by the trade
unions, and some collective agreements prohibit its use. Piece
rates are strictly forbidden, for instance, in the building trade
agreements in England and Scotland. Sometimes the prohibition
applies only to some forms of payment by results, such as the
Bedeaux system, which is banned by the Italian agreement of
26 February 1935 for the Fiat works in Turin. Many agreements
provide that certain groups of persons, such as workers below a
certain age, may not be employed on piece or task rates.
Other agreements permit piece rates subject to certain conditions. Payment by output may, for example, be allowed for certain
operations and prohibited for others that might involve undue
physical strain upon the workers. Another method is to permit
piece rates only with the consent of the parties concerned. Under
the German national agreement of 1929 for the building industry,
piece work had been made the subject of special regulations. It was
provided that the local or district organisations should not agree
to payment by output except when it was customary (i.e. the
method in force for more than 50 per cent, of the workers concerned)
in their area. In the event of any disagreement, the arbitration
body mentioned in the covering agreement would decide. A
similar provision exists in the agreement for the furnishing trades
in Birmingham.

WAGES

Under some agreements a joint committee is responsible for
deciding whether piece work should be introduced ; under others,
the employer may be authorised to use this method if he guarantees
certain minimum conditions to the worker, such as a fixed hourly
wage, certain allowances, etc. (British heavy metal industry).
I n many industries piece rates are widely used. Hewers in
mines, the great majority of textile workers, quite a large proportion
of metal workers and many others are paid by output. Sometimes
time rates and piece rates exist side by side, but certain collective
agreements impose restrictions in this direction so as to avoid the
possibility of a section of the workers being exploited (clothing
industry in Quebec Province, Canada).
The following passage is taken from the agreement drawn
up in the U.S.S.R. for the first State motor-car factory
(" Staline ") :
31. The main form of remuneration for labour shall be direct,
individual task rates, subject to no limitation.
Remuneration shall be fixed in such a way that the increase in wages
is directly linked up with the worker's output on the tasks assigned to
him ; it should act as a material stimulus for the workers to become
more skilled. . . .
The fixing of piece rates. — When collective agreements recognise
piece rates they generally t r y to give the worker certain guarantees.
What is of importance here is therefore not so much the details
of the systems in force b u t rather the general functions of agreements
in this sphere. I t should be noted that, in contrast to the fixing
of time rates, collective agreements concerning piece rates do not
specify the actual amount to be paid to the worker, for this
naturally varies with his output. B u t they mention certain factors
t h a t should be taken into account in calculating his actual
earnings, or else they aim at eliminating factors t h a t would prove
detrimental to the worker.
The question of the unit of output for the purpose of wages
(number of articles, volume, weight, etc.) must depend on the
nature of the work. But, in order to enable the worker to follow
the calculations, some agreements stipulate t h a t the rates should
be expressed in terms of money and not, say, in Bedeaux units
(Turin agreement of 1935 cited above).
The main point dealt with b y the agreements is t h a t of the
rates to be taken as a basis for individual earnings. These rates
may be fixed directly, or the procedure for establishing them may
be laid down. I n the former case, lists of prices will be included

COLLECTIVE AGREEMENTS IN PRACTICE

in the agreement or in a schedule. Detailed tables of the articles,
parts of articles or operations peculiar to the industry in question
show the corresponding values in each case ; these may be expressed
directly in money or indirectly in time units (e.g. in the textile
industry, ready-made clothing industry, cutlery, stone-cutting,
etc.) A variant of the method is to fix a normal rate for a standard
article or operation, all other rates being expressed as a percentage
of the normal.
Such a system is workable only with mass production, where
the operations are largely uniform. I n many industries the products
and the operations vary from undertaking to undertaking and
even within a single factory. The rate cannot then be a general
one ; it must be fixed separately for each factory or for the different types of work.
Collective agreements take full account of this fact. Some of
them simply stipulate t h a t the rates shall be fixed by direct
agreement between the employed and the worker or group of
workers concerned. I n order to protect the workers, however, it
is often provided that they should have the help of a committee,
which may collaborate in every case or only when the parties
are unable to agree. The composition of these bodies varies greatly;
they may consist of the shop stewards, staff representatives
appointed in virtue of legislation or of the provisions of the agreement, persons appointed ad hoc or persons selected by the joint
committees.
When the employer is left free to fix the rates, he is obliged
to comply with certain conditions, such as informing the trade
unions of the classification of operations, the method of striking
averages, etc. I t is frequently stipulated, or even prescribed by
law, t h a t the rates should be posted u p in the factory and t h a t
the worker should receive a document showing the conditions of
his employment. This ensures that he will not remain in ignorance
of these conditions. The worker may also be obliged to keep a
record of the time taken for his various jobs.
Piece rates of wages may be fixed with reference to the average
output of a worker or with reference to time rates. I n the former
case, in order to ensure equitable results, many agreements specify
the groups of workers to be taken into consideration (e.g. only
skilled workers of a certain age, engaged on certain specified
jobs), the operations to be taken into account and the working
period to be selected as a basis for calculating the average (e.g.
several weeks or a few months, with due allowance for certain

WAGES

stoppages, for the normal working hours, etc.). The above-mentioned representatives of the workers and joint committees may
co-operate, according to the agreement, in fixing the averages.
Special investigations are often undertaken to determine these
averages, and the agreements sometimes stipulate t h a t the worker
must not t r y to avoid such experiments or to obstruct the investigators, and also t h a t precautions should be taken to ensure t h a t
a true average and not a maximum is finally selected as a basis.
I t may also be provided t h a t special attention be paid to the fatigue
of the worker, to the periods of beginning and ending various
operations, to personal factors,, etc. (cf. the ruling of the British
Industrial Court of 10 May 1935 concerning the North British
Rubber Co. Ltd.).
I n the U.S.S.R., output standards have been fixed because
" technical standardisation is the most effective means of increasing the workers' output and their skill. . . " (section 21 of the
agreement cited above).
When piece rates are calculated on the basis of time rates,
the latter may be either fixed ad hoc or they may be the general
rates stipulated in the agreement. I t is generally provided t h a t
the piece rates should be so fixed t h a t the average worker can
earn at least as much as on time rates or, more usually, a certain
percentage more than on time rates. This percentage varies from
10 to 50 in different industries and undertakings.
A system combining the general list of wage rates and the
establishment of special rates exists in the English coal mining
industry. I n Northumberland and Durham, for example, county
averages are fixed, and also rates per seam. Provision is made
for an adjustment of wages when the worker's actual earnings
do not reach the country average.
Different rates may be laid down not only for different operations but also for workers of different ages or for men and women
(cf. the decision of the British Industrial Court cited above).
On the other hand, many agreements state t h a t the same rates
must apply to men and women workers.
Some agreements stipulate t h a t output should be the sole
criterion in determining earnings ; others guarantee the worker
a certain minimum level of earnings. Precautions are often taken
to ensure t h a t the worker is not deprived of part of the amount
he might normally count on earning through defective material
or temporary interruptions for cleaning, repairs or other necessary
tasks. I n such cases, the time rate is often paid ; if it is not high

COLLECTIVE AGREEMENTS EST PRACTICE

enough, it may be increased by a certain fraction (say, 10 per cent.).
The time rate may also be taken as the minimum when the worker,
for reasons connected with the service, is temporarily removed
from his job.
Finally — and this is the most important case — wages at
time rate or a fixed minimum wage may be guaranteed to all
workers employed on piece rates.
There is also the case where wages are fixed for groups of
workers collectively. Some tasks are often entrusted to a group
working together. I t may then be thought desirable to fix a rate
of remuneration for the group and lay down rules for the distribution of the total sum among the various members. The shares
may be equal if all the workers are of the same category, but the
group often consists of skilled and unskilled workmen, and the
former are then entitled to a higher percentage of the total. In
order to ensure a certain minimum wage for all, the agreement
may stipulate t h a t the number of persons in the group may not
exceed a given maximum.
I t is sometimes provided t h a t all the members of the group
must be considered as working for a single employer, and the
foremen or leaders of groups or the skilled workers are then forbidden to engage assistants in their own names.
Collective agreements often make provision for bonuses as an
incentive to the worker. This method has spread considerably
in recent years, more especially in connection with rationalisation.
As a rule, bonuses are payable when a certain normal output
is exceeded, when the standard output is reached in less than the
normal time, when a given standard of quality is reached or passed,
when a saving in materials is effected, etc.
The following passage from the Russian agreement to which
reference has several times been made is of interest in this connection :
11. The system of bonuses should be widely used for rewarding the
best workers, engineers, salaried employees, " advance guards ", economic
groups and workshops for having accomplished or exceeded the tasks
assigned to them, as regards both quantity and quality, for having
displayed initiative in the field of socialist emulation and the new
forms of labour organisation, which are calculated to ensure the complete
fulfilment, or even more, of the industrial and financial plan.
When, as is often the case, the worker is guaranteed a minimum
wage (e.g. the normal hourly rates), the system is a mixed one.
A bonus may also be guaranteed to a group of workers if a

WAGES

certain level of output is reached or is reached in a given time.
In some industries in England, more particularly, there is a tendency
to extend the benefit of the bonus, so that not only the workers
directly engaged in production but all those in the undertaking
should share in the advantage. The system thus takes an intermediate position between time rates and payment by output.
The special conditions of such systems are generally regulated
by works agreements.
Apart from these general provisions, collective agreements
regularly contain special guarantees for workers working on piece
rates. As any change in the scale may easily give rise to disputes,
the procedure for amending the rates is prescribed in many agreements. If the fixing of the rates is left to the employer, it is often
stipulated that they cannot be changed except when new processes
are introduced or when there is a fundamental change in working
conditions. If the rates are fixed jointly by the employer and the
staff representatives or between the industrial organisations
concerned, it is normally stated that they cannot be changed
except by agreement between the same persons or bodies.
It is further stipulated that no change should be made in the
rates simply because the workers, by special skill and effort,
earn high wages. On the other hand, if the workers are not able
to. earn the normal wage, or if there has been some mistake in
fixing the rates, it is always possible to alter them. Many agreements expressly provide that the rates should not be changed
if only one worker is unable to reach a normal output.
If the work done is unsatisfactory, the worker is not paid for
it, but many agreements limit the loss of wages to cases in which
the defect in the product is due to some fault of the worker. In
order to guarantee fair treatment for the workers it may be stipulated that joint committees or staff representatives should check
the quality of the products and supervise the payment of wages,
or that they should intervene in the event of a dispute.
Special cases. — Commissions, percentages or even shares in
profits are all special forms of remuneration based on the worker's
output. Provisions concerning them are naturally more frequent
in salaried employees' agreements than in workers'. It may
be noted, however, that certain agreements covering taxi-drivers
guarantee them a fixed wage with a percentage of takings.
In view of their special nature, the question of commissions
and percentages is often left to be regulated by individual agree-

COLLECTIVE AGREEMENTS EST PRACTICE

ment. B u t some more definite guarantees may be inserted in
agreements concerning commercial travellers, representatives, etc.
Sometimes the scheduled rates are guaranteed in the event of the
commission earned falling short ofthat figure. There are sometimes
provisions forbidding the employment of commercial travellers
unless a fixed wage is guaranteed. Joint committees may intervene
if the parties do not agree as t o the rate of commission, etc.
Compensation may be paid to a traveller who, for instance, is
employed on onice work. I t is often stipulated t h a t the employee may
apply, a t specified dates, for a statement of the commission earned.
I n several countries (such as Germany and Italy) the collective
agreements or similar regulations for hotels, boarding houses,
restaurants, cafés, etc., have abolished tips, replacing them by
a percentage (10 to 15 per cent.) added to customers' bills.
One important function of collective agreements is to regulate
the distribution of the percentages thus charged. There are
individual and collective systems in force. In the former case,
the employees in contact with the customers are entitled t o the
sums paid by the latter. This method is met with most frequently
in restaurants and cafés. Under the other system, which is
commoner in hotels, boarding houses and sometimes in large
restaurants, all the sums collected are pooled and distributed to
the staff in accordance with an agreed scale. To prevent possible
abuses the agreements must ensure an equitable distribution and
provide for supervision. They therefore state first of all what
categories of staff are entitled to share in the distribution : only
those in direct contact with customers, or those and other groups,
such as kitchen staff (e.g. in the Italian national agreement).
Then the shares must be specified. The agreement m a y merely
mention the gross percentage due to various groups of staff and
leave the details to district or local agreements (Italy). Other
agreements make the undertaking responsible for regulating the
distribution of the sums received, stating that this should be done
in collaboration with representatives of the staff. Again, the
agreement, especially if it is for a single town or district, may
fix the categories (in hotels, for instance : floor staff, restaurant
staff and hall staff), classify the staff in these categories and
prescribe the share to which each employee is entitled.
Various provisions govern the supervision of the distribution
of gratuities. Staff representatives may be given the right to
inspect the bills ; in some cases they are responsible, with the
approval of the employer, for distributing the money.

WAGES

The agreements generally also lay down guaranteed minimum
wages, so that if the percentages paid by customers do not reach
these rates the employer must make good the difference. Under
some agreements the employer must always pay the fixed wage
irrespective of the fluctuating percentages. Sometimes, also, it
is agreed that the percentages will go to the employer, who
undertakes to pay fixed rates of wages to his employees.
In Italian agriculture, some collective agreements are intended
to guarantee to the workers a share in the gross output of the
farm. The distribution of the produce varies according to the
type of agreement and the productivity and organisation of the
farms : as a rule, the workers are entitled to 33 per cent, of the
total produce. A monthly or weekly advance may be granted
them, subject to certain conditions.
As profit-sharing is limited to a single undertaking, it is
unusual to find this method of remuneration dealt with in collective
agreements. But the agreements between certain firms and their
workers contain provisions on the subject, the workers being
entitled to inspect the accounts of the undertaking.
Sliding Scale of Wages
There are two sets of factors that may lead to the adoption
of a sliding scale of wages — social and economic ones.
Social factors. — In view of the fact that the worker depends
for his livelihood on his wages, efforts have sometimes been made
to adjust wages in such a way that the worker will be able to
maintain a certain standard of living irrespective of price variations.
Many agreements make provision for a fixed basic wage and a
fraction varying with the cost of living. This method spread in
some countries when the currency was fluctuating rapidly (e.g.
Austria and Germany). The system adopted may be simple or
elaborate. The simplest is to add to the wage a cost-of-living
bonus, the amount or percentage of which is specified in the
agreements. But this empirical method is not usually considered
satisfactory. A general cost-of-living index has been found more
satisfactory, the nature of the index being the deciding factor
in determining wages. But it is becoming increasingly rare for
the index to be mentioned in agreements, and the question, although
of undoubted practical importance, is not within the scope of
this study. In countries that regularly publish a cost-of-living

COLLECTIVE AGREEMENTS IN PRACTICE

index, this official index is generally used for the purpose of collective
agreements (Australia, Great Britain, Sweden, etc.).
The first necessity is to fix the basic wage ; this may be done
by agreement between the parties, or the index may be used to
determine it also. The basic wage may even be fixed by the
authorities, in which case the agreement has simply to adapt
wages for a certain period to the conditions in different industries
and districts.
The variable fraction may be fixed either by a special committee
meeting at regular intervals (say, every three months) or else
automatically in accordance with the movements of the index.
Sometimes minimum and maximum limits are fixed, beyond
which wages do not follow the index. Quite often the agreements
merely fix a minimum. If the limit is reached, the whole agreement
must be altered to allow for the variations in the index adopted.
Economic factors. — In some industries or occupations the
selling price of the products or the volume of the receipts may
be the factor determining the variable fraction of the wages of
workers engaged in that branch of production. It is impossible
to go into details, but the English coal-mining industry may be
taken as an example. The agreements in force provide that the
variable part of wages should be determined by the receipts for
the district in question, after deducting the cost of production
(not including wages). There are detailed provisions as to how
receipts are to be reckoned ; joint committees are set up by many
of the English agreements with powers to supervise the proceedings
and arbitrate if necessary. There are certain restrictions to prevent
the wages of the lowest paid workers from falling below a specified
minimum.
Wages in Kind
Many collective agreements try to abolish payment in kind,
substituting therefor cash wages. Mention was made in an earlier
paragraph of certain allowances that took the place of the traditional provision of accommodation, food, heating, etc.1
When a collective agreement recognises payment in kind it
often mentions, in general terms, that this payment constitutes
part of the worker's remuneration. Many agreements clearly
define the employer's obligations. In breweries or the wine trade,
1

Cf. above, p . 16.

WAGES

for instance, the employer must supply the workers with a certain
quantity of beer or wine. In the transport industry, clothing
must be provided (e.g. uniform for railway and tramway employees, etc.). When it is customary for the employer to provide
board and lodging, it may be stipulated (as in the case of hotels
or restaurants) that the food must be sufficient and of good
quality ; sometimes the matter is regulated in even greater
detail.
There are two branches particularly in which payments in.
kind are still of some importance — coal-mining and agriculture.
In mining districts more than anywhere else it is customary
for the workers and employees to be given dwellings either as
part of their remuneration or at a nominal rent. In coal-mining
and also sometimes in the heavy metal industry it is likewise
usual to give the workers a specified amount of coal or to sell
it to them cheaply. Special agreements are even concluded on
this subject (e.g. Great Britain : Durham coalfield).
The text generally enumerates the categories of persons entitled
to this allowance, distinctions being made according to sex, civil
status, length of service, etc. The rights of members of the family
are also regulated.
In agriculture, allowances in kind often form an important
fraction of the worker's remuneration. Working conditions vary
so much in different regions and for different crops and also with
differences in the social and economic structure of agriculture
that it is impossible to go into details here.1
The points that may be covered by a collective agreement
should, however, be noted. The regulations vary according as
they apply to salaried employees or to workers in agriculture,
to unmarried or to married persons. The employer must provide
either a house or a room of a given size satisfying certain hygienic
and economic conditions ; heating and lighting must also be
supplied, as well as food comprising a given quantity of corn,
potatoes, milk, etc. Sometimes, in place of food, the worker may
receive a certain amount of land for cultivation and stock-rearing.
The agreements usually make provision for the settlement of any
disputes. (Cf. the principles laid down in Czechoslovakia, the
Swedish collective agreements, etc.)

1
Cf. INTERNATIONAL LABOÜB OFFICE : Collective Agreements in Agriculture,
Geneva, 1933 (especially Chap. II, sees. I and H, 3).

COLLECTIVE AGREEMENTS IN PRACTICE

T H E PAYMENT OF W A G E S

The payment of wages is a matter both for legislation and for
collective agreements ; the latter often contain rules on the subject,
frequently supplementary or modifying the legislation.
Dates and Place of Paying

Wages

Agreements, in the same way as the legislation, often prescribe
t h a t wages should be paid at specified intervals, varying in different
countries and different industries. When the maximum interval
is fixed at a fortnight or possibly even longer, many agreements
stipulate t h a t the worker should receive a payment on account
every week. This advance is generally fixed at a high percentage (80-90 per cent.) of the actual earnings up to the date in
question.
Agreements often go further than the legislation in t h a t they
prescribe shorter intervals, generally one week, for the payment
of wages. The strict principle of weekly payment is sometimes
relaxed by a clause permitting fortnightly payment (with the right
to a weekly advance) when the special conditions of the undertaking
so require. I n any case, it is frequently stipulated that if a worker
leaves an undertaking before the usual pay day, his wages must
be paid immediately.
When workers are paid by output, the agreements provide,
as is done also by many laws, t h a t the employer must make payments on account on the usual pay day if a worker has not finished
his task or if his actual earnings have not been calculated.
The actual p a y day is also often specified ; some agreements
state t h a t it must be a working day, sometimes excluding Saturday ;
others mention a definite day. I t is normally agreed that wages
should be paid during or immediately after working hours. In
the latter case it may be stipulated t h a t the whole operation shall
not exceed a certain time — from 10 to 30 minutes. Beyond t h a t
limit the worker may claim compensation for having to wait
(e.g. in the building industry, Netherlands) or payment for one
hour's overtime (some Australian awards).
The place of payment is generally the office of the undertaking,
but if the workplace is far from the central office (building, public
works, etc.) payment may be made at the workplace or special
remuneration given for the time required to go to the office.

WAGES

Guarantees of Wage

Payment

The rule t h a t wages expressed in terms of money must be
paid in cash, which is laid down in the legislation of most countries,
is often confirmed by collective agreements. Payment by cheque
may be recognised as equivalent (United States, mines). The
possibility of drawing bills in payment is accepted in the
coal-mining agreement of Illinois (United States). These bills
are not negotiable or transferable, and the worker must be paid
the full nominal amount ; the trade unions exercise a certain
supervision over the system. I t should, however, be noted that
this method of payment is prohibited in a great many countries.
Collective agreements often provide, as do some laws, that
when payment is made the employer must supply the worker
with a slip indicating the gross wage, its components, any deductions
made, the net amount, etc.
The most important provisions are those dealing with the
negative side of the problem — whether deductions from wages
are permitted or not.
There may be a general clause prohibiting any deductions
not specifically mentioned in the agreement (e.g. some South
African agreements). In particular, it may be forbidden for the
employer to exert pressure on the worker to make him purchase
goods from the employer or from a store indicated by him, or to
make him accept a lodging provided by the employer. I t is often
stipulated t h a t the employer must supply the worker, free of
charge, with tools, requisites, etc., as well as with raw materials,
and t h a t he make provision for the return of the tools in good
condition. The workers have often to be paid an allowance if
they are authorised to use their own tools. If accessories are
supplied by the employer, the agreement sometimes states that
he may, after consulting the workers' representatives, lay down
rules as to the normal quantities to be used ; a worker who uses
more may be required to compensate the employer.
The amount t h a t may be deducted from wages may be limited
by collective agreement in such cases as the loss of materials
or tools entrusted to the worker, for which he must pay compensation. I t is sometimes provided t h a t the employer may not
withhold, on this account, more than a given fraction of the weekly
wage (5 per cent, for plumbers in the Netherlands). If the agreement
permits the employer to continue the custom of making the worker
buy certain of his working requirements from him, it very often

COLLECTIVE AGREEMENTS IN PRACTICE

stipulates that he may not charge more than a fixed price, possibly
the cost price (e.g. for explosives used in mines), or that the
worker's wage, after deducting the cost of these articles, may
not fall below the agreed rate. Similarly, prices may be fixed for
the provision of meals, accommodation, working clothes, etc.
(South Africa : passenger transport).
Deductions for faulty work may also be limited by the collective
agreement. In the glass industry, for instance, faulty workmanship,
breakages, etc., are regulated in great detail ; the collective
agreements for hotel and restaurant staff likewise often limit the
employee's liability for breakages, wear and tear, etc., to cases
where he was guilty of some fault or restrict the amount payable
to a certain percentage of the value. The workers are generally
bound to inform their superiors at once of any flaw in the materials
or defect in the machinery ; joint committees may be set up to
deal with disputes. Several agreements concluded in France
during the summer of 1936 prohibit deductions for faulty work.
The problem of disciplinary penalties, more especially fines,
is closely linked up with that of deductions from wages, and the
laws of most countries contain at least some general rules on the
subject. Italian legislation leaves the question to be dealt with
by collective agreements.
Fines are usually laid down in works regulations, but it is
interesting to note that many collective agreements stipulate that
these regulations may not depart from the terms of the agreements.
Deductions from wages in respect of fines are prohibited in
many agreements (Australia, France, South Africa). Agreements in
the mining industry often contain detailed rules concerning the enforcement of disciplinary measures. In particular, the worker may
be penalised if the coal or mineral he produces is impure, and the
collective agreements prescribe the fines (e.g. in the United States)
or even stipulate that the worker is to be suspended temporarily
from his employment (Great Britain : iron mines in Cumberland).
If the offence is repeated, the penalty is more severe — prolonged
suspension or immediate dismissal. In order to protect the worker
to some extent, it may be provided that staff or trade union representatives should be allowed to examine the product complained of.
Penalties may also be imposed if the worker remains absent
without permission and without valid reason, but the agreements
often stipulate that no action should be taken on account of a
single absence. In the mining industry, more especially, workers
are punished for stopping work too early, and the trade unions

WAGES

undertake to see t h a t their members observe the regulations (cf.
the Cumberland agreement cited above).
On the other hand, the workers receive some guarantees in the
form of clauses permitting them to appeal to a joint committee
and stipulating t h a t the fines will be used for the welfare of
the workers in general (e.g. for a sickness or other insurance
fund), etc.
When as in Italy, there are general regulations concerning
works discipline, the agreements specify the particular cases in
which disciplinary action can be taken and the maximum penalties ;
the latter are graded according to the gravity of the offence (fines
of varying amounts, suspension, dismissal).
Payment

of Wages wheri^Work

Interrupted

The two main obligations arising out of the individual contract
of employment — wages and the performance of work — are so
closely connected t h a t the cessation of the one automatically
involves the cessation of the other. Yet the strict apphcation of
this principle would be unjust if it meant that the worker lost
his wages whenever he was prevented from working through
no fault of his own.
Quite a number of collective agreements in several countries
include provisions on this point, the solutions being adapted to
the needs of various industries and occupations. A distinction
is usually made between interruptions in work caused by the
worker and those caused by the employer. B u t it may be noted
at the outset t h a t there are agreements which stipulate t h a t
remuneration is payable only for work actually performed, so
that, according to ordinary law, the worker receives no wages
if his work is interrupted. Other agreements accept the same
principle but permit exceptions, which are frequently restricted
to certain specified cases. On the other hand, a number of agreements lay down general regulations for the whole question. An
intermediate solution of the problem is found in some agreements
t h a t set up mutual aid funds to continue the payment of wages
wherever work is stopped or in certain circumstances (e.g. sickness).
The most important causes of interruption for which the worker
is held responsible are sickness and accidents.
I n the event of sickness, the worker has certain obligations.
He must send a medical certificate to his employer ; under some

COLLECTIVE AGREEMENTS IN PRACTICE

agreements, he must allow himself to be examined by a doctor
selected by the employer, or he may be required to be regularly
inspected.
The employer's obligations vary. I n the first place he must
keep the worker's post open for him — a matter that will, be
discussed later. The extent of the obligation to pay wages varies
in different cases.
Most agreements make no distinction between different groups
of workers, but casual labourers are often excluded. Sometimes
the payment of wages during sickness is guaranteed only to
certain categories (in British coal mines, for instance, only to
deputies, overmen and shot lighters).
The actual extent of the obligation is often determined with
reference to sickness insurance. I t is sometimes provided that
when a worker is ill he receives only the cash benefits granted
by the sickness fund, which may be instituted by the collective
agreement (as in Italy) or by law.
Frequently, however, the agreements require certain additional
payments from the employer, such as the payment of insurance
contributions (in many Netherlands agreements), or they may
regulate the working of the insurance scheme to the worker's
advantage (e.g. in the Netherlands : fixing the daily wage to be
taken as a basis for benefits, determining the length of the benefit
period, co-ordinating the rules of the insurance institution and the
terms of the agreement, etc.). Under quite a number of agreements
the employer is obliged to pay to a worker who is sick the difference
between the cash benefit of the insurance institution and his actual
wage, or it may be agreed that the employer pays a fraction of
the wage which, with the cash benefit, will make up the whole,
or a high percentage of the worker's total wages.
¡¡Finally, the collective agreement may regulate the payment
of wages quite apart from social msurance. This is the case more
especially when the agreement has merely to supplement or adapt
to the needs of a special industry the provisions concerning wage
payment t h a t already exist in the legislation of the country (civil
code, commercial code or legislation concerning contracts of
employment).
Some agreements make the payment of wages during sickness
conditional on a certain length of service, while others guarantee
it from the outset.
The worker may draw his full wage or only a percentage.
I n the latter case, the fraction may rise with the duration of his

WAGES

illness (e.g. from 10 to 30 per cent, according to several Czechoslovak agreements) ; but the contrary may also be stipulated,
the full wage being paid for the first half of the period of absence
and 50 per cent, thereafter (Spain : basic agreement for Madrid
commercial employees), or half being paid for the first few weeks
and a quarter for the rest of the period covered (Austria : guiding
principles for the Vienna metal industry).
The rules may differ for undertakings of different size, the
employees of larger undertakings having more extensive rights
(e.g. the Spanish regulations cited above, which distinguish
between undertakings employing less than 5 employees and those
employing 5 or more).
Some agreements provide for a waiting period, usually of
from 1 to 3 days, but it is also stipulated that if the illness is a
lengthy one wages will be paid as from the first day.
The period for which wages are paid is limited ; it may be
a few weeks or a few months, being longer as a rule for workers
with long service. When that period expires, the worker may be
dismissed, in which case he may (e.g. in Italy) be entitled to
compensation.
Some agreements also deal with relapses — i.e. when the
worker has a second attack of the same disease within a specified
period after the end of the first attack. As a rule, the worker
can claim the payment of his wage only in so far as he did not
exhaust his rights during the first period. In the case of a different
disease, he retains his full rights provided that he worked for a
certain minimum period between the two illnesses.
When a worker has to attend a certain place for treatment,
some agreements, especially in Austria and Czechoslovakia,
guarantee the payment of wages for the hours thus lost, up to
a specified maximum (say, one week's wages).
The same rules often govern sickness and accidents, but in
some cases the employer's obligation to pay wages applies only
to industrial accidents. Other agreements provide that in such
cases the full wage must be paid for a longer period (e.g. 26
weeks). Many agreements treat childbirth on the same footing
as illness.
In addition to sickness and accident, there are other reasons
that may be recognised by agreements as justifying the worker's
absence and the payment of remuneration. These include domestic
contingencies, summonses to appear in court (provided thè worker
himself is not the culprit) and the performance of certain functions
3

COLLECTIVE AGKEEMEKTS IN PBACTICE

or public duties. In these cases the wage, or a fraction thereof,
is due only for the hours of work actually lost. The maximum
period of absence permitted varies from a few hours to one or
two days, according to circumstances.
Some texts contain very detailed provisions on this point.
An interesting example is the 1921 agreement for the Vienna
metal industry, which has served as a model for numerous Austrian
agreements and which contains a long list of reasonable and
unjustifiable absences.
The cases in which the employer is held responsible for the
interruption vary greatly in different industries and for different
groups of workers. One may distinguish factors external to or
inherent in the undertaking.
According to most agreements it would seem that the worker
cannot claim any remuneration if the working of the undertaking
is stopped by external factors, especially by force majeure. Yet
there are industries that are particularly exposed to uncontrollable
external forces—building, surface mines and quarries, in which
weather conditions play an important part. In these industries,
collective agreements aim at protecting the worker against a loss
of earnings through a stoppage due to bad weather. Various
methods are employed : it may simply be stated that time lost
will be made up by extending hours on other days. In this case
ordinary or overtime rates of wages may be paid for these hours.
Again, there are clauses guaranteeing the payment of wages, or
a fraction of wages, for time lost in this way. In the Netherlands
building industry, for instance, a worker can draw 70 per cent.
of his wage for three consecutive days, subject to a maximum.
of 15 days in any three months. Interruptions due to cold are
excluded from this rule. Many attempts have been made to solve
the problem in Great Britain, but without any positive result.
Mention may be made of the plan for creating a fund, to which
employers and workers would contribute equally, to guarantee
the payment of wages during interruptions in work.1
Another solution is this : a worker who comes to work but
cannot be employed because of the weather receives a fraction
of his wage proportionate to the time spent in waiting. A worker
who does not turn up receives nothing (in some English
quarries).
1
Cf. MINISTRY OF LABOUR : Report on Collective Agreements between Employers
and Workpeople in Great Britain and Northern Ireland, Vol. I, p . 390. London, 1934.

WAGES

In other industries, wages are paid in respect of interruptions
caused by factors inherent in the production process (shortage of
raw materials, power, etc.). Often the agreements cover only
workers on piece rates, who are obviously exposed to more serious
risks than the others (e.g. in the pottery and glass industries),
but quite frequently all workers are covered. I t is generally stipulated that the workers should, as far as possible, be employed
on other tasks or that the time lost should be made up later.
[;': When the payment of wages is guaranteed, workers on piece
rates usually receive hourly wages or a certain percentage of
their average earnings. In some industries, more detailed rules
are laid down (e.g. Czechoslovakia : sheet glass works).
Payment is limited to a certain period — a few hours or a
few days.
By way of example, reference may be made to the solution
adopted in the English agreement of 1 June 1930 for the light
casting industry, in the event of a shortage of raw materials. If
the shortage is due to the employer's negligence or to an error
by the foreman or the cupola man, or if the metal, in the foreman's
opinion, is not fit to be worked, the workers must be paid twothirds of their wages ; if the supply of power (electricity, gas,
water, etc.) is cut off owing to some cause for which the firm is
not responsible, the employer is not obliged to pay any remuneration. If the shortage of metal is due to some cause within the
undertaking — a lack of power or an accident to machinery —
but that cause escaped the supervision exercised by the employer,
the latter is not presumed to be responsible, but a joint committee
must settle the question of responsibility within a fortnight.
The employer can escape his liability altogether by paying a
lump sum of £5, provided that the loss to the workers did not
exceed that amount. No compensation need be paid if the lost
earnings can be made good the following day.

CHAPTER III
HOURS OF WORK

The question of hours of work includes the following main
problems that are regulated by collective agreement : the limitation
of hours, holidays with pay and the weekly holiday. The present
survey will be restricted to these points.
Normal Hours of Work
Respective Spheres of Legislation and Collective Agreements
The limitation of hours, like the fixing of wages, was early
dealt with by collective agreement, and it has also been the
subject of legislation. In most countries, therefore, the legislation
and the work of the industrial associations stand side by side.
In order to have a proper appreciation of the part played by
collective agreements and similar regulations in this field, it will
be well, before studying their contents, to consider very briefly
the main features of the relationships between the legislation on
hours of work and the collective agreement. The various possibilities
may be summed up as follows :
(a) According to the scope of the legislation :
In the absence of legislation, the regulation of hours of work
is left entirely to collective agreements, but this situation rarely
arises. More frequently the legislation applies only to certain
industries or groups of persons ; for others, collective agreements
are necessary. The most frequent case of all is that in which the
legislation deals only with some aspects of the question, leaving
the others for collective regulation.
(b) According to the structure of the legislation :
When the legislation regulates in detail the whole question
of hours of work, all that is left for the collective agreement is to

HOURS OF WORK

prescribe conditions more favourable than the legal minimum.
Very often the legislation defines the functions of the collective
agreement by attributing to it certain specific tasks in the regulation
of hours. There are several alternatives possible. The law may
lay down a general principle to be applied by collective agreement
according to the needs of various branches or districts. This
may be done directly, or it may be done indirectly, as when the
collective agreement is used as a basis for administrative regulations.
Again, the legislation may deal with certain details of hours of
work but not regulate it exhaustively. The collective agreement
must then fill the gaps or adapt the legal standards to occupational
needs. Finally, the legislation may leave the way open for exceptions to be fixed by collective agreement.
I t will thus be seen that the functions of collective methods of
regulation, and therefore also their practical value, may vary very
greatly according to the legislation in force.

THE LIMITATION OF HOURS OF WORK

Attention may be confined to three aspects that are constantly
dealt with in collective agreements : the definition of hours of
work, the fixing of limits and exceptions.
Definition
The scope of the legislation depends largely on the interpretation
of the term " hours of work ". Many agreements simply refer
explicitly or by implication to the legislation or custom, but several
others are more definite. I t may be stipulated that hours of work
should be taken to mean the hours of actual work, excluding breaks.
This is the most usual method.
It is sometimes provided that hours of work include certain
periods not devoted to actual work, and the breaks or interruptions
that are to be included are enumerated. This system is common in
some industries or for certain groups of workers. For instance,
breaks may be assimilated to working hours in undertakings
where work proceeds continuously by day, by night and even on
Sundays, or when the special nature of the work so requires (in
mines, for example). If the work is very dirty, the time the worker
needs for washing may be included in working hours. When the
worker has a considerable journey to the workplace, the whole or
part of that time may be reckoned as working time (in mines,

COLLECTIVE AGREEMENTS IN PRACTICE

building or civil engineering). In some cases the travelling time is
reckoned and paid for separately.1
In certain industries, interruptions inherent in the service may
he counted as hours of work, as for instance when a worker has
to wait for fresh materials (textile industry) or when he dehvers
finished articles and receives other work (ready-made clothing).
In some occupations, again, the work involves travel or prolonged
waits in addition to actual work (in various types of transport
work, for watchmen, doorkeepers, messengers, etc.). In that
case hours of work, which are often longer than those of other
workers, are usually taken to be the time during which the worker
is at the employer's disposal.
Fixing of Limits
Interesting as it might be to study the various limits set to
hours of work, that subject is just as out of place here as was
the study of actual wage rates ; for present purposes the important
thing is the methods by which collective agreements fix these
limits. It may be mentioned in passing that the limits may refer
to the day, the week or both these periods. When the work is done
in shifts, the length of the shift may be given instead of the working
day.
The first case to be studied is the most frequent one, where
hours of work coincide with the working hours of the undertaking,
there being stoppages at regular intervals. Certain special features
of continuous process undertakings will then be considered.
Discontinuous Work
If hours of work are fixed by the day, this does not necessarily
mean that all working days are of the same length. The working
day on Saturday or the eve of a public holiday is often shorter
than the normal, ending at midday or at 1 or 2 p.m.
When hours are fixed on a weekly basis, their distribution over
the working days is frequently left to the employer's discretion
or to local or works agreements. But collective agreements sometimes set limits to the number of days over which the hours can
be spread (5 or '6 days) or to the number of hours that may be
worked per day. The same applies when a period of more than
1
With regard to agriculture, cf. INTERNATIONAL LABOUR OFFICE : Collective
Agreements in Agriculture, Studies and Reports, Series K (Agriculture), No. H ,
Geneva, 1933, p p . 79 et seq.

HOTTRS OF WORK

a week is taken as a basis. Some agreements fix a limit of two
weeks, but longer periods of calculation are not generally permitted
for discontinuous processes. Such a possibility exists, however,
in the Italian agreements for a reduction of hours, concluded at
the end of 1934 — e.g. in the agreement of 23 November for the
engineering and heavy metal industries.
The actual arrangement of the time-table and breaks is often
left to the employer, but some agreements state that he must
consult or come to an agreement with the staff representatives.
Quite frequently the agreement specifies the time-table and breaks ;
it may, for instance, stipulate that work must begin and end between
8 a.m. and 6 p.m. Some agreements simply fix either the hour
at which work will begin (before which no workman can be required
to work) or the hour at which it must normally cease. Others again
mention the exact hours at which the working day begins and ends.
Sometimes it is provided that work will proceed without a
break, or at least with only a brief interruption after a certain
time (say, five hours). More frequently, the agreement stipulates
that there must be a break, the length of which may also be fixed
(e.g. from midday to 2 p.m.).
In certain special cases, the normal limits may be exceeded,
as for instance when time lost has to be made up by extending
the working day, more especially in undertakings where the work
is hable to be interrupted because of the nature of the processes
or because of bad weather (glass or china works ; building).
Even the time lost on certain holidays has sometimes to be made
up. In these cases an hourly or weekly limit is generally set to
these extra hours, and it may be stipulated that lost time cannot
be made up after more than, say, one week has elapsed. The
staff representatives may have to be consulted or to give their
consent.
For similar reasons, the time-table in seasonal industries is
often different in the season from what it is in slack periods, or in
summer and in winter (building industry in England and in
Belgium). Some regulations provide that a worker may be required
to make up individual lost time, even when the loss was not due
to any fault of his.
The regular hours of work of workers employed on unhealthy
or particularly arduous tasks, in a damp atmosphere or at a high
temperature are usually shorter than the normal hours for other
workers (e.g. in mines). Some agreements prescribe shorter hours
for young workers and women (Austria : large flour mills, 1933).

COLLECTIVE AGREEMENTS EST PRACTICE

Continuous Process Undertakings
The special conditions of continuous process undertakings or
sections of undertakings which work day and night, perhaps even
on Sundays, with a system of shifts, require some adaptation of
the general provisions concerning the limitation of hours. Examples
are the metal, chemical, pottery and glass industries. When
continuous and discontinuous processes exist side by side, the
agreements sometimes enumerate the undertakings or sections
belonging to each category.
The work is performed in regular shifts, but only the length
of the shifts can be exactly limited, their actual distribution being
necessarily elastic. There may be two, three or four shifts daily.
Moreover, the hours of work may be reckoned over several weeks,
and even the length of the shift may vary from week to week
(e.g. Australia, metalliferous mines in New South Wales : 88 hours
a fortnight, distributed as 6 shifts of 8 hours the first week and
5 shifts the second). Some agreements, however, fix not only the
duration and the number of shifts, but also the time-table of
these shifts.
Breaks are not usually specified, but the ordinary interruptions
in the work are often considered as breaks.
Agreements that do not directly arrange a plan of rotation
for the workers try to ensure that they will be employed on the
various shifts in turn and that, in particular, they will all have
a fair share of night and Sunday shifts. For this purpose Sunday
is often taken as the day for shifts changing over ; instead of the
normal three shifts, there are two longer shifts on that day, so
that every worker has a 24 hours' break on one Sunday in three.
Other agreements provide for a minimum rest period between
two shifts. These two methods may be combined (e.g. Sweden,
metal works).1
The night shift is often considered as normal work, but sometimes higher remuneration may be paid for it, as is generally
done for Sunday or week-end shifts. What is meant by a Sunday
shift is often defined in the agreement : it may, for instance, be
defined as a shift beginning on Sunday morning, as distinct from
1
For details on all these points, the reader m a y be referred to t h e publications
of the International Labour Office concerning hours of work, and more especially
to the Grey-Blue Reports on the reduction of hours of work submitted to t h e
Nineteenth a n d Twentieth Sessions of the International Labour Conference.

HOURS OF WORK

one ending on Sunday morning or beginning on Sunday evening
(coal mines in Upper Silesia, Poland).
A worker who does two successive shifts may receive special
remuneration (e.g. as for overtime) or be given a longer rest
period.
Exceptions
Exceptions to the normal working hours may denote an extension or a curtailment of hours. Collective agreements seek to
safeguard the worker against the dangers of both possibilities —
in the one case undue fatigue, and in the other a loss of earnings.
Overtime
Compulsory prolongation of hours not reckoned as overtime. —
Not all extensions of hours are recognised as overtime. Generally
speaking, it is often stipulated that the hours of work may be
exceeded by a few minutes (perhaps 10 minutes) without any
compensation.1 Similarly, the workers of one shift must wait
for those of the succeeding one when changing over. Many regulations provide that workers must change their clothes, wash,
etc., outside working hours. Sometimes even certain operations
connected with the work, such as the cleaning or inspection of
machinery, attending to animals (agriculture), etc., must be done
before or after the hours of service. But the contrary may also
be stipulated. Some persons, such as foremen, supervisors or
inspectors, may be required to carry out certain of their duties
after the normal working hours.
In cases oí force majeure, accidents, disasters, etc., the legislation
usually permits an extension of hours, and this is often confirmed
by collective agreement. In periods of general distress it has
sometimes even been agreed that extra hours or shifts should be
worked without being reckoned as overtime ; consequently, there
was no increase in the rate of remuneration (e.g. in German
mines and the heavy metal industry after the War).
Quite a number of agreements provide that workers on short
time who are required to work longer than usual, but not more
than the normal hours of work, are not entitled to overtime pay.
But the contrary is stipulated in the agreement for the Netherlands book trade.
Extra work performed by the worker of his own accord, without
1

B u t cf. above, pp. 28, 38.

COLLECTIVE AGREEMENTS IN PRACTICE

being asked by the management, is not usually recognised as
overtime by collective agreements.
Restrictions. — The amount of overtime that may be worked
is very often limited by the agreements. Sometimes they merely
recommend that there should be as little of it as possible, that
it should be exceptional, that it should not be so arranged as to
exhaust the worker, etc. In other agreements it is restricted to
cases of necessity (several French agreements of 1936); the Italian
agreements of late 1934 for the reabsorption of the unemployed
prohibited overtime in general, permitting it only in exceptional
cases of urgent necessity.
It has sometimes been ruled to be an infringement of the
agreement when overtime was worked instead of engaging extra
staff or organising a second shift (Belgium, book trade, 1931).
According to certain agreements, a worker may refuse to
work overtime if he can adduce valid arguments for so doing ;
under others, he may not be required to work overtime on Sundays
or public holidays (Netherlands : house-painting, 1931).
Collective agreements may also fix quotas for overtime, specifying the aggregate and the individual number of hours of overtime that can be required of the workers over a given period
(day, week, year, etc.)
The procedure prescribed for authorising overtime or for
paying remuneration for it may indirectly restrict its amount.
Organisation of overtime. — Many agreements leave the employer
free to decide when overtime is necessary, but others try to restrict
this liberty by obliging him to give due notice to the workers
concerned or to consult their representatives. Some regulations
state that the decision to work overtime must be taken by the
employer in agreement with the staff representatives, and more
especially with the works' councils or committees, where such
have been instituted by law. In Poland, the collective agreement
for the iron industry of the Dombrowa district prescribes that
overtime must be authorised by the factory inspector and must
be agreed to by the workers. A joint committee, consisting of
the employer and representatives of the trade union, may also
be required to take the decision. Again, there may be a mixed
system, the employer being entitled to decide alone in urgent
cases, whereas the workers must give their consent in other
cases.

HOURS OF WORK

The Italian agreements already cited provide that an employer
who wishes to make use of overtime must inform the employers'
organisation, which in turn notifies the workers' organisation.
The two organisations then discuss the validity of the motives
for the overtime ; in the event of failure to agree, the corporative
inspectorate decides.
Definition of overtime. — With regard to the meaning of overtime, collective agreements may provide in general terms that
any work performed outside the regular working hours is considered
overtime. Some agreements specify that overtime is to be reckoned
on the basis of daily hours, so that the worker can claim special
payment whenever the daily limit is exceeded. Others take the
week as a basis, so that the worker is entitled to overtime pay
only when his work exceeds the weekly maximum, irrespective
of the number of hours worked on any given day. The two methods
may be combined (Austria, paper industry, 1931).
A distinction is often made between overtime due to various
causes. These are sometimes enumerated (e.g. repair work and
other work that cannot be postponed, work essential in the interests
of the undertaking or the public, etc.). Many agreements make
a distinction between ordinary overtime, night work and work
on Sundays or holidays ; this is mainly a questionai different
rates of pay.
Bates. — The increase in the rate of pay for overtime is generally
anything from 15 or 25 to 100 per cent. There are sometimes
special rules for reckoning the rates for workers on piece rates,
their average earnings serving as a basis.
The rates may be uniform, but it is more usual to find a scale
— generally based on the above-mentioned distinction between
ordinary overtime, night work, Sunday work and work on public
holidays. For this last type, the rate is often 100 per cent, above
the normal (e.g. Polish Upper Silesia, coal mines).
For ordinary overtime there may be a flat rate or a progressive
scale in accordance with the number of hours of overtime ; sometimes, special rates are paid for work during rest periods.
A considerably higher rate of remuneration is usually paid
for night work or Sunday work, but in continuous process undertakings, where the shifts take turns at working by night or on
Sunday, any special rates that may be prescribed differ less widely
from the normal than they do in ordinary factories where such

COLLECTIVE AGREEMENTS EST PRACTICE

work is exceptional. In certain industries, detailed provisions
may be drafted to deal with special cases.
Short Time
A number of collective agreements contain provisions concerning short time and the corresponding reduction in wages ; this
problem has become particularly acute during the present economic
depression. Often the employer is required to give notice in advance
of his intention to work shorter hours ; in some cases he must
terminate the contracts of employment, giving the due period of
notice. Other agreements make the consent of the staff representatives or of a majority of the staff a necessary condition.
Short time may be applied either by rotation among the staff
or by alternate periods of shorter hours and normal hours.
The texts may set limits to short time. They sometimes fix a
maximum reduction in hours that may not be exceeded without
the consent of a joint committee (Netherlands, book trade) ; in
other cases it may be agreed that wages must not be reduced unless
hours of work are shortened by a certain minimum amount — say,
five hours a week.
Among the Italian agreements to which reference has frequently
been made, those covering industry provide for the institution of
a fund to make good the loss of earnings suffered by heads of
families working short time. The fund is constituted by employers'
and workers' contributions.
If short time is a temporary measure to keep the workers in
employment in exchange for a sacrifice of wages on their part, some
very few agreements try to guarantee the workers a certain stability
of employment. London taxi-drivers, for instance, are guaranteed
a 48-hour or a 36-hour week, spread over not more than 6 days ;
the length of the working day may not be less than 5 or more than
10 hours.
In the ready-made clothing industry in the Netherlands, the
1932 agreement guarantees 780 hours of work for six months to
all workshop hands who have been in the employer's service for
not less than 5 months ; the employers also undertake not to dismiss
staff during the slack season (17 December to 4 March and 2 July
to 17 September), while the trade unions pledge themselves to
prevent workers, as far as they can, from breaking their contracts
without good reason during the remainder of the year.
The question of the reduction of hours of work as a remedy for
unemployment is irrelevant here ; it is closely finked up with the

HOURS OF WORK

question of the regulation of working hours in general. I t may be
noted, however, that some agreements concluded for this purpose
make it compulsory for the employer to re-engage some unemployed
workers.
HOLIDAYS WITH PAY AND PUBLIC HOLIDAYS

After dealing with hours of work, collective agreements generally go on to speak of holidays with pay and, to some extent,
public holidays.
Holidays with Pay
A brief summary of the question is all that will be given here ;
for fuller details, the reader may be referred to the report on the
subject submitted to the Nineteenth Session of the International
Labour Conference.
There are two main problems dealt with in the agreements :
the existence of holidays and the payment of wages. Holidays are
often granted only to those who have a certain length of service,
varying from a few months to a year. Detailed rules may be laid
down for calculating this period, prescribing, for example, that the
transfer of the undertaking and absence from duty on account of
sickness, accident or even, in some cases, the suspension of work
are not, within certain limits, to be considered as interruptions in
the period of service.
The length of the holiday varies from a few days to a few weeks.
It may be the same for the whole staff, if more or less homogeneous,
but more usually it is different for various groups : salaried employees, workers, apprentices, adults, young persons, etc. It is
often proportionate to length of service. Minimum and maximum
figures are generally fixed for its duration.
Many agreements stipulate that the holiday must not be
broken up, but must be given all at once. Exceptions are sometimes
made to this rule (Sweden, agriculture).
The actual time at which the holiday is to be taken may be left
to the employer to decide or may be settled by works agreements
or regulations. Some agreements fix a period for holidays — say,
between 1 April and 30 September, or during the slack season in
seasonal industries.
If the holiday is to have its due social value, the worker must
not engage in other work during this rest period ; this is often
prohibited in agreements, on pain of withdrawal of the right to a

COLLECTIVE AGREEMENTS I N PRACTICE

holiday. It may also be provided that the employer must not
commute the holiday for a money payment.
The worker draws his wages during his holiday. Several Netherlands agreements provide for the institution of a fund to which
employers and workers pay contributions to provide holiday
allowances. Generally, however, the employer remains solely
responsible for the payment of wages. As a rule normal wages
are paid, less any bonuses or special allowances, such as overtime
payments. Workers on piece rates receive their average earnings.
Quite a number of agreements deal with the question of short
time. It is sometimes stipulated that the normal wage must be
paid even if short time is being worked in the undertaking while
the individual in question is on holiday ; on the other hand, he gets
less than the full wage if he himself was on short time for a certain
period before going on holiday.
Many texts contain special rules governing the case of dismissal
before the holiday period. Some state that the worker must take
his holiday before leaving and must not be paid compensation
unless it is impossible for him to take his holiday. Others provide
for compensation in proportion to his length of service during the
year in question. If the worker is dismissed for some serious
reason, however, he loses his right to a holiday, but the agreements
often stipulate that he must be guilty of a serious offence before
this measure is applied.
It should also be noted that some agreements make provision
for special conciliation committees to deal with disputes concerning
holidays (e.g. Great Britain, printing trades agreement of 1930
concerning hours of work and holidays).
Public Holidays
Public holidays are in general fixed by legislation, but collective
agreements may stipulate special holidays for a certain industry
or district. Thus, 1 May is a public holiday in several countries.
It is impossible to study here in detail the number and nature of
these holidays, for they vary largely from country to country.
They may be general, religious or national festivals, local festivals,
commemorative days, etc. With regard to their number, it may
be noted that most Australian agreements provide for 6 to 8 general
holidays.
In such cases the worker is entitled to a day off ; if he works, he
receives the overtime rate of pay specified in the agreement.

HOTTRS OP WORK

When the legislation has no provisions on the subject, collective
agreements sometimes regulate the wages to be paid on legal public
holidays and other holidays mentioned in the agreements.
Obviously, these arrangements affect only workers paid by the
day, for persons paid by the week or month will continue to receive
their remuneration irrespective of intervening holidays. Many
agreements, however, contain no provisions on this point, or even
exphcitly exclude all payment (e.g. Austria, general agreement
for the textile industry, 1934 ; Czechoslovakia : glassworks, paperworks, etc.).
In the Netherlands, compensation for public holidays is paid
out of the holiday fund to which reference was already made.
In some industries (e.g. the book trade) or in some countries
more generally (e.g. Australia) the payment of wages for public
holidays would seem to be the rule. In the case of piece workers,
wages may be paid at the hourly rate (gold-mines in Victoria,
Australia) or on the basis of the average wage (Czechoslovakia :
book trade).

CHAPTER IV
INDIVIDUAL RELATI0NSHD7S BETWEEN EMPLOYERS
AND WORKERS

The following pages deal with the rules for the engagement
and dismissal of workers and salaried employees. The reciprocal
rights and obhgations of the employer and the individual worker
will be summarised, in so far as they have not been dealt with
above, and the provisions of collective agreements concerning
certain special groups of workers will be studied.
ENGAGEMENT OF WORKERS

This section deals only with the provisions concerning employers
and individual workers. Collective problems, such as the organisation of placing and the supply of labour will be discussed
later. The successive points to be dealt with are : the person
of the employer, the nature and methods of the engagement and
the person of the worker.
The texts of agreements, especially those covering large
undertakings, may specify the persons responsible for the engagement of staff and the place to which workers in search of
employment should apply. Sometimes the staff representatives
have to be consulted before a worker is engaged.
In certain cases the agreement must define who is the employer,
especially when some intermediary, such as a sub-contractor,
comes between the main employer and the worker. Many agreements prohibit sub-contracting (Great Britain, building) ; others
permit it on condition that the intermediary accepts the provisions
of the collective agreement, or — and this is important in the
event of the sub-contractor becoming insolvent — that the
principal employer remains jointly responsible towards the worker
for the fulfilment of the obhgations assumed by the sub-contractor
(Germany : various agreements for parquet-making, the engagement
of orchestras, etc.).

RELATIONSHIPS BETWEEN EMPLOYERS AND WORKERS

Many agreements make a distinction between permanent,
temporary and casual engagements. The last-mentioned may
even be excluded entirely from the scope of the agreements.
Several texts limit the number of temporary or casual workers
that may be engaged to a certain percentage.
Special rules often govern engagements on probation. The
probation period is usually restricted to a certain maximum,
varying with the trade or the nature of the job. During the
probationary period, the contract of employment can be broken
at any time, but occasionally certain restrictions are placed on
this right. When the probationary period comes to an end, it
is often prescribed that the provisional engagement automatically
becomes an ordinary engagement.
When the employment is by nature intermittent, detailed
rules may be laid down concerning the order and special methods
of engagement, especially for dock workers, for instance.
A certain order of engagement is also sometimes stipulated
for the event of an undertaking reopening after a stoppage, so
that workers who were formerly employed there are guaranteed
priority over others, fathers of families over unmarried men,
workers belonging to that trade over those from other occupations, etc.
The agreements may also lay down a certain ratio between
different groups of workers — skilled to less skilled, etc. (e.g.
London taxi-drivers, South African railwaymen). Other similar
rules will be considered later, in connection with the employment
of young persons and apprentices, etc.
Some agreements restrict the employment of foreigners by
stating that only nationals of the country may be engaged. But
these provisions are rare, for the matter is rather one for the
legislator. Regulations concerning the employment of women
are more frequently met with. A number of texts guarantee
equality of treatment for men and women (e.g. several French
agreements of 1936) ; others again tend to reduce the percentage
of women employed. The Italian agreements of 1934 for the
relief of unemployment stated that women should be replaced
by men and young persons by adults. In so far as women were
kept on, their employment was to be limited to functions that
are peculiarly suited to them.
In certain occupations the agreements prohibit the employment
of women on specified tasks, particularly those that are considered
as men's jobs. In the event of a dispute, joint committees are
4

COLLECTIVE AGREEMENTS HST PRACTICE

sometimes required to determine what those tasks are. The
same may hold good for the employment of young workers (e.g.
in England : national agreement for the boot and shoe industry,
January 1935).
In many countries it is customary for the wife of an agricultural
worker to be obliged to work also for the employer, and many
German collective agreements impose restrictions on this practice.
The employer is required, for example, to see that women are
not overworked — so that they neglect their household duties —
that they are employed on work suited to their capacities, that
they are permitted to finish their day's work earlier than the
men, etc.
The personal characteristics of the worker, as distinct from
the category to which he belongs, are also the subject of stipulations.
Very often, his engagement is dependent on his being in good
health ; he may have to submit to a medical examination or
produce a doctor's certificate. The cost of this may be borne
by the employer. According to some agreements, the worker is
not obliged to go to the doctor paid by the employer, but may
select his own (United States, petroleum industry).
Employees who will have to assume certain financial responsibilities, such as cashiers and managers, must often furnish
special guarantees, more especially the deposit of security, before
being engaged. Collective agreements often offer these employees
certain guarantees. The security they deposit, for instance, may
not be used by the employer for his business, but must be deposited
with a public office or bank, so that neither the employee nor the
employer can touch it independently. The interest that accumulates must go to the employee, to whom the deposit is returned
when he leaves the employer's service.
The workers' occupational qualifications are obviously the
essential condition for his engagement, and he may therefore,
according to the nature of the vacant post, be required to produce
diplomas, testimonials or,, in the case of skilled workers, proof
of having duly completed his apprenticeship.
Some agreements expressly state that occupational ability
must be the sole criterion for engagement, which means that the
employer may not discriminate arbitrarily ; in fact, this is often
stipulated in these terms. The employer may also undertake to
re-engage workers dismissed as the result of a strike or lock-out.
More generally, many agreements try to safeguard the workers'
freedom of association by stipulating that the employer may not

RELATIONSHIPS BETWEEN EMPLOYERS AND WORKERS

make the worker's or employee's engagement conditional on his
membership or otherwise of a trade union in general or of any
specified trade union. Sometimes the workers give a similar
undertaking with regard to their employer or their fellow-workers.
On the other hand, it may be stipulated t h a t preference should
be given to trade union members (e.g. Sweden, bakeries). I n so
far as this is the direct consequence of the reciprocal recognition
of organisations, the matter will be dealt with in connection with
collective relationships. Mention will be made here only of the
provisions concerning individual employers. The agreement may
merely recommend t h a t preference be given to workers who are
trade unionists. The employers may agree to employ trade
unionists as far as possible, or to give preference to members of
the contracting organisation, or to consult t h a t organisation before
taking on workers. Sometimes the employer's obligation is very
strict and is supplemented by a corresponding obligation on the
worker's part (frequent in the book trade). For the workers,
however, the obligation is often more elastic : they undertake
not to work for an employer who is not a member of the employers'
organisation or who does not comply with the conditions of the
collective agreement.
I n many countries, such as Australia and the United States,
the problem of the closed shop is extremely important. I t must
suffice here to refer to the solution adopted in the awards of the
Australian Federal Arbitration Court. A recent decision (C.A.R.
1932, p . 438) summed up as follows the principles by which the
Court is guided :
(1) The Court will not grant preference of employment to members
of a union unless a respondent unjustifiably discriminates against them
in the engagement or dismissal of employees.
(2) The Court may grant preference when an order is necessary
or conducive to industrial peace.
(3) The Court may grart preference for the purpose of aiding the
Court by encouraging unionism or preventing injustice to unionists.
(4) The Court will only in case of very strong necessity permit any
interference with the employer's discretion in choosing his employees.
DISMISSAL

The dismissal of workers, like their engagement, may be subject
to restrictions laid down in collective agreements. But this is
not always the case ; many agreements, on the contrary, leave
the employer entirely free to dismiss the worker, and the latter
to give up his job ; it may even be stipulated t h a t both parties

COLLECTIVE AGREEMENTS IN PRACTICE

are free to withdraw from the contract of employment at any
time, on an hour's or a day's notice. The most recent texts would
seem to show a desire to make employment more stable. Before
the stipulations of collective agreements can be appreciated at
their true value, one must compare them with the legislation,
which in many countries contains rules governing dismissal. It
may be noted, for example, that in France the collective agreement
only — as distinct from the individual contract and works regulations — can take the place of custom in the matter of
dismissal.
To require that notice be given is the commonest means of
restricting the liberty of the parties to terminate contracts of
employment. As a rule, the period of notice is the same for the
employer as for the workers, but the latter may be given the
advantage of longer notice. The period varies from a few days
or a week to several months, according to custom, occupation
(industry or commerce for example), categories of persons (workers
and salaried employees, and also different grades of the latter
group) and often also length of service or age. Some groups of
workers, however, are usually excluded from this protection —
e.g. day labourers, assistant workers, probationers, etc.
When the contract of employment is terminated in a manner
contrary to the terms of the collective agreement, damages may
be payable. Some few agreements state that if the employer
illegally breaks the contract the workers may refuse to continue
to work for him after the joint committee has given its decision ;
if the worker is guilty of a breach of contract, the other employers,
after a similar decision, may be prohibited from giving employment
to the worker (Netherlands, printing trade).
In addition to Ihe necessity for notice, it may be stipulated
that contracts can be terminated only at certain times, such as
pay-day or the end of a week, month or quarter. Often, notification
of dismissal has to be given in a prescribed form — for example,
in writing or by' registered letter — even if no period of notice
is required. Some agreements add further restrictions, stipulating
that a worker may not be given notice of dismissal while on holiday
or absent ill.
Immediate dismissal with the payment of wages for the
statutory period of notice is generally considered to be the equivalent of due notice. It may also be provided that a worker who
fails to give due notice forfeits his right to wages.
Agreements often expressly confirm the possibility of imme-

RELATIONSHIPS BETWEEN EMPLOYERS AND WORKERS

diately terminating the contract for valid reasons. The reasons
for which a worker may be summarily dismissed may be enumerated — absenteeism and other disciplinary offences are the
most common.
The reasons for dismissal may be laid down in general terms
in collective agreements. I t is sometimes stated, for instance,
t h a t the reasons for dismissal must always be given, and t h a t
if the employer does not do so the worker is entitled to ask for
the reason. A clause of this kind is often found along with other
clauses prohibiting dismissal for certain specified motives, the
chief of which will be examined below.
The question of freedom of association is very important, as
in the matter of engagement. Dismissal on account of membership
or otherwise of a union, or of activity as a trade unionist is often
forbidden. But employers who have undertaken not to engage
non-unionists are always obliged to dismiss any workers who
refuse to join any union or a certain specified one.
Many agreements provide t h a t illness for not more than a
specified period or an accident to the worker may not be used
to justify dismissal. The same may be stipulated concerning a
change of ownership of the undertaking. I n Italy, the Labour
Charter prescribes t h a t such clauses must be included in collective
agreements. I n a few cases, the agreement contains an exhaustive
list of the reasons t h a t justify dismissal.
I n order to ensure the observance of these rules, the agreements
sometimes grant the worker the right of appeal against dismissal
when he considers it unjust, and conciliation or arbitration boards
may be set up to settle disputes. For example, the standard
agreement between the French National Federation of Distributive
Co-operative Societies and the General Confederation of Labour
stipulates t h a t the societies must grant the contracting trade
union the right to request information concerning the reasons for
the dismissal of any of its members, if the member appeals to
the union. If the union contests the validity of these reasons,
the matter can be submitted to an arbitration board, which
determines the compensation due for the injury, if any, done
to the worker. I n the British tin industry, a worker directly
employed in the production process may not be suspended on
account of an accident to a machine until he has been allowed
to state his case to the management, and he may not be finally
dismissed until after his case has been examined by the staff
representatives.

COLLECTIVE AGREEMENTS IN PRACTICE

I t is sometimes laid down (as in the Australian arbitration
awards) t h a t dismissal for the obvious purpose of avoiding some
obligation, such as the granting of a holiday with pay or the
payment of wages for a public holiday, is deemed null and
void.
The problem takes on a different aspect when the dismissal
affects not one person only but a group of workers or employees,
or perhaps the whole staff (the undertaking being closed). Collective
agreements sometimes try to mitigate the severity of these measures.
The staff representatives may have to be consulted before the
decision is taken (Czechoslovakia, potteries), or the matter may
be submitted to a conciliation or arbitration board. The agreements sometimes give a definition of collective dismissal on the
basis of a certam minimum number of workers dismissed, or a
percentage of the number of persons or groups of persons employed
in the undertaking or in one department of it. The cases of suspension of work in which the staff representatives are entitled
to intervene may also be enumerated.
The order of dismissal may also be prescribed, the employer
being bound to take into consideration the length of service, age,
family responsibilities and capabilities of the workers. The trade
union may be consulted on this point.
There are even agreements prohibiting employers and employees
from terminating their contracts of employment at certain times
of the year, as is the case in the Netherlands agreements
mentioned above. 1
Dismissal always involves certain obligations on both sides.
I t is sometimes expressly stated that the worker who is under
notice must still work conscientiously. The employer, on his
side, must allow the worker enough free time to look for another
job or to p u t in order his tools (it being customary in some trades
for the worker to supply his own).
If the employer provides accommodation or a house for the
worker, it must be evacuated when the worker leaves his employment, b u t some agreements allow him a certain period of grace.
The employer must also give the worker a certificate and
any other documents t h a t he may require for the purpose of
the employment exchange, unemployment insurance, etc.
Finally, the agreements may compel the employer to pay
compensation for dismissal. This obligation is sometimes laid
1

Cf. p . 52.

RELATIONSHIPS BETWEEN EMPLOYERS AND WORKERS

down by legislation, more especially in the case of salaried employees. The Italian Labour Charter makes it a general rule. In
that country, therefore, most collective agreements stipulate that
workers must receive compensation for dismissal. The principles
on which it is granted are usually the following : the worker
must have a certain length of unbroken service to his credit (one
year, perhaps) ; no compensation is payable if the worker throws
up his job of his own free will or if he is summarily dismissed
for some serious motive ; the amount of the compensation varies
with length of service, but a minimum and a maximum are regularly fixed. The rates sometimes differ according to the size of
the undertaking (the number of workers employed). There are
normally special provisions concerning the calculation of length
of service, showing what interruptions on account of sickness,
accident, lack of work, etc., may be reckoned for this purpose.
The problem of compensation for dismissal has become a
matter of great importance in the United States in recent years
(e.g. railways).
THE WORKER'S OBLIGATIONS

The services that the worker must perform under his contract
of employment are regulated in various ways by collective agreements. Many of them expressly stipulate that he must perform
his work conscientiously to the best of his ability and that he
must not engage in other work on his own account or for another
employer outside his working hours (especially in the building
trade, the book trade, etc.).
Some agreements also state that the employer must employ
the worker on tasks suited to his capacities. A clause of this
kind is frequent in theatrical agreements. The freedom of the
employer to transfer the worker to tasks other than those for
which he was engaged is often restricted, but exceptions are
always made for cases of force majeure, accidents, interruptions
in work, or, more generally, with a view to avoiding dismissals
when trade is slack. I t was already pointed out that workers
on piece rates may be employed on other jobs for a certain given
time if no piece work is available for them.
On the other hand, strict rules may be laid down concerning
the allocation of tasks. Several agreements provide that work
normally done by skilled workers must not be entrusted to unskilled
men ; others limit the number of machines or appliances that
may be placed under the supervision of one worker (e.g. in the

COLLECTIVE AGREEMENTS IK PRACTICE

manufacture of iron bedsteads in Great Britain) ; or again all the
work pertaining to a certain grade of the staff must, save in cases
of extreme urgency, be' performed by workers of that grade (United
States, petroleum industry).
The workers must not, however, place obstacles in the way of
the introduction of new processes ; a definite clause to this effect
sometimes exists in the agreement. The same applies to new
machines, but one English agreement contains a reservation that
may be noted : the employer must guarantee that every worker
ousted by a machine is given an opportunity of learning how to use
that machine (Sheffield, precious metals). Staff or trade union
representatives may be required to discuss with the management
any new distribution or reorganisation of work or working methods.
In any case, a worker who is transferred to some new task must not
suffer any loss of wages on account of the change.1
Factory discipline was mentioned in connection with the rules
for the payment of wages ; it may be added here that collective
agreements often make it compulsory for the worker to begin and
stop work at fixed hours, not to absent himself without permission
during working hours, to obey the regulations, etc. I t may even
be agreed that the workers should, subject to certain conditions,
submit to inspection on leaving the factory or workplace. This
may be limited to certain circumstances, as when a case of theft
has occurred ; a shop steward or other staff representative may be
required to be present when the inspection is carried out.
In the case of certain categories, more especially salaried
employees, the agreements contain rules concerning trade secrets,
radius clauses, inventors' and authors' rights, etc. There is no need
to enter into the details of these special questions, although they
are of great importance, for sometimes there is no legislation on
the subject, and the collective agreement is the only safeguard of
the workers' rights.

THE EMPLOYER'S OBLIGATIONS

In addition to the obligation to pay the agreed wage, which is
the fundamental one, there are certain subsidiary obligations laid
upon the employer by numerous agreements, more especially with
regard to factory hygiene, accident prevention and insurance. Here
1

Cf. above, p . 23.

RELATIONSHIPS BETWEEN EMPLOYERS AND WORKERS

again, the agreements play a less important p a r t than does the
legislation of the country, b u t they often guarantee the workers
more than the legal minimum of protection.
Collective agreements often require the employer to provide
certain hygienic facilities or conveniences, such as changing rooms
and bathrooms, cloakrooms, bicycle stores, dining rooms, etc.
Good ventilation and heating and the regular cleaning of workplaces
are often mentioned. I n some industries where outside work
occurs, particularly in the building trade, shelters must be provided.
The employer may also be required to enable the workers to heat
their meals ; sometimes canteens have to be set up under the
joint management of the workers and the employer.
The workers are often exhorted to give strict obedience to the
safety regulations and to inform the employer or his representative
of any defect in materials, plant or machinery. The employer,
on the other hand, sometimes expressly undertakes to have all the
necessary inspections made, with the collaboration of staff representatives, to provide the workers with the necessary protection,
etc. A well - equipped first-aid staff, or a t least the essential
materials, must be available for cases of illness or injury ; medical
attention may even be guaranteed to sick or injured workmen
(Swedish metal industries).
Quite apart from his legal obligations, the employer may, in
virtue of a collective agreement, be bound to insure his staff or to
insure certain groups of workers who run greater occupational risks
or who are not covered by compulsory insurance. Special compensation may be guaranteed to persons who are employed in places
where they are specially exposed to disease — e.g. malaria (in
several Italian agreements).
If a worker dies, many agreements make the employer responsible for the payment of compensation to his survivors ; the amount
may be fixed at several weeks' or months' wages, generally varying
with length of service. This right is often conditional on the worker
having a certain minimum length of service to his credit.

SPECIAL CATEGORIES OP W O R K E R S

Reference has already been made several times to various
special groups of workers, such as women, young persons, workers
who are partially incapacitated, etc. There remain two groups to
be considered : home workers and apprentices.

COLLECTIVE AGREEMENTS IN PRACTICE

Home

Workers

There is no need to deal here with the special collective agreements or regulations governing the conditions of home work in
various industries. I t will suffice to study the general agreements
t h a t contain clauses concerning home work ; these are quite common
in certain industries in which home work exists side by side with
work in factories or workrooms (e.g. the clothing industry ; cf.
agreements concluded in France during the summer of 1936).
Some agreements prohibit home work entirely. Others forbid
factory worker's to accept home work ; yet others specify certain
tasks t h a t must not be performed outside the factory (e.g. the
manufacture of travel goods in the leather industry, etc.). There
are sometimes clauses laying down a minimum age for home workers.
Some agreements, again, simply recommend t h a t the employer
should avoid as far as possible giving out work to be done at home.
Then there are agreements t h a t permit home work subject to
reservations. I t is often stipulated that the conditions of employment of home workers must not be less favourable than conditions
of work in general. Some agreements state t h a t home workers are
entitled to the same advantages as factory workers (e.g. the supply
of equipment, tools, etc.), t h a t they must have an annual holiday,
t h a t they must be covered by insurance, t h a t the scope of activity
of conciliation boards must extend to them, and so on ; they are
sometimes even entitled to a special allowance or a bonus on output
(Netherlands, ready-made clothing trade).
Apprentices
I n some industries, the regulation of apprenticeship and of the
conditions of work of apprentices is of great importance not only
for the apprentices themselves b u t also for the other workers.
The agreements for the textile industry, for example, contain
scarcely any provisions on this subject, whereas it is regulated,
sometimes in great detail, in the book trade, building and other
industries in which a thorough knowledge of the work is necessary
before the worker can reach his full output. There are, indeed,
often special agreements for apprentices. Here again, of course, the
collective agreement merely fills the gaps left by the legislation.
Two types of provisions may be distinguished : those limiting
apprenticeship and those regulating it.
Among the restrictive measures, the following may be noted.

RELATIONSHIPS BETWEEN EMPLOYERS AND WORKERS

It may be stipulated that only employers of recognised status in
their occupation are allowed to employ apprentices and that
permission may be withdrawn from those who do not give their
apprentices adequate training or who fail to observe any other
clauses of the collective agreement.
The employment of apprentices may be prohibited in certain
occupations (highly mechanised or dangerous work) ; sometimes
they are warned against entering occupations offering no future
(Great Britain : agreement between the society of British Gas
Industries and the Amalgamated Union of Building Trade
Workers).
Many agreements specify the maximum ratio of apprentices
to other workers, which may vary with the size of the undertaking ; a detailed scale is sometimes laid down. In other cases,
the number of apprentices is not limited, but the trade unions are
empowered to discuss with the employers the percentage of apprentices that may be employed in a given area. Exceptions may be
permitted for undertakings with a special department for apprenticeship (e.g. in the heavy metal trade). In order to prevent
evasion of the restrictive clauses, the agreements often prohibit
the engagement of unpaid workers, probationers, etc., or place
these persons on the same footing as apprentices.
The agreements usually prescribe that the apprentice must
produce a medical certificate, must have an adequate school
education for his trade, possess personal aptitude for it and be
within certain age limits.
There are quite often provisions concerning the vocational
training of apprentices. The parties sometimes expressly undertake to do all they can to train the apprentice. Often formal
articles of apprenticeship must be signed, and sometimes a standard
form of contract is appended to the agreement. Many texts
specify the duration of apprenticeship, prescribe the course of
training to be followed during the different years and the examinations to be taken, and appoint joint committees to supervise the
apprentices and set their examinations.
The conditions of work of apprentices may be included in the
general regulations or laid down separately. In the former case, the
apprentices are automatically assimilated to the workers covered
by the agreement, and this is sometimes expressly stipulated.
Many agreements contain special provisions, more especially
concerning remuneration. In some cases this matter is left to the
organisations concerned or even to the articles of apprenticeship.

COLLECTIVE AGREEMENTS IN PRACTICE

In some industries the employment of apprentices on piece
work is restricted, and it is often stipulated that an apprentice
must not be attached to a worker on piece rates. Precautions are
frequently taken to prevent the apprentice from being exploited
by the worker in whose charge he is placed, and the number of
apprentices attached to one worker may be limited on this account.
It may also be stipulated that the apprentice is directly responsible
to the employer.
Many agreements contain special rules concerning apprentices'
holidays with pay ; others limit overtime for them, make provision
for attendance at vocational schools, etc.
The first months of apprenticeship are generally considered
as a probationary period during which the contract can be broken
if the apprentice shows no aptitude for the trade. There are
sometimes special rules governing the interruption of apprenticeship
or the transfer of the apprentice when the undertaking is closed
down.
When apprenticeship is complete the employer must give the
young worker a certificate, and the worker may be obliged to pass
an examination.

CHAPTER V
COLLECTIVE INDUSTRIAL RELATIONS

The following pages deal with the mutual relations between
the parties in so far as they are governed b y the collective agreement. For obvious reasons, this survey will be limited to collective
agreements in the strict sense. The legislative aspect of the problem
will be touched upon later.

MUTUAL RECOGNITION OF ORGANISATIONS
The reciprocal recognition of organisations is a necessary
preliminary to the regulation of collective labour relationships, and
the fact of an agreement being concluded implies such recognition.
But many agreements contain a formal declaration of recognition,
especially when the agreement is intended to terminate a period
of conflict and inaugurate an era of collaboration, e.g. Luxemburg
(metal industry and iron mines, agreements of 1936). The scope of
such a declaration may vary, being either limited to the effects
of the agreement or in the nature of a general principle t h a t will
serve as a basis for future collective negotiations or possibly even
for legislation. Mention may be made of the basic agreements
concluded in Denmark, in Sweden, and more recently also in
Norway (agreement of 9 March 1935), in France (agreement
of 7 June 1936) and in Belgium (agreement of principle of
17 June 1936).1
The practical application of the principle of recognition through
the collective agreement has several aspects :
1. The creation of joint institutions on
2. The adoption of measures to secure
collective agreement ;
3. The appointment of joint bodies for
ment of existing agreements and the
1

Cf. below, p p . 83 et seq.

an occupational basis ;
the enforcement of the
the renewal or amendconclusion of new ones.

COLLECTIVE AGREEMENTS IN PRACTICE

Some of these provisions are to be met with in a large number
of agreements that have reached a certain stage of development,
but it is only in the agreements for highly organised industries that
they exist as a systematic whole.
INSTITUTIONS ON AN OCCUPATIONAL BASIS

Mutual Benefit Funds
The organisations that are parties to a collective agreement
often set up joint funds for making certain payments to workers
that the individual employers do not guarantee. Mention has
already been made of funds for family allowances x and for hohday
allowances, 2 but there are many other purposes, more especially
welfare work and insurance, for which funds may be set up by
collective agreements. There are, for example, sickness, invalidity
and widows' and orphans' funds (in several Italian agreements),
pension funds (in many agreements concerning salaried employees),
unemployment funds (United States : hosiery agreement of 1930)
and a variety of more general funds for payments of different kinds
to the workers (e.g. in German chemists' shops).
Very often the general agreement lays down the principle and
defines the purpose of the institution, the beneficiaries and how
the cost is to be shared ; special agreements are then drawn up to
regulate the details of the structure and working of the fund.
Provision is always made for some supervisory body.
Organisation of Placing
The principle of mutual recognition may be restricted so as to
exclude trade union intervention in the engagement of workers.
On the other hand, it may lead to the organisation of placing, in
so far as this task is not regulated by legislation.
Some agreements make it compulsory for the employers to
apply to employment agencies run by the trade unions. But it is
usually stipulated that if no suitable worker is forthcoming within
a given period, the obligation lapses (e.g. in many theatrical
agreements) ; the trade union, on the other hand, may have to
guarantee to provide the necessary supply of skilled workers.
More frequently the agreements set up joint employment
1

Cf. above, p . 17.
» Cf. above, p . 45.

COLLECTIVE INDUSTRIAL RELATIONS

agencies, or agencies working under joint management, to which
the employers are obliged to apply for labour and the workers
for employment. Both parties contribute to the expenses of the
agency and supervise its working either directly or through another
joint body, such as an arbitration committee.
The agreements often contain detailed rules for the organisation
and working of these agencies ; in other cases they leave the
agencies to draw up their own rules. It is impossible in the present
study to go into technical details, but mention may be made of the
provisions for ensuring impartiality in the work of the agency, such
as the stipulation that in the event of a strike or a lock-out the
agency should suspend all its activities as far as persons involved
in the dispute are concerned.
ENFORCEMENT OF THE AGREEMENT

There are two main types of measures for ensuring the proper
working of the agreement : those for securing compliance and those
for settling disputes.
Securing Compliance with the Agreement
The agreement sometimes expressly states, especially if there
is no legislation on the point, that its clauses automatically become
part of the individual contracts of employment. I t may be provided,
for example, that in every undertaking a copy of the agreement
must be inserted in an employment book signed by the employer
or his representative and the worker (Great Britain : steel industry
in South Wales and Monmouthshire).
The parties sometimes undertake to do what they can to ensure
observance of the agreement by their members ; they may also
guarantee specific action, such as the withdrawal of financial
assistance from refractory members (Great Britain : quarries in
Aberdeen).
Many texts prescribe that no individual agreements contrary
to the collective agreement may be entered into, or that any clause
by which a worker renounces, for the future or even for the past,
his claim to any right or benefit accruing from the agreement is
null and void.
Exceptions may be made, however, provided that the consent
of the works committee or a joint committee be obtained.
Provision may be made for measures to give effect to certain
clauses of the agreement. Committees may be set up, as has been

COLLECTIVE AGREEMENTS IN PRACTICE

mentioned at various times, to classify undertakings, workers or
areas, to fix piece rates, to discuss new methods of work or remuneration, to deal with apprenticeship, etc. Special mention may be
made of the mixed committees set up to follow economic developments, so as to adapt wages and other conditions to changed
circumstances (e.g. United States : national agreement for the
hosiery industry).1
Supervisory bodies may be appointed to check the methods
of calculation and the payment of wages and the due observance
of daily hours and other working conditions. Many agreements
permit the representatives of the trade unions to inspect factories
and workplaces. Joint committees are often set up for this purpose,
and their delegates make the necessary investigations. The
employers must allow them free access, and they must, in return,
refrain from interfering with the working of the undertaking. All
these tasks may be entrusted to a single body — the conciliation
.committee.
Again, provision may be made for special representation of the
staff by means of shop stewards or works committees. These may
be appointed for a specified purpose, such as to check the quantity
and quality of the product (in mines), to collaborate with the
management in accident prevention and the maintenance of
hygienic conditions in the undertaking, to assist the factory
inspectors, etc.
According to other agreements, the staff representatives have
extensive powers. In such cases, a distinction must be made
between countries that have legislation on the subject of works
committees, works councils, confidential councils or the like, and
those which have no such legislation. In the former (such as
Austria, Czechoslovakia, Germany — before 1933 — Luxemburg,
Norway and the U.S.S.R.), the collective agreements often contain
provisions concerning the organisation and working of these bodies,
but their scope is obviously limited by the legislation, to which
indeed the agreements sometimes simply refer. They may give
the committees some additional tasks (e.g. fixing piece rates)
or define the details of their competence in respect of a particular
industry or occupation (e.g. as conciliation bodies in the event
of a dispute between workers and employer or between workers),
or again make provision for the event of no committee being set up
under the legislation. Thus, in Czechoslovakia several agreements
1

Cf. also above p . 26.

COLLECTIVE INDUSTRIAL RELATIONS

state that shop stewards will be appointed, and it is sometimes
stipulated t h a t they cannot take up their duties without the
employer's consent (Förster piano factory).
I n other countries the collective agreements themselves provide
for the appointment of staff representatives and define their
powers. There are, for example, the collective agreements in the
British mechanical engineering and carriage-building industries,
which make provision for shop stewards and shop committees or the
" Tillidsmaend " in Denmark. Sometimes only r one person is
appointed for an undertaking or workshop ; sometimes there are
several, the number varying with the size of the staff. They may
be freely elected by the staff or by those of the staff who belong
to the contracting union, or they may be appointed by the unions
concerned.
I n France, the collective agreements concluded in accordance
with the Act of 24 June 1936 must make provision, and do in
fact provide, for the appointment of representatives elected by
the staff in undertakings employing more than 10 persons.
The staff representatives may form a joint works committee
with representatives of the employer. I n this case, some English
agreements stipulate t h a t the delegates must be trade union
members. Shop committees may also be appointed by a central
joint committee (in the house-painting trade in the Netherlands).
These bodies have generally a variety of functions in addition
to supervising the enforcement of the collective agreement. They
are the spokesmen of the staff in dealing with the employer, and
therefore many agreements make conciliation one of their main
functions.
Settlement of Disputes
Although the collective agreement is an instrument intended
to prevent the occurrence of industrial disputes, its application may
give rise to them. Naturally, therefore, most of the texts make
provision for the settlement of any disputes arising out of their
application. Sometimes there is merely a general statement to the
effect t h a t the organisations should strive to reach an amicable
settlement in the event of any difference 'of opinion. More
frequently, provision is made for submitting any dispute to a
joint committee, which may have powers of conciliation only or
may be permitted to arbitrate.
The important agreements covering great industries or the
whole of a country very often go further, laying down details of the
5

COLLECTIVE AGREEMENTS IN PRACTICE

conciliation or arbitration procedure. The structure of the system
varies from industry to industry and from country to country ;
it must suffice, therefore, to give a general survey of the main points
common to the majority of agreements.
When a worker has a complaint to make concerning his
employers, he must first of all appeal to his immediate superior.
In doing so, he may claim the assistance of a staff or trade union
representative, where such exist. Some agreements state that he
may appeal directly to the staff representatives. They must try
to settle the matter with the employer ; they may, either after an
ineffectual attempt at conciliation or, under some agreements,
directly apply to the trade union, which endeavours to settle the
question through its local delegation or its representative in the
undertaking.
If these attempts fail or if the parties are not satisfied with the
results, the dispute may be submitted to a joint conciliation board
or to a conference of organisations. The agreement may provide
for a single instance or for several. Distinctions may also be made
between individual and collective disputes, between subsidiary
questions and those of general interest. When a succession of
instances is set up, the question first comes before the local committee or conference, then before the district body and finally
before a central body. Frequently the joint bodies are competent
to deal with disputes of all kinds, but all questions of general
interest or directly affecting the organisations are submitted
directly to the higher bodies.
Provision may be made for special conciliation boards to deal
with specified cases, such as the settlement of disputes concerning
piece rates, dismissal or other questions to which reference has
already been made at various points throughout this survey.
The conciliation procedure may be combined with or supplemented by arbitration possibilities. Some agreements stipulate
that the final ruling will be given by a special arbitration board or
by the central joint committee ; others permit the parties to appeal
to a neutral party, such as the chairman of an arbitration board or
the Minister of Labour.
The agreements often contain rules for the conciliation and
arbitration procedure, but they may also leave the details to be
settled by the organisations. Generally speaking, the bodies
responsible for settling disputes have power to hear the evidence
of the parties and of witnesses, to send delegates to investigate on
the spot, to make such investigations directly, to inspect work-

COLLECTIVE INDUSTRIAL RELATIONS

places, see conditions of employment, etc. I n order to speed up the
procedure it may be stipulated t h a t the parties and the conciliation
or arbitration bodies must observe certain time-limits. A worker,
for example, may be obliged to submit any claims or complaints
within, say, 4 or 6 weeks, on pain of losing his rights.
COLLECTIVE BARGAINING

All the measures studied above are concerned with the enforcement of agreements ; they therefore presuppose the existence of
an agreement. But the most serious disputes usually arise over the
renewal or alteration of an agreement or the conclusion of a new
one. I t is obvious that only a limited number of agreements can
contain provisions concerning the procedure for drawing up new
collective rules. National agreements may constitute a basis for
district, local or works agreements ; covering agreements laying
down general working conditions may prescribe a procedure for
fixing wages and hours of work ; a general agreement between
large organisations of employers and employed, or even long
established custom confirmed by agreement, may create machinery
for collective collaboration.
The powers of the bodies thus set up vary greatly. Some
agreements appoint a central body (Tarifamt)
to which the
contracting parties may submit any request for a change ; the
central body does all the preparatory work for the amendment.
Very often it cannot do more than this, but even if it can make
proposals for revision, the final decision often lies with the
contracting organisations.
Joint committees may be given the task of settling working
conditions for a whole industry. Their powers may, however,
be limited to the fixing of wages and hours of work, as is the case
with the British joint boards and the bodies set up under a covering
agreement. The competence of such bodies is limited in area, as
their decisions apply in the main only to the districts or localities
for which they were set up. Covering agreements often make
provision for the intervention of other bodies if the regional or local
committees fail to agree. District joint committees and national
boards may be set up for this purpose : the former normally
act as conciliation bodies, whereas the second have power to
arbitrate.
A collective agreement may also appoint a joint council to
regulate working conditions in industry in an entirely independent

COLLECTIVE AGREEMENTS IN PRACTICE

manner (Great Britain : building, railways, mercantile marine ;
Japan : mercantile marine). In this case the general agreement
deals simply with the organisation and working of the council, which,
in the exercise of its functions, determines the rules governing
working conditions ; these are then incorporated as adopted in the
new, amended or revised agreement.
If the structure of the industry so requires, this central body
may form sub-committees to deal with various occupational
groups, categories of staff or industrial areas. The different bodies
may be graded and a right of appeal from a lower to a higher
instance permitted. At the same time, the decisions of the
council may not take effect unless ratified by the organisations
concerned.
Some industries, especially in the Central European countries,
have a system of collective collaboration analogous to that of
industrial councils. With a view to developing the industry, safeguarding industrial peace by the adoption and maintenance of
collective agreements and regulating all matters concerning labour
relationships, a joint body (Tarifgemeinschaft) may be instituted
by collective agreement, comprising all the employers' and workers'
organisations that are parties to the agreement. An effort is thus
made to co-ordinate the work of all the joint bodies set up to fix
wages, to regulate placing and apprenticeship, to act as conciliation
and arbitration boards, to supervise and revise the agreed rules, etc.
A hierarchy is established among those bodies, their respective
powers are defined, and a central board is appointed to co-ordinate
and control collective relationships (collective agreements in the
book trade in Austria, Czechoslovakia and Switzerland ; the first
agreement of this kind was concluded by the German printers in
1896). This joint body must often represent the trade as a whole,
defend its interests and see that persons not belonging to the
organisations do not work under less favourable conditions than
members ; for this purpose it may bring pressure to bear on outsiders
(black-listing them, for instance). In this way it may come to keep
a check on competitive conditions, more especially on prices (in
the book trade in Austria, Czechoslovakia and Switzerland).
The effectiveness of the measures laid down in the agreement is
often guaranteed by a solemn declaration made by, the contracting
organisations that they will not[have recourse to strikes or lock-outs
while the agreement is in force. This obligation may also be laid
down in a narrower form : the parties undertake to abstain from
any collective action for amending the terms of the agreement

COLLECTIVE INDUSTRIAL RELATIONS

so long as the prescribed conciliation or arbitration procedure is
being applied. In order to enforce this, it may be stipulated that
the conciliation or arbitration procedure cannot be applied so long
as a strike or lock-out exists.
Some agreements make provisions for a guarantee fund, to
which both the contracting organisations subscribe ; it is used
to pay compensation to either party for breach of the agreement by
the other.

PART II
THE LEGISLATION
CONCERNING COLLECTIVE AGREEMENTS

INTRODUCTION

The preceding survey shows that collective agreements —
concurrently with, but independently of, labour legislation in
the strict sense — constitute one of the main pillars of the worker's
rights, not only in respect of such matters as hours of work, holidays with pay, works regulations, etc., which may often be regulated by statute, but also and pre-eminently in respect of matters,
such as wages, that are not by nature susceptible of uniform,
general regulation by law.
But the regulation of labour conditions and of wages is such
an important factor in the worker's well-being that it might
almost be suggested that social legislation in its various forms
— protective labour legislation, special insurance laws, etc. —
merely provide the framework within which collective relationships have to be organised, leaving the system of collective regulation to build up the solid structure round this framework.
Therein lies the originality and importance of the part taken
by collective agreements within the system of labour law.
I. — Historical Development of Legislation
In seeking to determine the line taken by legislation in this
matter, there is no need to relate the history of collective bargaining from the point of view of legislative measures, for that
history is to a large extent that of the trade unions — a subject

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

that has already been dealt with in the volumes concerning freedom of association.1 I t will suffice to indicate the main stages
in the legislative development and then to give an outline of
the plan to be followed in this study of the existing regulations.
Prohibition of collective agreements. — During the nineteenth
century, the development of collective agreements proceeded, as
a rule, outside the law. The reason for this was that the fixing
of working conditions, and more especially of wages, seemed
destined to escape from the control of the law and to be left entirely
to competition, that is to bargaining and contract. But the only
form of contract recognised by ordinary law was the individual
contract of employment or contract for the hire of services. It
was also the only form permitted by law, for the prohibition of
combination made any attempt at collective regulation illegal.
But — and this point will be elaborated in the third part
of the Report — economic developments inevitably made labour
relationships collective in character. As a corollary, collective
agreements came in practice, and equally inevitably, to
supplement if not actually to supersede individual contracts of
employment.
Indirect regulation of collective agreements. — The first step
taken by the legislator was to remove the legal obstacles that
impeded the free development of collective agreements. The
next was to promote the movement by a number of indirect
measures that need only be enumerated here, for they have already
been dealt with in numerous detailed studies by the International
Labour Office. They will, moreover, have to be mentioned again
later, for they are closely linked up with the regulation of collective agreements.
The first of these measures, which was the removal of legal
obstacles to the right to combine and to strike, usually supplemented by the recognition of trade unions, was intended to reestablish on the labour market that equality between the parties
that had been destroyed by economic developments and to ensure,
as far as possible, fair play in the relations between employers
and workers.
When this had been done, the necessary legal and material
1

Cf. INTERNATIONAL LABOTXB O I T I C B : Freedom of Association.

Studies a n d

Reports, Series A (Industrial Relations), Nos. 28, 29, 30, 31 and 32.

INTRODUCTION

basis existed for the normal growth of collective agreements,
and in most countries the system is still built up on the trade
unions.
The second measure, which was the institution of conciliation
and arbitration bodies x , was intended to provide the parties
with a procedure for collective bargaining that was calculated to
facilitate the conclusion of agreements and the settlement of
disputes arising from this source.
The dual part played by conciliation and arbitration — in
the conclusion and in the enforcement of collective agreements
— will be studied later.
The third measure was the introduction of minimum wagefixing machinery.2 Its main purpose was to provide for the compulsory regulation of wages in industries and occupations with
no trade union organisation and therefore beyond the reach of
the collective system of regulation. The measure thereby tended
to strengthen the power of the trade unions to conclude agreements in other industries.
Reference will be made later to schemes for the actual fixing
of wages throughout all industries ; these take the place of the
collective regulation of working conditions.
Even social insurance schemes may be classed among the
forms of direct intervention — more especially unemployment
insurance, which guarantees to the workers, in all circumstances,
a certain minimum of social security and thereby mitigates the
effects of the competition of unemployed persons on the labour
market.
The legislation concerning collective agreements. — With the
aid of all these indirect guarantees — at least in countries, such
as Great Britain, where they all actually existed — collective
agreements were able, in the absence of any direct system of
regulation, to develop normally and even to make great strides.
Indeed, certain countries gave preference for a long time to
the method of voluntary regulation, believing that freely concluded
agreements, in which the responsibilities of the parties were
1

Cf. INTERNATIONAL LABOUR OFFICE : Conciliation and Arbitration in Industrial

Disputes. Studies and Reports, Series A (Industrial Relations), No. 34.
2

Cf. INTERNATIONAL LABOUR OFFICE : Minimum Wage Fixing Machinery.

Studies and Reports, Series D (Wages and Hours of Work), No. 17.
The reader is also referred to the Draft Convention and Draft Recommendation
concerning Minimum Wage-fixing Machinery adopted at the Eleventh Session
of the International Labour Conference, Geneva, 1928.

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

directly engaged, would take fuller account than could legally
sanctioned agreements of the interests of all the parties concerned
and could be more easily adapted to changing conditions in
industry.
On the other hand, the absence of legislation involves a number
of grave social and economic risks, not only for the parties concerned but also for the country as a whole.
The social risk lies in the fact that the application of these
purely de facto agreements, which ordinary law does not regulate
or enforce by penalties or guarantee in any way, is left entirely
to the good-will of the parties, and any dispute that may arise
concerning their conclusion, interpretation or renewal must
necessarily, failing an agreement, be settled by means of a strike
or lock-out.
The economic risk is that the lack of any or of an adequate
collective system of regulation of working conditions means
constant disturbances in the equilibrium of the economic system.
This risk becomes much greater in periods of depression and
widespread unemployment, when the normal weapons of the
trade unions are sometimes too weak to prevent an excessive
drop in wages and in purchasing power. This is one of the main
causes of economic disorganisation.
In order to meet these risks, the legislator in practically every
industrial country eventually intervened and regulated both the
methods of concluding collective agreements and their legal
effects.
II. — Plan of Study
In conformity with the dual nature of collective agreements
as instruments both for fixing working conditions and for securing
observance of these conditions, this study will be divided into
two sections, the first dealing with the various means of drawing
up agreements, and the second with their legal effects.
Methods of drawing up collective agreements. — The legislation
concerning the methods of concluding agreements is very varied
in character, but there are three main types, determined by the
aim in view :
1. Regulation of working conditions on the basis of independent
trade unions or occupational groups.

INTRODUCTION

The legislation, which is intended to prevent the disadvantages
inherent in the instability of collective agreements, lays down
rules for their conclusion but leaves the parties free to decide
their contents.
The first chapter will deal with trade unions as a basis for a
system of collective agreements. But as the Office, as was mentioned,
has carefully analysed trade unionism in its studies on freedom
of association, showing the conditions to be complied with by the
unions in various countries before they are legally recognised and
entitled to conclude collective agreements, it will suffice here to
mention the legislative measures taken either to guarantee the
right of the unions to conclude such agreements or to extend
the scope of these agreements to as many workers as possible.
The second chapter will analyse the methods of concluding
agreements on the wider basis of the occupation.
2. Regulation of working conditions by compulsory arbitration.
The purpose of the legislator is, on the one hand, to avoid
the dangers of collective labour disputes and, on the other, to
maintain the standard of living of the workers ; he therefore
enforces State arbitration on the parties, and this naturally
involves the fixing of working conditions in the light of essentially
social considerations.
Here .again it is unnecessary to repeat the study of conciliation
and arbitration systems ; all that is required is to bring out the
criteria governing the fixing of collective labour conditions by
compulsory arbitration.
3. Regulation of working conditions in the light of economic
conditions.
In this case the legislation takes account of the interdependence
of social and economic conditions and is intended to maintain
social and economic equilibrium by influencing simultaneously
the labour market and the commodity market.
As this system falls outside the scope of a legal study of
collective agreements, it will be dealt with in a special section.1
The legal effects of collective agreements. — The second part
will deal successively with :
1
Cf. below : " The Place of Collective Agreements in t h e Economic Structure
of t h e Community " .

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

(1) The conditions of validity of collective agreements ; (2) the
legal nature and scope of collective agreements ; (3) the contents
of collective agreements ; (4) the scope of collective agreements
as regards time, area, occupations and persons — more especially,
their application to third parties ; (5) the enforcement of collective
agreements, the responsibilities arising out of them and the
penalties attached to them.
In accordance with the purpose of this Report, which is intended
simply as a basis for the general discussion of the problem of
collective agreements by the International Labour Conference,
this analysis of the legislation concerning collective agreements
will aim merely at bringing out the main problems with which
the legislator has had to deal and the solutions that have been
adopted.
References will constantly be given to the legislation itself,
and quotations from it will be given only in exceptional cases
and for purposes of illustration.

A. — METHODS OF DRAWING
UP COLLECTIVE

AGREEMENTS

CHAPTER I
TRADE UNIONS AS A BASIS FOR A SYSTEM
OF COLLECTIVE AGREEMENTS

By definition, collective agreements presuppose a collective
body as contracting party, at least on the workers' side, for all
the national regulations permit the individual employer to conclude
such agreements. The extent to which the right to be a party
to collective agreements is granted is obviously of fundamental
importance, for the effectiveness, scope, duration, stability and
above all the substance of collective agreements depends mainly
on the power of the contracting organisations, the discipline they
can exercise over their members and the extent of their sphere
of influence.
I. — OCCUPATIONAL GROUPS AS CONTRACTING PARTIES

Some laws concerning collective agreements, such as the
Swiss Federal Code of Contract of 1911 (sections 322 and 323),
the French Collective Agreements Act of 25 March 1919 (sections 31
and 32),1 the Rumanian Contracts of Employment Act of 28 March
1929 (sections 101-104)2 and the Brazilian Act of 23 August 1932
1
Cf. Legislative Series, 1919, Fr. 1. I t will be remembered t h a t this Act underwent fundamental changes in consequence of the Collective Agreements Act
of 24 J u n e 1936. As the principal provisions of t h e new regulations will be analysed
later, it will be sufficient to note here t h a t while t h e coming into operation of the
new Act did not lead to the explicit repeal of the provisions of the Act of 25 March
1919 concerning the power of casual groups to conclude collective agreements, yet
these have in fact become inoperative. (See below, p p . 85 et seq.).
• Cf. Legislative Series, 1929, Rum. 2.

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

(section l), 1 confer the right of concluding collective agreements
on groups of workers as well as on trade unions.
The aim of the legislator in thus putting casual groups —
usually strike committees — on a footing of equality with trade
unions was, in the first place, to depart as little as possible from
the ordinary law of contract, which grants no privilege in the
conclusion of contracts to any given organisation, and, in the
second place, to facilitate the conclusion of collective agreements
even in industries and occupations in which no trade unions had
been set up.
But this type of agreement is relatively unimportant in practice,
for it has proved extremely difficult to conclude and also to enforce
agreements based on mere occupational groups. With regard
to conclusion, these groups obviously have no legal personality,
and they must therefore receive special authority from all the
workers concerned whenever a legally valid agreement is to be
drawn up.2 From the point of view of application, such ephemeral groups, usually possessing no officers and no rules, are not
in a position to assume the obligations devolving on them under
collective agreements or, which is more serious, to enforce respect
of these obligations upon the group.
For this reason the great majority of laws base the system
of collective agreements solely on the trade unions, which have,
moreover, historical warrant for assuming this rôle.

II. — TRADE UNIONS AS CONTRACTING PARTIES

There are two groups of laws to be considered :
(1) Those that reserve the right to conclude collective agreements to recognised incorporated trade unions, as in Australia, 3
Austria, 4 Bulgaria (Legislative Decree of 22 September 1936 on
collective agreements), Chile,5 China (Act of 28 October 1931 on
collective agreements), Finland,6 Greece, cf. Legislative Series,
1

Cf. Legislative Series, 1932, Braz. 6.
Some laws (sec. 31 (b) of t h e French Act, sees. 102-104 of the Rumanian
Act, and sec. 1 (2) of the Brazilian Act) have tried to get over this difficulty by
substituting for t h e procedure of receiving authority in accordance with ordinary
law the simpler procedure of subsequent ratification of t h e agreement entered
into by the group.
8
Cf. Legislative Series, 1928, Austral. 2, sec. 73.
* Cf. Legislative Series, 1934, Aus. 2, sec. 9.
6
Cf. Legislative Series, 1931, Chile 1, sec. 17.
* Cf. Legislative Series, 1924, Fin. 2, sec. 1.
2

METHODS OF DRAWING TIP AGREEMENTS

1935, Gr. 7, Italy,1 Netherlands,2 New Zealand,3 Poland, Portugal,*
Spain,5 Union of South Africa, 6 U.S.S.B.,7 Venezuela (Labour Law
of 16 July 1936), and Yugoslavia 8 ;
(2) Those that confer this right on all trade unions, as in
Austria (former system), 9 Canada,10 Czechoslovakia, Denmark,
Germany (former system), n Great Britain, n Irish Free State
(Act of 14 February 1936 on conditions of employment), Latvia,13
Mexico,14 Norway, 15 Sweden 16 and the United States. 17
The recognition of trade unions, subject to certain formal and
fundamental conditions that were analysed by the Office in its
studies on freedom of association, is intended, on the one hand,
to provide a legal basis for the right of trade unions to conclude
collective agreements and to take action at law to secure their
enforcement, and, on the other hand, to define the obligations
of the trade unions under these same agreements.
But this distinction has lost its force since the legislation on
collective agreements may — and actually does — endow trade
unions existing under ordinary law with the same privileges as
recognised unions and may impose the same obligations on them.
. From the practical point of view, more importance must be
attached to the measures taken to enable the trade unions to be
parties to collective agreements for the furtherance of their
members' interests. These measures serve a dual purpose : (1) to
guarantee the right of trade unions and trade unionists to enter
into contracts, and (2) to strengthen the bargaining power of the
unions by regulating inter-union competition on the labour market.
Protecting the Right of Contract of the Unions
In order to protect trade unions in the exercise of their right
to conclude collective agreements, most laws prohibit any measures
1

Cf.
Cf.
3
Cf.
4
Cf.
6
Cf.
e
Cf.
7
Cf.
8
Cf.
» Cf.
10
Cf.
11
Cf.
12
Cf.
" Cf.
14
Cf.
15
Cf.
'• Cf.
17
Cf.
2

Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative

Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,

1926, I t . 2, sec. 10.
1927. Neth. 2, sec. 1.
1925, N.Z. 1, sec. 28.
1933, Port. 5.
1931, Sp. 14, sec. 12 (1) a n d (2).
1930, S.A. 3, sec. 2 (1).
1923, Russ. 1, sec. 15.
1931, Yug. 4, sec. 209.
1920, Aus. 22, sec. 11 (2).
1934, Can. 5 (Quebec), sees. 1 and 2 (1).
1929, Ger. 2, sec. 1.
1934, G.B. 7, sec. 1.
1927, Lat. 3, sec. 1.
1931, Hex. 1, sec. 42.
1927, Nor. 1, sees. 2, 3, et seq.
1928, Swe. 2, sec. 1.
1933, U.S.A. 2, sec. 7 (a) and 1935, U.S.A. 1.

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

calculated to prevent the conclusion of agreements or to interfere
with their stability or continuation when concluded.
(a) Prohibition of non-union agreements. — Measures to
prevent the conclusion of collective agreements generally take
the form of non-union agreements. This practice consists in the
insertion of a clause in a contract of employment whereby the
engagement or retention of the worker is made dependent on
his formally undertaking not to become, or t o cease being, a
member of a trade union, which may or may not be a party to
a collective agreement.
This form of contract is little known in the industrial countries
of Europe, for even when no legislation exists on the subject, a
contract discriminating against trade unions would be considered
contrary to public policy and contra bonos mores in every country
t h a t legally recognises the right of combination ; b u t in the United
States it has played an important p a r t in industrial relations.
Until quite recently, the non-union agreement was not only
legally recognised b u t was even enforced at law by means of
injunctions, in the same way as property rights. 1
Moreover, Federal legislation and the laws of certain of the
States t h a t prohibited discrimination of this kind against trade
unions were invalidated as being contrary to the Federal Constitution or to the constitutions of the various States. 2
This state of affairs, which threatened to paralyse the progress
of collective agreements in numerous industries and occupations,
was dealt with in recent regulations (forming p a r t of a group of
reforms t h a t will be discussed later) which may be briefly outlined here, because of the important principle it enshrines.
First of all, section 3 of the Industrial Disputes Act of 23 March
1932 3 — which was held by the Supreme Court to be constitutional 4 •—• declared non-union contracts to be contrary to public
policy and therefore of no legal validity.
Then came the Act of 20 May 1934, 5 amending the Railway
Labor Act of 1926, section 2 (5) of which not only prohibited
1
Cf. International Labour Review, Vol. X X I , No. 3, March 1930, p p . 315 et
seq. : " Injunctions in Labour Disputes in the United States ", b y Dr. Edwin

WITTE.
2

Ibid., Vol. X I V , Nos. 5 and 6, Nov.-Dec. 1926 : " The Constitutionality
of Labour Legislation in the United States ", b y William Gorham R I C E , J r .
3
Cf. Legislative Series, 1932, U.S.A. 2.
4
International Survey of Legal Decisions on Labour Law, 1934, United States,
No. 8, third case.
5
Cf. Legislative Series, 1934, U.S.A. 1.

METHODS OF DRAWING UP AGREEMENTS

non-union clauses for the future b u t also annulled retroactively
all clauses of this kind t h a t h a d been included in agreements.
A further measure was section 7 (a) (2) of the National
Industrial Recovery Act of 16 J u n e 1933, 1 which prescribed t h a t
every code of fair competition must contain a clause to the effect
t h a t no employee and no one seeking employment should be
required as a condition of employment to join any company
union or to refrain from joining, organising or assisting a labour
organisation of his own choosing. This provision is mentioned
merely as a matter of historical interest, for it was annulled in
consequence of the order of the Supreme Court of 27 May, 2 which
held the Act of 16 June to be invalid.
Finally, The National Labor Relations Act of 5 July 1935 3
(Wagner Connery Act) prohibits, among other " unfair labor
practices ", any action taken by the employer " by discrimination in regard to hire or tenure of employment or any term or
condition of employment to encourage or discourage membership
in any labor organization ".
B u t this Act also authorises the parties to collective agreements to agree to a clause requiring membership of a labour
organisation as a condition of employment. Thus, although nonunion clauses are prohibited, the. parties to a collective agreement
may lawfully agree to a clause requiring the exclusive employment
of union labour.
I t is true t h a t the effect of these measures is limited to the
relations between employers and workers engaged in " interstate
commerce ", b u t non-union contracts are now in point of fact
almost everywhere prohibited, since many States have followed
the example set by the Federal legislation.
(b) Protection against anti-union discrimination. — The stability
and continuation of collective agreements may be threatened by
a variety of measures : the dismissal of unionists covered b y a
collective agreement, unfair discrimination between unionists and
workers not covered by collective agreements, material pressure
on workers (reduction of wages, transfer to a lower grade, etc.),
moral pressure, etc.
These forms of discrimination by which the worker is threatened
1

Cf. Legislative Series, 1933, U.S.A. 2.
For the text o! this order, cf. International Survey of Legal Decisions
Labour Law, 1934-35, United States, No. 1, second case.
3
Cf. Legislative Series, 1935, U.S.A. 1.
2

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

have led to the adoption of various protective measures, which
the Onice analysed in detail in its studies on freedom of association,
to which the reader may be referred.1 It may be noted, however,
that countries which legally guarantee freedom to combine for
trade purposes and the right of collective bargaining consider
dismissal because of union membership or because of being party
to an agreement, or any other discriminatory practice as an abuse
of these rights, so that the worker who is the object of any such
measure can claim compensation. Some countries even consider
such measures as an offence for which penalties can be imposed.
But in view of the fact that this protection of the right to
combine and to conclude agreements is likely to remain inoperative
so long as the employee is obliged to prove (as is required by
ordinary law) that the dismissal or discrimination was due solely
to his being a member of a union or a party to an agreement
— which can be proved only in very exceptional cases — some
laws have gone so far as to reverse the system of proof. To quote
merely one example, section 9 (4) of the Australian Commonwealth
Conciliation and Arbitration Act provides that in any proceedings
for an offence against freedom of association or of contract, if
all the facts and circumstances constituting the offence, other
than the reason for the defendants' action, are proved, it Mes
upon the defendant to prove that he was not actuated by the
reason alleged in the charge.
With a view to preventing the parties to collective agreements
from systematically giving preference to non-unionists, some laws
make it compulsory for the employer, other things being equal,
to give preference to union members.2
The Regulation of Competitive Bargaining
The second set of measures taken by the legislative authorities
to strengthen the power of the trade unions to conclude agreements
— they are, indeed, closely linked up with those already mentioned
— is intended to prevent excessive competition in bargaining
on the labour market.
The problem of regulating competitive bargaining obviously
1
Cf. Freedom of Association, Vol. I, p p . 25 et seq., and the chapters of the
national monographs concerning the legal status of trade unions. For more recent
legislation, such as t h a t of Brazil, Spain, the United States and Mexico, cf. J.L.O.
Year-Book 1931, 1932, 1933 and 1934-35.
2
Cf. Australian Commonwealth Act, section 40 (I(aJ) ; Italian Labour Charter,
sec. 23, etc. For further details, see below, p . 161.

METHODS OF DRAWING UP AGREEMENTS

does not arise in countries in which the trade union movement
is highly centralised and bargaining is in practice carried on, in
accordance with an express or tacit agreement, by the central
organisations of employers and workers.
In this connection mention should be made of the national
agreements — which are real treaties of mutual recognition —
between the employers' and workers' organisations of the Scandinavian countries, which were subsequently legally recognised
either by legislation or by the practice of the law courts and which
still form the basis of the system of collective agreements.
The first treaty of this kind was the so-called " Concordat
of 5 September 1899 ", concluded between the Confederation of
Trade Unions and the Confederation of Employers' Organisations
of Denmark at the end of a serious labour dispute. This Concordat
first settled the question of principle which was the central point
of the dispute ; it decided that collective agreements concluded
between the two central organisations must be respected and
applied by all the affiliated associations, and that the central
organisations were responsible for this being done. It further
laid down detailed rules to be observed by the parties in the event
of a strike or lock-out being declared, and fixed the minimum
period of notice for withdrawal from any agreement concluded
between any of the affiliated organisations at three months. It
recognised the right of the employers to organise and distribute
the work in their undertakings and to employ whatever labour
seemed best suited to their requirements. The Trade Union
Federation undertook to use its influence to secure observance
of this clause if necessary. Finally, an arbitration board was
set up to settle any disputes arising out of the application of the
Concordat. This September Concordat, which was a collective
agreement concluded without the intervention of the public
authorities, has for thirty years formed what may be called the
constitutional law governing relations between employers and
workers in Denmark, in so far as they are regulated by collective
agreement, which is generally the case.1
This agreement was soon confirmed by the decisions of the
law courts ; it was definitely ratified by the Permanent Arbitration
Court Act,2 which stipulated that disputes concerning infringements
1
Cf. International Labour Review, Vol. X X V I , No. 5, Nov. 1932 : " Scandinavian Employers and Collective Labour Agreements ", by E . ERICHSEN. Cf. also
Freedom of Association, op. cit., Vol. I l l , Denmark, p p . 285 et seq.
8
Cf. Legislative Series, 1929, Den. 2 B .

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

of the agreement of 5 September 1899 must be submitted to the
arbitration court.
The Danish example was followed in 1906 b y Sweden, when the
central organisations of employers and workers concluded a national
agreement on a similar basis, known as the " December Compromise "- 1
On 9 March 1935, the central organisations of employers and
workers in Norway also concluded a national agreement, which
is all the more significant in t h a t it led to the repeal of certain
provisions of the Labour Disputes Act of 1934 t h a t were thought
to restrict the freedom of the trade unions. 2 The chief purpose
of these provisions had been to organise satisfactorily the vote
t h a t would have to be taken when the collective agreements expired
in the spring of 1935, but it was understood t h a t they could be
repealed if the parties succeeded in establishing a satisfactory
system of collective bargaining ; as the blanket agreement between
the parties did in fact regulate the voting procedure, the whole
matter was thus settled.
According to the agreement of 9 March 1935, the blanket
agreement will remain in force until 31 December 1939 and may be
extended automatically for periods of two years at a time, unless
either p a r t y gives six months' notice of withdrawal from it. I t
guarantees freedom of association and the right of collective
bargaining to workers and employers alike. Other provisions deal
with the procedure for voting on collective agreements, the
appointment and powers of workshop delegates, etc. Voting on
proposals for collective agreements must be by secret ballot and
in writing ; no proposal can be validly rejected unless a t least
half the members entitled to vote have voted in the negative.
Thus the principle of the recognition of the central organisations of employers and workers as the principal parties to
collective agreements has been definitely established in the three
Scandinavian countries without any previous direct intervention
of the legislative authorities.
Quite recently national agreements of a similar kind were
concluded in France and in Belgium.
As a result of an extensive strike movement in France, which
1
For t h e text of this agreement, cf. Freedom of Association, op. cit., Vol. I l l ,
Sweden, p . 328.
2
For the t e x t of this agreement, cf. Industrial and Labour
Information,
Vol. LTV, No. 8, p p . 247-249, and Legislative Series, 1934, Nor. 1, a n d 1935,
Nor. 1.

METHODS OF DRAWING TJP AGREEMENTS

threatened to spread throughout the country, the French General
Confederation of Production and the General Confederation of
Labour, after arbitration by the Prime Minister, agreed on 7 J u n e
1936 to a collective agreement of a general nature, known as the
" Matignon Agreement ".
Under this agreement, which is intended to form the basis
of all future regulation of industrial relations in France, the
employers' representatives agreed to the immediate preparation
of collective contracts of employment, which were to include
also the following clauses on freedom of association, wages, and
workers' representation :
Freedom of Association. — On the ground that it is the duty of
citizens to obey the law, the employers acknowledged the right of
freedom of opinion and the right of all workers freely to join and belong
to a trade union established in virtue of Book III of the Labour Code.
The employers undertook that in arriving at decisions in regard
to engagement, conduct or distribution of work, disciplinary measures
or dismissal, they would not take into consideration the fact of the
workers belonging or not belonging to a trade union.
If one of the contracting parties questions the grounds for dismissal
of a worker, alleging such dismissal to have been carried out in breach
of the aforesaid right of association, both parties are to take action
to ascertain the facts and to bring about a fair settlement of all disputed
cases. Such action will not affect the right of the parties to secure
judicial apportionment of damages by process of law.
The exercise of the right of association may not give rise to acts
contrary to law.
Wages. — I t was agreed that from the day of resumption of work
the real wages in effect for all workers on 25 May 1936 should be registered on a descending scale beginning with an increase of 15 per cent.
for the lowest wages and ending with an increase of 7 per cent, for
the highest wages, provided that the total wage bill of each undertaking
might not in any instance be increased by more than 12 per cent. Any
wage increases granted since 25 May 1936 were to be credited towards
this adjustment, but when such increases exceeded the adjustment,
the excess was to remain in effect.
The negotiations for the fixing by collective agreement of minimum
wages by districts and occupational classes, which were to be begun
at once, were to devote particular attention to the necessary readjustments of wages which are ordinarily low.
The employers' delegation undertook to carry out the necessary
adjustments to maintain a normal relation between wages and salaries.
Workers' Representation. —• Apart from the special cases already
covered by the law, it was agreed that there should be established
for every undertaking with over 10 workers, after agreement between
the trade associations or, in their absence, between the parties concerned,
two workers' delegates or several delegates and substitute delegates
according to the size of the undertaking. These delegates are to have
authority to submit to the management such individual demands as

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

have not been directly met in regard to the observance of Acts, Decrees,
regulations of the Labour Code, wage scales, and health and safety
measures. All workers of both sexes aged 18 and over may participate
in the election of delegates, provided that they have at least three
months' service in the undertaking at the date of election and have
not been deprived of their civil rights. Persons eligible to serve as
delegates are to be those who are qualified as electors under the preceding clause, who are of French nationality and at least 25 years of age,
and have worked uninterruptedly in the undertaking for a year ;
provided that a shorter period of service may be agreed on if insistence
on the full year's service would reduce the number of persons eligible
to less than five. Workers carrying on a retail business of any kind,
whether on their own account or through their wives, are not to be
eligible.
The employers' delegation undertook t h a t no penalties would
be imposed in connection with the strike. The workers' delegation
agreed to ask the workers on strike to decide upon the resumption of work as soon as the managements of undertakmgs had
accepted the general agreement, and negotiations in regard to its
application had been started between the managements and the
staffs of undertakings.
This agreement was subsequently incorporated in most of the
collective agreements concluded for various industries and occupations, and was finally confirmed by the Collective Agreements
Act of 24 J u n e 1936, the structure of which will be discussed
in more detail in the following chapters.
I n Belgium, too, it was in consequence of a widespread strike
movement throughout the country that, under the chairmanship
of the Prime Minister, an agreement of principle was concluded
on 17 June 1936 between the representatives of the Central Industrial Committee on the one hand and the Belgian Trade Union
Commission and the Federation of Christian Trade Unions on the
other. This agreement dealt with the following points among others :
Adjustment of Wages. —• A general raising of wages was considered
desirable and it was agreed that a minimum wage of 32 francs for
eight hours' work should be fixed for able-bodied adult industrial
workers working full time. Any exceptions to this minimum that
might be needed would be fixed by joint committees.
The Government was called on to adjust family allowances to the
new situation.
Holidays with Pay. — A system of holidays with pay on the basis
of six working days' leave a year is to be established without delay.
It will take into account length of service on the one hand and the
seasonal nature of certain industries on the other.
Freedom of Association. — I t was noted that cases had occurred
in which the freedom of the worker in regard to trade association had

METHODS OP DRAWING TIP AGREEMENTS

not been duly respected. All were agreed that such freedom should
be effectively secured and that the Government ought to take the
necessary measures for the purpose.
Hours of Work. — It was agreed that hours of work should be
reduced gradually to 40 in the week in industries or branches of industry
in which work is performed under dangerous or arduous conditions.
The principles in question were to be established by legislation and
the list of industries and the methods of applying the principles to
be laid down in Royal Orders.
Joint Committees. —• The agreement on the points mentioned above
was reached between the representatives of the three organisations
in question, but they had no authority to bind their associations.
They undertook, however, to recommend the ideas to their associations
and agreed that the various joint committees should be convened
at once and should consider the application of the proposed measures
in their respective industries. They would be invited to submit their
conclusions at the earliest possible date.
In the branches of industries in which there is no joint committee,
the Government, pending the appointment of such a committee, would
arrange for the necessary contact between the employers' associations
and trade unions concerned.
As regards salaried employees, the Government would consider
at an early date how best to establish the necessary contact with
representatives of the employers' associations and salaried employees
unions.
I n consequence of this agreement most of the joint committees
established special agreements for the principal industries and
occupations. As in France, an Act on joint committees and collective agreements will probably confirm and consolidate the new
regulations.
Side by side with this natural trend towards integration, there
exist among the employers' and the workers' organisations certain
centrifugal tendencies. I n many countries, occupational associations of varying denominational or political views compete
with each other on the labour market. This involves competitive
bargaining, and the consequence is t h a t many agreements are
concluded, prescribing different conditions of employment and of
production, often in one and the same occupation or industry.
Various measures, which will be very briefly described, have
been taken by the legislative authorities to counteract this tendency.
Even under systems t h a t confer the right to conclude agreements
on all occupational associations without distinction, the law
courts have retained the right to verify the status of the contracting
parties. The German courts, for example, have always refused
to grant the right to conclude collective agreements to mixed
unions, works unions and others t h a t are not able to assume the

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

rights and obligations arising out of the collective agreements.
It is of interest to note that the same principles were incorporated in the German-Polish agreement of 15 May 1922 concerning
Upper Silesia. Section 161 ofthat agreement defines trade unions
as being voluntary associations of workers for the sole or main
purpose of regulating working relationships by collective agreements,
provided that they fulfil the following conditions :
(a) Membership of a union must not be subject to the condition
of working in any particular undertaking ;
(b) Employers may not belong to a trade union. Trade unions
are forbidden to accept subsidies or any other assistance
from employers ;
(c) The defence of the occupational interests of members
must not involve any pressure extraneous to the unions,
more especially political pressure.
The distinction thus made between the trade unions, representing the workers in an industry or occupation, and works
unions, the scope of which is obviously limited to a single undertaking, finds indirect confirmation in the legislation of certain
countries concerning works councils.
The former Austrian Works Councils Act 1 authorised these
councils, subject to the consent of the trade unions, to supplement
the collective agreements concluded by the latter by certain detailed
rules for their application, but works agreements were not otherwise
permitted to take the place of collective agreements.
Similarly, the former German Works Councils Act 2 did not
allow these councils to enter into collective agreements, but it
entrusted them with the supervision of the enforcement of agreements concluded by the trade unions. They thus had a certain
power of supervision, but were not able to take the place of the
trade unions in fixing the working conditions of those employed
in the undertaking.
It may be added that the new Austrian regulations concerning
works communities 3 and also the German regulations concerning
confidential councils,4 which replace the older works councils
legislation, retain the principle of this distinction.
1
2
3
4

Cf.
Cf.
Cf.
Cf.

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Legislative
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Series,
Series,
Series,
Series,

1920,
1920,
1934,
1934,

Aus.
Ger.
Aus.
Ger.

19-20.
1-2, 11.
7.
1.

METHODS OF DRAWING UP AGREEMENTS

The same problem in a similar form had to be faced by the
legislative authorities of the United States. Section la, paragraph 1,
of the National Industrial Recovery Act of 16 June 1933 had
laid down the rule t h a t the parties must include in every code of
fair competition the following clause : " That employees shall
have the right to organise and bargain collectively through
representatives of their own choosing, and shall be free from the
interference, restraint or coercion of employers of labor, or their
agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective
bargaining or other mutual aid or protection ". As the application
of these provisions in practice gave rise to numerous difficulties
of interpretation, the Government set up on 30 June 1934 a
National Labor Relations Board, 1 the duties of which were, inter
alia, to investigate issues, facts, practices or activities of employers
or employees in any controversies arising under section 7 a of the
Act, and when it appeared in the public interest, to order and
conduct elections b y secret ballot of representatives of employees
for the purpose of collective bargaining with the employers.
The rulings of this Board will not be analysed ; suffice it to
say t h a t it established the principle t h a t the trade union receiving
the majority of votes should be considered as the only one representing the workers and therefore as solely entitled to conclude
collective agreements. The provisions of section 7 a of the Act
of 16 June 1933 lapsed, as will be remembered, when the Supreme
Court declared the Act invalid.
B u t the National Labor Relations Act of 5 July 1935 revived
these clauses and defined their scope more closely. This Act
not only prohibits it as an " unfair labor practice " for the employer
to interfere with, restrain or coerce employees ; it also forbids
him to interfere in the formation or administration of any labour
organisation or to contribute financial or other support to it.
Section 9 of the Act also maintains the principle laid down b y
the National Board by stating t h a t the representatives designated
by the majority of the employees will be the exclusive representatives of all employees in the undertaking for the purposes of
collective bargaining.
I n order to secure the observance of all these clauses, the
new Act appointed a National Labor Relations Board, having
sole power to settle disputes arising out of the violation of the
1

Cf. Legislative Series, 1934, U.S.A. 3.

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

provisions concerning unfair labour practices — subject of course
to a right of appeal to the ordinary courts — and the power to
organise elections for the appointment of representatives to
conclude collective agreements.
The Australian Commonwealth a n d the separate States have
adopted another method — the registration of the association as
an " organisation ", which gives it the right to conclude collective
agreements and to be a p a r t y to conciliation and arbitration
procedure. Registration may be refused if a registered organisation
already exists to which the members of the organisation could
without difficulty belong. The same method is applied in the
Union of South Africa.
The Mexican Federal Labour Code makes it compulsory for
an employer to conclude the collective agreement with the trade
union which has the largest membership among the workers in
his undertaking. Moreover, the Federal conciliation and arbitration boards decline to grant registration to minority unions
if the interests of the workers are more effectively furthered by
the more representative unions.
Similarly, in New Zealand, under the Act of 8 June 1936 no
industrial union may be registered, except with the concurrence
of the Minister of Labour, if there already exists for the same
industry in the same industrial district either a registered industrial
union or a trade union registered before 1 May 1936.
This process of rationalisation in the methods of concluding
collective agreements has been carried more or less to extremes
in the legislation of the U.S.S.R., Italy, Austria, Portugal and
Bulgaria.
The Labour Code of the U.S.S.R.1 reserves for majority
unions or recognised unions the exclusive right of concluding
collective agreements, the clauses of which apply to all persons
employed in the undertaking, occupation or industry which the
agreement covers, whether or not these persons belong to a trade
union.
Section I I I of the Italian Labour Charter, which lays down
the same principle very clearly, reads : " Trade or occupational
organisation is free. Nevertheless, only trade associations which
are legally recognised and placed under the supervision of the
State have the right to represent a t law the whole category of
employers or workers for which they are formed, to safeguard
1

Cf. Legislative Series, 1922, Russ. 1, sees. 15 and 16.

METHODS OF DRAWING UP AGREEMENTS

their interests in relation to the State and to other trade associations,
to conclude collective contracts of employment binding on all
persons belonging to the category concerned, to levy contributions
upon them and to exercise in respect of them any public functions
entrusted to them ".
The Austrian regulations (Order of 2 March 1934, supplemented
by the Order of 3 December 1934 concerning the Confederation
of Workers and Salaried Employees ; Act of 17 October 1934
concerning the establishment of a Federation of Manufacturers),
as well as those of Portugal (National Labour Code, issued by
Decree of 23 September 1933) and of Bulgaria (Decrees of 30 July
1934 and 11 September 1934 concerning trade unions) are based
on the same ideas. Similar trends may be seen in the bills at
present under discussion in the Baltic countries and in Hungary}
It may also be noted in passing — for the matter will be referred
to again later in connection with the scope of collective agreements
(cf. below, p. 182) — that the former German 2 and Austrian 3
regulations, the Australian conciliation and arbitration laws,4 the
Brazilian Decree of 23 August 1932 concerning collective labour
agreements,5 the Act of 20 April 1934 concerning the extension
of collective agreements in the Province of Quebec 6 and the
Industrial Standards Acts of 1935 in Alberta and Ontario, Canada,
the French Act of 24 June 1936 on collective agreements (section
31 v(d), the Greek Act of 16 November 1935 on collective agreements (section 6) 7 , the Mexican Federal Labour Code of 18 August 1931, 8 the British Cotton Manufacturing Industry Act of
18 June 1934 9 and the Legislative Decree of 29 April 1935
to regulate conditions of work in the textile industry in
1
Cf. Decree No. 52000 of 1935, concerning the establishment of wage committees in certain branches of industry (Legislative Series, 1935, Hung. 6).
2
Cf. Decree of 23 December 1923 concerning collective agreements (Legislative Series, 1923, Ger. 2) and Act of 28 February 1928 to amend the above
(Legislative Series, 1928, Ger. 2). This legislation was repealed and replaced by
the National Labour Act of 20 January 1934, which also prescribes t h a t collective regulations and works regulations will be applicable to third parties.
1
Cf. Act of 18 December 1919 concerning conciliation boards a n d collective
agreements (Legislative Series, 1920, Aus. 22), amended by the Order of
16 February 1934 concerning the maintenance of collective agreements (Legislative Series, 1934, Aus. 2).
4
Cf. Legislative Series, 1928, Austral. 2.
6
Cf. Legislative Series, 1932, Braz. 6, sec. 11.
6
Cf. Legislative Series, 1934, Can. 5.
7
Cf. Legislative Series, 1935, Gr. 7.
8
Cf. Legislative Series, 1931, Mex. 1, sec. 58.
* Cf. Legislative Series, 1934, G.B. 7.

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

Czechoslovakia 1 empower certain administrative or certain judicial bodies to declare collective agreements freely entered into by
trade unions to be binding on third parties. 2
The Obligation to conclude Collective Agreements
In systems that take the trade unions as a basis for collective
agreements, the initiative in concluding collective agreements
rests, as a rule, with the parties themselves.
If the trade unions have a monopoly of the right to conclude
agreements (whether only in practice or guaranteed by law), the
obligation to enter into collective agreements is more or less an
automatic consequence of the working of this system.
Some countries, however, have laid down the compulsory
principle in their legislation. In Italy, for example, section XI
of the Labour Charter lays it down as the duty of recognised
trade associations to enter into collective contracts to govern
the labour relations between the categories of employers and
workers which they represent.
Similarly, section 43 of the Mexican Labour Code and section 34 of the Labour Law, Venezuela, stipulate that any employer who employs workers belonging to a trade union must
conclude a collective agreement with that union if the latter
so desires.
In the United States, the National Labor Relations Act of
5 July 1935 includes among " unfair labor practices " the refusal
of the employer to bargain collectively with the organisation selected
for this purpose by the majority of the workers concerned.
But so long as the legislation does not prescribe compulsory
arbitration for fixing the contents of collective agreements, the
obligation is merely to negotiate rather than actually to conclude
collective agreements.

Cf. Legislative Series, 1935, Cz. 1.
These conditions also apply in the Irish Free State, in accordance with
section 50 of the Act of 14 February 1936 on conditions of employment (cf.
Legislative Series, 1936, I.F.S. 1).
2

CHAPTER II
COLLECTIVE AGREEMENTS ON AN
OCCUPATIONAL BASIS

In some countries this primary method of regulating collective
agreements on the basis of the trade unions is supplemented
by another : regulation of collective relationships on an occupational basis.
In these systems, there are joint permanent bodies, generally
composed of an equal number of representatives of the employers'
and workers' occupational organisations concerned, which are
responsible for fixing working conditions by agreements that have
the same effects and the same status as collective agreements in
the strict sense of the term. In this system, which might be called
the secondary method of organising labour relations, the various
sections of the trade union movement may sink their differences
and work together, without thereby giving up any of their independence.
The principal types of regulation of collective conditions of
employment on an occupational basis will be studied below, first
for the countries where such regulation is purely voluntary, and
then for those where it is based more or less on legislation. The
following will thus be considered in turn : the British joint industrial councils, the Belgian joint committees, the Luxemburg
National Labour Council, the French joint committees, the South
African industrial councils, the joint conferences of the Canadian
provinces of Alberta and Ontario, the Spanish joint labour boards,
and the Netherlands industrial councils.
It will be remembered that the British joint industrial councils x
1
With regard to the origin, working and powers of the joint industrial councils
in Great Britain, cf. International Labour Review, December 1921 : " Joint
Industrial Councils in Great Britain " ; Ibid, October 1923 : " Progress of Joint
Industrial Councils in Great Britain " ; INTEBÎÏATIONAX LABOUR OFFICE : Industrial
Relations in Great Britain, by J. H. RICHARDSON, Studies and Reports, Series A
(Industrial Relations), No. 36, Geneva, 1933.

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

regulate conditions of remuneration and a variety of other matters
without any legislative intervention whatsoever. Whereas the
decisions of the trade boards 1 — official bodies set up by Acts
of 1909-1918 in ill-organised industries and trades — come into
force as soon as they have been approved by the Minister of
Labour and are binding on all members of the occupation, the
decisions taken by the joint industrial councils are — morally
speaking — binding only on the bodies represented on the councils.
But there is a certain movement in favour of giving legal effect
to the agreements arrived at by the councils. For several years
back, Bills have been regularly submitted to Parliament for the
establishment of a complete system of joint bodies : works councils
as a basis, 2 joint industrial councils for various industries as the
second stage 3 and a national industrial council as the crown of the
system.4 The Industrial Councils Bill, which is the one of greatest
interest in the present connection 5 proposes that such joint
bodies should be set up and their agreements made legally
binding.
It should be pointed out, however, that there is considerable
opposition to the movement in favour of legalising voluntary
trade agreements. A first step in this direction was nevertheless
taken by the Cotton Manufacturing Industry Act of 18 June
1934.6 The Act enables organisations representing the majority
of the employers and of the workers in the cotton industry to
make a joint application to the Minister of Labour for the issue
of an Order giving statutory effect to any agreement made between
them as to rates of wages. A board of three persons not connected
with the industry decides, with the assistance of a certain number
of representatives of the organisations concerned, whether the
proposed measure is desirable. This decision must be unanimous,
whereupon the Minister of Labour may issue an Order enforcing
the agreed wage rates for all persons in the industry.
This procedure has been put into practice, and an Order of
the Minister of Labour of 27 June 1935 made the rates of wages
1
Cf. International Labour Review, August 1923 : " The Economic Effects of
the British Trade Boards System " , b y Dorothy M. SELLS. The Act of 7 August
1924 regulating the wages of agricultural workers provides for a similar system
in agriculture (cf. Legislative Series, 1924, G.B. 5).
2
Cf. Hansard, C. Vol. 298, No. 46 : " Works Councils Bill ".
3
Cf. Ibid : " Industrial Councils Bill " .
4
Cf. Ibid : " National Industrial Council ".
0
Cf. analysis of this text in The I.L.O. Year-Book 1931, p p . 482-484, and
The I.L.O. Year-Book, 1932, pp. 285-286.
6
Cf. Legislative Series, 1934, G.B. 7.

METHODS OF DRAWING UP AGREEMENTS

fixed by collective agreement binding on all persons employed
in the industry.1
Similarly, in Belgium, the establishment by groups of industries
of joint committees of representatives of the various interests
involved is directly linked up with the industrial associations of
employers and workers. It is based on the mutual recognition
of these associations as the legitimate representatives of the
occupational interests of all the employers and all the workers.
The joint committees are appointed by Royal Decree, with a
Government representative as chairman. The main questions
with which they deal are wages and other working conditions.
They are also consulted with regard to the exemptions that may
be granted from the statutory provisions concerning the eighthour day and the 48-hour week.
As a general rule, it is the parties concerned that must take
the initiative in establishing joint committees. The authorities
intervene only at the request of the employers' and workers'
organisations; they then endeavour to obtain the consent of all the
organisations concerned, and they allocate the representation on the
committee according to the interests of various districts and the
numerical strength of the groups in question. These committees
may be national or regional, according to whether the industry is
spread over the whole country or concentrated in a certain area.
The committees carry out investigations and act as conciliation
boards, but their decisions are not binding. So far, therefore, in
Belgium as in Great Britain, the organisation of collective relations
on an occupational basis is an entirely voluntary matter.
But in Belgium also there is a tendency to develop in the
direction of statutory regulation of these agreements. • It may be
noted, for instance, that a Bill is at present before Parliament 2
for the purpose of granting a definite legal status to employers'
associations and trade unions, recognising collective agreements
concluded between these bodies and setting up official joint
committees for every trade. The Bill further proposes the establishment of district and national production committees. The preamble
states that the purpose of combining in a single Bill all the provisions concerning trade unions, collective agreements, joint trade
committees and production committees is to organise the various
1
Cf. t h e t e x t of this Order in The Ministry of Labour Gazette, J u l y 1935, p. 246 :
" Legalisation of Wage Bates in t h e Cotton Weaving Industry ".
2
Cf. Chambre dea représentants, No. 12, Session 1934-35 : Bill concerning t h e
legal status of industrial associations, collective agreements and joint committees.

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

trades, to set up authorities for each occupation and to further
the adoption of occupational regulations. Moreover, in 1935 the
Prime Minister announced in his ministerial declaration t h a t the
Government intended to proceed gradually to organise the various
trades and t h a t it proposed to entrust certain organisations representing these organised trades with certain powers of regulation,
within the limits and in accordance with the economic and social
aims of the trade in question.
Quite recently the question of the regulation of conditions of
employment through the joint committees again became acute.
Mention has already been made of the part played by these committees in the settlement of the national industrial dispute t h a t
broke out between employers' and workers' organisations in June
1936.
The Government declaration, read on 24 June 1936 by the
Prime Minister t o the Chamber of Deputies, contemplated an
early settlement through the joint committees and collective
agreements. The Government stated that it attached the highest
importance to the general establishment of the system of joint
committees and collective labour agreements. A Bill would be
presented for the setting up of joint committees in a large number
of industries in which the need for them had been felt. At]the same
time the Government would submit to Parliament provisions
intended to ensure the observance by all the parties concerned
of the stipulations contained in collective agreements. The Government would itself make use of all the means at its disposal to
secure the observance and wide application of such agreements ;
among other things, it would introduce in the rules relating to
the acceptance of tenders a clause which would make possible
the exclusion of any contractor, whether for works or for supplies,
who refused to apply the provisions of the collective agreements
in operation. 1.
I n Luxemburg, too, the organisation of labour relations was
recently placed on a statutory basis by a Decree of 23 January
1936, which set u p a National Labour Council.
This Council, which in reality will carry out the duties of a
national industrial relations council, is composed of an equal
number of delegates from the most representative trade unions
and employers' associations (in fact, the employers' and workers'
1
Cf. Chambre des Représentants, No. 79, Extraordinary Session 1936 : Bill
concerning the legal status of joint committees.

METHODS OF DRAWING UP AGREEMENTS

delegates to the International Labour Conference), the chairman
being the Minister of Labour and Industry. Special committees
formed on the same lines have been set up for the various branches
of industry. The main task of the Council is to make for conciliation between workers and employers in collective labour disputes,
and more especially to assist in solving the problem of wages.
The Council may,.ea; officio, deal with any collective dispute even
if-not referred to it b y one of the parties. Conciliation procedure
is compulsory, b u t the decisions are not binding on the parties
unless they agree of their own free will. I n consequence of the
action of the National Labour Council, national collective agreements have been concluded for the principal industries of the
country, in particular for the metallurgical industry and iron
mining.
This contractual form was also introduced in France, by the
Collective Agreements Act of 24 June 1936. Under the new sections
31 v (a) and (b) of the Labour Code, the Minister of Labour
or his representative will convene a meeting of a joint committee
with a view to the conclusion of a collective labour agreement
to regulate relations between employers and workers in a given
branch of industry or commerce for a given district or for the
whole of France.
The joint committee will include delegates of the most representative trade associations of employers and workers in the
branch of industry or commerce in the district concerned or in
the whole country, as the case may be.
If the joint committee so convened is unable to agree on one
or more of the clauses to be introduced in the collective agreement,
the Minister of Labour, a t the request of one of the parties and
after consulting the competent trade section of the National
Economic Council, must endeavour to bring about agreement.
I n pursuance of these provisions the Minister of Labour
addressed a circular on 4 April 1936 to the prefects of departments, instructing them to set up immediately in each department
a joint consultation committee as prescribed by the Act and
defining its functions in the following terms :
" I t frequently happens that when a dispute arises it cannot be
settled by direct negotiations between employers and employed, the
parties having no one to bring them together and help them to reach
agreement. In future such disputes are to be referred to the joint
consultation committee in each department.
" The committee will sit under the chairmanship of the prefect
and will consist of employers and workers in equal numbers, appointed

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

on the proposal of the Chambers of Commerce in the case of employers,
and the departmental federations of trade unions in the case of the
workers.
" Whenever a dispute is referred to a committee, it will appoint
an official with the necessary qualifications, who will approach both
parties and try to initiate negotiations. The prefect will not summon
the parties to appear before the committee unless concihation by the
official fails.
" The committee will not normally give decisions which are binding
on the parties. Its main function is to act as a conciliation authority
which, at the request of the parties or on its own initiative, will make
recommendations or propose a settlement. I t will issue arbitration
awards only in very exceptional cases, when both parties agree in
defining the questions submitted to it and undertake to accept the
award."
I n brief, collective labour disputes will in future be referred
in each department to the jouit conciliation committee. I n the
Department of the Seine, disputes will continue to be referred
to the divisional labour inspector.
These regulations show that, while recourse to the joint committee is compulsory, the decision taken by the committee is not
binding on the parties unless they voluntarily accept it. The
agreement reached between the parties before the committee has
the legal force of a collective agreement, the nature of which wil
be considered in other chapters of this study.
I n the Union of South Africa the principle observed is that
it is for the parties themselves to take the initiative in setting
up industrial councils.
Under section 2, subsection 1, of the Conciliation Act of 26
March 1924,1 amended by the Acts of 28 May 1930 2 and 7 March
1933,3 a registered employers' organisation or any group of two
or more registered employers' organisations may agree with a
registered trade union or group of registered trade unions for the
establishment of an industrial council for the consideration and
regulation of matters of mutual interest to them and the prevention and settlement of disputes.
Once formed, however, the council acts under State supervision. Any industrial council so set up, adds section 2, must be
registered. An application for the registration of the council
must be made in writing to the competent Minister by the parties,
who must furnish with the application information as to the
1
2
3

Cf. Legislative Series, 1924, S.A. 1.
Ibid., 1930, S.A. 5.
Ibid., 1933, S.A. 1.

METHODS OF DKAWING UP AGREEMENTS

authority under which the application is made ; the numbers and
occupations of the persons authorising the application ; the character of the undertaking, industry, trade or occupation in respect
of which it is desired that the industrial council shall be registered ;
the area for which it is desired that the industrial council shall
be registered ; and the situation of the head office of the industrial
council, together with a copy of the constitution and rules of the
industrial council and of any agreements between the parties.
If the Minister is satisfied that the agreement for the establishment of the industrial council is in accordance with the terms
of the Act and that the industrial council would be sufficiently
representative within any area of the particular undertaking,
industry, trade or occupation, he must register the constitution
and rules. Upon the application of the council he may in his
discretion from time to time increase or decrease or vary such
area in order to make it conform with the limits within which
the council is representative.
The Minister may also cause the name of the council to be
removed from the register if he is satisfied that it has ceased
to exist or to perform its functions under the Act ; or that a resolution for the removal of its name from the register has been
passed by a majority of its members at a joint meeting ; or that
a majority of the representatives of the employers or a majority
of the representatives of the workers upon the council have
resigned.
The rules of a registered industrial council must provide,
among other things, for the appointment of an equal number of
representatives of employers and employed and of substitutes and
the method of such appointment and for the election of a chairman and, whenever occasion arises, of a person to preside over
meetings in his absence, and the method of such election.
The decisions of the industrial councils must be the result
of agreement between the parties unless they voluntarily refer
the matter to arbitration. But once an agreement has been reached,
the Minister may, at the request of the parties, publish by notice
in the Gazette the agreement arrived at, and therein declare that
from a date and for such period as may be specified by him in
the notice, the terms of the agreement shall be binding upon the
parties to it and upon the employers and workers represented
upon the council.
Similarly, if he is satisfied that the applicants are sufficiently
representative of the undertaking, industry, trade or occupation

100

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

concerned, he may publish by notice in the Gazette the agreement
arrived at and therein declare that from the date and for such
period as may be specified by him in such notice all the terms
of the said agreement, or such terms as he may specially indicate,
shall within the area defined by him become binding upon all
employers and workers in that undertaking, industry, trade or
occupation.
Any person who fails to comply with a condition which has
become binding upon him by virtue of a notice published in the
Gazette is guilty of an offence, and renders himself liable to a
fine not exceeding £20. 1
Two recent Acts in Canada, the Industrial Standards Acts
of Alberta and Ontario, rest on similar principles. Under these
Acts,2 the main provisions of which are identical, the Minister
of Labour may, upon the petition of representatives of employers
or of workers in any industry, convene a conference or series of
conferences of employers or workers engaged in such industry
in any one or more zones for the purpose of investigating or considering the conditions of labour and the practices prevailing in
such industry and for negotiating standard or uniform rates of
wages and hours of work in each industry in the said zone or zones.
The employers and workers attending the conference may
agree upon a schedule of wages and hours of work for all or any
class of workers in the industry within the zone or zones in question.
If a schedule of wages or hours of work for any industry is
agreed upon in writing by a proper and sufficient representation
of workers and employers, the Minister may approve thereof,
and upon his recommendation the Lieutenant-Governor in Council
may declare the schedule to be in force for a period not exceeding
twelve months, thus making it binding on every worker and
employer in the industry in the zone or zones in question.3
The Spanish Act of 27 November 1931 4 took the place of the
1
For further details of t h e system of conciliation and arbitration in t h e Union
of South Africa and its working, cf. Conciliation and Arbitration in Industrial
Disputes : " Union of South Africa " .
2
Cf. Legislative Series, 1935, Can. 3.
8
For an account of the application of these Acts cf. The Labour Gazette of
Canada, 1935 and 1936.
1
Cf. Legislative Series, 1931, Sp. 15. This Act had been completely remodelled
b y an Act of 16 J u l y 1935, consolidated b y the Decree of 29 August 1935 (cf. Legislative Series, 1935, Sp. 3) ; b u t this latter Act in turn was repealed by the Act of
30 May 1936, which restored the whole of the provisions of the Act of 27 November
1931.

METHODS OF DRAWING UP AGREEMENTS

101

Decree of 26 November 1926 concerning the corporative organisation of the country, which was codified on 8 March 1929 1 and
changed into an Act on 9 September 1931.2 It makes provision
for the establishment of joint boards in all industries and
occupations (including homework and rural labour), which are for
this purpose classified in 24 groups.3
The joint labour boards are public institutions, responsible
for regulating employment in the trade or occupations concerned
and for acting as conciliation and arbitration bodies within the
groups of industries for which they are set up.
They are set up by the Ministry of Labour and Social Welfare,
either on its own initiative or on the apphcation of the parties
concerned.
A provincial joint labour board will be instituted as a rule
for each industrial group ; it may be subdivided into sections
with a view to facilitating the performance of its duties. The
Minister of Labour may fix geographical boundaries other than
those specified in the Act and may take other measures to
adapt the system to the needs of any particular industry or
occupation.
The joint boards consist of six employers' members and six
employees' members and an equal number of substitutes, all being
elected by the legally recognised organisations of employers and
employees. 4 If one of the parties (employers' or employees'
association) fails to participate in the election, or if the board
is unable to perform its duties owing to the systematic and unreasonable refusal of the employers or employees in the industry,
employment or occupation in question to appoint the members
of the board for their party, the Ministry of Labour and Social
Welfare may appoint them ex officio.
The boards take their decisions by majority vote, whereupon
the decisions become binding for all employers and employees in the
industry or occupation for which the board was set up.
The duties of the joint labour boards include the following :
1. To determine for their particular trade or occupation the
general conditions for the regulation of employment, wages,
the minimum duration of contracts, hours of work, over1

Cf. Legislative Series, 1929, Sp. 1.
With regard to the organisation, working and scope of the corporative system
in Spain, cf. Freedom of Association, op. cit., Vol. IV, Spain.
3
For an enumeration of these groups, see sec. 4 of the Act in question.
* For the election procedure, cf. sections 13 to 20 of the Act in question.
2

102

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

time, the procedure and conditions for dismissal, and all
other matters relevant to the above-mentioned regulation
of employment, which shall serve as a basis for the conclusion of collective or individual contracts.1
In the case of rural employment the joint boards also
lay down the conditions relating to the housing of employees
who are not working merely for a daily wage ;
2. To take cognisance of all questions submitted to it respecting
payment for overtime, wages disputes and the like, arising
out of the interpretation and fulfilment of contractual
obligations ;
3. To prevent disputes between capital and labour, and
endeavour to settle such disputes if they arise ;
4. To make inspections (in conformity with the law) in respect
of the observance of social legislation, and in particular
of the decisions made by the boards, and also of collective
and individual contracts, which shall conform at least to
the minimum conditions adopted by the boards.
This brief analysis shows that this system of regulation is
very comprehensive — its effects will be discussed in subsequent
chapters — and covers all the problems affecting the occupations
or industries concerned.
The Netherlands Act of 7 April 19332 is based on similar principles,
but the organisation of the system is different. The Minister of
Labour sets up an industrial council in every industry or branch
of industry in which circumstances render it desirable, either for
the whole country or for a part of the country. The order by which
it is set up specifies the operations which, according to the nature
of the work, come within the jurisdiction of the industrial council.
Each industrial council consists of an even number of members,
not being less than six or more than twenty. Half of the members
and of their substitutes are appointed by the industrial association
or associations of employers specified for the purpose by the
Minister of Labour, and the other half by the industrial association
or associations of workers, all or part of whose members are
employed in the industry concerned. In fixing the number of
members to be appointed to the industrial council by each specified
1
With regard to the legislation governing t h e determination of conditions
of employment, cf. the Act of 21 November 1931 concerning the contract of
employment, sees. 9 et seq. (Legislative Series, 1931, Sp. 14).
2
Cf. Legislative Series, 1933, Neth. 1.

METHODS OF DEA WING ITP AGREEMENTS

103

industrial association, the Minister must take into account the
number of members of each of the specified associations who are
employed in the industry, in so far as this is possible in view
of the other conditions requisite in order to obtain a suitable
composition of the industrial council.
On the recommendation of the industrial council, other members
or substitutes, who are not engaged in the industry for which the
industrial council is set up, may be appointed to the industrial
council in respect of all or certain activities, with or without the
right to vote.
In matters falling within its competence, the industrial council
may issue by-laws, provided that at least two-thirds of the members
of the employers' group, at least two-thirds of the members of
the workers' group and a majority of the additional members
are in favour of the by-law. The by-law must then be approved
by the Minister of Labour ; if approval is refused, reasons for the
decision must be given. When it is approved, it is promulgated
and becomes binding on all employers and workers engaged in
the industry in question. The council may impose a penalty of
imprisonment for not more than two months or a fine not exceeding
1,000 gulden for contraventions of the provisions of its by-laws.
The industrial councils are competent to deal with the following
matters :
(a) To draw up proposals for conditions of employment, if
possible in the form of a collective agreement ;
(b) To draw up rules to promote adequate vocational instruction in trade schools, vocational classes and workplaces ;
(c) To consider measures for preventing and combating
unemployment and increasing opportunities of employment ;
(d) To promote consultation between employers and workers
in the various undertakings through a body set up for
the purpose ;
(e) To promote the creation of funds and other institutions
for the benefit of workers, either for the whole industry
or for an undertaking or undertakings in the industry ;
(f) To discuss technical and commercial questions in the
industry in so far as the said questions affect the situation
of the workers ;
(g) To collect statistical data respecting the industry ;

104

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

(h) To encourage all measures likely to promote a good
understanding between employers and workers in the
country.
I t will be seen that the powers of the industrial councils in
the Netherlands, like those of the Spanish joint boards, are not
restricted to the regulation of collective conditions of employment
but extend to all questions affecting the social and technical
organisation of the undertaking.
It may be recalled in this connection that the codes of fair
competition in the United States are based on the same technical
methods, as are also the corporative systems now in force in
Italy, Austria and Portugal. But as the aim of these systems is
to regulate working conditions in the light of economic conditions,
they will be studied in the third part of this Report.1

1
Cf. below : " The Place of Collective Agreements in the Economic Structure " .

CHAPTER III
CONCILIATION AND ARBITRATION AS A BASIS FOR
COLLECTIVE AGREEMENTS

Conciliation and arbitration procedure has a twofold connection
with collective agreements, for it plays a part in the application
of the agreements and is in itself a means of establishing agreements.
It is a notable fact — and also a proof of the intimate connection
between the two systems — that in a number of countries, such
as the Union of South Africa, Australia, Denmark and Norway,
collective agreements are regulated by the actual legislation governing conciliation and arbitration, while in all other countries where
collective agreements are legally recognised, the awards given by
conciliation and arbitration boards are assimilated in all respects
to collective agreements.
The influence of conciliation and arbitration on the appUcation
of collective agreements will be discussed later (cf. below : "Application of Collective Agreements ") ; in the meantime a study is
made below of conciliation and arbitration as a means of establishing
collective agreements.
I. — VOLUNTARY CONCILIATION AND ARBITRATION AS A BASIS
FOR COLLECTIVE AGREEMENTS

Voluntary systems of arbitration and conciliation1 do not
differ legally from the contractual systems analysed in the preceding chapters. According to the definition given in several cases
by national legislation, voluntary conciliation and arbitration are
an auxiliary procedure for the conclusion of collective agreements.
This quality is brought out, moreover, by a series of characteristics common to most legislative measures relating to conciliation
and arbitration.
1
For an analysis of the texts, cf. Conciliation and Arbitration
Disputes, op. cit.

Industrial

106

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

In the first place, the laws give precedence to conciliation
and arbitration bodies set up on the sole initiative of the parties
over similar bodies of an official origin.
In the second place, the laws closely associate the parties
concerned — the workers' and employers' organisations — with
the procedure, either by calling upon workers' and employers'
delegates to sit, usually in equal numbers, on the conciliation and
arbitration boards, or by choosing the members of such bodies
from fists prepared by the trade associations.
Finally, awards are legally binding only if both parties accept
them of their own free will. But — and herein lies the real difference
between voluntary conciliation and arbitration and compulsory
arbitration — as long as the application of awards depends on
their acceptance by the parties concerned (even if such acceptance
is to be presumed from the presence of the parties at negotiations
or from their prior agreement to the procedure), there is an actual
contract based on mutual willingness.
Naturally, between complete willingness and absolute compulsion there is a whole range of intermediate stages. Many, indeed,
are the laws which have introduced certain measures of compulsion
in conciliation and arbitration systems, such as the obligation to
submit to conciliation (arbitration remaining optional), the
prohibition of industrial disputes during negotiations, the obligation
to appear and bear witness before conciliation and arbitration
bodies, etc. But the contractual character is not compromised
by such restrictions so long as the legal effect of awards depends
on their acceptance by the parties to the dispute.
II. —

COMPULSORY ARBITRATION AS A BASIS FOR COLLECTIVE
AGREEMENTS

Systems of compulsory arbitration constitute, on the other
hand, a special means of establishing collective labour conditions.
Under such systems, the award is binding, even against the
express wish of the parties. In this case, there is no longer any
question of a voluntarily contracted agreement, but of rules laid
down by State institutions.
Thus it is obvious that between the systems of voluntary
conciliation and arbitration and compulsory arbitration systems
the difference is not only one of degree ; it is also one of substance.
The regulation of labour conditions by compulsory arbitration
leads to a new problem of considerable practical importance which

METHODS OF DRAWING UP AGREEMENTS

107

may be summed up in the following terms. So long as the procedure remains optional and the acceptance of the award voluntary,
the parties interested continue to assume the entire responsibility
for fixing collective working conditions, whereas under compulsory
arbitration, it is in the last resort the State which, through the
medium of the competent arbitration authorities, assumes that
task. But as this method of regulation must necessarily withdraw
the establishment of conditions of work from the influence of
competition, the legislator is bound to replace the guarantees
of contractual freedom by legal guarantees, or, in other words,
to substitute a legal criterion for a business criterion. And it is
from this angle that a study will now be made of arbitration
systems limited to the pubhc services ; arbitration systems which
maintain the right of option as a rule and allow compulsion only
as an exception ; and finally, systems of generalised compulsory
arbitration. No reference will be made to systems of compulsory
arbitration based on reasons of pubhc order and implying no
effective regulation of working conditions.
Compulsory Arbitration limited to Public Services
According to section 16 of the Rumanian Act of 5 September
1920,1 as amended by the Royal Decree of 17 October 1932,2
" arbitration shall be compulsory, and all collective stoppages
of work shall be prohibited, in all State, departmental and
communal undertakings and institutions, irrespective of their
nature, and also in the following undertakings which serve pubhc
interests and the closing down of which would endanger the
existence and health of the people or the economic and social
life of the country ; undertakings for transport by land, water or
air, including persons employed in loading and unloading ; petroleum wells and distilleries, coal mines, metal mines, and undertakings for the utilisation of natural gas ; gas and electricity
works ; water and power distribution works ; mills, bakeries and
slaughter-houses ; hospitals ; sewage and street-cleaning undertakings ; public health services ; offices attached to such undertakings, and banks. "
But in exchange for the loss of the right to strike which is thus
imposed on them, wage-earning and salaried employees in such
undertakings receive special legal protection. Thus, in order
1
1

Cf. Legislative Series, 1920, Rum. 4.
Cf. Legislative Series, 1932, Rum. 7.

108

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

to prevent employers from taking undue advantage of the prohibition of the right to strike, section 42 lays down that :
In all undertakings in which arbitration is compulsory, the managements or employers concerned shall be required to draw up rules
governing the conditions of work and the remuneration of their
employees.
These rules are submitted to the Minister of Labour and
Social Welfare, who approves them either as they stand or subject
to the amendments which he considers desirable, after consultation
with the employers' and workers' organisations concerned.
The preparation of rules putting the staff of these undertakings
on a footing somewhat similar to that of public servants is therefore
the legal counterpart of the deprivation of the right to strike.
Voluntary Arbitration with Compulsion as an Exception
Under the former German legislation relating to conciliation
and arbitration (section 6, paragraph 1, of the Order of 30 October
1923,1 as amended by the Orders of 9 January 1931 2 and the
Order of 27 September 19313), an award not accepted by both
parties might be declared binding if the settlement contained
appeared just and reasonable with due consideration for the
interests of both parties, and if its application was desirable for
economic and social reasons.
In this way, the conciliation and arbitration authorities had
to base the compulsory establishment of working conditions on
principles of equity which took account of the interests of both
parties.4
In this connection, it may be noted that in recent years the
legislative authorities in a number of countries have insisted on
making provision for compulsory arbitration as a means of combating certain consequences of the depression and of preventing
industrial disputes concerning the expiry and the renewal of
collective agreements.
For example, under the German Order of 8 December 1931
relating to economic and financial stability,5 the conciliation and
1

Cf. Legislative Series, 1923, Ger. 6.
Cf. Legislative Series, 1931, Ger. 1.
3
Cf. Legislative Series, 1931, Ger. 8.
* For t h e working of this system, of. Conciliation and Arbitration in Industrial
Disputes, op. cit. : Germany ; and for the effects of compulsory arbitration, cf.
International Labour Review, Oct. 1925 : " The Compulsory Adjustment of
Industrial Disputes in Germany ", by Dr. Fritz SITZLER.
B
Cf. Legislative Series, 1931, Ger. 9.
a

METHODS OF DRAWING U P AGREEMENTS

109

arbitration boards were authorised to introduce changes in existing
collective agreements and to reduce wages by 10 per cent. These
measures were, however, accompanied by a number of guarantees
of a social character : reduction of rents, reduction of prices of
commodities of prime necessity (gas, electricity, etc.), which to
some extent counterbalanced the sacrifices imposed.1
Similarly, in Denmark the legislative authorities introduced on
various occasions measures for the regulation of conditions of
employment in order to counteract the effects of the depression.
The first occasion was in 1933, when the Social-Democratic and
Liberal Coalition Government, as a part of a general " crisis
agreement " concluded with the Agrarian Party, procured the
passing by the Rigsdag of an emergency Act to prolong existing
collective agreements for a year, and to prohibit stoppages of
work during that period. By this means it prevented the outbreak
of an extensive lock-out intended to enforce a general reduction
of 20 per cent, in wages. In the following year the Rigsdag passed
a Bill for compulsory arbitration in the slaughter-house industry
the export trade of which was threatened by a strike. During
the discussion in the Rigsdag on this occasion the spokesman
of the Social Democratic Party declared that though in an emergency recourse was had to compulsory arbitration, this did not
imply any departure from the opinion unanimously held by workers
as well as employers that permanent compulsory arbitration,
except in disputes arising out of the interpretation of collective
agreements, was undesirable.
Finally, in 1936 the biggest industrial dispute which has
occurred in Denmark for eleven years — a lock-out directly
involving some 125,000 workers — was settled on 29 March 1936
by legislative intervention.
In the course of negotiations opened at the beginning of the
year, the Danish Employers' Federation had demanded a prolongation of the existing collective agreements without alteration.
The workers, basing their claim on the rise in the cost of living
and the improved economic situation, had demanded wage increases, particularly in the lower-paid occupations, improved
holiday conditions, and in some cases the introduction of a 40-hour
week. In a few industries, e.g. the metal and textile industries,
1
For the application of this Order, ef. International Labour Review, April
1932 : " Recent Emergency Legislation in Germany, with Special Reference to
Wages a n d Hours of Work " by Dr. Fritz SITZLER. See below p . 215.

110

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

the workers accepted the proposed prolongation without any
change, but on the whole they maintained their claims ; and the
Employers' Federation declared the above-mentioned lock-out,
on 22 February 1936, in order to provoke a settlement of the
conflict at the earliest possible date.
On 17 March, when the dispute was in its fourth week, the
State Conciliators laid before the parties a series of conciliation
proposals, including one for revision of negotiation procedure
which provided in some cases for voluntary arbitration. The
approval of this proposal was made a condition of the approval
of the new collective agreements, but it was added that this proposal could be adopted even if the other conciliation proposals
were rejected. These other conciliation proposals included certain
wage increases, particularly, in the lower-paid occupations and in
industries which had specially profited by public economic relief
measures. In support of their proposals the conciliators referred
to the rising price level, the improved market conditions, and
the fact that the majority of the agreements were to be concluded
for two years, subject to adjustment after one year in the event
of substantial fluctuations in the cost of living.
The State Conciliators' proposals — with the exception of the
new negotiation procedure, which was approved by a large majority
both of the employers and of the workers — were adopted by
the workers but rejected by the employers (though a minority
of 41.2 per cent voted in favour of them).
In these circumstances, the Government introduced on 26
March a " Bill to prolong agreements between employers and
workers and to prohibit stoppages of work ", which provided that
the agreements on which negotiations had given no result should
be prolonged with such changes and for such periods as had been
proposed by the State Conciliators. As regards agreements expiring
during the period April-May, on which no negotiations had as
yet been undertaken, it was laid down that negotiations should
be opened but that no strike or lock-out notice should be permitted.
The Bill met with strong opposition from both the Conservative
and the Agrarian Parties ; but on 29 March the Rigsdag adopted,
with the approval of all the principal parties, an " Act for the
settlement of differences between the Danish Employers' Federation
and the Danish Confederation of Trade Unions, between the
Danish Employers' Federation and organisations outside the
Danish Confederation of Trade Unions, and between other employers' and workers' organisations ".

METHODS OF DRAWING TTP AGREEMENTS

111

The Act provided that the stoppages of work proceeding since
21 February 1936 should cease on 30 March and work should be
resumed, with a provisional settlement of wage accounts. It
further prescribed that fresh negotiations should be opened with
regard to those parts of the Conciliation proposals of 17 March
on which the parties had not agreed. These negotiations should
be.carried on under the direction of the State Conciliation Institution by a special committee, consisting of two representatives of
each of the two central organisations of employers and workers
(or of the organisation directly concerned, if it did not belong
to a central organisation), and must be completed within five
days. If agreement was reached in the committee with regard
to the settlement of the differences, this settlement would be
binding on the parties. If not, the decision — which must not
be given a validity of more than two years — would be taken
not later than 8 April by an arbitration board appointed by the
Prime Minister and consisting of four members, namely, the
President of the Permanent Arbitration Court as.chairman, two
members appointed by that Court, and a member appointed by
the State Conciliation Institution.
As regards those branches of industry for which the collective
agreements were due to expire between 1 April and 1 July, it
was prescribed that negotiations should be opened without delay,
and that if no agreement was reached before 22 April, the decision
should be taken by the arbitration board.
As the conciliation committee was unable to settle the dispute
within the prescribed period, the arbitration board issued an
award in conformity with the provisions of the Act which on the
whole confirmed the conciliation proposals and provided, among
other things, for an increase in the wage rates for the lower paid
occupations.
Steps of a similar nature were also taken in Czechoslovakia.
Decrees issued on 15 June 1934 and 29 April 1935 prolonged until
1 March 1936 the validity of collective agreements in force and
maintained the conditions of labour fixed by collective agreements
or by awards of the arbitration boards or other bodies responsible
for conciliation and arbitration procedure.1
In all these cases the restriction of the contractual freedom
1
For information on the application of the Acts of 1 March 1922 and 5 February
1927 relating to compulsory arbitration in Norway, and now repealed, cf. International Labour Review, January 1925 : " Compulsory Arbitration in Norway ", by

J. CASTBEBG.

112

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

of the parties to collective agreements was counterbalanced by
the maintenance of existing working conditions.
But the real problem of ascertaining how conditions of labour
are to be established in the absence of a commercial criterion arises
only under systems in which compulsory arbitration is the general
rule.
Generalised Compulsory Arbitration
This is the system favoured by the laws of Australia —
Commonwealth Act and Acts of the various States — and by
those of New Zealand.*
It is not necessary to give its past history or an analysis of
the various elements which go to make up the system of compulsory
arbitration in Australia and New Zealand," but it may be of
interest to describe them briefly and to explain the principles
involved.
The initial laws on conciliation and arbitration, adopted in
1890 following serious strikes which threatened to undermine the
social stability of Australia, aimed at preventing industrial disputes
and promoting the formation of trade associations, without any
idea as to the compulsory establishment of conditions of labour.
Thus, at the outset, the aim was to establish a purely contractual
method of regulation, based on the trade unions and a system of
voluntary conciliation and arbitration.
The idea of establishing minimum wages took definite form
for the first time in the Factory Acts adopted in New Zealand
and the Australian State of Victoria, which authorised the appointment of wage boards for certain industries. This system was
gradually extended to cover industry and trade as a whole and
was ultimately put into operation by most of the other Australian
States : Tasmania, New South Wales, South Australia, Queensland.
The second stage was thus characterised by the general adoption
of wage boards or industrial courts empowered to fix minimum
wages for all industries and trades.
1
Cf. list of laws concerning collective agreements in Australia and New
Zealand (Appendix I I I ) .
2
For information on t h e arbitration system in Australia, cf. International
Labour Review, Oct., Nov., Dec. 1924 : " The Development of State Wage Regulation in Australia and New Zealand " b y Miss D . McDaniel SELLS ; F e b . 1929 :
" The New Conciliation and Arbitration Act in Australia " b y O. de R. F O E NANDEB ; Dec. 1931 : " The New Commonwealth of Australia Conciliation and
Arbitration Act " b y O. de R. FOENANDER. For information regarding New
Zealand, cf. International Labour Review, Oct. 1921 : " Industrial Peace in New
Zealand " b y Sir J o h n FINDLAY ; March 1924 : " Experiments in State Control
in New Zealand " b y J . B . CONDLLFPE ; April 1931 : " The Effects of Falling
Prices upon Labour Conditions in New Zealand " by J . B. CONDLIPFE.

METHODS OF DRAWING UP AGREEMENTS

113

Finally, the third period, extending from the beginning of
the century up to the present day, witnessed the introduction
of industrial arbitration courts which, while following the procedure
of the wage boards, have a much wider social mission, because
they are responsible not only for the establishment of minimum
wages for certain classes of workers but they are also required
to fix a " fair wage " and other conditions of labour for all classes
of workers.
Nowadays, the arbitration courts appointed in New Zealand
and in different States of the Commonwealth of Australia — but
not in Victoria and Tasmania which have kept to the system of
wage boards — are the principal means of regulating conditions
of labour in Australasia.
It is thus seen that the arbitration system of Australia and
New Zealand has been built up by successive stages and has
retained something from each stage. Most of the laws provide
several methods for regulating conditions of labour : regulation
of minimum wages by wage and industrial boards, the legal
recognition of collective agreements voluntarily concluded by
trade associations, and voluntary conciliation and arbitration as
a first step to a compulsory procedure. But all these methods
lead ultimately to a system of compulsory arbitration by which,
when all else fails, working conditions are governed. This being
so, it is interesting to ascertain on what principles the system
works, and what standards are taken in fixing conditions of labour.
Establishment of Working Conditions by Social Standards. —
Purely experimental at the outset, the establishment of working
conditions soon came to be based on social requirements,
although these requirements were not expressed in figures at
that time.
It was only in 1906 that the amount of the weekly basic
wage was fixed for the first time, after an enquiry carried out
personally by Judge Higgins, at 42s., a sum representing the
amount necessary to satisfy the normal requirements of an average
wage-earner living in a civilised community. This basic wage,
called the Harvester Wage, was generally adopted by all the Australian States as the basic remuneration for work and was increased
or reduced according to fluctuations in the cost of living.
As all are aware, a " basic " or " living " wage is deemed to
mean the minimum wage considered necessary for the decent
maintenance of a typical working family composed of a given
8

114

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

number of persons, variable with the cost-of-living index but
retaining always the same purchasing power.
I t was therefore a question of a real minimum wage, invariable
in principle, whereas the secondary wage was liable to vary with
the qualifications of the labour employed, the nature of the work,
occupational skill, the age and sex of the worker, etc. 1
From this brief study it is clear t h a t the fixing of the basic
wage was left in the main to the authorities. In 1920, the Federal
Government, anxious to give a scientific basis to the awards of
the Courts, appointed a Committee of Enquiry known under the
name of the " Basic Wage Committee ". This Committee was
required :
(1) To establish accurate figures concerning the cost of living for
a family of five persons living in average comfort. The Committee
was to take into account all usual household expenses and to calculate
each item separately ; (2) to draw up similar figures for each of the
previous five years ; (3) to state what, in its opinion, was the best
means of adjusting automatically the basic living wage to any fluctuations likely to occur in the purchasing power of the currency.
The Committee came to the conclusion that the wages declared
to be normal by the various Australian Courts were inadequate
for the maintenance of a worker, his wife, and three children in
reasonably comfortable conditions.
I t appeared, moreover, t h a t the average of five persons per
family adopted as a uniform basis of calculation was too high
and t h a t it risked leading to unfair discrimination with regard to
unmarried wage earners on the one hand, and wage earners with
large families on the other. One of the indirect results of the enquiry
was t h a t New South Wales 2 introduced the principle of family
allowances in its legislation, thus allowing unmarried workers to
have the benefit of the basic wage while heads of large families
received supplementary allowances to cover the cost of family
responsibilities.
I n conclusion, it may be said t h a t the work carried out by the
Committee of Enquiry contributed to the improvement of the
methods employed for the establishment of a living wage without
in any way undermining the principle of such wages.

1
For a detailed study of the system of fixing wages, cf. G. ANDEBSON : Fixation
of Wages in Australia. Melbourne, 1929.
2
Cf. Legislative Series, Australia (New South Wales), 1927, 4 and 8 ; 1928, 3 ;
1929, 3 and 10 ; 1930, 1 ; 1931, 7.

METHODS OF DBAWING TTP AGBEEMENTS

115

Fixing of wages by economic standards. — Now, the regulation
of conditions of labour by the authorities gives rise to another
question which, moreover, has assumed first-rate importance as
a result of the economic depression — to what extent should the
authorities take account of the economic position of the undertakings ?
I t is true t h a t the laws governing conciliation and arbitration
authorise the courts to make allowances for industries in temporary
difficulties, to review working conditions in the light of changes
in the economic situation, and to grant temporary exemptions
to employers whose undertakings are in a precarious position,
but all such measures must not be allowed to endanger the principle
of a living wage which is considered to be the absolute minimum
below which it is impossible to go. Certain courts went even
further and gave it as their opinion that it was for the legislative
authorities to p u t industry in a position to conform with arbitration
awards bj T protecting and strengthening it when necessary by
customs tariffs and export bonuses.
A provision requesting the courts, before making any award
or certifying any agreement, to take into consideration the probable
economic effect of the agreement or award on the community
in general and the industry concerned in particular, was introduced
in the legislation by a Federal Amending Act of 22 June 1928, 1
but this amendment was withdrawn by the Act of 18 August
1930.2
Thus, until recently, social standards remained pre-eminently
the basis for the establishment of working conditions, economic
standards being used only as a means of adjustment and in exceptional circumstances.
During 1931, however, the Commonwealth Court of Australia,
like the Arbitration Court of New Zealand, decided to amend
most of the awards rendered previously and to reduce the basic
wage by 10 per cent, in comparison with wage rates in force in 1929.3
B u t in 1932, the trade associations of Australia requested the
Court to restore the 10 per cent, cut made in wages, basing their
claim not only on the traditional grounds of the standard of living
in Australia b u t also on the economic argument of purchasing
power. They pointed out t h a t wages paid to adult workers under
1
2
3

Cf. Legislative Series, 1928, Austral. 2, section 25 D.
Cf. Legislative Series, 1930, Austral. 11.
For t h e t e x t of this award, cf. COMMONWEALTH B U R E A U OF CENSUS AND

STATISTICS, Australia : Labour Report, 1931.

116

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

awards of the Court were inadequate to ensure living conditions
conforming with Australian standards and that it was impossible
to restore the prosperity of industry unless the purchasing power
of the community was increased so as to establish an equilibrium
between production and consumption.
By an award of 5 May 1933, the Federal Court rejected the
demand for the total abolition of the 10 per cent, cut, but adopted
the workers' proposal to establish a new method of calculation of
the basic wage. The Harvester Index was corrected by the more
comprehensive All Items Index, 1 which had the effect of considerably reducing the loss of wages previously imposed. It may be
noted that subsequently the 10 per cent, cut was progressively
abolished in a whole series of industries and trades.
To sum up, it may be said that the system of compulsory
arbitration in force in Australia has weathered the economic
depression and still continues to be the principal means employed
for the establishment of conditions of labour.
Only a very brief reference has been made here to the principles
underlying compulsory arbitration in Australia, for this matter
will be discussed later in connection with the issue of awards,
their effects and their application.
In New Zealand the system of regulating wages and conditions
of employment was based, as stated above, on similar principles
and followed a similar course up to 1932.
As in Australia rates of remuneration fixed by awards and
agreements were reduced by 10 per cent, in consequence of a
general order issued in May 1931 in virtue of special powers
granted by Parliament. In the following year, however, an Act
of 27 April 1932 amending the Conciliation and Arbitration Act
of 1 October 1925 abolished compulsory arbitration except as
regards the fixing of minimum rates of wages for female workers.2
The rejection of the system of compulsory arbitration was only
temporary, however. A recent Act — the Industrial Conciliation
and Arbitration Amendment Act of 8 June 1936 — not merely
restored to the Arbitration Court its former jurisdiction in relation
to industrial disputes that cannot be settled by direct negotiations
or conciliation, but also profoundly modified the earlier legislation,
1
For information about the new index, cf. COMMONWEALTH BUBEAU OÏ
CENSUS AND STATISTICS, Australia ; Labour Beport, 1932, pp. 45 et seq.
2
Cf. J. E. RICHES : " The Depression and Industrial Arbitration in New
Zealand " in the International Labour Review, Volume XXVIII, No. 5, November
1933. Cf. also below, p. 216.

METHODS OF DRAWING XTB AGREEMENTS

117

especially as regards the fixing of the basic wage, the scope and
membership of trade unions, the powers of the Arbitration Court,
and the regulation of hours of work.
The provisions relating to trade unions and the powers of
the Arbitration Court will be discussed in other parts of this
Report. It will be sufficient here to analyse briefly the clauses
concerning the fixing of the basic wage and hours of work.
Under the provisions relating to basic rates of wages, the
Arbitration Court was required to fix by a general order within
three months of the coming into operation of the Act (i.e. by
8 September 1936) a basic rate for adult male workers employed
in any industry to which any award or industrial agreement
related and a separate basic rate for adult female workers so
employed. The basic rate for male workers must be sufficient
to enable a man to maintain a wife and three children " i n a fair
and reasonable standard of comfort ".
In fixing the basic rates, which may be amended at intervals
of not less than six months, the Court must have regard to the
general economic and financial conditions affecting trade and
industry in New Zealand and to the cost of living. Whatever
rates may have been fixed under awards or agreements, no adult
male or female worker, unless in possession of a permit issued
by the Court, in any industry covered by an award or an agreement
may receive less than the current basic rates.
In connection with the fixing of a basic wage, the Act also
regulates the question of hours of work. Under sections 20 to
22, the Court is directed to fix the maximum hours (exclusive
of overtime) at not more than 40 per week, unless in its opinion
it would be impracticable to carry on efficiently any industry to
which the award relates if hours are so limited. It is further
empowered to amend existing awards or industrial agreements
so as to fix the maximum hours at 40, or, if that is considered
impracticable, at a figure intermediate between 40 and the previous
maximum. Finally, the Court is required to endeavour to fix
working hours when the maximum is not more than 40 per week
in such a way that no part of the working period falls on Saturday.
No award fixing hours at 40 or less was to take effect before 1
September 1936.
If in any award made after the passing of the Act hours of
work are fixed in excess of 40, the Court must indicate in the
award the ground which, in its opinion, made impracticable the
fixing of a maximum of 40 hours.

118

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

Where an existing award or agreement is amended so as to
reduce the maximum hours of work, any rates of pay fixed in
the award or agreement must, if necessary, be increased, either
directly by the Court or indirectly by the operation of the order,
so that the ordinary rate of weekly wages of any worker bound
by the award or agreement may not be reduced by reason of the
reduction made in the number of working hours.
Fixing of Collective Labour Conditions by the Labour Courts
The institution of compulsory appeal to the labour courts in
Italy — as in other countries with a corporative system 1 — is
a logical sequence of the organisation of conditions of work through
officially recognised bodies placed under State control.
The Italian Senate's report on the Bill for the legal regulation
of collective labour relations pointed out in its time that as the
State did not allow the various classes and groups of producers
to take action in the defence of their own interests and as on the
other hand it did not feel it could remain indifferent to industrial
disputes but should rather act as a mediator between the various
classes and groups of producers in the interests of social justice,
it had a moral and political obhgation to set up permanent labour
courts which would act as direct representatives of the State and,
consequently, in the general interests of the community.
Thus, according to section 13 of the Act of 3 April 1926 relating
to the legal regulation of collective labour relations,2 all disputes
connected with the regulation of collective relations which are
concerned with the carrying out of collective agreements or other
regulations in existence, or with demands for new conditions of
employment, come within the jurisdiction of the courts of appeal
acting as tribunals, for such matters.
It will be remembered that the court of appeal competent,
under section 13 of the Act, to settle collective labour disputes,
is composed of three magistrates — one a president of a section
of a court of appeal and the other two councillors of the court
of appeal — together with two citizens who are experts in problems
of production and labour.3
1

Cf. Legislative Series, 1934, Por. 3.
Cf. Legislative Series, 1926, It. 2.
For information on the composition and .working of the labour courts, cf.
Freedom of Association, op. cit. Vol. IV, Italy, p p . 70 et seq., and Conciliation and
Arbitration in Industrial Disputes, op. cit., Italy.
s

METHODS OP DRAWING TJP AGREEMENTS

119

As to the criterion to be observed in establishing conditions
of labour, the Act stipulates t h a t the court of appeal, acting as
a tribunal for labour matters, is to prescribe new conditions of
labour " in conformity with the principles of equity. . . , adjusting the interests of employers and the interests of employees and
in each case having regard to the superior interests of production " (section 16).
Furthermore, the Labour C h a r t e r 1 (sections XI-XXI) and
the Royal Decree of 6 May 1928 2 lay down a certain number
of minimum conditions of employment which must be established
by collective agreements and consequently by the labour courts
(cf. below : " Contents of Collective Agreements ").
I n connection with wages, section X I I of the Labour Charter
requires the industrial judge to adopt a threefold criterion which
will take account of social and economic requirements and
possibilities of output. This section reads as follows :
The adjustment of wages to the normal requirements of life, the
possibilities of production and the output of labour shall be ensured
by means of trade association action, the conciliation work of corporative
organs, and the awards of the labour courts.
The Charter adds, moreover, t h a t the fixing of wages is not
to be governed by any general rules and must be based on agreement between the parties to collective agreements.
Thus, contrary to the Australian system of compulsory regulation, Italian legislation does not attempt to fix the actual
amount of wages in advance.
I t is also to be noted t h a t as a result of the organisation of the
corporations (cf. P a r t I I I of the present Report), the social and
economic standards on which the judge can base his award can
be denned with the greatest accuracy.
Judicial proceedings cannot be taken until the federation or
confederation to which the trade association belongs, or the
corporation, has attempted to secure an amicable settlement of
the dispute, and such attempt has failed.
I t is thus clear that the legislator, while providing for recourse
to the labour courts in the last resort and as a final instance of
appeal, has endeavoured to leave the way open to voluntary
conciliation and arbitration. And it appears from an enquiry
carried out by the Ministry of Corporations into the working of
1
5

Cf. Legislative Series, 1927, It. 3.
Cf. Legislative Series, 1928, It. 3.

120

. LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

conciliation machinery and the labour courts in Italy, 1 that the
courts have been called upon to settle but a very small number
of disputes although those few concerned important questions of
principle and legal interpretation.
Similarly, in Greece compulsory arbitration was recently
introduced by an Act of 16 November 1935. Under section 8 of
this Act the arbitration authorities, when fixing wages, must
take into account the social and economic needs of the undertakings involved in the dispute, their economic and technical
capacity, the level of wages paid in relation to the cost-of-living
index number, and also general economic interests.
The new German National Labour Act 2 also contains provisions
for the compulsory regulation of conditions of labour and wages.
Section 32, paragraph 2, of the Act states that if it is urgently
necessary for the protection of the workers in a given group of
undertakings in a given area, the Labour Trustee concerned may,
after consulting a committee of experts, issue collective rules in
writing, the terms of which are binding as standards for the classes
of employment covered. But as here again the supervision of
conditions of labour and wages is closely bound up with the control
of economic life, a detailed study is made of the whole question
in the third part of this volume.3

1
Cf. International Labour Review, Oct. 1934 : " The Settlement of Labour
Disputes in Italy ".
2
Cf. Legislative Series, 1934, Ger. 1 a n d 6, and International Labour Review,
April 1934 : " The New German Act for the Organisation of National L a b o u r " .
3
Cf. later, under " The Place of Collective Agreements in the Economic
Structure of the Community ".

B. — THE

LEGAL

EFFECTS

COLLECTIVE

AGREEMENTS

CHAPTER I
CONDITIONS OF VALIDITY OF COLLECTIVE
AGREEMENTS

All the laws concerning collective agreements require certain
conditions of substance and of form to be fulfilled before the
agreements are valid.
CONDITIONS OF SUBSTANCE

The conditions of substance may concern either the purpose
of the agreement or the status of the contracting parties.
With regard to the purpose of the agreements, it is sufficient
to point out that in principle they are subject to the same restrictions as individual contracts of employment : lawful cause and
purpose, possible advantages, conformity with public policy and
the requirements of morality.
As to the status of the contracting parties, the legislation
lays down — usually in very exact detail — the conditions to
be complied with by the parties to collective agreements (trade
unions, joint committees, corporative organisations, etc.) or by
the institutions responsible for regulating collective agreements
(compulsory arbitration procedure, labour courts, etc.). As
these have already been dealt with in connection with the methods
of drawing up collective agreements, which were summarised in
the preceding chapters,1 it will suffice to refer the reader to them.
1

With regard to the conditions to be complied with by trade unions, cf. Freedom
of Association, op. cit.
With regard to the conditions governing the constitution and working of
conciliation and arbitration schemes, cf. Concuiation and Arbüration in Industrial
Disputes, op. cit.

122

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

CONDITIONS OF FORM

It is for the benefit of the parties themselves that the legislation
on collective agreements insists on stricter conditions of form
for the conclusion of such agreements than are required by ordinary
law in the case of individual contracts of employment.
The first condition laid down by the laws of every country
(thus rendering an enumeration of countries superfluous) is that
a collective agreement is not valid unless drawn up in writing.
This applies to every type of collective agreement : the agreements
concluded by industrial associations, the decisions of joint committees, arbitration awards, the decisions of labour courts, the
orders issued by corporations and the collective rules promulgated
by labour trustees.
No matter how collective agreements may be concluded, the
important thing always is that the rights and obligations resulting
from them for the contracting parties and for all the workers
covered should be clearly and unequivocally stated.
A second condition of form is that collective agreements must
be lodged, and usually registered, with some authority : the
probiviral councils or the conciliation magistrate (juge de paix)
in France,1 the conciliation and arbitration authorities in Mexico,2
in Norway 3 and in Austria,4 the chambers of labour in Rumania,5
the factory inspectors in Chile6 and in Venezuela, the industrial
registrar in Australia,7 the prefect and the Ministry of Corporations in Italy, 8 9 the Ministry of Labour or of Social Welfare
in Latvia, 10 Finland, u Brazil,32 Greece,13 France, 14 and in the
Irish Free State 15 . In all these cases, the collective agreement
must be deposited, and in some cases registered, before it can
come into force. In this way, those concerned can at any time
make themselves acquainted with the obligations by which they
1

Cf.
Cf.
3
Cf.
4
Cf.
6
Cf.
6
Cf.
7
Cf.
• Cf.
» Cf.
10
Cf.
11
Cf.
1S
Cf.
13
Cf.
11
Cf.
15
Cf.
2

Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative
Legislative

Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,

1919, Fr. 1, sec. 31 (c).
1931, Mex. 1, sec. 25.
1927, Nor. 1, sec. 3 ( 1 ) .
1920, Aus. 22, sec. 13.
1929, R u m . 2, sec. 107.
1931, Chil. 1, sec. 19.
1928, Austral. 2, sec. 76.
1926, I t . 2, sec. 10.
1928, I t . 3.
1927, Lat. 3, sec. 2.
1924, Fin. 2, sec. 2.
1932, Braz. 6, sec. 2.
1935, Gr. 7. sec. 2.
1936, Fr. 7, sec. 2 (31 c).
1936, I.F.S, 1, sec. 50.

LEGAL EFFECTS OF AGREEMENTS

123

are bound. This second guarantee is thus directly complementary
to the first one, by which agreements must be in writing ; its
purpose is usually merely to ensure publicity and knowledge of
the agreement.
I n some countries, however, collective agreements have to be
examined before being registered, and thus registration — and
the application of the agreement — may be refused if the statutory
conditions are not fulfilled.
For example, the Order of 2 February 1923 ! in the U.S.S.R.,
concerning the registration of collective agreements, prescribes
t h a t no collective agreement can be registered if it contains clauses
involving conditions of work less favourable than those laid down
by law or by regulations.
Similarly, the Italian Legislative Decree of 6 May 1928 2
concerning the lodging and publication of collective agreements
makes registration conditional not only on certain statutory
formalities but also on the substance of the agreement being
approved, and more especially on its conformity with the principles
of sections XIV to X X of the Labour Charter 3 (cf. analysis of
these provisions below, under "Contents of Collective Agreements").
Thus, under legislation which contains special guarantees as to
the contents of agreements, the formality of registration enables
the authorities to see that these guarantees are actually enforced.
A third condition of form is the publication of collective
agreements. This is required wherever the agreements apply
not only to workers who are members of the contracting trade
unions but also to non-unionists (cf. below, " Scope of Collective
Agreements ").
Thus, collective labour agreements in Italy, Portugal and the
U.S.S.R., and collective agreements t h a t are declared binding
on third parties in Austria, Brazil, Canada, Czechoslovakia (textile
industry), Germany, Great Britain (cotton industry) and Mexico,
the decisions of joint boards in the Netherlands and Spain,
Australian arbitration awards, the decisions of the labour courts
in Italy and Portugal, the orders of the corporations in Italy,
Austria and Portugal and the collective rules issued by the labour
trustees in Germany must all be published in the official bulletin
of the Ministry of Labour or in the official collection of legislative
enactments.
1

Cf. Legislative Series, 1923, Russ. 7.
* Cf. Legislative Series, 1928, I t . 3.
» Cf. Legislative Series, 1927, I t . 3.

CHAPTER IT
LEGAL NATURE AND SCOPE OF COLLECTIVE AGREEMENTS

AU the laws concerning collective agreements — save only
the new German National Labour Act, which prescribes that
collective rules will be issued by the labour trustees of their own
motion — contain two sets of regulations, differing in their nature,
scope and purpose :
(1) regulations concerning the rights and obligations of the
parties to collective agreements : trade unions, joint
committees, corporative organisations, groups of workers
on conciliation or arbitration boards ;
(2) regulations concerning the conditions of work of the persons
represented by the parties to collective agreements.
The regulation of the relationships between the parties to
collective agreements is not an end in itself ; it is a method of
fixing working conditions, serving merely as a framework for the
regulations of conditions of employment, which is, after all, the
essential aim and object of collective agreements. The two sets
of regulations must therefore be studied separately.
I. — REGULATION OF RELATIONS BETWEEN PABTIES
TO AGBEEMENTS

The legal nature of the relations between the parties to collective
agreements obviously differs according to the methods of drawing
up the agreements, which were analysed in Part I (cf. above,
p. 77). I t may be noted again that these relations are of a purely
contractual nature in voluntary systems, since the rights and
obligations involved are those arising out of the ordinary law of
contract and out of the engagements freely entered into by the
parties. The relations are of a legal nature in compulsory systems,
for their rights and obligations are imposed on the parties with
the force of law.

LEGAL EFFECTS OF AGREEMENTS

125

The scope of the various methods will be discussed later in
connection with the scope and enforcement of collective agreements and the penalties for contraventions.
II. — REGULATION OF WORKING CONDITIONS BY

COLLECTIVE

AGREEMENTS

Whereas the legal value of the rules governing the relations
between the parties to collective agreements vary according to
the system, the value of the regulations governing the working
conditions of the persons covered by the agreements is the same
in every legislation. It will therefore be possible to give a general
survey without referring in each instance to the provisions of the
various laws, which vary only on points of detail.
AH collective agreements, in so far as they regulate working
conditions, lay down in advance the conditions of employment
that must form part of every individual contract of employment
concluded between persons bound by the collective agreements.
It follows from this definition that the collective agreement
is not itself a contract of employment between the parties that
sign it, for neither the employers' associations nor the workers'
unions owe wages or services respectively to each other ; the collective agreement involves the contingent regulation of the conditions
of employment of third persons represented by the parties to the
agreement, and these conditions do not come into force until, at
some later date, individual contracts of employment are concluded.
Departure from the Provisions of Collective Agreements Prohibited
It is clear that such a system of regulation is valueless unless
the persons to whom it is meant to apply are bound to observe
it. Consequently — and this shows the fundamental unity of
all systems of collective labour agreements — all the laws concerning
collective agreements, whether these agreements are concluded
between employers' associations and trade unions or laid down
by occupational or corporative institutions, by arbitration awards
or by collective rules, prohibit individual contracts of employment
from containing provisions that are not in conformity with the
collective agreement ; they attach to this prohibition a dual
minimum legal effect : 1
1

I t is a minimum efieet, for it will be seen later (ef. under " Application of
Collective Agreements ") t h a t several laws supplement this civil guarantee by
penal guarantees.

126

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

(1) Individual contracts of employment concluded by persons
covered by the collective agreement are null and void
in so far as they are not in conformity with the collective
agreement. This nullity is absolute and automatic, but,
in contrast to ordinary law, it affects only the clauses
that are contrary to the agreement, leaving the rest of
the contract valid. For to invalidate the whole contract
of employment would be quite contrary to the purpose
of collective agreements, which is to enforce uniform
working conditions in a given industry or occupation ;
(2) The clauses that are not in conformity with the collective
regulations are automatically replaced by the corresponding clauses of the latter. The first guarantee — the mere
invalidation of the clauses in question — would not be
sufficient to secure conformity between individual contracts
and the collective regulations ; it must be supplemented
by the automatic replacing of the invalidated clauses
by the corresponding ones of the collective agreement
— that is, even against the express will of the parties.
It should be noted that this dual effect applies not only to
contracts concluded after the collective agreement came into
force, but also to those that were already in existence when it
was concluded and that fall within its scope. Moreover, the dual
effect remains in operation even after the collective agreement
has lapsed whenever the parties have agreed to provisions that,
by their nature, take effect only when the collective agreement
expires, such as radius agreements, retiring allowances, etc.
Waiver of the Mights conferred by Collective Agreements
A final problem that arises in connection with the prohibition
of contracts that do not conform to the collective agreement is
whether a person may subsequently waive any of the rights conferred by that agreement. In other words, can a worker claim
arrears of wages to which he is entitled according to the collective
agreement but to which he tacitly or expressly relinquished his
claim ?
The question is obviously of great practical importance, especially in periods of depression, when workers are often faced
with the alternative of giving up a fraction of their wages or losing
their jobs.

LEGAL EFFECTS OF AGREEMENTS

127

Although the legislation on collective agreements does not
always deal with the matter, this lacuna has frequently been
made good by the rulings of the courts. In Germany and in Italy,
for instance, the courts have held waivers to be incompatible
(whenever their purpose was to evade certain obligations) with
the principle that collective agreements may not be modified
by individual agreement. This is particularly the case if the
waiver, even when explicit — as by signing a receipt " in full
settlement " — is made or is presumed to have been made under
economic pressure exerted by the employer on the worker in
his employment. It may be added that a recent decision of the
German Federal Labour Court (13 July 1935) declared any waiver,
even when explicit and voluntary, of the rights conferred by
collective rules to be illegal in virtue of the National Labour Act
of 20 January 1934.
Similarly, in Australia (Commonwealth and States) the waiver
of any of the stipulations of an arbitration award, except in so
far as permitted by the award itself, is held to be illegal. The
same holds good in Spain with regard to the decisions of the joint
boards, in Great Britain (Cotton Manufacturing Industry Act),
in Canada (Industrial Standards Acts of Alberta and Ontario
and Collective Agreements Act of Quebec) and in general in all
countries in which collective agreements or collective rules have
the force of law.
The solution thus given in certain countries to the problem
of waiving rights conferred by collective agreement defines and
strengthens the principle of no departure from the terms of these
agreements by declaring void any agreements that would, even
indirectly and subsequently, endanger the rights granted by the
collective agreement.
Exceptions to the Principle
There are, however, two exceptions to the principle of no
departure from the terms of collective agreements, the nature
and scope of which has just been described.
(1) All laws concerning collective agreements permit departures from the terms of such agreements when they are more favourable to the worker ;
(2) All the laws also permit, departures that are expressly
authorised and provided for by the collective agreement itself.

128

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

(a) Departures favourable to the workers. — Individual agreements modifying the provisions of collective agreements are, as
a rule, valid when they change the worker's conditions of employment to his advantage. Thus, as in the case of protective labour
legislation, the prohibition of modifications by agreement is
operative only for the benefit of the workers and never to their
detriment. The reason is that the collective regulation of conditions of employment is presumed to lay down minimum conditions
on which the parties to collective agreements are naturally left
free to improve, if only in order to enable them to make remuneration proportionate to the efficiency of the individual worker
within each category or wage group. Under schemes of compulsory
arbitration, the distinction between the minimum living wage
and the secondary wage serves the same purpose.
The right which the parties to individual contracts of employment thus possess of modifying the provisions of the collective
agreement in the worker's favour is, of course, merely a right
and not an obligation. Thus if an employers' association which
is a party to a collective agreement rules that its members must
consider the conditions of work laid down in the agreement as
being maximum conditions that must not be exceeded, it would
not thereby contravene the terms of the collective agreement.
The situation would be different if the collective agreement
expressly stated that the conditions it contained were to be considered as a minimum.
Although most laws accept the principle of departures from
collective agreements when they are to the workers' advantage,
some of them permit the parties to prohibit such departures.
If a clause prohibiting such departures is actually included in
an agreement, the consequence is that the conditions of employment it prescribes, which theoretically represented a minimum,
become ipso facto a maximum, applying uniformly throughout
the occupation or industry covered by the agreement. Such a
clause could be met with only in collective agreements applying
to industries or occupations in which working conditions were
very similar or practically identical, and the agreements would
require to regulate in great detail the conditions of remuneration
of various classes of wage-earners.
The laws on this subject do not define what is meant by a
departure to the worker's advantage, the interpretation of this
concept being left to the courts. They, with a view to preventing
the protective provisions of collective agreements from being

LEGAL EFFECTS OF AGREEMENTS

129

indirectly evaded, place a dual restriction on these departures
in favour of the workers. I n the first place, certain clauses, especially those concerning hours of work, are considered as measures
of social protection t h a t cannot be modified by individual agreement, no matter what advantages the change might bring. Thus
an agreement to prolong hours of work beyond the figure stipulated in the collective agreement (but within the limits of the
statutory hours, of course), accompanied by an increase in wages,
is not deemed to be a departure to the worker's advantage even
if he feels himself to be the gainer.
I n the second place, when the law-courts have to interpret
agreements departing from the collective agreement they always
adopt the principle t h a t the collective interests of the trade must
come before the personal interests of an individual worker. I n
other words, agreements to modify the terms of a collective agreement must not be interpreted simply in the light of the personal
advantage of the parties concerned, b u t in the light of the collective
interests óf all the persons to whom the collective agreement
applies.
(b) General exceptions -permitted by collective agreements. —
The right to depart from the terms of a collective agreement for
the benefit of the worker really accentuates the fact t h a t these
agreements are essentially protective measures for the workers.
B u t one of the fundamental differences between collective
agreements and ordinary laws is t h a t the legislation authorises
the parties to collective agreements — or, in their stead, arbitration
boards, judicial bodies or the public authorities responsible for
regulating conditions of employment collectively — to permit
general exceptions to the principle t h a t collective agreements
are sacrosanct.
The view taken has been t h a t although it was desirable to
forbid the parties to individual contracts to enter into any stipulation t h a t was contrary to the collective agreement and less
favourable to the worker — so as to ensure the full effectiveness
of the collective regulations and, if necessary, to protect the workers against their own weakness — there was no need for the
same restrictions in the case of parties to collective agreements
(trade unions, etc.), bargaining on an equal footing, able to appreciate the desirability of the measure in question and able also
to supervise its application.
The legal effect of the measure is this : within the limits of
9

130

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

the powers conferred on them by the collective agreement, the
persons to whom it applies recover their freedom of contract
and can agree to conditions of employment that may be even
less favourable than those specified in the agreement. Here again
— unless there is any express stipulation to the contrary — there
is no obligation to depart from the provisions of the collective
agreement ; it is simply that such a departure is permitted to
the parties to individual contracts of employment and not to
the employer only.
Under compulsory systems, this power to grant exceptions
to the provisions of collective agreements is conferred on the judicial
or political authority responsible for collective agreements.
The social effect of the measure is that the parties to individual
contracts of employment are enabled to take account of the
situation and needs of particular undertakings to which the collective agreement applies.
Here again, then, the aim of the legislator has been to make
collective agreements as elastic as possible.
It will be seen later (cf. below, " Duration of Collective Agreements ") that the procedure for the revision of collective agreements offers further possibilities of adapting working conditions
to the changing needs of industry.
Position of Collective Agreements under Labour Law
In view of the fact that departure from the terms of collective
agreements is inadmissible, as is the case also with legislative
provisions, the texts of these agreements — in so far, that is,
as they regulate conditions of employment for the persons to
whom they apply — have the same force as legislative texts and
restrict in the same way the freedom of contract of the parties
to them.
From this point of view collective agreements are in every
way analogous to protective labour legislation, but they must
be considered as special laws governing a certain industry or
occupation, limited in their duration and promulgated — as a
rule — by the parties and not by the legislative authorities.
Since collective agreements, within the limits of their scope,
have thus been assimilated to labour legislation, the question of
the relationship between the agreements and the legislation
naturally arises. This problem will have to be studied as a whole
later, in connection with the possibility of using collective agreements as instruments for regulating certain conditions of employ-

LEGAL EFFECTS OF AGREEMENTS

131

ment internationally. For the moment it will suffice to answer,
in the light of the existing legislation, a few of the questions t h a t
arise concerning the legal scope of collective agreements : (1) can
collective agreements ipso jure depart from the provisions of
labour legislation ? (2) to what extent are such departures
authorised by labour legislation itself ? (3) what part can collective
agreements play in the application of labour legislation ?
(a) Departures ipso jure from labour legislation by collective
agreement. — I t is a general principle of labour legislation t h a t
agreements, whether individual or collective, may not depart
from the imperative provisions of social legislation except in so
far as they are more favourable to the workers. Moreover, such
agreements become null and void, and those who enter into them
are liable to the penalties prescribed for infringements of the
law.
As a general rule, then, even if the text of the law makes no
provision on the subject, laws take precedence over agreements
just as collective agreements, as was shown above, take precedence over individual contracts of employment. Some laws indeed
expressly lay down the order of legal precedence of the various
types of labour law. An example is to be found in Spanish legislation, which recognises, in addition to labour legislation in the
strict sense, other methods for the collective regulation of labour
conditions, such as the orders of joint boards, collective agreements
and collective contracts.
Sections 9 to 12 of the Contracts of Employment Act of
21 November 1931, 1 which deal with the restriction of contractual
freedom, define the respective status of each of these methods
of regulation as follows :
11. " Employment regulations " (bases de trabajo) shall mean
the rules adopted by the joint juries or the joint committees legally
recognised for that purpose which lay down the minimum conditions
as to protection for employees with respect to wages, hours of work,
rest periods, guarantees of permanent employment, provident schemes
and all other measures which may be specified in the contract of
employment.
The employment regulations shall not lay down any condition less
favourable to the employees than those specified in the statutory
provisions.
12. A " collective agreement " (pacto colectivo) respecting the
conditions of employment shall mean an agreement concluded between
1

Cf. Legislative Series, 1931, Sp. 14.

132

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

an association or associations of employers and an industrial association or associations of employees, legally constituted for the purpose
of establishing the standards which must be observed in contracts of
employment (whether individual or collective) concluded between
employers and employees in the branch, trade, employment or occupation to which both parties belong in the district concerned.
Collective agreements respecting conditions of employment shall
not include conditions which are less favourable to the employee than
those laid down in the statutory provisions and the regulations adopted
by the legally recognised joint juries or joint committees.
But there are certain exceptions to the precedence taken by
labour laws over collective agreements, more especially in countries
in which the collective regulation of labour conditions by collective
agreement is the predominant method.
In Italy, for example, some of the courts of first instance had
ruled t h a t collective agreements could, in their own sphere, lay
down provisions contrary even to the express principles of labour
laws. But the Court of Appeal reversed this decision and upheld
the principle that collective agreements were not entitled to
depart from more favourable standards laid down by law. 1 On
the other hand, the courts have clearly asserted the precedence
of collective agreements over customary practices, even when
the latter are recognised by some labour law and hence enjoy,
to some extent, the legal status of that law.
This problem arose in the following manner. Section 17 of
the Italian Legislative Decree of 23 November 1923 concerning
private contracts of employment states t h a t the provisions of
the legislation apply, notwithstanding any agreement to the
contrary, except when there is an individual agreement or local
usage t h a t is more favourable to the employed person. The
courts, taking the law as being imperative as a matter of public
policy, held t h a t it was quite impossible to make any departure
from commercial usages by individual contracts of employment,
since the employed person might have signed such an agreement
under stress of necessity. The same arguments were advanced
in support of the view t h a t collective agreements could not run
counter to established usage. But on the other hand it was argued
t h a t in the field of collective labour relationships the problem
took on quite a different aspect and that, consequently, departures
from custom by collective agreement were entirely permissible.

Cf. International Survey of Legal Decisions on Labour Law, 1929, Italy, Nos. 6
and 7 and note ; 1930, Italy, Nos. 7 and 37 ; 1931, Italy, No. 30.

LEGAL EFFECTS OF AGBEEMENTS

133

This view was upheld by the Court of Appeal on 12 January
1933 ; the reasons given for the decision included the following :
The collective regulation of labour conditions is based on the legal
and political principles summed up in section IV of the Labour Charter,
which states that the individual interests of employers and employees
must be subordinated to the higher interests of production. This
principle implies that in exceptional cases the benefit of some local
custom may be withdrawn from certain groups of employees while
retaining its full legal force in respect of other employees whose conditions of work and of production do not call for any such sacrifice.
Thus, in Italy, collective agreements may, in principle, decree
a departure from customary practices, even when the latter are
more favourable and are recognised b y law.
The question arose in still another form in Australia, both
in the separate States and in the Commonwealth. Most of the
arbitration laws, it will be recalled, empower the industrial courts
to regulate various matters, such as hours of work, apprenticeship,
family allowances and placing, which, in other countries, are
dealt with by labour legislation, the function of collective agreements then being merely to fill gaps in the legislation or to lay
down collective regulations more favourable than the legal minimum.
I t is thus natural t h a t the laws should authorise the industrial
arbitration courts to depart from the rules which they themselves
draw u p and have to enforce. 1
The same powers are naturally given to the Commonwealth
authority responsible for preventing and settling disputes of
competence between the State courts and the Federal Court and
giving a ruling in case of conflicting awards.
The Commonwealth Conciliation and Arbitration Act 2 therefore
prescribes a number of measures (orders restraining the State
authorities from dealing with a dispute, invalidation of decisions
contrary to the Federal award, etc.) to ensure t h a t the awards
of the Federal Court will have complete precedence, not only
over State awards, but also over State legislation. Section 20 of
the Act reads :
If it appears to the Court that any State industrial authority is
dealing or about to deal with an industrial dispute, with part of an
industrial dispute or with a matter which is provided for in an award
1
For an instance of the regulation of one of the most important of working
conditions by industrial arbitration, cf. International Labour Review, Vol. X X V I ,
No. 1, p . 51 and No. 3, p . 364 : "The Standard Working Week in Australia ", by

O. de R.
8

FOENAHHEB.

Cf. Legislative Series, 1928, Austral. 2.

134

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

of the Court or is the subject of proceedings before the Court, the
Court may make such order restraining the State industrial authority
from dealing with that dispute or any part thereof, or with that matter,
as the Court thinks fit, and thereupon the authority shall, in accordance
with that order, cease to proceed in the dispute or part thereof or in
that matter.
Any award, order or determination of a State industrial authority
made in contravention of an order made under this section shall, to
the extent of the contravention, be void.
Sections 30 and 30 A of t h e Act state :
When a State law or an award order or determination of a State
industrial authority is inconsistent with, or deals with any matter
dealt with in an award or order lawfully made by the Court, the latter
shall prevail, and the former shall, to the extent of the inconsistency,
or in relation to the matter dealt with, be invalid.
Any person interested may apply to the Court for a declaration
that a State law dealing with an industrial matter or an award, order
or determination of a State industrial authority, is invalid under
section 30 of this Act. •
These are a few instances of collective agreements or arbitration awards being permitted, as a matter of course, to depart
from the terms of labour legislation ; they constitute exceptions
to the rule t h a t labour laws take precedence over collective
agreements, but the rule remains in most countries one of the
fundamental principles of labour law.
(b) Departures authorised by the legislation. — Although the
legislative authorities may not wish to give the parties to collective
agreements power to draft or to amend social legislation, they
very often use collective agreements as a means of making the
legislation more elastic. The classic example is to be found in
hours-of-work legislation in which the parties are authorised to
depart by collective agreement from some of the imperative
provisions of the law.
For instance, the German Order of 14 April 1927,1 as amended
by the Act of 26 July 1934 2 concerning hours of work, authorises,
subject to certain conditions, departures from the statutory
hours of work to be laid down by collective agreement and —
since the National Labour Act of 20 January 1934 came into
force —- by collective rules.
According to section 5 of the Act, if working hours are extended
1
2

Cf. Legislative Series, 1927, Ger. 2.
Cf. Legislative Series, 1934, Ger. 13.

LEGAL EFFECTS OF AGBEEMENTS

135

by collective agreement (collective rules) beyond the statutory
limits, the provisions of the collective agreement (rules) will
then apply, instead of the statutory provisions, to the employment
of the workers on whom the collective agreement is binding.
But certain guarantees are added, for it is stipulated that if a
collective agreement (or collective rules) contains provisions
relating to hours of work which are incompatible with the principles
of the legislation for the protection of workers, in particular with
reference to the need for protection of women and young persons,
the supreme State authority may challenge these provisions and
if they are not altered within a period fixed by the authority,
may itself issue regulations concerning the permissible duration
of working hours. Section 9 also fixes a maximum of ten hours
in the day that may be stipulated by collective agreement. Thus
the departure from the statutory hours is permitted only subject
to the supervision of the authorities and to the observance of
limits fixed by the law itself.
Other examples of departures from legislative provisions concern
jurisdiction in labour matters. Quite a number of laws concerning
labour courts (which, theoretically, are alone competent to deal
with disputes arising out of individual contracts of employment
or apprenticeship) recognise the validity of arbitration clauses
that remove disputes from the competence of the labour courts,
provided that they are based on definite arrangements mentioned
in the collective agreement.
It may also be noted that conciliation and arbitration bodies
appointed by agreement between the parties generally take precedence over official conciliation and arbitration systems.
(c) Application and adaptation of labour legislation by collective
agreement. — The commonest way in which collective agreements
are made to serve the ends of the legislation is undoubtedly their
use as an instrument for the application or adaptation of labour
legislation. It would be practically impossible to enumerate all
the legislative provisions that refer to or in some way or other
depend on the support of collective agreements : legislation concerning the minimum wage, works regulations, notice of dismissal,
the weekly rest, the closing of commercial or industrial establishments, hours of work, workshop discipline, etc.
It must suffice here to note one particular trend, which is
to lay down the principle of some proposed social reform in the
legislation and leave its application to collective agreements.

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LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

For instance, the French Act of 23 April 1919 concerning
the eight-hour day lays down the principle and states that the
public administrative regulations issued under the Act must refer
to the collective agreements, where such exist, drawn up by the
associations of employers and workers in the industry or occupation
concerned. Thus the provisions of these agreements are directly
incorporated in the legislation and become applicable, in the same
way as the legislative provisions, to all persons falling within
the scope of the Act.
According to the report on the subject submitted to the
National Economic Council in 1934,1 six million wage earners
were at that date covered by the eight-hour day, primarily on
the basis of a system of collective agreements.
The part played by collective agreements under the French
Act of 29 December 1923 concerning the weekly closing of industrial
and commercial establishments is still more important, for the
application of the Act is conditional on the conclusion of agreements
between the employers' and workers' organisations concerned.

Cf. CONSEIL NATIONAL ECONOMIQUE : Les conventions collectives de travail.
Paris, Imprimerie nationale, 1934.

CHAPTER III
THE CONTENTS OF COLLECTIVE

AGREEMENTS

In the survey of the de facto situation of collective agreements
(cf. Part. I, pp. 12 et seq.), the main clauses that go to make up
these agreements were briefly analysed. The legal value of these
clauses must now be studied.
The distinction made with regard to the legal nature of collective
agreements — as regulating conditions of employment on the
one hand and regulating the relations between the contracting
parties on the other (cf. the preceding chapter) — must be made
again with regard to their contents. Indeed, it is here that the
full significance of the distinction becomes apparent. The clauses
specifying the conditions of employment of persons covered by
the agreement and those defining the rights and obligations of
the contracting parties differ not only in respect of the persons
to whom they apply but also in respect of their legal nature and
the sanctions for their enforcement.
In the first place, the two sets of clauses differ with regard
to the persons to whom they apply, for the persons who enjoy
rights or are under obligations in virtue of the provisions governing
conditions of employment are, primarily, the employers and
workers who are parties to the individual contracts of employment
concluded under collective agreements, whereas the parties affected
by the rights or obligations conferred or imposed by the clauses
concerning the relations between the contracting groups are,
primarily, the employers' and workers' organisations.
In the second place, they differ as to their legal nature, for
the dual legal effect of collective agreements — in the prohibition
of contracts departing from the collective agreement and the
automatic substitution of the appropriate clauses of the latter
for the offending clauses of the former — resides only in the clauses
that regulate working conditions, whereas those governing the
relations between the parties — apart from compulsory systems,
which will be mentioned later — are binding on the contracting

138

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

organisations only within the limits of the agreement and only
in so far as they were freely accepted by both parties. In other
words, no matter what the system may be, the clauses regulating
working conditions have the imperative force of law for the persons
to whom the collective agreement applies, whereas the clauses
concerning the relations between the parties to the agreement
have simply the force of a contract between the signatory bodies.
The two sets of provisions also differ as regards the legal
sanctions for their enforcement, for it will be shown later, in
connection with the enforcement of collective agreements, that
disputes arising out of the interpretation or application of these
clauses are subject to different procedure and are heard by different
bodies.
It may be added that in systems making provision for the
extension of collective agreements to third parties (cf. below,
" Scope of Collective Agreements ") only the provisions governing
conditions of employment are extended beyond their strict legal
application ; the clauses concerning the rights and obligations
of the contracting bodies are not affected by the extension but
remain in their original form.
The two sets of clauses are of course closely bound up with each
other and may also impose obligations simultaneously on the
parties to a collective agreement and the parties to individual
contracts of employment. It is then a matter for the courts to
decide in each particular case whether the person (or body) to
whom a certain right (or obligation) applies is the individual
employer or worker, or the contracting organisation, or both at
once.
Moreover, as will be seen later in connection with the enforcement of agreements, the fact that the laws of many countries
enable industrial associations to take legal proceedings not only
in the defence of their own interests but also on behalf of their
members ensures that the proper legal sanctions will be taken
in every case to enforce the rights laid down by collective agreement.
This first distinction was based on the legal value of the different
clauses of collective agreements ; a second one depends on the
organisation of the system of collective agreements. In voluntary
systems, the parties are in general entirely free to settle the contents
of collective agreements, whereas in compulsory systems part or
the whole of these contents may be prescribed by the authorities.
The following survey of the contents of collective agreements

LEGAL EFFECTS OF AGBEEMENTS

139

will therefore deal first of all with systems in which the contents
are fixed by voluntary negotiation and then with systems in
which they are prescribed b y the authorities. For the first type
it will suffice to give a few examples illustrating the difference
between the clauses determining the conditions of employment
of the workers and those defining the rights and obligations of
the contracting parties (for details of the system, the reader is
referred to Part I of this Report). I n the case of the compulsory
systems, the two sets of clauses will again be examined separately
in the same order.

—

CONTENTS

SETTLED

BY VOLUNTARY

NEGOTIATION

The freedom of the parties to regulate working conditions by
collective agreement, which is theoretically unlimited in systems
of voluntary negotiation, is of course subject to the restrictions
imposed by the provisions of social legislation : general legislation
on the individual contract of employment, private contracts of
service, apprenticeship contracts, etc., and special laws concerning
certain social matters, such as the minimum wage, guarantees of
wage-payment, hours of work, holidays with pay, public holidays,
notice of dismissal, workshop and service regulations, etc. I n
all these cases, as has been shown, the relative authority of labour
legislation and collective agreements prevents the parties to the
latter from agreeing to conditions less favourable to the workers
than the statutory ones.
Voluntary Regulation of Working Conditions by Collective Agreements
Subject to t h a t general reservation, t h e various clauses t h a t
actually regulate working conditions may now be studied.
The criterion for distinguishing between the two types of
clauses is naturally to be found in the fact t h a t only the clauses
governing conditions of employment are intended and suitable
for incorporation in the individual contracts to be concluded
subsequently between the employers and workers covered by
t h e collective agreement (a clause concerning wages, for instance),
whereas clauses dealing with the relations between the contracting
parties cannot appropriately be incorporated in individual contracts
(for example, a clause concerning the institution of an employment
agency).
This means that the provisions of the first type are such as

140

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

by their nature, might be stipulated by the parties to an individual
contract of employment. They are therefore of four main kinds :
Clauses defining the employer's obligations under the individual
contract of employment ;
Clauses defining the worker's obligations under the individual
contract of employment ;
Clauses concerning the termination of the contract of employment ;
Clauses concerning the organisation of individual relationships
and the settlement of individual labour disputes.
The employer's obligations. — The main obligation of the
employer t h a t is specified in the collective agreement is, of course,
the payment of wages. On this subject it may contain very detailed
provisions concerning such points as the amount of the remuneration, the principles governing it (time rates or piece rates), its
components (all sorts of allowances, bonuses and shares in profits),
measures to guarantee its payment, etc.
In connection with the fixing of piece rates —• which is of
special importance to the workers, since a cunningly contrived
system of piece rates over which they had no control could destroy
the whole value of wage-fixing by collective agreement — it should
be noted t h a t collective agreements may prohibit this form of
remuneration, or permit it only subject to certain conditions,
regulate its application, subject it to the supervision of joint
committees, guarantee a minimum rate of earnings t h a t is higher
by a certain percentage than t h e normal time rates, which are
the usual basis for the calculation — in short, hedge it about
with all the necessary guarantees.
In addition to this main obligation, the collective agreement
may contain clauses concerning the employer's obligation to take
measures to protect the worker's person and property, clauses
concerning his obligation to provide the stipulated work (paying
remuneration for hours of attendance even if no work is available
through some fault on the employer's part, etc.), concerning holidays
with pay (conditions, duration, time of year, compensation, etc.),
concerning re-engagement after a strike, and so on.
The worker's obligations. — The main clauses of collective
agreements concerning the worker's obligations include those
requiring good faith in the performance of the agreed task (nature,

LEGAL EFFECTS OF AGREEMENTS

141

amount, work-place and, more especially, hours of work), radius
clauses, clauses concerning inventors' and authors' rights, manufacturing secrets, etc.
Provisions concerning the termination of the contract. —• The
clauses on this point include, inter alia, those concerning the
period of notice, the method of dismissal (in writing), the reasons
for dismissal, prohibition of dismissal on account of membership
of a union or being party to an agreement, restriction of the right
of dismissal, etc.
Provision concerning individual relationships. — Finally, among
the clauses of collective agreements governing the individual
relationships between thè parties to contracts of employment,
mention may be made of those concerning t h e organisation of
the work (time-table, time of beginning and stopping work, breaks,
etc. ; disciplinary rules, fines, penalties, etc.) and those concerning
the settlement of individual disputes.
This brief enumeration, which includes, of course, only a
few typical examples, will serve to show t h a t the regulation of
conditions of employment by collective agreement may cover
all the relationships between the parties to individual contracts
of employment.
I t must be remembered t h a t all these clauses are binding for
the employers and workers to whom the collective agreements apply,
just as a law would be, and the parties to individual contracts of
employment may depart from them only when it is to the worker's
advantage.
Voluntary

Regulation

of the Parties'

Rights and

Obligations

The clauses of collective agreements dealing with t h e rights
and obligations of the parties to such agreements are intended
primarily to ensure their due application, for which the contracting
organisations are mainly responsible. They may be grouped
under the following heads :
Clauses concerning the enforcement of collective agreements ;
Clauses concerning the organisation of collective relations
between the parties to agreements ;
Clauses concerning the establishment of joint bodies ;
Clauses concerning the engagement of staff ;
Clauses concerning the collective dismissal of workers.

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LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

Enforcement of collective agreements. — Every contract — and
a collective agreement is a contract — implies t h a t the parties
must carry out the agreed terms in a spirit of good faith ; otherwise
the contract may be annulled or damages payable.
Consequently, even when there is no express stipulation to
this effect, the parties to a collective agreement are bound to
refrain from doing anything t h a t might interfere with its loyal
application and to do all they can to secure its enforcement.
From the point of view of collective relationships this means
t h a t the parties must, so long as the agreement is in force, refrain
from exercising any direct or indirect pressure to bring about
an amendment of the collective agreement or to endanger its
existence or application, such as lock-outs, strikes, black-listing,
boycotting, inciting members of associations to commit these
acts, etc. I t further involves the positive obligation for the parties
(industrial associations, etc.) to use the means at their disposal (fines,
exclusion, etc.) to induce their members to respect the agreement.
This obligation to observe in good faith the terms of the
collective agreement is naturally a relative one ; it applies only
to the limited contents of the agreement and for such time as
it remains in force. Thus, strikes, lock-outs and other forms of
collective pressure in respect of other matters not dealt with by
the collective agreement (e.g. a strike for higher wages when the
agreement does not regulate wages), sympathetic strikes or lockouts and defensive strikes or lock-outs for the maintenance of
an agreement t h a t has been broken by the other party are not
precluded.
I n addition to this obligation which is inherent in every collective agreement, the parties may agree to any clauses they consider
calculated to secure the application of the agreement, such as :
the undertaking to submit to conciliation or arbitration any
collective dispute concerning the interpretation of the clauses of
the collective agreement ; the undertaking not to have recourse
to measures of collective pressure, even in connection with matters
not regulated by the agreement ; the undertaking t o maintain
industrial peace even after the agreement has expired ; general
arbitration clauses providing t h a t recourse will be had to conciliation or arbitration for all collective disputes concerning the
renewal or alteration of agreements or the drafting of new ones ;
clauses concerning the contractual responsibility of the parties
in the event of infringements of collective agreements : fines,
guarantee funds, etc.

LEGAL EFFECTS OF AGREEMENTS

143

Clauses concerning the collective relations between the parties. —
This heading covers, more especially, the various types of " tradeunion clauses ". The parties may agree — within the limits, of
course, of legality and public policy — t h a t they will give preference to, or even reserve employment exclusively for, trade unionists
in general, or members of a given union, or (when the collective
agreements are concluded by occupational groups) non-unionists. 1
Similarly, collective agreements may make it compulsory for
the employers to extend the benefits of collective agreements to
workers not actually covered by them, or, on the other hand,
to reserve them for members of the contracting organisations.
Again, they may stipulate t h a t trade union members must be
re-engaged after a strike and t h a t no reprisals must be taken.
Clauses concerning the establishment of joint bodies. — This
heading includes the provisions of collective agreements concerning
welfare bodies or insurance institutions : mutual sickness, invalidity,
survivors' or unemployment funds ; pension funds ; equalisation
funds for family allowances, compensation for dismissal, etc. ;
the establishment of trade-union or joint employment agencies ;
most important of all, clauses concerning bodies for supervising the
enforcement of agreements — works councils, joint committees, etc.
Clauses concerning the collective engagement or dismissal of
workers. — The parties to collective agreements may stipulate
t h a t employers, when engaging employees, shall observe certain
rules, more especially as regards the proportion of various groups
according to criteria such as occupational ability : skilled workers,
labourers, apprentices, etc. ; nationality : ratio of foreign to
national workers ; sex : ratio of women to men ; age : ratio of
children or young persons to adults, etc.
The agreements may also contain provisions concerning the
collective dismissal of workers, stipulating certain conditions of
form or of substance : written notice to be given to the associations
concerned ; the work to be distributed and hours reduced before
any mass dismissal takes place ; account to be taken of certain
factors, such as age, length of service, occupational skill, family
responsibilities, trade union membership, etc., when workers have

1
With regard to the legality of such clauses, reserving employment for trade
union members, giving them preference, or agreeing to employ only non-unionists,
cf. Freedom of Association, op. cit.

144

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

to be dismissed ; preference to be given to former employees when
business revives.
This brief enumeration of the main clauses governing the
relations between the parties to collective agreements shows t h a t
the organisations are free to lay down any reciprocal obligations
they may consider conducive to the smooth working of the agreement.
I t should be noted t h a t these provisions are binding on the
parties only within the limits set by the terms of the agreement signed
by them.

II.

—

T H E CONTENTS OP AGREEMENTS PRESCRIBED BY THE
AUTHORITIES

The fact that, in the voluntary systems, the parties are left
entirely free to determine the contents of collective agreements
does not, of course, necessarily mean t h a t agreements will actually
be concluded to regulate working conditions in every case (e.g.
if one of the contracting parties is weak, the economic situation
unfavourable, etc.).
I n order to avoid the possibility of social or economic instability
as a result of the failure to draw up collective regulations, the
legislation of some countries prescribes the contents, or part of
the contents, of collective agreements.
The legislative provisions concerning working conditions will
first be studied, and then those concerning the relations between
the parties.
Compulsory Regulation of Working Conditions by Collective
Agreements
One form of legislative intervention t h a t is met with in quite
a number of countries is for the law to enumerate certain matters
t h a t must be dealt with by the collective agreement or by some
similar procedure, failing which the collective agreement is void.
For instance, section 8 of the Italian Royal Decree of 6 May
1928 states :
A collective contract of employment shall not be published unless
it contains definite provisions respecting disciplinary regulations, the
probationary period, the rate of remuneration, the method of payment
thereof, hours of work, weekly rest and (in the case of undertakings
with continuous processes) annual leave with pay, the termination
of the employment by the death of the employee or by his dismissal

LEGAL EFFECTS OF AGREEMENTS

145

without any fault on his part, the transfer of the undertaking, provision
for the employee in case of illness, the calling up of the employee for
service in the army or in the volunteer militia for national defence
in conformity with the principles laid down in sections XIV to XX of
the Labour Charter.
Similarly, section 34 of the Portuguese Legislative Decree
of 23 September 1933 to promulgate the National Labour Code
reads :
Collective contracts shall lay down standards for hours of work,
rules of employment, salaries or wages, penalties for breaches of the
rules, the weekly rest, holidays, the conditions of the suspension or
loss of employment, the period during which employment is guaranteed
in case of sickness, leave for the performance of military service, the
period of apprenticeship or probationary period for new employees,
and the contributions of employers and wage-earning or salaried
employees to the provident funds of trade unions.
Again, section 27 of the German National Labour Act of
20 January 1934 stipulates t h a t the following conditions of
employment must be included in the establishment rules (which
have taken the place of the former works agreements) :
1. The beginning and ending of the normal daily hours of work
and of the breaks ;
2. The times for the payment of remuneration and the nature
thereof ;
3. The principles for the calculation of jobbing or bargain work,
if work is done on a job or bargain basis in the establishment ;
4. Regulations for the nature, amount and collection of fines if
provision is made for them ;
5. The grounds on which an employment can be terminated without
notice, in cases where this does not rest upon statutory grounds ;
6. The utilisation of remuneration forfeited by the unlawful
termination of an employment, in cases where the said forfeiture
is prescribed in the establishment rules or contract of employment
in pursuance of statutory provisions.
Section 32 of the same Act empowers the labour trustees to
lay down guiding principles for the tenor of establishment rules
and to issue, ex officio, collective rules prescribing minimum conditions of employment for the protection of the persons employed
in a group of establishments within the territory allocated to each
trustee. The collective rules take the place of the former collective
agreements.
The compulsory arbitration courts in the Commonwealth and
the various States of Australia may — within the limits of their
respective jurisdictions — lay down conditions of employment
by arbitration award. A good idea of the extent of their powers
in this direction may be obtained from the enumeration of the
10

146

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

subjects t h a t fall -within the jurisdiction of the Commonwealth
Court of Conciliation and Arbitration.
According to section 4 of the Commonwealth Conciliation and
Arbitration Act of 22 J u n e 1928 x the " industrial matters " with
which the Commonwealth Court of Conciliation and Arbitration may
deal include :
All matters relating to work, pay, wages, reward, hours, privileges,
rights, or duties of employers or employees, or the mode, terms, and
conditions of employment or non-employment ; and in particular,
but without limiting the general scope of this definition, includes all
matters pertaining to the relations of employers and employees, and
the employment, preferential employment, dismissal, or non-employment
of any particular persons, or of persons of any particular sex or age,
or being or not being members of any organisation, association, or
body, and any matter as to the demarcation of functions of any
employees or classes of employees, and any claim arising under an
industrial agreement, and includes all questions of what is fair and
right in relation to any industrial matter having regard to the interests
of the persons immediately concerned and of society as a whole.
The laws of the various States have followed this example and
given equally explicit definitions of the powers of the State
Courts. 2
The New Zealand Industrial Conciliation and Arbitration Act
of 8 June 1936 includes in the definition of " industrial matters "
given in section 2 also all matters affecting the privileges, rights
and duties of industrial unions or associations and their officers.
Under the French Act of 24 June 1936 collective agreements
must embody provisions relating to :
1. Freedom of association and the worker's freedom of opinion ;
2. The appointment in undertakings employing more than ten
persons of delegates elected by the staff from among members
of the staff to submit to the management individual claims
which have not received direct satisfaction and which refer
to the application of wage rates, the Labour Code and other
laws and regulations concerning the protection of the workers
and their health and safety ; these delegates may call in the
assistance of a representative of their trade union ;
3. Minimum wages fixed by category and by district ;
4. Notice of dismissal ;
5. Organisation of apprenticeship ;
6. Procedure for the settlement of disputes arising out of the
application of the collective agreement ;
7. Procedure for the revision or amendment of the agreement.
1

Cf. Legislative Series, 1928, Austral 2.
Cf. Legislative Series, 1926, Austral. 7, section 5 (New South Wales) ; 1929,
Austral. 6, section 5 (Queensland) ; 1926, Austral. 1, section 5 (South Australia) ;
1925, Austral. 12, section 4 (Western Australia).
8

LEGAL EFFECTS OF AGREEMENTS

147

A collective agreement may not contain clauses contrary to
the laws and regulations in force, but they may stipulate more
favourable provisions.
I n the U.S.S.R., the parties to collective agreements are
obliged, when determining conditions of employment, to observe
the guiding principles laid down by the State.
But some laws do more than prescribe a part or the whole of
the subjects t h a t must be dealt with in collective agreements ;
they lay down detailed rules for their effective application. Below
will be found some examples of the compulsory regulation of wages
and hours of work, followed by examples of the regulation of
other working conditions.
A. — Wages and Hours of Work
The attention of the legislative authorities has been devoted
mainly to the principles governing wages and the normal hours
of work, more especially in countries in which there is no special
legislation on this latter point.
Wages have come to be regulated by collective agreement
not merely because of their intrinsic importance as a factor in
social and economic life but, still more, because the problem of
wages cannot be dealt with by law in a general and uniform manner,
as can other social questions.
I t will be found, indeed, t h a t even in countries with the most
extensive system of wage regulation (such as Australia and the
U.S.S.R.) the legislation has had to take account of various
geographical, occupational and even personal factors t h a t play
a very minor part in the regulation of other social questions.
Minimum wage fixing machinery. — The first form of legislative intervention, which, although indirect, is closely linked up
with collective agreements, is the establishment of minimum
wage fixing machinery. However vast the scope of collective
agreements as a means of voluntarily regulating working conditions
may be, there is no country in which they cover every branch
of the economic system.
Quite a number of occupations or industries are excluded
from the benefit of collective agreements, on account either of
the methods of work (home work), or of the composition of the
labour employed (women and young persons), or of the absence
or weakness of trade unions.
This lack of collective agreements and the protection they

148

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

bring has led the legislative authorities to set up special wage
committees, wage boards or trade boards to fix minimum wages
for certain industries and thereby make good the deficiency. .
It is sufficient in the present context, where any fuller analysis
would be out of place, to have referred to this close and direct
connection between minimum wage fixing machinery and collective
agreements.1
Moreover, it will be shown later that systems of wage regulation
by collective agreement often adapt and extend the methods of
minimum wage regulation.
Wage regulation in undertakings working for the public
authorities. — Here again it will suffice to mention the provisions
contained in the laws of several countries concerning the relations
of Government departments with undertakings working for the
States. According to these laws, the public authorities may grant
the concession only on condition that the contractor undertakes
to fulfil certain social obligations — inter alia, to pay his workers
either the prevailing, rates laid down in collective agreements or
a minimum prescribed in the specifications.
A distinction must be made between work to meet the normal
requirements of the public services and emergency work undertaken
to relieve unemployment. In this latter case the authorities
usually reserve the right to prescribe lower rates of wages than
the prevailing rates (e.g. in Germany), for it is held that the
payment of lower rates, even if it may tend to affect the stability
of wages in similar private industries, is justified as a matter of
public policy, since the relief of unemployment is of paramount
importance.
These two methods are more or less on the fringe of the system
of wage-regulation by collective agreement ; those dealt with
below, on the other hand, directly regulate the remuneration of
workers by collective agreement or some similar procedure. It
will be found that they range from the mere legal confirmation
of wage rates freely agreed upon by the parties to the detailed
regulation of wages in advance by the authorities responsible for
the collective regulation of conditions of employment.
Legal confirmation and application to third parties of wage rates
fixed by collective agreements. — This is the method adopted,
1
Cf. INTEBNATIONAL LABOUR OFFICE : Minimum
Wage Fixing
Machinery.
Studies and Reports, Series D (Wages and Hours of Work), No. 17. Geneva, 1927.

LEGAL EFFECTS OF AGREEMENTS

149

with variations on points of detail, in Great Britain under t h e
Cotton Manufacturing Industry Act of 18 J u n e 1934, in Spain
under the Joint Boards Act of 27 November 1931, in the Netherlands under the Industrial Councils Act of 7 April 1933, in Canada
under the Industrial Standards Acts of Alberta and Ontario
passed in 1935, and in the Union of South Africa under the Industrial Conciliation Acts of 28 March 1924, 28 May 1930, and
7 March 1933. (See above, A, Chapter I I : " Collective Agreements
on an Occupational Basis ".)
I t may be added t h a t in countries such as Austria,
Brazil,
Canada (Quebec), Czechoslovakia, France, Gheece, Italy, and Mexico,
where the provisions of collective agreements can be extended
to third parties, the act of extension has similar effects. (See
below, Chapter IV, " The Scope of Collective Regulation ".)
Establishment of guiding principles to be followed by the authorities
responsible for the collective regulation of conditions of employment.
— This is the system adopted for instance in Italy.1 I t was pointed
out already in the first part of this study t h a t the trade unions,
the labour courts and the corporative organisations had to
employ a threefold criterion when fixing wages : the normal
hving requirements of the worker, the capacity of t h e industry
to pay and the efficiency of the individual worker.
I n Italy, section X I I I of the Labour Charter provides t h a t the
data collected by public departments, the Central Statistical
Institute and legally recognised trade associations respecting
conditions of production and labour, the state of the money market
and variations in the workers' standard of living, collated and
prepared by the Ministry of Corporations, will be used as the
criterion for t h e adjustment of the interests of the various categories
and classes among themselves and of these interests with the
higher interests of production.
So far, conditions of employment and wage rates have been
fixed in Italy on a purely contractual basis, by voluntary agreements between the associations of employers and workers. B u t
the establishment of corporations by the Act of 5 February 1934
will doubtless lead to far-reaching changes in the methods of fixing
1
Cf. Legislative Series, 1934, Por. 3 and the Portuguese Legislative Decree
of 1 April 1935 concerning minimum wages. This Decree authorises the UnderSecretary for Corporations to fix a minimum wage whenever there is a systematic
fall in wages as a result of cut-throat competition in any branch of trade or industry.
Cf. also the Greek Act of 16 November 1935 on the settlement of collective labour
disputes (Legislative Series, 1935, Gr. 10).

150

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

wages. I t will be remembered that section 10 of the Act of 3 April
1926 concerning collective labour relations empowered the corporations to lay down general rules governing conditions of employment
in the undertakings within their field of activity, and the Decree
of 1 July 1926 (sec. 57) gave these rules the force of collective
agreements. B u t section 8 of the Act of 5 February 1934 1 states
t h a t the corporations are also empowered to " draft rules for
the collective regulation of economic relations and for centralised
discipline in production ". To this end they have very extensive
powers of control over economic affairs (cf. P a r t I I I of this study).
This means t h a t the corporations, which are now responsible
on the one hand for laying down general rules concerning working
conditions and on the other for organising the economic relationships between the undertakings within their jurisdiction, will now
be able, with a full knowledge of the situation, to prescribe conditions of work on a solid basis and in the light of economic conditions,
and vice versa.
Apart from the general problem of wage regulation, Italian
legislation endeavours to solve the special problems of piece rates.
Section XrV of the Labour Charter prescribes t h a t " when
work is paid for by the piece, the piece rates shall be fixed so
t h a t it is possible for an industrious worker of normal working
capacity to secure minimum earnings higher than the basic wage ",
but it does not oblige the parties to regulate the system by collective
agreements.
As early as 1931, however, tbe Central Committee of Corporations had decided t h a t the action of the trade unions with regard
to the fixing of wages should include, in collaboration with the
employers' associations, the consideration of the factors — time,
output and rationalisation — all of which have an influence on
wages.
Again, a t a meeting held on 8 and 9 November 1934 the National .
Committee of Corporations declared t h a t :
The adoption of any system of piece-work or wage bonuses should
be the subject of collective regulation. Such collective regulation
should entail the following guarantees: (1) that all remuneration'
resulting from such systems should conform to the principles of
section XII of the Labour Charter (containing the criteria for wage
fixing mentioned above) ; (2) that the workers should be able to understand clearly and simply the elements which determine their own
remuneration ; (3) that the standards of output should not be fixed
1

Cf. Legislative Series, 1934, It. 1.

LEGAL EFFECTS OF AGREEMENTS

151

by one party but by agreement between the associations of employers
and workers.
The Committee instructed the associations of employers and
workers to examine as soon as possible the conditions resulting for
the workers from the application of the Bedaux system and other
systems of piece-work or bonuses, together with the conditions resulting
from possible variations in standards of output. If difficulties could
not be speedily settled, disputes should be brought before the Corporations concerned.
These decisions show t h a t in Italy the working and application
of wage systems have been placed under the direct supervision
of the trade unions and the corporations.
Actual fixing of wages (and of hours of work) by industrial
arbitration courts in accordance with certain principles prescribed
by law or established by the courts. — This is the method used in
the Commonwealth of Australia (in Queensland, New South Wales,
South Australia and Western Australia) and in New Zealand.
Mention was made already (cf. above, " Conciliation and Arbitration as a Basis for Collective Agreements ") of the criteria
adopted by the arbitration courts in Australia and New Zealand
when fixing wages by award.
The Australian Commonwealth Conciliation and Arbitration
Act, as amended on 18 August 1930, does not contain exact rules
for fixing wages and normal hours of work, b u t it states t h a t
the decision to change the normal hours of work or the basic
wage or the principles by which this wage is calculated requires
a majority among the members of the Federal Court, which for
this purpose comprises the Chief Judge and a t least two other
judges, whereas any other dispute can be settled by a single judge
or even by the conciliation commissioner.
On the other hand the laws of some of the Australian States
lay down the principles to be followed by the arbitration authorities
(industrial courts or commissioners, wages boards, etc.) when
fixing the basic wage or the normal hours of work.
The practical enforcement of the principles laid down in the
legislation is, of course, always a matter for the courts, and a
complete picture of the actual working of the system can be got
only by a careful analysis of the awards themselves. 1 Subject
1
For further details concerning wage fixing machinery in Australia, of. George
ANDEKSON : Fixation of Wages in Australia, 1929 ; for New Zealand, cf. N . S.
WOODS : " A Study of the Basic Wage in New Zealand prior to 1928 ", in The
Economic Record, December 1932.

152

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

to these reservations, however, it is of interest to mention here a
few of the most typical provisions of the laws of one of the Australian States concerning the fixing of the basic wage, simply as an
example, seeing it is impossible to cite all the clauses of Australian
laws dealing with wages.
Section 9 of the Conciliation and Arbitration Act of Queensland
of 6 J a n u a r y 1933 1 provides t h a t the Industrial Court, constituted
for this purpose by the President and two members, may make
declarations as to :
(a)
(b)
(c)
(d)

cost of living ;
the standard of living ;
the basic wage for males and females ;
the standard hours ;

Provided that :
The basic wage of an adult male employee shall be not less than
is sufficient to maintain a well-conducted employee of average health,
strength, and competence and his wife and a family of three children
in a fair and average standard of comfort, having regard to the conditions of living prevailing among employees in the calling in respect
of which such basic wage is fixed, and provided that in fixing such
basic wage the earnings of the children or wife of such employee shall
not be taken into account ;
The basic wage of an adult female employee shall not be less than
is sufficient to enable her to support herself in a fair and average
standard of comfort, having regard to the nature of her duties and
to the conditions of living prevailing among female employees in the
calling in respect of which such basic wage is fixed ;
The Court shall, in the matter of making declarations in regard
to the basic wage or standard hours,2 take into consideration the
probable economic effect of such declaration in relation to the community in general and the probable economic effect thereof upon
industry or any industry or industries concerned.
Sections 264-267 of the Labour Acts of 1920-1924 in South
Australia (text of 6 January 1926 3 ), section 7 of the Arbitration
Act of New South Wales of 18 March 1926,* as amended on 13
December 1929,5 and sections 121-124 of the Arbitration Act
of Western Australia of 31 December 1925, 6 as amended by the
Act of 24 December 1930 ' all define in a similar manner the rules
to be observed by the arbitration authorities when fixing the
1

Cf. Legislative Series, 1933, Austral. 1.
W i t h regard to t h e relationship between normal working hours and t h e
basic wage, ef. section 10 of t h e same Act.
3
Legislative Series, 1926, Austral. 1.
4
Legislative Series, 1926, Austral. 7.
5
Legislative Series, 1929, Austral. 5 B.
6
Legislative Series, 1925, Austral. 12.
7
Legislative Series, 1930, Austral. 7.
2

LEGAL EFFECTS OF AGREEMENTS

153

basic wage. As was mentioned above, the basic wage is a minimum
real wage ; a lower rate of wages is permitted only in exceptional
circumstances and subject to the statutory conditions concerning
certain groups of workers whose ability is below normal and who
therefore run the risk of being dismissed if the rules concerning the
minimum wage were strictly applied. Consequently, most of
these Acts permit exceptions in certain strictly specified cases
for the benefit of young persons, women, disabled persons and
older workers.
As the question of hours of work has been dealt with in special
studies by the Onice, it must suffice to note here that the basic
wage is always reckoned in terms of normal working hours.
It may be remembered that in New Zealand the Arbitration
Court is required, on the one hand, to fix the basic rate of wages
at a level sufficient to enable a man to maintain a wife and three
children in a fair and reasonable standard of comfort and, on the
other, to fix the normal working week at 40 hours. Moreover,
the reduction of hours may not entail any fall in weekly wages.
Simultanéeme regulation of certain conditions of employment
— more especially the minimum wage and maximum hours —
and of certain industrial conditions.. — This method has been
adopted in the United States, Canada (Industrial Standards Act
of Alberta, 1935) and to some extent in France under the Legislative
Decree of 3 October 1935 concerning the silk industry.
In the case of the United States — for which the Office has
already published a detailed study of the machinery for fixing
wages and hours of work 1 — it will be recalled that the former
National Recovery Act of 16 June 1933 prescribed that the compulsory regulation, by the codes of fair competition, of wages, hours
of work and certain other conditions of employment was to be
accompanied by the regulation of competitive conditions and
the detailed regulation, in some industries, of production, prices
and markets.
Since the repeal of the Act of 16 June 1933 by order of the
Supreme Court (cf. above, p. 81), the American Congress has
passed an Act for the reorganisation of the coal industry which
applies to that industry some of the fundamental principles of
the earlier Act.
1

Cf. INTERNATIONAL LABOUR O F F I C E : Social and Economic Reconstruction

the United States. Studies a n d Reports, Series B (Economic Conditions), No. 20.

154

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

The Guffey Act of 30 August 1935 for the reorganisation of
the coal industry *• is based on the following principles :
(1J An excise tax of 15 per cent, per ton of coal, 90 per cent.
of the yield being returned to the industries t h a t comply
with the provisions of the Act ;
(2) Organisation of the industry in accordance with the
provisions of the earlier codes of fair competition in the
coal industry ;
(3) The establishment, in the Interior Department, of a
National Bituminous Coal Commission, which, in collaboration with 23 district boards, would fix minimum prices for
coal in accordance with the provisions of the Act, with
a view to securing a minimum living wage for the workers
and a reasonable margin of profit for the employers ;
(4) The creation of a Bituminous Coal Labor Board, consisting of one employer, one worker and an independent
chairman, to prevent and adjudicate disputes arising out
of the application of the guarantees granted to the workers
by the Labor Kelations Act (Wagner Act, cf. above,
p. 79) , which are incorporated in the present Act ;
(5) Creation of the office of Consumers' Counsel to represent
the interests of the consuming public. 2
This Act, too, was invalidated by a decision of the Supreme
Court of 6 March 1936. (The t e x t of the decision is reproduced
in the International Survey of Legal Decisions on Labour Law,
1935-36 ; United States, No. 1).
There is also before Congress a Bill for the reorganisation of the
textile industry, which also provides, on the one hand, for the
establishment of a minimum wage, maximum hours and compensation for dismissal, and, on the other, for a certain control
of production and the regulation of piece rates.
The adoption of the Walsh-Healy Act concerning undertakings
working for the State which came into fnrr>e nn 98 September
1936 enables the Government to prescribe, inter alia, minimum
wages and maximum hours when allocating orders to contractors.
The Industrial Standards Act of 1935 in Alberta makes pro1
Cf. more especially P a r t I I I , " Labor Relations " of the Bituminous Coal
Conservation Act, 1935 (Public — No. 402 b — 74th Congress) (H. R. 9100). Cf.
also the text of the collective agreement concluded under this Act in Monthly
Labor Review, December 1935 : " Renewal of Appalachian Agreement in Bituminous Coal Industry " .
2
Cf. Journal Officiel, 31 October 1935, No. 256.

LEGAL EFFECTS OF AGREEMENTS

155

vision, not only for the preparation of schedules of wages and
hours of work, but also for the establishment of standard rules
for the price of commodities for industrial use or for sale within
the Province.
The object of the French Decree of 30 October 1935 for the
regulation of the silk industry was mainly to adjust the means
of production to the state of home and foreign markets, in particular
by controlling the extension of existing factories or the establishment of new factories, and to prevent a slump in wages and piece
rates by the establishment of minimum basic rates. The agreement
was to come into force if approved by two-thirds of the weaving
and throwing manufacturers representing three-fourths of the
means of production. As the number of ratifications received
was inadequate, it remained a dead letter.
Wages and other working conditions fixed ex officio by direct
representatives of the State. — This system was introduced in
Germany by the National Labour Act of 20 January 1934, section
32 of which, as was mentioned, empowers the labour trustees
to lay down minimum conditions of employment and remuneration
for their respective districts.
In exercising this power, the labour trustees are assisted by
a committee of experts ; they must consult this committee but
need not follow its advice. I t should be noted, however, t h a t
the system of consultation in social and economic matters was
recently reorganised on a comprehensive basis under the auspices
of the Labour Front. 1
Moreover, the Labour Front recently
set u p an Institute of Scientific Research, the chief duty of which
is to investigate thoroughly the best methods of establishing fair
rates of wages.
Establishment of a wages fund for each industry, occupation
and undertaking, which the parties to collective agreements have
to allocate to the various groups of workers in accordance with a
certain number of criteria, the principal one being individual output.
— This is the system followed in the U.S.S.R.
There is no
point in studying wage-fixing in the U.S.S.R., except in conjunction with State economic planning, since the economic and
financial plans regulate every detail of production and labour,
including wage rates. As the whole of this question is dealt with
1

Cf. I.L.O. Year-Book 1934-35, Chapter V I I : " The Workers' General Rights".

156

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

in P a r t I I I of the Report (cf. below, p. 241), the reader may be
referred to t h a t section.
These are the main methods in force for fixing wages by collective agreements. P a r t I I I , entitled " The Place of Collective
Agreements in the Economic Structure of the Community "
deals with the apphcation of these various systems and their
effects on social and economic conditions.
B . — Other Conditions of

Employment

When dealing with conditions of employment other than wages
and hours of work, the function of collective agreements is to
pave the way for legislation or to fill u p lacunae rather than to
take the place of social legislation, for these other matters can,
and in many countries do, form the subject of protective labour
legislation, whereas wages do not.
Consequently, when the legislation concerning collective
agreements contains any imperative provisions on this subject
— which is rarely the case — they usually consist simply in an
enumeration of the conditions of employment t h a t should be
regulated by means of collective agreements, but the way in
which these rules are t o be applied is not specified (cf. above,
Italy, Portugal, Germany, pp. 144 and 145).
In countries with compulsory arbitration systems, of course,
such as the Commonwealth and the States of Australia, in which
the competence of the industrial courts covers various matters
dealt with in other countries by labour legislation, conditions
of employment are determined practically entirely by arbitration
award (cf. above, p. 145). Similarly, the Italian Labour Charter,
in addition to laying down the rules concerning wages t h a t were
analysed above, enunciates the following principles to be observed
by the parties t o collective agreements when determining working
conditions :
XIV. Payment shall be made at a higher rate for night work not
included in regular periodical ¡slilii.» ¿»Lan for day wort.
XV. Workers shall be entitled to a weekly rest day falling on
Sunday.
Collective contracts of employment shall apply this principle with
due regard to the provisions of existing laws and the technical requirements of undertakings, and, subject to these requirements, shall ensure
that civil and religious holidays are observed in conformity with local
tradition.
XVI. Every worker in an undertaking working throughout the
year shall be entitled to an annual holiday with pay after one year's
uninterrupted service.

LEGAL EFFECTS OF AGREEMENTS

157

XVII. In undertakings working throughout the year, if a worker
is dismissed through no fault of his own, he shall be entitled to compensation proportionate to the number of years for which he has served.
Such compensation shall also be payable in the event of the death of
the worker.
X V i n . In undertakings working throughout the year, the transfer
of the undertaking to another owner shall not terminate the contract
of employment, and the staff employed in the undertaking shall retain
its rights under the new proprietor. Similarly the sickness of the
worker shall not terminate the contract of employment, provided that
it does not exceed a certain fixed period. A worker shall not be dismissed because he has been called up for service in the army or the
militia.
XIX. If workers commit breaches of discipline or acts which
disturb the normal working of the undertaking, they shall be punished,
according to the gravity of the offence, by a fine, suspension from
employment, or, in more serious cases, summary dismissal without
compensation.
The cases in which the employer may inflict a fine or may suspend
or summarily dismiss a worker without compensation shall be specified.
XX. A newly-engaged worker shall be subject to a period of
probation during which the right to cancel the contract may be exercised by either party, subject only to payment of remuneration for
the time during which work was actually performed.
These are pre-legislative measures, to which effect must be
given, on pain of nullity, by collective agreements until such
time as legislation is enacted on these points.
One problem of considerable practical importance t h a t is
rarely dealt with by labour legislation is t h a t of the protection
of workers against individual dismissal. I t is specially mentioned
in the legislation on collective agreements in Spain, under the
Joint Boards Act, and in Germany under the National Labour
Act.
Section 45 of the Spanish Act of 27 November 1931 1 empowers the joint labour boards or their local sections to decide
concerning the legality of the dismissal of employees from factories,
workshops or occupations in which they were working, in conformity with a special procedure outlined below.
The dismissal of a worker may be justified on grounds for
which he is responsible or for reasons over which he has no control.
In the first case, dismissal does not give a right to any compensation. In the second case (industrial depression, cessation of
the undertaking, casual or limited character of the employment
in question, etc.) the employee may claim his wages for the normal
1

Cf. Legislative Series, 1931, Sp. 15.

158

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

period of notice fixed by custom or by the employment regulations
adopted by the board concerned, which is responsible in every
case for deciding concerning the attendant circumstances and the
decision to be issued in conformity therewith.
If an employee is dismissed on the allegation by the employer
of any of the causes which justify dismissal, or without his giving
any reason whatever, the employee may lodge a complaint against
the dismissal with the joint board or the competent section of
the board within a time-limit not exceeding five working days
from the day following his dismissal. The complaint must be
submitted by the employee concerned, or, as his representative,
the industrial association of which he is a member, or a person
of the same category.
If the board decides that there are no grounds which justify
dismissal, it gives the employer the option of reinstating the
employee or paying him the compensation fixed by the chairman
in the exercise of the discretion on the subject granted him by
the Act.
In both cases, provided that the employee has not entered
into other employment, the employer is bound to pay him the
wages due for the days that elapsed between the dismissal and the
date by which the claim must be established in order to come
within the normal time-limits laid down by the Act, but not
exceeding 24 days.
The compensation to be paid to the employee for the loss
inflicted on him by the dismissal pending his entry into fresh
employment may vary between a fortnight's and six weeks'
wages.
Finally, section 64 of the Act states that employees may not
waive any of their rights under the Act and under the decisions
legally adopted by the joint bodies.
Sections 56 to 62 of the German Act of 20 January 1934 *
similarly replaces the protective provisions against dismissal
contained in the former works nnnnnila legislation, which it repealed,
by a certain number of rules concerning the individual dismissal
of workers.
They provide that if a salaried or wage-earning employee is
dismissed after one year's employment in one and the same establishment or undertaking, and the said establishment or undertaking employs as a rule not less than ten persons, he may lodge
1

Cf. Legislative Series, 1934, Ger. 1.

LEGAL EFFECTS OF AGREEMENTS

159

a complaint with the labour court within a fortnight of receiving
notice to leave, applying for the revocation of the dismissal if
it constitutes an undue hardship and is not necessitated by
conditions in the establishment.
If a confidential council has been set up in the establishment,
the complaint must be accompanied by a certificate from the said
council showing t h a t the continuance of the employment of the
person in question has been unsuccessfully raised in the council.
The production of the certificate may be waived if the dismissed
person shows that he appealed to the confidential council within
five days of receiving notice to leave, b u t that the council failed
to issue the certificate within five days of his appeal.
If the court decrees the revocation of the dismissal, it must ex
officio include in the sentence an award of compensation to take
effect if the owner of the undertaking refuses to revoke the dismissal.
The owner of the undertaking must state to the dismissed
person within three days of the communication of the sentence
whether he elects to revoke the dismissal or to pay compensation.
If he fails to make this statement within the limit, he is deemed
to have elected to pay compensation.
Both the economic situation of the dismissed person and the
solvency of the establishment must be duly taken into account
in the assessment of the compensation. The compensation is
calculated according to the duration of the employment, and
may not exceed four-twelfths of the last annual earnings.
If the owner of the undertaking revokes the dismissal, he is
bound to pay the dismissed person his wages or salary for the
interval between his discharge and the resumption of his employment. However, the owner of the undertaking may make
deductions in respect of public allowances received by the dismissed
person during the interval from unemployment relief or poor
relief funds, and is bound to repay these sums to the authority
granting them.
If the dismissed person has in the meantime entered into a
new contract of employment, he is entitled to refuse to resume
his employment with his previous employer.
If a wage-earning or salaried employee is dismissed without
due notice, in the course of the proceedings by which he establishes
the nullity of this dismissal, in anticipation of the finding of the
said dismissal valid for the next permissible date of dismissal,
he may apply for the revocation of this dismissal.
The provisions that have been thus briefly summarised do

160

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

not apply in cases of dismissal in pursuance of an obligation based
on the law or collective rules.
It may also be noted in this connection that the French Act
of 19 July 19281 concerning notice of dismissal, although it
does not form part of the system of regulating working conditions
by collective agreement, makes a direct reference to the system,
which may be quoted. The Act amends section 23 of the Labour
Code, which now states that " the giving of notice and the duration
of the period of notice shall be fixed in accordance with local and
trade custom, or in default of such custom by collective agreements.
Exceptions to the period of notice fixed by custom may be made
by collective agreements ".
On the other hand, any clause in an individual contract or
in rules of employment fixing a period of notice less than that
established by custom or by collective agreement is ipso facto
null and void. The parties are not permitted to waive in advance
their right to claim compensation under the provisions governing
notice of dismissal.
Compulsory Regulation of the Rights and Obligations of the Parties
to Collective Agreements
The enforcement of the working conditions laid down by
collective agreement is obviously a matter for the contracting
organisations much more than for the parties to individual contracts
who fall within the scope of the agreement.
It is not surprising, therefore, that the legislation of most
countries on collective agreements regulates, often in great detail,
the rights and obligations of the parties to these agreements.
The provisions are fundamental parts of the system of collective
agreements and, as such, have been or will be analysed in other
parts of this volume. It will therefore be sufficient here to give
a few general indications as to the main points to which these
provisions refer.
The obligation to give effect to agreements. — The fundamental
obligation of the parties, which is to give effect loyally to the
agreement they have concluded, is dealt with by a number of
laws, which cover :
(1) The reciprocal obligations of the parties : regulation or
prohibition of strikes, lock-outs and other forms of collective
Cf. Legislative

Series,

1928, Fr. 4 B.

LEGAL EFFECTS OF AGREEMENTS

161

pressure ; compulsory conciliation and arbitration ; the legal
determination of the responsibility and penalties for infringement
of collective agreements, etc. ;
(2) The obligation of the parties towards their members : the
obligation to use all the means prescribed in the rules to induce
their members to comply with collective agreements — trade
union discipline, fines, loss of membership, etc.
This matter will be referred to later in connection with the
enforcement of collective agreements and the penalties for their
non-observance.
The organisation of relations between contracting parties. —
The problem of the organisation of the relations between the
parties to collective agreements (trade union clauses) is dealt
with in a variety of ways according to the different methods by
which collective agreements are drawn up. These were described
in P a r t I, to which the reader may be referred.
Certain laws, however, deal specially with the question of
preferential employment for trade union members.
Section X X I I I of the Italian Labour Charter, for instance,
permits employers, when engaging workers through the employment
exchanges, to give preference from among the persons on the register
to members of trade associations according to seniority in registration.
Similarly, section 40 of the Australian Commonwealth Conciliation and Arbitration Act x provides that the court or the conciliation
commissioner may, by an award or an order made on the application
of any organisation or person bound by the award, direct that,
as between members of organisations of employers or employees
and other persons offering or desiring service or employment at
the same time, preference shall be given to such members, other
things being equal.
Similar provisions exist in the legislation of the various States
(an instance of detailed regulations on the point is section 24 C
of the Arbitration Act of New South Wales of 18 March 1926, as
amended by section 4 of the Act of 9 December 1927 2 ).
The provisions of the New Zealand Act of 8 June 1936 are
specially characteristic in this respect since they tend wherever
1
5

Cf. Legislative Series, 1928, Austral. 2.
Cf. Legislative Series, 1927, Austral. 7.

162

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

possible to give absolute priority of employment to trade unionists.
To this end the Act requires all workers who are subject to
any award or industrial agreement to be members of a union.
Every award or agreement made after the passing of the Act
must contain a provision making it unlawful to employ in the
industry concerned any adult who is not a member of an industrial
union bound by an award or agreement. One month after the
passing of the Act all existing awards and agreements were to
be deemed to be amended to include the same provisions.
No union, unless its maximum membership is fixed by the
Arbitration Court and is already reached, may refuse to accept
as a member any person obliged by the Act to become a member.
Any person debarred by this provision from membership of a
limited union may be employed if no member of the union is
available and willing to perform the particular work to be done.
Any other non-unionist may be continued in employment during
such time as no member of the union bound by an award or agreement is available and willing to do the work in question.
Preference may also be granted to organised workers under
the legislation of Austria, Germany, Mexico, Portugal, the United
States and the U.S.S.R.
Joint activities. — Most of these, such as the regulation of
apprenticeship, the organisation of joint employment agencies
and the establishment of insurance and provident funds of all
kinds, are dealt with in the majority of countries by special legislation. Other matters, such as the organisation of supervisory
committees, are generally left entirely to the discretion of the
contracting parties.
I t may be noted, however, t h a t in Australia apprenticeship
and placing are regulated directly by the conciliation and arbitration legislation.
In Italy, also, section X X V I I I of the Labour Charter states
t h a t collective agieciiieiiLa must, whenever technically possible,
provide for the setting up of mutual sick benefit funds by means
of contributions from employers and workers, to be managed by
representatives of both parties under the supervision of the
corporative organs.
Collective engagement and dismissal of workers. — The collective
engagement and dismissal of workers, which is a particularly
difficult problem in periods of depression, is not dealt with by

LEGAL EFFECTS OF AGREEMENTS

163

legislation except in countries t h a t keep a check on, and sometimes
strictly control, the movements of labour.
Section 20 of the German National Labour Act of 20 January
1934 (which replaces the Order of 8 November 1920 concerning
measures to prevent reductions of staff or the closing of undertakings, as amended by the Order of 15 October 1923 concerning
the closing of undertakings and the distribution of employment)
stipulates that an employer is bound to give notice in writing to
the labour trustee in the following cases :
(a)
(b)

I n an establishment which as a rule employs less than
100 persons, before he dismisses more than nine persons ;
I n an establishment which as a rule employs not less
than 100 persons, before he dismisses ten per cent, of the
persons usually employed in the establishment and
before be dismisses more than fifty persons within four
weeks.

Dismissals of the prospect of which notice must be given under
this subsection may not become operative without the approval
of the labour trustee until four weeks have elapsed since the
sending to him of the notice ; the labour trustee may grant
retroactive approval. He may also give instructions that dismissals
shall not become operative until a t most two months after notice
thereof is given. I n cases where dismissals are not carried out
within four weeks of the date as from which they are operative
under the first or second sentence, it is held t h a t the notice has
not been given.
If the owner of the undertaking is not in a position to keep
his employees in full work until the date mentioned above, the
trustee may authorise him to introduce a reduction of the hours of
work in his undertaking (spreading the work). Nevertheless,
for this purpose the weekly hours of work of an employee may
not be reduced below twenty-four hours. Where the system of
spreading the work is adopted, the owner of the undertaking is
entitled to make a proportionate reduction in the wages or salary
of the employees whose hours of work are reduced, provided t h a t
the reduction of pay does not become operative until the date on
which the employment would end under the general provisions
of the law or the terms of the contract.
I n establishments which as a rule do more work at a particular
time of year (seasonal establishments), or which as a rule do not
work for more than three months in the year (temporary seasonal

164

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

establishments), the above provisions do not apply to dismissals
occasioned by the special nature of the establishment.
It has also been mentioned that in Australia the arbitration
courts are competent to deal with all matters pertaining to the
employment or non-employment of workers. This term includes,
without limiting its general scope, all matters pertaining to the relations of employers and employees, and the employment, preferential
employment, dismissal or non-employment of any particular
persons, or of persons of any particular age or .sex, or being or not
being members of any organisation, association or body, and any
matter as to the demarcation of functions of any employee or
class of employees.
Equally definite provisions exist in the legislation (codified
texts) of the various Australian States : New South Wales (section
5 b, c), Queensland (section 5 c, d, e, f, g), South Australia (section
4 c) and Western Australia (section 5 c, d, e, f, g) and of New
Zealand (section 2 of the Act of 8 June 1936).
Employment and dismissal are, of course, very strictly controlled
in the U.S.S.R., where the economic plans regulate in detail
the whole movement of workers.
Mention may be made, in conclusion — although its connection
with the legislation on collective agreements is only indirect —
of the important Provisional Order of 20 April 1934 x in Czechoslovakia which was renewed in 1935 ; it deals with the closing
down of undertakings and guarantees a considerable measure of
protection against collective dismissal.

i Cf. Legislative Series, 1934, Cz. 2.

CHAPTER IV
T H E SCOPE OF COLLECTIVE

REGULATION

The preceding chapters dealt with the legal significance of
collective regulation and with the legal value of the provisions
which could or should form the content of such regulation.
Who are the beneficiaries ? I n other words, how is the scope
of collective regulation limited in time and space and with respect
to occupations and persons ?
This question in fact raises two quite separate problems, as to
the scope of legislation concerning collective agreements on the one
hand and as to the scope of the collective or similar agreements
concluded in virtue of such legislation on the other.
I. — SCOPE OF LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

Since the scope of collective agreements has been limited,
in the various countries, on fairly uniform lines, all that is necessary
here is to elucidate the principles which are commonly applied
in such limitation and then to mention the laws which depart
from the general rule.
Most of the laws concerning collective agreements are, with
exceptions to which reference will be made later, in force for an
unlimited time, while, in space, they apply to the whole country.
On the other hand, the laws themselves seldom define the
scope of collective agreements with respect to occupations and
persons.
The very nature of collective agreements, however — the fact
t h a t the initial regulation of working conditions by such agreements only becomes effective when individual contracts of employment are concluded — suggests that, in practice, the scope of
the agreements and contracts is the same. I n other words, t h a t
scope covers all employment relations between wage-earners and
employers which are governed by private law, whether the employer

166

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

be an individual, a body corporate or even a public body corporate,
b u t does not apply to employment relations governed by public
law.
Therefore, subject to compliance with legal stipulations and
provided it has been possible to form the trade associations and
unions which are the legal parties to collective agreements, laws
concerning such agreements govern relations between employers
and workers not only in industry, trade, liberal occupations and
agriculture, 1 b u t also in public administrations and services.
Only the relations between the State or other pubhc institutions
and public officials or pubhc servants, whose conditions of employment are laid down in staff regulations, he in principle outside
the scope of t h e laws in question.
Nevertheless the " normal " scope of laws and regulations
concerning collective agreements allows, as defined, of exceptions
which m a y be either extensive or restrictive. These will have
to be mentioned.
The position of certain countries with Federal constitutions
will be considered separately.
Restriction of the Scope of Legislation concerning Collective
Agreements
I n the first place, certain laws which were promulgated by
way of experiment or with a view t o meeting a n emergency have
a restricted scope.
I n Great Britain the Cotton Manufacturing Industry (Temporary Provisions) Act is only to remain in force for a limited
time, i.e. until 30 December 1937. Further, its application is
limited geographically and occupationally t o the Lancashire
cotton industry and materially to wage regulation alone.
I n the United States t h e National Recovery Act of 16 J u n e
1933 which was found unconstitutional by the Supreme Court
shortly before its validity expired was to have remained in force
r.
IUI

t
I; WO

yCOiLti.

The Canadian Acts, which provide for the extension of collective
agreements to third parties, do so in respect t o wages and hours
of work alone. Thus, under the Quebec Act of 20 April 1934,
the only provisions in the collective agreements which were, b y
virtue of the Decree extending application to third parties, made
1

Cf. INTERNATIONAL LABOUR O F F I C E : Collective Agreements

Studies a n d Reports, Series K (Agriculture), No. 11, Geneva, 1933.

Agriculture.

LEGAL EFFECTS OF AGREEMENTS

167

binding on all wage-earners and employers in an industry or trade,
were those relating to wages and hours of work.
Similarly, in Alberta and Ontario, the Acts of 1935 concerning
industrial standards provide for the application of the agreed
wage scales and hours of work alone to all persons concerned in
the industry or district.
Other Acts only apply to given industries. This is true not
only of the Lancashire Cotton Manufacturing Industry Act, but
also of the United States Act of 30 August 1935 concerning the
coal industry. Similarly in Czechoslovakia, special Acts were
passed in 1935 introducing collective agreements in the textile,
flour milling and motor industries, etc.
Other laws which are in principle of general application exclude
certain categories of workers.
For instance the Act of 26 March 1924, amended by the Act
of 7 March 1933, concerning the prevention and settlement by
conciliation of disputes between employers and wage-earners in
the Union of South Africa applies neither to employment in agricultural undertakings or farms, nor, unless by the authority
and with the approval of the Minister, to undertakings run by
the Crown or the Government of the Union or one of the latter's
departments.
The Act of 27 November 1931, amended by the Act of 16 July
1935, concerning joint labour boards in Spain likewise excludes
domestic servants and all work performed in private offices or
by persons engaged in Uberai professions for their own account
and not in anyone else's interest.
Further the Act does not apply to work performed in industries
and on estates directly run by public authorities, or to public
utilities operated on behalf of the State, the provinces, communes
or other administrative or public bodies. On the other hand,
in these occupations special provision has been made for bodies
in which both the administration and the workers are represented,
and, in all cases, until such bodies begin to operate, the workers
employed in these services may not be required to work under
conditions which are less favourable than those prevailing in
similar occupations and trades. Finally the Minister of Labour
may introduce special regulations concerning the activities of
certain public services of national importance, provided such
regulations apply the general principles contained in the Act.
The scope of the Italian Act of 3 April 1926 concerning the legal
organisation of collective employment relations did not cover

168

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

home workers. Nevertheless under Section XXI of the Labour
Charter the benefits and obligations stipulated in collective labour
agreements were to be extended to such workers.
In the United States, within the meaning of the National
Labour Relations Act (Wagner Act) of 5 July 1935, the term
" employer " does not include the United States, or any State
or political subdivision thereof or any person subject to the
Railway Labor Act.1 Similarly the term " employee " does not
include agricultural labourers or domestic servants or any
individual employed by his parent or spouse.
Finally the scope of the Conciliation and Arbitration Acts
passed in the various States of the Australian Commonwealth
is defined in great detail and only excludes certain domestic and
agricultural workers.
Extended Scope of Legislation concerning Collective Agreements
Whereas in the cases mentioned above the scope of the legislation concerning collective agreements has sometimes been defined
restrictively, other countries have extended the definition so as
to cover not only employment relations proper but also economic
relations both in agriculture and in industry generally.
With reference to agriculture, it may be pointed out that
the Italian Act of 3 April 1933 2 extended the legal regulation
of collective employment relations to contracts for producesharing in agriculture and for the letting of smallholdings.
Under section 1 of the Act, the legal regulations applicable
in pursuance of the Act of 3 April 1926 and the Royal Decrees
of 1 July 1926 and 6 May 1928 are to be extended to all leases
and agreements, compacts and arrangements which are concluded
by the competent trade associations for the purpose of regulating
produce-sharing relationships (share tenancies, métayer system,
etc.) and to accessory contracts relating to special branches of
cultivation and stock-raising to be carried out on the land, which
are subsidiary to the principal relationship.
Such leases, agreements, compacts and arrangements must
however be in conformity with local customs and conditions and
must not contain any provision relating to hours of work, holidays
1
Railway labour relations are governed b y an Act of 20 May 1934 concerning
conciliation and arbitration in railway labour disputes (cf. Legislative Series, 1934,
U.S.A. 1).
2
Cf. Legislative Series, 1933, I t . 7.

LEGAL EFFECTS OF AGREEMENTS

169

or probationary periods or any other provisions stipulated in
collective contracts of employment which are contrary to the
nature of the relationship.
The provisions of the preceding section are also to apply to
contracts for the letting of smallholdings with a variable or fixed
rent in kind or in money, where such contracts are concluded by
smallholders who cultivate the land directly or mainly by their
own labour or t h a t of the members of their family.
Similarly the Spanish Act of 27 November 1931, amended
on 16 July 1935, concerning joint labour boards, provides t h a t
in addition to the industrial and rural labour boards there are to
be joint boards for rural property (sees. 79-88) and joint boards
for agricultural production and industries (sees. 89-94).
Finally it may suffice to point out t h a t the corporations in
Italy, Portugal and Austria, the rescinded National Recovery Act
in the U.S.A., the Act concerning industrial standards in Alberta,
and to some extent the Decrees concerning industrial agreements
in France, all deal in varying degrees with economic as well as
employment relations. (Cf. below : " The Place of Collective
Agreements in the Economic Structure of the Community ".)
The Scope of Legislation concerning Collective Agreements
in Countries with a Federal Constitution
The definition of the territorial scope of legislation concerning
collective agreements raises special difficulties in some countries
which have a federal constitution.
I n the first place, it should be pointed out t h a t in most countries
with a fairly pronounced federal constitution, such as Germany,
Austria, Brazil, Mexico and the U.S.S.R., the problem is as it
were settled from the very outset inasmuch as under the constitutional law of those countries the central legislature is exclusively
competent in matters of labour legislation, and in particular
the regulation of collective agreements.
Thus the earlier German Act of 23 December 1923-28 February
1928 concerning collective agreements, and the National Labour
Act of 20 January 1934, the Austrian Act of 18 December 1919
concerning the establishment of conciliation boards and collective
agreements, and the Decrees concerning corporative organisation
issued in pursuance of the new constitution of 1 May 1934, the
Brazilian Decree of 23 August 1932 concerning collective agreements,
the Mexican Labour Code of 18 August 1931 (chapter concerning
collective agreements) and the Labour Code of the
U.S.S.B.

170

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

(chapter concerning collective agreements) apply, in each case,
throughout the national territory.
Similarly in Switzerland the essential legislative provisions in
regard to collective agreements are contained in the Federal
Code of Contract Law, without prejudice, however, to the right
of cantons to introduce detailed regulations concerning the operation and application óf collective contracts.
On the other hand, in the Commonwealth of Australia, in
Canada and in the U.S.A., the issues raised are different, for under
the constitutional law of these countries both the Federal and the
State (provincial) legislatures have power to enact legislation
concerning collective agreements. Since, however, the problem is
highly complicated and goes beyond the limits of the present
enquiry, it need only be mentioned and not discussed here.

II. —

SCOPE OF COLLECTIVE AGREEMENTS

I t was observed in the chapter dealing with the legal nature of
collective agreements (see p . 124, above) that collective agreements which have received legal recognition and other forms of
collective regulation concerning labour conditions have, within
the limits of their scope as defined with reference to time, territory,
occupations and persons, the binding force of law. Accordingly
the real significance of such regulation cannot be appreciated
unless its scope has first been ascertained.
How has the problem been solved by legislation ? A general
analysis of the laws and regulations concerning collective agreements suggests the following general rule : laws concerning collective agreements do not define the scope of such agreements a priori
b u t lay down certain principles which must, for the purposes of
such definition, be observed by the parties (under a contractual
system) or by the bodies responsible for introducing collective
regulation (under a compulsory system). The reason for this rule
is — and it is nnp. nf fh« characteristic features which differentiate
these two sources of labour law — that, unlike labour laws, which
directly regulate labour conditions, laws concerning collective
agreements merely confer on the " parties " or on certain public
bodies authority to enact regulations.
Now as it is clearly impossible to foresee all the individual
cases which may arise and it is therefore impossible to define the
scope of agreements or ulterior regulations beforehand and in
all their details, the parties concerned must be left to do this with

LEGAL EFFECTS OF AGREEMENTS

171

reference to the circumstances of time and of place on the one
hand and on the other hand to the particular conditions prevailing
in the occupation or industry to which such agreements or regulations are to apply.
Moreover, collective agreements could not serve the purpose
for which they are intended, which is mainly to adapt labour
conditions to changing economic circumstances, if they could only
be concluded within rigid limits laid down beforehand.
But., subject to these reservations there is room for legislation
which will give collective agreements the widest possible scope
and hence the greatest measure of efficiency compatible with the
purpose for which they are intended.
Enquiry into the provisions concerning the scope of collective
agreements will show how the relevant legislation has been designed
to reconcile the need for making such agreements as flexible as
possible with that of giving them the maximum degree of efficiency.
As in the analysis of the other problems, the following survey
will attempt to bring out the features which are common to various
legislations, while only the provisions which go beyond the common
rule will be cited.
The Validity of Collective Agreements in Time
The freedom of action of the parties or bodies concerned is
limited by legislation : (1) at the date at which the collective agreement comes into force ; (2) so long as the agreement remains in
force ; and (3) on the expiry of the agreement.
Entry into force. — It has already been observed that the
entry into force of a collective, agreement is conditional on compliance with a certain number of stipulations in regard to form and
substance : e.g. the signature of the document containing the
agreement ; the filing, registration and, in some cases, under a
contractual system of regulation, the approval of the collective
agreement before it comes into force ; under a compulsory system,
the promulgation and publication of the awards, orders, decrees
and regulations.
As a rule the entry into force of a collective agreement coincides
with the fulfilment of these legal requirements.
Nevertheless — and here the autonomy of the professional
legislative body recovers its rights — the parties, under a contractual
system of regulation, and the authorities responsible for collective
regulation under a compulsory system, may provide that a collec-

172

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

tive agreement shall apply as from some other date, either before
or after t h a t of legal entry into force. They may, for instance,
provide — and this is the only case which has any legal or practical
importance — t h a t the agreement or regulations shall apply
not as from the date on which they were signed or promulgated
b u t from t h a t on which a dispute settled by the collective agreement
began.
In other words, the parties, or the body responsible for regulation, may make the collective agreement retrospective. If this
is done, the agreement does not, as would normally be the case,
merely determine the content of contracts of employment of
persons covered by the collective agreement which are in force
a t the time or which may be concluded subsequently, but also t h a t
of contracts which, although they expired before the agreement was
concluded, were valid during the period of retrospective application.
The effect of an agreement can, of course, only apply retrospectively to material obligations which may be fulfilled after
the event, such as an increase in wages, the reinstatement of
workers dismissed in consequence of a strike, etc., and not to
purely formal stipulations such as the rule t h a t certain contracts
of employment must be drawn u p in writing, or to obligations
concerning the form and the instalments in which wages are paid,
etc.
In short, it may be said t h a t in most cases the legal provisions
concerning the entry into force of collective agreements are not
in any way imperative, and t h a t the parties, or the arbitration
or trade authorities, may always, subject to compliance with the
formal and substantial stipulations governing validity, provide
for such exceptions as they think fit.
The duration of collective agreements. — As in the case of entry
into force, legislation leaves the parties concerned free to limit
the duration of collective agreements as they think best. This
follows from the fact t h a t such logislaliim, in conformity with
the ordinary law of contract, recognises three forms of collective
agreements : those which are valid for an indeterminate period,
those which are valid for a fixed period of time, and those which
are only valid for the duration of a given undertaking.
In the first case, t h a t of a collective agreement valid for an
indefinite period, the parties may if they wish withdraw from the
contract, provided (and here legislation concerning collective
agreements departs from the rule of ordinary law) they give notice

LEGAL EFFECTS OF AGREEMENTS

173

of withdrawal, the notice varying, under different laws, from one
to three months.
This restriction was necessary in order that the parties might
have an opportunity to open negotiations in good time with a
view to the renewal or amendment of the agreement before the
latter expired.
I n the second- case, t h a t of á collective agreement which is
valid for a given period, legislation merely fixes the extreme
limits of validity : (1) in some very rare cases a minimum limit
which varies, under different laws, from six months to two years ;
(2) in all cases, since ordinary law does not admit of permanent
contracts with an unlimited validity, a maximum duration varying,
in different countries, from two to five years.
If the parties fail to limit the duration of the agreement, the
latter is presumed to have an indeterminate validity. If the
agreement is concluded for a period which exceeds the legal maximum, it is not void, save in exceptional cases when the only
reason for the agreement was its duration, but the latter may be
limited to the legal maximum. Finally, an agreement which
expires without having been explicitly terminated by the parties
is presumed to have been tacitly renewed.
I n the third case, a collective agreement the duration of which
is limited to t h a t of a given undertaking is only a special instance
of the preceding type.
Here again legislation simply fixes a
maximum period of validity. If the undertaking has not come
to an end when the collective agreement expires, the latter remains
in force as an agreement with an indeterminate validity.
Under compulsory systems of regulation, it is of course the
authorities responsible for the collective regulation of employment
conditions, that is arbitration or judicial bodies and public authorities, who determine the validity of labour regulations in time.
I t is in the very nature of the system that such regulations should
have a limited validity varying, according to the provisions of
the Act which governs them, from one to five years (as in the
case of the Australian arbitration awards).
Thus, within the limits laid down by law, the parties, or the
authorities responsible for regulating conditions of employment,
have a free hand in determining the duration of collective agreements.
The revision of collective agreements. — I n spite of the legislative
precautions taken to ensure the greatest flexibility in the conclusion

174

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

of agreements, it may happen t h a t considerable changes occur
in the economic position of the undertakings on which the agreements are binding during the validity of the latter. Now as has
already been observed, in virtue of the principle t h a t collective
agreements may not allow of exceptions, and in some cases by
reason of the penalties for which provision has been made, conditions of employment laid down in a collective agreement may
not, so long as the latter is in force, be altered except by agreement
between the parties. This rule holds good irrespective of any
changes which may have occurred.
Pains have therefore been taken in legislation concerning
collective agreements to provide remedies for the disadvantages
which might arise from excessively rigid regulation.
I n the first place, under a contractual system the parties may
themselves prevent or lessen such disadvantages. They may,
as has already been observed, systematically give preference to
agreements which have been concluded for an indeterminate
period, and from which they may a t any time withdraw provided
they give the notice stipulated by law or agreement.
Further, they may specifically provide, in the agreement
itself, for revision and determine beforehand the circumstances
in which such revision shall take place.
Finally, they may draft their agreement in such a way as
to forestall the effects of future economic changes by making
conditions of employment, and more especially stipulations in
regard to pay, vary with certain economic indexes, such as cost
of living, price, production indexes, etc.
I t may be added t h a t the principle of rebus sic stantibus has
sometimes been applied by the Courts in order to justify the
amendment or termination of agreements which have become
inapplicable.
Under systems which allow, in varying degrees, for State
intervention in the regulation of collective conditions of employment, specific legiöla-üivtj provision has been made for the revision
or termination of collective agreements on certain conditions.
Thus, under section 28, paragraph 3, of the Australian Commonwealth Conciliation and Arbitration Act of 22 June 1928
(Consolidated text), 1 " If the Court is satisfied that circumstances
have arisen which affect the justice of any terms of an award,
the Court may, in the same or another proceeding, set aside or
Legislative Series, 1928, Austral. 2.

LEGAL EFFECTS OF AGREEMENTS

175

vary any terms so affected ". Further, under section 38 O
and 38 0(a)), the Court may suspend all or any of the terms
of an award, vary its orders and awards, reopen any question
and give an interpretation of any term of an existing award.
The Arbitration Tribunals of the various States in the Commonwealth and the Arbitration Court of New Zealand have the
same powers of adapting, varying, reconsidering, and cancelling
awards.
Under section 71 of the Italian Royal Decree of 1 July 1926 l
actions with respect to the drawing up of new conditions of employment may be brought even if a collective contract has been concluded and even before the expiry of the period of vahdity of
the contract as prescribed therein, provided that a substantial
change in the circumstances existing a t the time of the conclusion
of the contract is proved to exist.
Similarly, the Mexican Labour Act of 18 August 1931 2 provides
in section 56 (Chapter I I : Collective Contract of Employment)
that, " every collective contract, whether for an indefinite period,
a fixed period, or specified work, shall be subject to complete
or partial revision every two years at the request of any of the
contracting parties, on the following conditions, viz. — if the
employees' industrial associations so request, the revision shall
be effected, provided t h a t the applicants represent not less t h a n
51 per cent, of the total number of members of the industrial
association which concluded the contract ; if the employers so
request, the revision shall be effected, provided t h a t the applicants
employ not less than 51 per cent, of all the employees affected
by the contract. The application for revision, by whichever party
it is submitted, shall be made not less than sixty days before the
expiration of the contract. If the parties fail to come to an agreement during this period or withhold their consent to the prolongation of the said period, the matter shall be referred to the competent conciliation and arbitration board for decision ; during the
proceedings before the board, the contract the revision of which
is under discussion shall remain in operation ".
Further, under
contract may, at
who represent the
to revision by the
1
2

section 65 of the same Act, a generally binding
the request of the employers and employees
majority mentioned in section 58, be subjected
Federal Executive within a time-limit of three

Legislative Series, 1926, It. 5.
Legislative Series, 1931, Mex. 1.

176

'LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

months or at any other time when the existing economic conditions
justify such a step.
I n Great Britain, under section 54 of the Cotton Manufacturing
Industry Act of 28 June 1934,1 the Minister of Labour has power,
on request from either of the organisations concerned, to reject
an Order setting out rates of wages, provided such Order has
been in operation for at least 12 months.
The procedure for revocation is much the same as that followed
when the Order is made (see p . 94, above). In the event of imminent national danger or great emergency, however, the Minister
may, without any such proceedings, revoke the Order by Order.
In Canada, under section 5 of the Quebec Act of 20 April
1934 respecting the extension of collective labour agreements, 2
the Lieutenant-Governor in Council may a t the request of the
parties repeal or amend the Order-in-Council extending the
application of a collective agreement.
Under section 31 v (f) of t h e French Act of 24 June 1936
an order to extend a collective agreement to third parties will
cease to have effect when the parties concerned agree to
denounce, revise or amend it. I t may also be cancelled by the
Minister of Labour by an order, issued in the manner prescribed
in sections 31 v (d) and (e), when it becomes apparent that the
collective agreement no longer meets the economic requirements
of the branch of industry or commerce concerned in the district
in question.
According to section 28 of the Chinese Act of 1 November
1932 the administrative authorities may, at the request of either
of the contracting parties, prematurely terminate a collective
agreement if, since the agreement came into force, there have
been profound changes in the economic situation of the undertakings.
Finally, in Germany, labour regulations may be amended,
revised or abrogated by the labour trustees who have promulgated
I t appears from the examples cited above that, while affording
the greatest possible measure of stability in collective agreements,
legislation in a great many countries has been able t o provide
remedies for the disadvantages which might attend exclusive
rigidity in such agreements.
1
2

Legislative Series, 1934, G.B. 7.
Legislative Series, 1934, Can. 5.

LEGAL EFFECTS OF AGREEMENTS

177

Expiry of collective agreements. — Collective agreements or
similar regulations normally expire when the time-limit placed
on their duration is reached. Nevertheless, and this is an important
reservation, most laws provide t h a t the agreement shall expire
only when formal notice of termination has been given within a
specified time ; in the absence of such notice, the collective agreement is considered to have been renewed for a period equal to
t h a t of its initial validity, or to have been prolonged for an indeterminate period.
Further, in cases of force majeure (e.g. when the undertaking
is wound up, if the collective agreement applied to one undertaking only ; intentional and substantial violation of the agreement by one of the parties, etc.) a collective agreement may be
terminated either wholly or in part before the normal date of
expiry.
On the other hand, certain extraordinary causes of termination
which are recognised in ordinary law do not apply in the case
of collective agreements. Thus, to mention only outstanding
examples which are to be found in most laws concerning collective
agreements, if one of the parties ceases to have power to enter
into a contract (loses legal personality), if one of the contracting
organisations is dissolved, or even if one of the parties to the agreement disappears (death of an employer bound by a collective
agreement, cession or transfer of the undertaking) the agreement
does not necessarily lapse.
The reason for this is t h a t a collective agreement is not exclusively, nor even mainly, a contract between the parties (trade
associations and unions) but also, and above all, an instrument
regulating conditions of employment for the persons it covers.
Moreover, on the employer's side the purpose of the agreement
is not so much to bind the individual employer as the undertaking,
the trade or the industry concerned. I t follows t h a t the heir,
in the event of the death of a party to a collective agreement,
or the person who acquires an undertaking under any title whatsoever, in cases of cession or transfer, automatically takes over
the rights and obligations of the employers who were originally
bound.
Similarly, on the workers' side, the loss of legal personality
or the dissolution of a trade union which is a party to an agreement
only involves incapacity to enter into agreements in future but
does not relieve the workers of their obligations under collective
agreements which are already in force.
12

178

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

The Effect of Collective Agreements after Expiry. — Obviously
the result of expiry is t h a t the collective agreement ceases to be
operative. The expiry of individual contracts of employment,
however, may not always coincide with t h a t of the collective
agreement which determined their content. When it does not,
t h e conditions of employment laid down in the agreement continue
to apply even after the latter has ceased to be in force and until
the contracts themselves expire. Further, certain stipulations
in the collective agreement, such, for instance, as the undertaking
given by the employer to pay the wage-earner a pension, or t h a t
of the wage-earner not to compete with his employer until a certain
space of time has elapsed, continue to apply even after the collective
agreement has expired, since by their very nature they cannot
become effective during the validity of the agreement.
The expiry of collective agreements and similar regulations
raises a further legislative problem. As is well known, it is the
renewal of collective agreements, during the period between the
expiry of the old and the conclusion of the new agreement, when
there is no contractual regulation in force, t h a t gives occasion
for the outbreak of the most serious labour disputes.
I t has already been seen that, in order to overcome this difficulty, collective agreements are under most laws presumed to
have been tacitly renewed when the date of expiry has been
reached. With the same object in view, certain laws and regulations
compel the parties to submit to conciliation before the agreement
expires.
Such measures have certainly helped to lessen the risk of
disputes breaking out during the period when there is no contractual
regulation, but they do not completely eliminate t h a t risk.
Several recent enactments, for instance, the Danish Act of
31 January 1933, the Czechoslovak Decrees of 15 J u n e 1934 and
29 April 1935, have compulsorily extended by one year the validity
of collective agreements which were in force when they were
promulgated.
In both cases the enactments were emergency
measures introduced to avoid serious labour disputes which seemed
likely to break out when the agreements expired and to prevent
an expected fall in wages.
On the other hand, attempts have been made in two countries
to solve the problem once and for all by legislation.
The Italian Act of 25 January 1934 provides in section 3 t h a t
collective agreements which have expired shall continue to be
operative until a new agreement has been concluded or until

LEGAL EFFECTS OF AGREEMENTS

179

an award has been made, in lieu of an agreement, by the Labour
Courts.
Similarly, the Australian Commonwealth Conciliation and Arbitration Act provides in section 28, paragraph 2, t h a t after the
expiration of the period specified in the award, the latter shall,
unless the Court otherwise orders, continue in force until a new
order has been made.
The purpose of such legislation is to bridge over the period
which separates the old from the new contract and so to confer
on the parties all the advantages t h a t the continuity of collective
regulation affords, while enabling them to adapt conditions of
employment to any new economic circumstances which • may
have arisen.
Territorial

and Occupational

Scope of Collective

Agreements

I t is in this respect t h a t legislation leaves the parties concerned
the greatest measure of freedom of judgment and of decision.
Most laws require the contracting parties to define the territorial
and occupational scope of their collective agreements but leave
them free to limit t h a t scope as they think best.
Moreover, given t h a t industrial relations are highly complicated,
that there is the greatest variety in the operations performed
in any one industry and t h a t conditions of employment vary in
different economic regions, it would — unless, as will be seen
later, economic activities are classified first — be very difficult
to lay down in advance the territorial and occupational framework into which collective agreements will have to fit.
I n practice, the territorial and occupational scope of collective
agreements is determined by the field of action and the organisation
of the parties, t h a t is, of the trade associations and unions.
As regards territory, since legislation does not confer power
to conclude collective agreements on local unions alone b u t also
on their federations, collective agreements may cover one or more
undertakings, a given locality, a district or the whole country,
according as the parties to the agreement are works unions, local
trade unions or national federations.
As regards occupation, the agreements may cover only a
single trade or skilled occupation, if the unions are organised on
an occupational basis, or on the contrary cover a whole industry
when trade union organisation is on an industrial basis.
B u t however extensive and comprehensive the agreements
may be, their flexibility permits of the parties adapting them

180

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

to the diversity and complexity of the relationships to be regulated.
Thus in the case of agreements with a comprehensive scope, a
distinction is usually made between basic agreements in which
t h e general conditions of employment to be applied throughout
the industry (such as hours of work, holidays with pay, methods
of calculating wages or even minimum wage rates) are laid down,
regional agreements which allow for requirements in a given region,
and finally wage agreements, which are usually concluded for
a shorter period than the basic agreements and specify the wage
rates payable to different classes of wage-earners, e.g. manual
workers, unskilled workers, skilled workers, technical employees,
adolescents, women, aged workers, etc.
But while most laws do not limit the territorial and occupational
scope of collective agreements beforehand and in detail, they
may, nevertheless, by determining trade union and occupational
organisation, broadly outline the framework of collective regulation.
I n this respect it may be mentioned t h a t in many countries, e.g.
Austria, Australia, France, Italy, Mexico, New Zealand, Portugal,
Spain, Union of South Africa, United States and U.S.S.E., power
to conclude collective agreements has been conferred only on the
largest union in a given trade, the most representative unions or
those which are officially recognised. Similarly, in other countries
power to conclude agreements has been conferred only on national
federations and confederations.
Thus, in Italy, under the Royal Decrees of 16 August 1934
issued in pursuance of section 7 of the Act of 5 February 1934,
respecting the constitution and functions of the corporations,
with a view to bringing trade union organisation into line with
t h a t of the new corporations, legal recognition is henceforth to
be granted only to the national trade federations and the national
associations for a given industry or occupation, and therefore
these bodies alone will have power to conclude national agreements,
subject to approval by the national confederations to which they
belong.
Similarly in Austria, under the Order of 2 March 1934 concerning
the Confederation of Austrian Workers and Salaried Employees
(completed and amended by the Order of 3 December 1934 defining
the rules of t h a t Confederation) and the various Orders concerning
employers' confederations, responsibility for concluding, amending
or terminating collective agreements under the supervision and
with the approval of the national confederations lies with the
national trade unions.

LEGAL EFFECTS OF AGREEMENTS

181

Again in the U.S.S.R., in principle the central trade unions
are responsible for organising collective employment relationships.
I n all countries where the collective regulation of employment
conditions is controlled by the central bodies in the trade union
system, collective agreements can and will normally extend to
all occupations or industries within the widest possible territorial
limits.
This is in the nature of a facility, and the parties are free
to make use of it with a view to giving their agreements as wide
a scope as possible, but there is nothing to prevent their allowing,
when they draw up their agreements, for geographical and occupational conditions, or even concluding agreements which apply
only to one locality or undertaking, where circumstances make
this necessary.
The tendency to lay down beforehand the territorial and
occupational framework of collective agreements is even more
marked when collective systems of regulation are based on occupational or industrial organisation.
I t has been observed t h a t the organisation in question may
be t h a t of a single industry, as in Great Britain (Cotton Manufacturing Industry Act of 28 June 1934) and the U.S.A. (Act
of 30 August 1935 respecting the coal industry), or t h a t of a whole
series of industries as in Spain (Act of 27 November 1931-16
J u l y 1935 concerning joint labour boards in industry and agriculture) and the Netherlands (Act of 7 April 1933 respecting the
organisation of industrial councils).
In the last-named country, it may be noted t h a t industrial
councils are set up in the various occupations as and when the
need arises, whereas in Spain the occupations and industries for
which joint labour boards have been set u p were at the outset
classified in 24 principal groups, these being in turn subdivided
with reference to specialised occupational categories. 1
I t should be added t h a t the Codes of Fair Competition in the
U.S.A. (under the rescinded National Recovery Act of 16 J u n e
1933) were based, and t h a t the corporations in Italy are still
based, on an industrial and occupational organisation which is
no longer confined to employment relationships but also covers
economic relationships. In Italy, as is known, 22 corporations
were instituted under the Act of 5 February 1934 respecting the
constitution and functions of corporations. These 22 corporations
Legislative Series, 1931, Sp. 15, section 4.

182

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

were divided into three groups, each corporation in the first
representing a cycle of agricultural, industrial and commercial
production, each in the second a cycle of industrial and commercial
production and the third the service industries and occupations. 1
Under all these systems the territorial and occupational scope
of collective agreements or regulations is laid down at the outset
in the Act.
But here again the scope of the regulation is not extended a t
the expense of flexibility. The agreements or decisions given by
industrial committees or corporative organisations are, it is true,
binding on all persons, whether salaried employees or wageearners, working in the occupation or industry considered, b u t
they do no more than fix, just as the basic agreements in purely
•contractual systems do, general conditions of employment, i.e.
minimum stipulations, which will, by special collective agreements,
be completed or adjusted to the regional or occupational requirem e n t s of the industry.
Finally, it will suffice to mention the bodies responsible for
regulation under compulsory systems : industrial arbitration
courts in Australia and in New Zealand, labour courts in Italy,
a n d labour trustees in Germany have power to determine at their
discretion and within the limits of their territorial competence,
t h e scope of collective regulations. However, although they give
t h e agreements as wide a territorial and occupational scope as
t h e i r legal competence permits, they are also free to limit such
scope to a single locality or to given undertakings, or again to
.allow any exceptions or exemptions which may, owing to the
particular circumstances of individual undertakings, seem
necessary.
In short, however wide the territorial and occupational scope
of collective agreements may be, care has been taken in drafting
legislation to ensure t h a t they shall be as flexible as is necessary
t o allow for all possible circumstances.
Scope of Collective Agreements with reference to Persons
Since the significance of collective regulation is to some extent
measured by the number of beneficiaries, minute and detailed
attention has been given to the problem of determining the scope
of collective agreements with reference to persons. The methods
adopted will be described very briefly.
1

Cf. the complete list of corporations in the I.L.O. Tear-Book 1934-35, p. 375.

LEGAL EFFECTS OF AGREEMENTS

183

As a general rule, at any rate under contractual systems,
collective agreements apply a t the outset not only, as they clearly
must, to the organisations which are parties to the contract and
which have signed the agreement, b u t to all members of such
organisations. They do so either in virtue of a mandate tacitly
implied in the contract of association or in virtue of a specitìc
mandate given prior to conclusion of the agreement or subsequently confirmed.
This is in fact merely an application to collective agreements
of the rule of ordinary law in regard to mandates.
Questions which arise when third parties come into an existing
agreement or when parties withdraw from collective agreements
are likewise settled with reference to the ordinary law of contract.
Organisations, groups or isolated employers (employers being
in all cases treated as collective bodies) may only become parties
to an existing agreement subject to the consent of the parties
originally bound by t h a t agreement.
Individual wage-earners may only become parties to a collective
agreement indirectly by joining one of the organisations which
are parties.
As regards withdrawal from or non-acceptance of a collective
agreement, a distinction must be drawn between collective agreements which have been concluded for a fixed period and those
which have an indeterminate validity.
If the agreement has been concluded for a fixed period, the
original parties or any parties which subsequently come into
the agreemsnt are bound throughout the period during which
the agreement is t o remain in force, unless the latter is altered
or terminated by common consent.
Members of the organisations
which are parties to the agreement may on the other hand withdraw
from the latter by retiring from the organisation, provided this
is done within a fixed period (generally a very short one, varying
from three to eight days) which begins to run from the date at
which the agreement legally comes into force.
If the collective agreement has been concluded for an indeterminate period, the contracting parties may withdraw from it
at any time, provided t h a t they give legal notice of withdrawal
(varying under different laws from one to three months) and inform
the other parties. Since, so far at least as the workers are concerned, the only parties to the agreement are the trade unions, the
withdrawal of a union clearly involves t h a t of its members.
The members of an organisation which is a party to a collective

184

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

agreement may at any time withdraw from the latter by ceasing
to be members of that organisation within the time-limits laid
down in the Act.
Further, in cases where there are several contracting parties,
the withdrawal of any one of these does not automatically release
all the others from the contract, but under most laws it affords
them an opportunity of giving notice.
It should be added that where the principle of freedom to
conclude collective agreements applies, there is nothing, even in
an industry, occupation or undertaking already covered by a
collective agreement, to prevent rival trade unions from concluding
other collective agreements on their own behalf and on that of
their members.
It follows from this very rapid survey of principles that in
purely contractual systems, collective regulation of conditions of
employment is exclusively a matter for the contracting parties
and in no way concerns third parties, even if these are, as in the
particular case under consideration, wage-earners engaged in the
undertakings covered by the collective agreements. Third parties
are therefore free to depart from the conditions laid down in the
agreement and to consent to other conditions of employment
which are less favourable than those laid down by collective
regulation.
In fine, purely contractual regulation does not exclude, but
to some extent makes for variety in the systems of regulating
employment conditions, often within the same industry, the same
occupation or even the same undertaking.
Now it is important to note that this variety in systems of
regulation is not due to differences, in actual conditions of employment or in industrial operation, for contracting parties would
be in a position to allow for such differences, either by agreeing
to exclude handicapped undertakings from the territorial or
occupational scope or by making provision for all the necessary
exceptions and exemptions in the agreement. The differences in
question are simply due to the fact that the persons concerned
may or may not be members of the unions which have signed
the agreement.
No doubt in countries where trade union and occupational
organisation has developed to a considerable extent and where
it is, moreover, highly centralised and standardised, collective
agreements do in fact apply to all the wage-earners in the undertakings they cover, even if such wage-earners are not trade

LEGAL EFFECTS OF AGREEMENTS

185

unionists. This extension usually takes place by common consent
between the parties, though such a stipulation would appear to
be binding on the contracting parties alone and not on third parties.
I n cases where these conditions do not hold good, the consequence of competitive bargaining and of the fact that collective
agreements do not apply to third parties may be so serious that,
in most countries, legislative steps have been taken to overcome
the difficulty either by direct measures designed to lessen trade
union or contractual competition in the labour market, or by
indirect measures the object of which is to extend, as far as possible,
the personal scope of the agreement.
The first type of measure has already been considered when
dealing with the methods of drawing up collective agreements, and
reference to the remarks made in t h a t connection should suffice.
Measures of the second type will be briefly analysed here.
The first step towards extending the personal scope of collective
agreements, a step which is taken in most laws, is to make such
agreements legally applicable to all wage-earners, even those who
are not members of a trade union, in an undertaking or occupation
where the employer or employers are themselves bound by the
collective agreement. I n some countries this only happens in
virtue of a legal presumption. I n the absence of any other agreement, wage-earners are then automatically covered by the collective
agreement. I n most other countries, however, such application
is compulsory in virtue of the Act and consequently over-rides
any exceptional agreements.
The second measure consists in prohibiting any withdrawal
from the collective agreement during the period for which the
latter has been concluded.
Both these measures are designed to stabilise and standardise,
for a minimum period of time, conditions of employment in
undertakings where the employers are themselves parties to the
collective agreements. I n fact, such legislation merely gives full
effect to the wishes of the contracting parties, without, however,
going beyond the contractual scheme on which the parties have
agreed.
On the other hand, in the systems which will now be considered,
the purpose of the measures adopted is mainly to extend collective
regulation to third parties such as employers and wage-earners
who are not covered by the collective agreement but who are
engaged in an occupation coming within the territorial and
occupational scope of t h a t agreement.

186

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

Measures taken to this end vary according to countries. They
may do no more than confer either on the Government — t h a t
is, in most cases on the Minister of Labour, or on arbitration and
judicial bodies, the faculty to extend the scope of the collective
agreements so as to cover third parties ; or, in the other extreme,
application to third parties may be compulsory under the Act.
The following is a summary of such measures :
1. Extension of collective agreements to third parties by administrative measures. — This is the method adopted in Brazil (Decree
of 23 August 1932, section 11 x) ; in Canada : Quebec (Act of
20 April 1934, section 2 2) ; Alberta and Ontario (Acts of 1935
concerning industrial standards 3) ; in Czechoslovakia (Order of
29 April 1935 concerning collective agreements in the textile
industry 4) ; in Great Britain (Act of 28 June 1934, sections 1
and 2 5) ; in Mexico (Labour Code of 18 August 1931, sections
58 to 67 6) ; in the Union of South Africa (section 9, paragraph
4, of the Acts of 28 May 1930 and 7 March 1933 7 ), in France*
(Act of 24 June 1936, sections 31 v(d) and 31 v(e)) and in
Greece9 (Act of 16 November 1935, section 6). 10
I n all these countries the procedure for extending the scope
of collective agreements to cover third parties is governed by a
certain number of conditions of form and substance, the details
of which may vary though in essence they are the same. They
may be summed up as follows.
The most important of the conditions of substance, which
is to be found in all systems, is t h a t the extension of an agreement
to third parties may not be applied for unless t h a t agreement is
already predominant in its own territorial or occupational field,
either by reason of the number of persons covered (50 to 75 per
cent, of the workers concerned) or by reason of the questions
with which it deals ; i.e. wages, hours of work, etc. The Order
extending the agreement is not issued automatically but only at
the request of the parties to the contract or of the trade organisations ; in other words, on the initiative of those concerned.
1

Cf.
Cf.
Cf.
4
Cf.
8
Cf.
8
Cf.
' Cf.
8
Cf.
9
Cf.
10
Cf.
2
3

Legislative. Series, 1932, Braz. 6.
Legislative Series, 1934, Can. 5.
Legislative Series, 1935, Can. 3.
Legislative Series, 1935, Cz. 1.
Legislative Series, 1934, G.B. 7.
Legislative Series, 1931, Mex. 1.
Legislative Series, 1930, S.A. 5 ; 1933, S.A. 1.
Legislative Series, 1936, Fr. 7.
Legislative Series, 1935, Gr. 7.
also : Legislative Series, 1936, I.F.S. 1.

LEGAL EFFECTS OF AGREEMENTS

187

I n order t h a t third parties may be informed of the measure
contemplated and may be in a position to state their views or
objections, if any, the request for the extension of a collective
agreement must in most countries be published. When publishing
such request, the authorities mention a time-limit within which
any objection or opposition must be made and given a
hearing.
When the time-limit has expired, the competent authority
is free to take any decision it thinks fit in regard to the
request. I t may either accede to or reject the request without
appeal.
Under some laws the declaration or decree need do no more
than extend the collective agreement to third parties without
altering it, or, on the other hand, it may alter the duration of
the agreement, provide for exceptions or exemptions in favour
of certain undertakings, authorise revision within a given period
or under certain conditions, etc.
Again, the extension may in some cases be effected only with
respect to certain conditions of works : wages in Great Britain,
or wages and hours of work in Canada ; or again it may cover
conditions of work as a whole.
Such in brief is the procedure under systems which allow for
the optional extension of collective agreements to third parties.
Stress must be laid on the fact t h a t in all countries parties make
use of this procedure not by way of exception but in the normal
course of events. Moreover quite a number of laws, more particularly the Act passed in Great Britain and the Canadian Acts,
have been specially drafted with this end in view.
2. The extension of collective agreements or arbitration awards
to third parties by conciliation or arbitration. — This is the method
adopted in Austria (Act of 18 December 1919, sections 16 to 19 x ),
and in Australia both in the Commonwealth legislation and in
t h a t of various States, and in New Zealand. I t will suffice to
summarise, by way of example, the provisions of the Australian
Commonwealth Conciliation and Arbitration Act and the New
Zealand Act of 8 June 1936.
Under section 38 (f) and (g) of the Act of 22 June 1928
(consolidated t e x t 2 ) the Court of conciliation and arbitration

1
2

Cf. Legislative Series, 1920, Aus. 22.
Cf. Legislative Series, 1928, Austral. 2.

188

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

has power to declare by any award or order that any practice,
regulation, rule, custom or term of agreement, condition of employment or dealing whatsoever determined by an award in relation
to any industrial matter shall be a common rule of any industry
in connection with which the dispute arises.
Before declaring a common rule, the Court must pay due
regard to the extent to which the industries or the persons affected
enter or are likely to enter into competition with one another.
Further, before any common rule is so declared, the Court must
by notification published in the Gazette and in such other publications, if any, as the Court directs, specify the industry and the
industrial matter in relation to which it is proposed to declare
a common rule, and make known that all persons and organisations
interested in and desirous of being heard may, on or before a day
named, appear or be represented before the Court. The Court
must, in the manner prescribed, hear all such persons and organisations appearing or represented.
Further, the Court has power to direct with due regard to
local circumstances within what limits of area, if any, and subject
to what conditions and exceptions, the common rule so declared
is binding upon the persons engaged in the industry whether
as employers or employees, and whether members of an organisation or not.
Under section 23 of the New Zealand Act of 8 June 1936 the
Arbitration Court has power to extend an award so as to join
and bind as party thereto any (and not merely any specified)
trade union, industrial union or association, or employer in the
same industry, even if the award does not relate to a trade or
manufacture the products of which enter into competition with
those manufactured in another industrial district and in which
a majority of the employers and unions of workers are bound
by the award ; the previous legislation had contained a proviso
limiting the power of the Court in this case. However, the Court
may not extend an award to cover any employer unless a majority
of the employers in the district who are engaged in the industry
to which it relates are already bound by it.
Further, the Court may, on application within one month of
the making of any order extending an award to unspecified unions
or employers, grant exemption from it.
3. Automatic statutory extension to third parties of collective
agreements or of compulsory awards. — This procedure is followed

LEGAL EFFECTS OF AGREEMENTS

189

in Germany (Act of 20 January 1934, section 32 x) ; in Italy (Act
of 3 April 1926, section 10 2) ; Decree of 1 July 1926, section
57 3 ; Labour Charter of 21 April 1927, section I I I 4) ; in Portugal
(Decree of 23 September 1933, section 33 5) ; in the United States
(Act of 5 July 1935, section 9 6) ; and in the U. S. S. R. (Labour
Code of 9 November 1922, section 16 7 ).
I t should be pointed out that in the United States the extension
of collective agreements to third parties is a consequence of the
fact t h a t the trade union representing the majority of the workers
in a given district, occupation or industry, is, as regards the conclusion of collective agreements, considered to be the sole representative of all the wage-earners, whereas in other countries only
legally recognised organisations have power to conclude collective
agreements applicable to all the wage-earners and all the employers they represent, whether such wage-earners and employers
are members of the organisation or not.
Similarly, in Germany collective regulations promulgated by the
Labour Trustees are binding on all the persons concerned who
come within the territorial or occupational scope of such regulations.
Finally it will be remembered t h a t in Spain (Act of 27 November
1931-16 July 1935, section 19 8) and in the Netherlands (Act of
7 April 1933, section 19 9 ), occupational agreements concluded
by the joint labour boards or industrial councils are binding on
all persons, whether employers or wage-earners, engaged in the
industry or the occupation for which such agreements have been
drawn up.
I n conclusion, it may be said t h a t by the various means which
have been mentioned, legislation has sought so far as possible
to convert collective agreements which are normally limited to
the members of the contracting organisations into regulations
applicable throughout the occupation concerned.

Legislative
Legislative
3
Legislative
4
Legislative
6
Legislative
6
Legislative
7
Legislative
8
Legislative
9
Legislative
2

Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,
Series,

1934, Ger. 1.
1926, I t . 2.
1926, I t . 5.
1927, I t . 3.
1933, Por. 5.
1935, U.S.A. 1.
1922, B u s . 1.
1935, Sp. 3.
1935, Neth. 1.

CHAPTER V
THE APPLICATION OF COLLECTIVE

AGREEMENTS

In practice, all sorts of difficulties may arise when collective
agreements and other collective methods of regulating conditions
of employment are to be applied. Thus, the legislative authorities
have two tasks before them : on the one hand, the enforcement
of the agreements and regulations must be secured, while, on the
other, appropriate measures must be taken to settle any disputes
to which the application of agreements may give rise. This involves
the introduction of legislative measures organising the supervision
of collective agreements and laying down penalties for breach
of agreement.
So far as the collective agreements form an autonomous system
of regulation, such supervision and sanctions are, as has already
been stated, determined by the agreements themselves. 1
I . — MEASURES OF SUPERVISION

Generally speaking, if a conciliation authority is responsible
for following up changes in conditions of employment, it may,
in order to take the necessary action in time, have to supervise
the operation of collective agreements (cf. the Danish Act of
18 Januaiy 1934, section 2). Similarly, factory inspectors whose
d u t y it is to see t h a t social legislation is enforced must also supervise the application of collective agreements, more especially
with reference to certain Acts, for instance, those dealing with
hours of work.
Under the Australian Acts which provide for compulsory
arbitration, the duties of factory inspectors include t h a t of seeing
t h a t awards and collective agreements are enforced. For this
purpose, inspectors may enter any premises where work is done
and must make any necessary investigations and reports (cf.
1

Cf. above, pp. 63 et seq.

LEGAL EFFECTS OF AGBEEMENTS

191

Commonwealth Act, sec. 50 A ; Queensland Act of 1932, sec. 76,
etc.). I n countries where minimum conditions of employment are
laid down by joint labour boards or industrial councils, such
bodies may as a rule supervise the application of their decisions.
I n Spain, under the Act of 27 November 1931, the joint labour
boards are responsible for seeming the observance both of their
own decisions and also of individual and collective contracts.
With this end in view, they may appoint inspecting members who
are treated as assistant inspectors in the general service of the
labour inspectorate (sections 19, 20, 32 et seq of the Act).
Special bodies may be set up to supervise the application of
collective agreements. I n Canada, in the province of Quebec,
the parties to a collective labour agreement made obligatory
under the Act of 20 April 1934 must set up a joint supervisory
committee, to which the Minister of Labour may add two delegates
designated by the employers or employees who are not parties
to the agreement. I n the province of Ontario, under the Industrial
Standards Act of 18 April 1935, the Minimum Wage Board has
power to enforce the provisions of the Act.
I n countries where laws have been enacted concerning works
committees or councils, such bodies may have to supervise the
application of collective agreements. That, prior to 1933, was
the case in Germany under the Act of 1920 concerning works
councüs. I n Austria, the works councils set up by the Act of
1919 and the works communities for which provision is made
in the Act of 12 July 1934, have authority to supervise the application of collective agreements. So have the works councils which
are set up in Czechoslovakia under the Act of 1921.
Finally, in the U.S.S.R. the workers' representatives in each
undertaking have extensive powers of supervision, and in Italy
the application of collective agreements is supervised by the
corporative inspection service.
II. — PENALTIES

The nature of the penalties and the way in which they are
enforced depend on the type of legislation enacted concerning
collective agreements or other methods of regulating conditions
of employment. As a general rule, the principles applied to collective agreements are those of the ordinary law of contract.
B u t since in practice it is difficult to apply these principles
thoroughly, legislation has in several countries been introduced

192

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

either to adapt the principles of ordinary law to the special requirements of collective agreements or to substitute for such principles
other measures which are considered more satisfactory.
Rights and duties of individual employers and workers. —
According to the principles of ordinary law, collective agreements
take effect as regards both the individual employers and the
workers who are bound by such agreements, in rights and duties
created by contracts of employment. Any breach of a collective
agreement must therefore be a breach of an individual contract
in order to justify payment of damages, termination of contract,
etc. That is still the legal position in many countries. However,
under quite a number of laws, collective agreements directly
confer rights and lay duties on the persons to whom they apply,
and breaches of such agreements entail legal consequences for
which provision is made in the Act. This being so, according to
the principles of ordinary law, legislation may either compel
persons committing a breach of the Act to pay damages, or it
may make provision for disciplinary measures and penalties.
I n any event, an employer or a worker may be held responsible
only if he has been guilty of an offence.
Damages. —- Many Acts (in France, Latvia, Mexico, Netherlands, Sweden, etc.) expressly provide for the payment of damages.
Even when this obligation is not expressly stipulated, it follows
from the wording of an Act which declares t h a t a collective agreement is binding upon the employers and workers (Chile, Estonia,
Rumania, etc.).
In principle, the amount of the damages payable corresponds
t o the loss inflicted. Nevertheless, some Acts limit the amount
in the worker's favour (Sweden), lay down a fixed penalty (Canada,
Quebec : 20 per cent, of the wages in dispute), or even allow
of granting exemption from all liabilities to pay damages if such
exemption seems reasonable (Sweden).
Disciplinary measures. — As a rule, trade union rules provide
for disciplinary measures in the event of a member breaking such
rules, particularly in connection with collective agreements.
Provision is made for such measures in Italian legislation.
The German National Labour Act of 20 J a n u a r y 1934 likewise
provides for disciplinary measures. Under this Act the courts
of honour may inflict penalties for any serious lack of loyalty

LEGAL EFFECTS OF AGREEMENTS

193

to the undertaking either on the part of the employer or on that
of the .worker. The penalties mentioned are warning, reprimand,
withdrawal of the right to be head of the undertaking or workers'
representative, and loss of employment.
Fines and penalties. — Under section 10 of the Brazilian
Act of 23 August 1932, collective agreements are to include penalties
for breach of agreement. The amount of the fine is lower for
workers and their organisations than for employers or employers'
associations. Under section 7 of the Finnish Act of 22 March
1924, fines are inflicted on employers or workers who intentionally
act in contravention of collective agreements. The maximum
fine stipulated in the case of an employer (5,000 marks) is considerably larger than the maximum which may be inflicted on
a worker (500 marks). However, such penalties may be altered,
or even suppressed, by collective agreement.
Similarly, in Australia (Commonwealth Act) fines are inflicted
for breach of collective agreements. Such fines should be stipulated
in the agreements. If they are not, the maximum amounts mentioned in the Act apply.
As a rule, laws and regulations concerning joint labour boards
or industrial councils also provide for sanctions. For instance,
under the Spanish Act of 27 November 1931, joint labour boards
may inflict fines. The Netherlands Act of 7 April 1933 concerning
industrial councils even mentions imprisonment.
In Great Britain, the Cotton Manufacturing Industry Act of
28 June 1934, and the Canadian Act already cited respecting the
extension of collective agreements, provide that penalties shall be
inflicted on persons committing a breach of collective stipulations
which have been declared binding on third parties.
Under systems of regulation which lay down minimum wage
rates and make arbitration compulsory, sanctions attach to all the
decisions of industrial councils and awards of arbitration courts or
boards. Finally, in certain countries, penal codes include special
provisions concerning collective agreements and similar regulations.
For instance, section 509, para. 1, of the Italian Penal Code provides
that an employer or worker who fails to observe the stipulations
of a collective agreement or the decisions of the competent corporative bodies may be punished by a fine amounting to not more
than 5,000 lire.
Procedure. — If the obligation to pay damages is disputed, the
case must be submitted to a judicial body. However, in cases where
13

194

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

the collective agreement provides that such disputes shall be
submitted to conciliation and arbitration authorities, this stipulation usually takes precedence over the official procedure.
According to the different legislations, ordinary courts, special
courts, labour courts, wage boards, and, in certain cases, conciliation
and arbitration bodies, have power to deal with disputes arising
out of collective agreements.
If the collective regulation of conditions of employment is
accompanied by penal sanctions, the application of these must
depend on the decision of some official authority. Such penalties
may be inflicted either by the ordinary penal courts or by factory
inspectors, who are given power to impose fines, or, again, by
bodies which are responsible for laying down conditions of employment (industrial arbitration courts, joint boards, etc.).
The responsibility of trade associations and unions. •— When
trade associations or unions are parties to a collective agreement,
or are involved in procedure for regulating conditions of employment, legislation must decide how far such organisations may be
held responsible for any breach of the collective regulations, and
must further determine the legal consequences of such breach.
Collective responsibility. — In order that a trade association
or union may contract legal obligations, it must have legal personality, otherwise the organisation as such could not be held responsible, and all its individual members would have to answer for the
breach. If the organisation is to be answerable, the Act must
provide for collective responsibility. This can only attach to the
acts of the association or union itself, that is acts performed by
an organ of the latter within the competence of that organ, or
performed as a result of a decision taken by the association or
union in accordance with its rules. Certain Acts deal with this
question in detail, either by mentioning the organs concerned
(Australia) or by laying down the rules of procedure to be followed
by associations or unions (Norway).
The question then arises as to whether associations may be
held responsible for acts committed by their members. According
to the general principles of ordinary law which apply in a great
many countries, associations and unions cannot be made answerable for such acts unless they have expressly given guarantees
in this respect., The principle is confirmed by several Acts, which
provide that associations and unions must do all they can to

LEGAL EFFECTS OF AGBEEMENTS

195

ensure that their members will observe the collective stipulations,
but are not to be considered as guaranteeing such observance
(Italy, Netherlands).
Other laws do, however, make the organisations answerable
for deeds performed by their members as weli (Chile, Latvia).
Organisations are only responsible for acts performed in
contravention of a given stipulation, or of the collective stipulations
as a whole. This rule follows from the general principles of ordinary
law, and is sometimes expressly confirmed in the legislation.
Rights and duties of associations and unions. — In so far as
collective regulations are held to be contractual, an association or
union which is responsible for a breach of the regulations is liable
for payment of damages. A number of Acts have, however,
substantially modified the rules of ordinary law in this respect.
In several countries, associations and unions are required by
law to set up a guarantee fund so as to ensure that damages will
in fact be paid (Chile, Italy). On the other hand, a certain proportion of the association's or union's funds may be declared free from
seizure.
Under ordinary law, there is strict reciprocity between rights
and obligations. As regards collective relationships, however,
the principle has been substantially modified in favour of trade
associations and unions. Under several Acts, any association or
union which has concluded a collective agreement may, if one of
the other parties, or a member of such party, acts in contravention
of their obligations, claim damages not only in respect of any loss
it has itself suffered thereby, but also in respect of a loss suffered
by its members (Netherlands, Act of 24 December 1927, sec. 15 ;
Finland, Act of 22 March 1924, sees. 9 and 10).
Other laws confer on trade associations or unions the right to
bring an action, without having to prove any special mandate,
on behalf of one of their members who has suffered a loss owing
to a breach of the collective agreement committed by the other
party (Estonia, Finland, France, Italy, Rumania and Sweden).
Under certain laws, a trade union even has this right in respect of
any person bound by the collective agreement, whether such
person be a member of the union or not (Finland). Generally
speaking, an organisation which has power to defend the collective
interests of persons engaged in an occupation may naturally bring
any actions necessary for this purpose, or become a party to any
action. Under the Canadian Act (Quebec) of 20 April 1934, the

196

LEGISLATION CONCERNING COLLECTIVE AGREEMENTS

right to claim damages on behalf of the trade is conferred not
on the union b u t on the joint committee formed by the parties
to the agreement.
As regards the assessment of damages, certain Acts depart
from the principles of ordinary law. The Netherlands Act cited
above provides, in section 16, that, " If it is impossible to assess
the loss in money, a sum, fixed a t a reasonable estimate, shaD be
granted as damages ". Mention may also be made of the Swedish
Act, section 8 of which provides, t h a t :
In deciding whether and to what extent loss has been incurred,
the interest of the person concerned in the maintenance of the contract
and other circumstances other than those of a purely economic nature
shall be taken into consideration.
The amount of the damages may be reduced if this appears reasonable in view of the slight degree of culpability of the person who has
caused the loss, the situation of the person who has suffered loss in
respect of the occurrence of the dispute, the extent of the loss or other
circumstances ; complete exemption from liability to pay damages
may also be granted. An individual employee shall not in any case
be sentenced to pay damages exceeding 200 kronor.
The Canadian Act mentioned above provides t h a t the amount
of damages shall be fixed at 20 per cent, of the wages in dispute.
A similar provision has been made in Finland. Under the Act of
1924, organisations and employers who fail to observe the stipulations of a collective agreement to which they are parties must
pay a fine as damages for the other party. I n fixing the amount
of the fine, consideration is to be given to all the relevant circumstances, more especially to the actual loss caused and t o the extent
of the responsibility incurred. I n the absence of any stipulations
to the contrary j the fine must be paid to the person who has
suffered a pecuniary loss, if any, and in other cases to the party
which has brought the action.
Some laws provide t h a t a collective agreement may be terminated when, owing to a serious breach committed by one of the other
parties (Sweden, Finland), or even by an individual worker or
employee (Sweden), its observance can no longer be required of
one of the parties. I n order t h a t such termination may become
effective, an award must be given. Under the Swedish Act, the
court may also relieve an employer, worker or organisation of all
liability under the agreement when any given stipulation of the
agreement is not observed and nothing is done to correct this
state of affairs, even if tbe breach is not a serious one.
Finally, public penalties may be inflicted on an organisation.

LEGAL EFFECTS OF AQBEEMENTS

197

Under certain Acts, legal personality may be withdrawn, or
the organisation may be dissolved if it fails to carry out its undertakings. Under a number of laws, fines may be imposed (Canada,
Australia, Union of South Africa).
In many countries, disputes arising out of the application
of collective agreements are settled by a judicial procedure, and
the conciliation and arbitration authorities take no action unless
the dispute bears on the renewal of the agreement.

PART III
THE PLACE OF COLLECTIVE AGREEMENTS
IN THE ECONOMIC STRUCTURE
OF THE COMMUNITY

INTRODUCTION

The earlier parts of this Report have described the scope
and structure of collective agreements and the legislation enacted
in different countries to regulate them and to extend their scope.
Indications have been given of the increasing significance of the
rôle assigned by recent legislative measures to collective agreements
in the economic organisation of the modern industrial community,
based upon a growing recognition of their value not only in the
field of industrial relations, but also in the social and economic
structure of the State.
In the present Part of the Report, the place of collective agreements in the economic structure of the community is considered,
attention being first directed to the relation between collective
agreements and State regulation of working conditions. Account
is then taken of the tendency in the modern industrial community
towards greater standardisation of working conditions, especially
within each industry. This provides an economic basis facilitating
the collective regulation of working conditions whether by voluntary agreements or by State action. Illustrations are then given
of recent State intervention in the normal regulation of working

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COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

CHAPTER I
COLLECTIVE AGREEMENTS AND STATE REGULATION

In many countries, there is a wide measure of agreement by
organised employers and workers and by the State that the individual method of regulating working conditions independently by
each employer is unsatisfactory and that, especially in times of
depression, it results in " c u t - t h r o a t " competition and chaos.
The alternative to some method of collective regulation is becoming
steadily more important in industrialised countries. Conditions
may, however, be determined collectively either by State legislation
and machinery or voluntarily by agreement between the parties
directly concerned. For some questions State machinery possesses
clear advantages, but for others, particularly wages, the method
of collective agreement usually provides the most satisfactory
basis. In many countries, however, labour standards are regulated
partly by the State and partly by collective agreement, and the
relative importance of each method and the degree of co-ordination
between them varies from country to country according to the
political system established and to the degree of development
of industrial relations between employers and workpeople.
In some countries voluntary relations have developed so
extensively that working conditions throughout a large part of
industry are regulated by the method of self-government, and
an elaborate code of industrial " by-laws " is applied with little
intervention by the State. In such circumstances the State often
limits its intervention to : (1) regulating conditions in certain
branches of industry to which the system of collective agreements
has not extended and in which conditions are found on investigation to be unsatisfactory ; (2) establishing standards on questions
for which State action is more suited than collective agreements ;
(3) assisting the processes of collective bargaining by systems
of conciliation and arbitration.

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COLLECTIVE AGREEMENTS EST THE ECONOMIC STRUCTURE

Among the chief industrial countries, Great Britain is one
in which voluntary methods of collective bargaining cover a large
p a r t of the industrial field, on the basis of an evolution extending
over nearly a century. I t is of special interest, therefore, to quote
the following passage from a detailed and comprehensive Report
on Collective Agreements recently published by the British Ministry
of Labour :x
Collective bargaining between employers and workpeople has
for many years been recognised in this country as the method best
adapted to the needs of industry and to the demands of the national
character for the settlement of the conditions of employment of the
workpeople in industry. Although collective bargaining has thus
become established as an integral part of the industrial system, it
has discharged its important function, on the whole, so smoothly and
efficiently and withal so unobtrusively, that the extent of its influence
is apt to be, if not altogether overlooked, at least underestimated.
I t has produced a highly co-ordinated system of working arrangements,
affecting in the aggregate large numbers of workpeople and defining
often with great precision almost every aspect of industrial relations.
These arrangements are embodied in a vast number of collective agreements representing in many industries the result of prolonged and
continuous development.
The Report also indicates t h a t the effects of the war and especially the post-war reconstruction and readjustment to peace
conditions accelerated the rate of growth in importance of collective
agreements in Great Britain. Their significance is now much
greater than in pre-war years. Not only are agreements concluded
for many branches of industry in which collective bargaining
was almost unknown before the war, b u t in many industries
national agreements have superseded local agreements, and in
some industries agreements which formerly applied to skilled
workers only have been extended to semi-skilled and unskilled
workers. Further, although many workers and firms are not
members of signatory organisations, the agreements have a considerably wider application than t h a t of the membership of the
contracting parties, and in many of the most important industries
the workers whose conditions of employment are determined
directy or indirectly by the provision of collective agreements
constitute a high proportion of the total number of workers in
these industries. 2

1
MINISTRY OF LABOUR : Report on Collective Agreements between Employers and
Workpeople in Great Britain and Northern Ireland, Volume I, 1934.
2
See U.K. MINISTRY OF LABOUR : Report on Collective Agreements, p . X I I I .

COLLECTIVE AGREEMENTS AND STATE REGULATION

203

Similar developments have taken place in the regulation of working conditions in industry in a number of other countries, among
which Denmark, Sweden and Norway are particularly noteworthy.1
In France, where collective agreements were important only in
a few industries (chiefly coal-mining, baking, printing, maritime
transport and docks), the National Economic Council lately
reported in favour of a development of the collective regulation
of working conditions. The report also noted that labour legislation
is now covering an increasing proportion of the conditions of
employment, in particular hours of work, and is therefore reducing
the possible field of action of collective agreements, but referred
to the official regulation of working conditions on the basis of
agreement between the parties, which is described as " the specifically French form of the collective agreement ". Evidence
was submitted showing that the Public Administrative Regulations, Decrees and Orders applying various labour laws, particularly on the 8-hour day, were based either on existing collective
agreements or on agreements reached in joint committees representative of employers and workers.2
As a consequence of the agreement concluded in June 1936
(cf. p. 85 above) between the General Confederation of Production
in France and the General Confederation of Labour, the movement in favour of collective agreements gained new strength.
A network of agreements now covers most of the industries
in the country.
Where conditions are favourable to the conclusion of collective
agreements this method has claims to be regarded as superior
to other forms of collective regulation. In reaching agreements,
the parties directly concerned know at first hand the economic
conditions of the industry and the social standards of the workers,
and they can also effectively supervise the application of agreements. Even where the State intervenes, the conditions which
it establishes are limited to those which are tacitly approved
by the employers and workers and which are practicable in view
of prevailing economic conditions. Very largely, national legislation
establishes some general principle and provides for the setting
up of machinery, in the operation of which representatives of
'See Appendix I, which gives statistics of collective agreements for the few
countries which publish such data. More information is available about industrial
disputes,
the statistics of which are given for a number of countries in Appendix II.
8
CONSEIL NATIONAL ECONOMIQUE : Les Conventions Collectives de Travail,
1934.

204

COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

employers and workers participate, for the practical application
of this principle. This method, for example, is almost invariably
adopted when the State intervenes for the purpose of regulating
minimum wages. I t is often merely a modified system of collective
agreement, especially where the authority of the State is kept
very much in the background. Sometimes the method is regarded
as a stepping-stone towards completely independent collective
bargaining.
Until comparatively recent years the main purpose of State
intervention for the regulation of working conditions was humanitarian, b u t increasing emphasis is now being placed upon the
responsibility of the State for the co-ordination of economic life.
Growing intervention in one line has caused the boundary between
the field of collective bargaining and t h a t of State legislation
and regulation to become less clearly denned. This has led to
the development of a tendency, much more marked in some
countries than in others, to integrate the system of collective
agreements with t h a t of State regulation. The aim seems to be
to secure a sufficient co-ordination of the factors of economic life
while preserving elasticity and a certain degree of independence
from the rigidity of a highly centralised bureaucratic organisation.
Reference to this evolution, which has come into prominence
during the depression, was made in the Report of the Director to
the 1935 Session of the International Labour Conference, from
which the following passage may be quoted :
The attempt being made in a whole series of countries towards
the organisation of industry is one of the outstanding features of
present-day economic development. The search for a " half-way
house " between complete freedom and complete regimentation,
between a State-planned and directed economy on the Russian model
and the old system of unregulated competition is being diligently
prosecuted along widely different lines. The object in each case,
however, is the same. What is sought is some means of reconciling
the merits of private enterprise with the need for some measure of
discipline and organisation. In country after country and industry
after industry efforts have been made to prevent " cut-throat "
competition from bringing the producers to bankruptcy and forcing
down labour conditions to impossible levels. I t has been felt that
unless some means could be found to " put a bottom into industry ",
to arrest the downward spiral of deflation before prices and wages
had sunk too far, catastrophe would overtake the whole economy.
I n the regulation of working conditions, the system of collective
agreements, supported and extended where necessary by the

COLLECTIVE AGREEMENTS AND STATE REGULATION

205

authority of the State, seems well fitted to meet these needs of
modern industrial organisation. It is founded upon the principle
of self-government in industry, and, supplemented and co-ordinated
by the State, is capable of gradually assuming a responsible place
in the body politic. It preserves a democratic procedure which,
when conditions are favourable, ensures harmonious relations as
well as an intimate knowledge of the needs of industry. In most
countries the State prefers the methods of self-government in
industry, while retaining general powers of intervention to prevent
abuses, to secure adjustments by measures of economic control
during periods of crisis, and to effect co-ordination in the economic
development of the country.

CHAPTER I I
STANDARDISATION OF WORKING CONDITIONS

An outstanding feature of social evolution during recent
decades has been the growing standarisation and co-ordination
of working conditions. Collective agreements have made an important contribution towards this development. Increasing standardisation of conditions is mainly the result of improvements in
transportation and communication which have had the effect,
through increased mobility of labour and goods, of diminishing
the variation in methods of production and utilisation of labour in
different localities. Formerly economic life was largely localised,
and wide differences in standards of productive efficiency and,
therefore, in standards of living existed even between regions not
widely separated. There are still wide differences, especially
internationally, but with a marked tendency towards reduction
of inequalities. Information about new inventions and improved
methods is quickly disseminated, and competition compels firms
to introduce these methods if they are to survive. Thus, the
technical organisation of industry is becoming more standardised
and this reacts upon working conditions. Also the growth of mass
methods of production and of distribution is a factor in diminishing
the inequalities of working conditions and standards of living.
Progress in the standardisation of working conditions has been
most marked within the national economy. This is indicated by
the increase in many countries in the number and importance of
national collective agreements and other methods of regulating
working conditions on a nation-wide basis. Even in the advanced
industrial countries, collective agreements before the war were
almost entirely on a local or regional basis. Most of the early
agreements were concluded between the trade unions and individual
employers. The only standardising factors were the competition
of firms for labour and the policy of the trade unions of trying to
secure similar terms in their separate agreements with different
employers. However, the same factors which, as indicated in the

STANDARDISATION OF WORKING CONDITIONS

207

preceding paragraph, furnished an economic foundation for greater
standardisation of working conditions led to regional, national and
eren international consolidation of trade unions and employers'
organisations. This in turn resulted in the establishment of principles for the regulation of working conditions over wide areas,
and provided the machinery for the application of these principles
in collective agreements of extensive scope.
The evolution has not synchronised in the different countries
even among those which are highly industriaUsed, and in some of
them the regulation of working conditions separately by individual
establishments still predominates. Also, in certain countries
where national agreements are now concluded in many industries,
their conclusion is strongly resisted in particular branches of
production. Thus, in the British coal-mining industry the coal
owners oppose the demands of the Miners' Federation for national
wage regulation, and separate agreements are concluded on a
district basis.1
As already indicated in Part I, although some national agreements fix uniform standards for application throughout a country,
others fix different wage rates and conditions of work for each
district or alternatively establish general principles which are then
applied so that the actual conditions vary from district to district.
Thus in Great Britain in the building industry, a national agreement
fixes different wage rates for several grades of town, and the
agreement specifies the towns within each grade. This method was
also adopted in Germany in the former collective agreements,
several of which divided the country into districts (Ortsklasse)
with differing conditions. In Australia, basic wage rates and other
scales of wages have been regulated in this manner.
This method may be regarded as a half-way house on the road
to national standardisation. It permits adaptation to local circumstances while it has the advantage of bringing each area under
review from the standpoint of the needs of a larger unit than that
of any one locality. It is particularly suited to the requirements
of the larger countries which are made up of distinct economic
regions, and its success within various countries suggests that it
might provide a possible basis for international collective agreements. The principle upon which it is founded is already embodied
1
From 1921 to 1926 general principles of wage regulation operative in all
districts were adopted in national agreements a n d these were applied by joint
district boards, b u t the national agreements were terminated on the insistence
of the owners after the 1926 stoppage.

208

COLLECTIVE AGREEMENTS D i THE ECONOMIC STRUCTtTCtE

in certain International Labour Conventions. It provides the only
possible basis for international wage agreements if these are to fix
rates of wages and not merely establish general principles tobe
observed in the regulation of wages.
The forces tending towards greater standardisation of conditions are first experienced by those industries which are highly
competitive. During recent years such industries as iron and steel,
engineering, coal mining, cotton textiles, shipping and shipbuilding
have been greatly affected in all countries by world factors, while
building, printing, and public utility services have been affected
only indirectly and often after a considerable time lag. Often in
an industry, most firms are prosperous together or depressed
together. Consequently, while conditions within industries have
tended towards uniformity, marked disparities have arisen in
conditions from industry to industry. These are illustrated by the
considerable differences which arose in Great Britain during the
post-war deflationary period between conditions in the sheltered
and unsheltered industries. These different standards react upon
one another, but the mobility of capital and labour is so slow that
the disparities may persist for many years.
Two consequences of importance in collective bargaining follow
from the fact that, in the short period, conditions tend to vary
from industry to industry. The first is that the industrial basis
is the most convenient for the collective regulation of working
conditions, and the second that, where differences in the intensity
of competition result in considerable inequalities in standards,
demands are made for a modification of the competitive principle.
There has been a tendency in many countries to abandon or modify
the older craft basis of trade union organisation and of collective
bargaining in favour of the industrial basis, which is more closely
related to the structure of productive organisation and to the shortterm effects of competition. Changes in methods of production have
contributed to this evolution, and many trade unions which were
originally organised on a skilled craft basis have extended their
membership to semi-skilled and unskilled workers within the
industry. Employers are generally organised on industrial lines,
while, although vertical combinations cutting across industrial
divisions are not unfrequently developed, the more common tendency is for the establishment of horizontal associations or cartels
of firms within a single industry. These both facilitate the conclusion of collective agreements for particular industries and contribute
towards the standardisation of working conditions.

STANDARDISATION OF WORKING CONDITIONS

209

In countries which have introduced schemes for the regulation
of working conditions in association with general measures for
the co-ordination of the national economic life, the establishment
of separate machinery for each of the chief industrial groups is a
prominent feature, and usually this machinery is responsible for
the determination of conditions according to the special circumstances of each industry. Thus, in the United States a separate
code authority was set up for each of a large number of industries
to establish conditions of fair competition in accordance with the
provisions of the National Industrial Recovery Act. In Italy the
basis of the corporative system is industrial, while in the Soviet
Union the trade union movement is established on industrial lines
and concludes collective agreements with the industrial trusts,
within the limits defined by the national planning organisations.
Although differences in technical and economic conditions and
the complexities of the industrial structure necessitate a system of
collective bargaining and regulation of labour standards separately
for each industry, some method of inter-industrial co-ordination
is often considered desirable. Without co-ordination, differences
in economic prosperity result in widely differing wage standards
and conditions of work. These inequalities of standard for workpeople of similar ability and experience in different industries are
socially unsatisfactory. The decline during recent years in the
relative wage standards of coal miners, engineers and shipbuilders
in various countries which formerly were equal to or even higher
than those of printers, municipal and public utility workers,
illustrates a change which may persist for many years and for which
there is no social justification.
Various methods have been tried for dealing with these fluctuations and consequent inequalities. Some of these are directed
to the protection of labour standards while others attempt to
deal with the underlying economic causes. Some co-ordination
results from the formation of central councils or federations of
trade unions and similarly from the formation of employers'
associations in which the organisations in the various industries
combine for the furthering of their common interests. Or the
State, usually in consultation with employers' organisations and
trade unions, may intervene and regulate minimum wages, either
by fixing basic rates applicable to all industries or by fixing special
rates for particular branches of industry and categories of workers
whose wages were below the level considered reasonable in the
country. The State systems extensively applied in New Zealand
14

210

COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

and Australia illustrate the former method, while the latter has
been adopted in a larger number of countries, as for home workers
in several continental European and South American countries,
for women and girls in Canada and the United States, and for
all classes of workers in certain British trades for which the Trade
Boards system has been introduced. Sometimes, though certainly
not inevitably, the fixing of minimum rates of wages may cause
some unemployment, which, however, may be preferable to a
continuation of work at wages involving misery. Such unemployment then calls for appropriate remedies, including training and
transfer schemes, and the fostering of new industrial developments.
Increasing attention is being directed to methods of economic
planning, with the object of ensuring a more balanced development
of the various industries and of preventing maladjustments
from arising which inevitably result in disparities in the demand
for labour and in the conditions of employment in different industries. The methods adopted are very tentative in some countries and highly developed in others, but most Governments have
extended their co-ordinating intervention during recent years.
In most countries international trade is regulated in relation to
the actual and potential productive resources of the country,
subsidies are granted for the development of certain industries,
the use of new capital is controlled, and methods are adopted
for an orderly reduction of over-expanded industries. Usually
the measures taken are not developed into a consistent plan, but
in some countries they are highly integrated. For example in
Great Britain, all the measures just mentioned are being applied
without, however, being co-ordinated into a planned economy.
In the United States the national recovery programme, especially
its agricultural adjustment scheme and public works policy,
presents distinct features of planning. In Italy, Germany and
other continental European countries the Governments have
acquired powers of co-ordination which at times are kept in reserve
but which on occasion are actively applied. In the Soviet Union,
planning covers the whole economic life of the country and is a
continuous process. These various methods, whether tentative
or developed, are of interest in the present study, as they must
take account of the intimate relationship between monetary
factors, commerce, production, employment, wages, and hours
of work ; also, they usually involve co-ordination of the collective
regulation of working conditions, and they tend to reduce the
disparities in labour standards between different industries.

STANDARDISATION OF WORKING CONDITIONS

211

Although modern industrial organisation and especially improvements in transportation and communication are steadily
extending the area throughout which similar standards of working
conditions can be established, the period of time during which
unchanged real standards are appropriate has been progressively
shortened by the rapidity with which inventions increasing productivity are applied. In earlier times changes in methods of
production were infrequent, and, except for the effects of variations
in harvests or the results of pestilence and war, standards of working
conditions remained unchanged for long periods. Indeed, the
condition was often one of stagnation. Nowadays, however,
substantial changes in productivity and in standards of living
are made in the course of a decade or two. The general level of
real wages in most industrial countries has risen steadily with
increased use of machine power. Before the war a working week
of 53 or 54 hours was common in many industries. It was in general
replaced after the war by a week of 48 hours. This was one of
the principles included in the Labour provisions of the Treaties
of Peace and developed by the Washington Hours Convention.
Yet within about fifteen years the course of economic progress
had brought the 40-hour week within the range of practical discussion. Alongside these real changes in standards there is the
necessity for frequent adaptation of .nominal standards to changes
in monetary values and price levels and to the fluctuations of
the economic cycle. The system of collective bargaining, which
enables frequent adjustments in conditions to be made and which
brings together employers and workers possessing the most
intimate knowledge of industrial conditions and the effects of
changes in methods of organisation and productive technique,
is well suited to the needs of industry and the economic life
of to-day. In many agreements, the process of adjustment is
facilitated by the device of the sliding scale, which is capable of
still wider application.
Both employers and workers benefit from the standardisation
of conditions of work throughout areas in which conditions of
work are similar, and from the establishment of " ratio " regulation covering areas with differences in conditions. Workpeople
have the assurance that during the period of the agreement they
will be protected against a progressive deterioration of their
conditions, which, as is shown by the experience of the United
States during the years 1930, 1931 and 1932, may proceed so
far as to endanger the economic structure of the country. They

212

COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

also know that, when the agreements are revised, account will
be taken of the long-range interests of the industry as a whole
and not of the narrow and short-term interests of a particular
firm. This advantage accrues to the employers, who are also
safeguarded from the exploitation of labour by their competitors.
They are therefore likely to concentrate upon reduction of labour
costs by improved methods of organisation, instead of seeking
to increase their competitive power by lowering labour standards.
In this way collective agreements tend to give a stimulus to industrial progress.
The community enjoys these benefits, and it also has the
advantage that unduly low standards involving privation and
deterioration are as far as possible prevented. Also pressure is
put upon firms unable to maintain standards which are generally
accepted as reasonable in the industry. If they cannot improve
their efficiency they are gradually squeezed out and the community's resources of capital and labour are directed towards more
suitable channels. At the same time the agreements can provide
in various ways for reasonable flexibility. Thus firms which desire
to do so can pay higher rates than those fixed in the agreements,
and special arrangements can be made for handicapped workers,
or for branches of industry experiencing special difficulties.
In concluding this section, it may be noted that during recent
years a policy of economic nationalism has been applied in many
countries which has contributed to the co-ordination of economic
life and has strengthened the trend towards standardisation of
working conditions within national boundaries. Its objects have
also included the sheltering of national labour standards from
the effects of severe international competition. If successful,
this policy would have the effect of resisting the tendency towards
greater international standardisation of labour conditions and
would result in the long-term maintenance of artificially isolated
national standards more or less independent of one another according to the extent to which national self-sufficiency was developed.
The interdependence of economic life is, however, so close that,
except temporarily and within narrow limits, this policy must
result in a lowering of national standards. It is of only shortrange significance and can only temporarüy interrupt or retard
the trend towards less international inequalities of standards.

CHAPTER

STATE INTERVENTION IN PERIODS OF ECONOMIC CRISIS

In conditions of economic stress and deflation during recent
years various Governments have found it necessary to interfere
with the ordinary course of collective agreements and other means
of regulating working conditions in order to secure a rapid downward adjustment of money wage rates over a wide industrial field.
This has been considered necessary in order to bring internal costs
of production and prices into closer relation with world costs and
prices, and the ordinary processes of adjusting conditions by
negotiation industry by industry were regarded as being too slow
to meet the needs of the emergency. Similarly, a number of
Governments has taken steps to secure general reductions in
hours of work as a means of spreading employment over a greater
number of workpeople. At least one Government — that of the
United States — has initiated a procedure for raising the wage
level, which had fallen out of line with the other economic factors.
General measures to shorten the working week have also been
taken in the United States and in other countries as a means of
dealing with unemployment during the crisis.
In making recent adjustments the Governments have acted
as far as possible in consultation with representatives of employers
and workers and, where conditions have permitted, have used the
machinery of collective bargaining, but they have exerted their
authority, to a greater or less extent, to secure modifications of
the conditions established by free agreements in order to meet the
exigencies of the national economic life. It may here be noted
that these adjustments were facilitated in several countries by the
existence of an established structure of working conditions regulated by collective agreements.
These processes of general adjustment to meet an emergency
may be illustrated from the experience of various countries. The
examples show action to reduce money rates of wages during
periods of deflation. In other circumstances, general upward

214

COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

movements of money wages may be found necessary, as is illustrated in a later section of this Report by the industrial recovery
measures taken in the United States of America.
In Italy as early as the autumn of 1927, at a time of rapid
appreciation of the lira, the directorate of the Fascist party under
Signor Mussolini decided in principle that a reduction of wages of
not less than 10 per cent, and not more than 20 per cent, was
necessary. The reductions were to be made by the trade union
organisations in each industry, but a National Trade Union Committee and provincial committees had power to intervene if the
organisations failed to agree upon the percentage of wage reductions.
The National Committee,.which was presided over by the general
secretary of the Fascist Party, was attended by the Under-Secretaries to the Ministries of Corporations and National Economy,
and by representatives of the Federation of Fascist Trade Unions,
the national employers' organisations, and the National Co-operative Institute. In each province trade union committees consisting
of the officers of the various trade unions under the chairmanship
of the Fascist Federations were formed to co-ordinate policy,
where necessary, in their areas. All the proceedings of the trade
union committees were subject to approval by the Minister of
Corporations, and the whole policy was closely supervised by the
Government. A policy of reducing prices was. associated with that
of wage reductions. By the summer of 1928, the Head of the
Italian Government issued a Circular forbidding any further
reduction in the wages of any class of workers, considering that in
the economic conditions then prevailing new reductions were
unnecessary.
At the end of 1934 a plan was adopted in Italy for the introduction of a 40-hour week for workers in industry without change
in hourly rates of wages. The various industries were separately to
arrange for the application of the plan, and the representatives
of the employers' and workers' organisations were to collaborate
in making the necessary changes. It may be added, that in 1936
the average nominal wage rates fixed by collective agreements
were increased by about 10 per cent, in a large number of trades
and industries.
In 1931, widespread reductions in money rates of wages were
effected in Germany, largely by governmental action, and measures
were taken at the same time to secure a reductionTof prices and
other costs. An Economic Advisory Council, which included
representatives of industry and of the trade unions, was set up

STATE INTERVENTION IN PERIODS OF ECONOMIC CRISIS

215

to enquire into the economic situation. It reported in favour of
wage and also price reductions. This advice was adopted by the
Government, and on 8 December 1931, an Emergency Decree was
issued involving a modification of collective agreements so as to
secure wage reductions in all industries.*• In accordance with the
Decree, wages were to be reduced to the levels ruling on 10 January
1927, or where the rates were more than 10 per cent, above the
level on 10 January 1927, a reduction of 10 per cent., or in certain
circumstances 15 per cent., was to be made. Rents, rates for water,
gas, electricity, the prices of many. commodities and rates of
interest were all to be reduced. The Conciliation authorities were
given wide powers to modify agreements, compulsorily to settle
disputes arising out of the wage reductions, and to prolong the
validity of wage agreements. The Federal Minister of Labour
was also given power to declare conciliation decisions binding.
Australia has long had a highly integrated wage structure which
includes collective agreements, wage regulation by official machinery
in the States, and a Commonwealth system of conciliation and
arbitration.2 For many years the Commonwealth Court of Conciliation and Arbitration took the living wage principle as the basis
of its awards, and the basic wages of workers subject to its awards
were adjusted according to changes in the cost of living. The
Commonwealth basic wages for the lowest-paid categories of
workers influence considerably the wages of workers in the higher
categories. They also influence the rates fixed in collective agreements and by the various State authorities. In January 1931, as
part of a general plan to meet the economic crisis, the Commonwealth Court reduced real wages by 10 per cent., in addition to a
reduction in the basic money wage in accordance with the fall in
the cost of living. With further reductions during the year the
total decline in the money wages of workers under Commonwealth
awards amounted to 23 per cent., and substantial reductions were
also effected in most of the States. In order, however, that sacrifices would not fall upon wage and salary earners only, measures
were taken to reduce interest rates on internal debt by 22% per
cent. In 1933 and 1934 when economic conditions had improved
the Commonwealth Arbitration Court cancelled the 10 per cent.
1

Cf. International Labour Review, April 1932 : " Recent Emergency Legislation

in Germany " b y Dr. F . SITZLEB.
s
See INTERNATIONAL LABOTJB O F F I C E , Studies and Beports, Series D, No. 17,

Minimum Wage Fixing Machinery ; also Studies a n d Reports, Series A, No. 34,
Conciliation and Arbitration in Industrial Disputes.
Cf. also above, p . . 109 :
Generalised Compulsory Arbitration (Australia).

216 COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

reduction in real wages, but made certain other changes, including
the introduction of a new method of determining the basic wage,
the net effect of which was that wages were not increased by the
full 10 per cent.
Somewhat similar systems of regulating wages and working
conditions are in operation in New Zealand. This country was also
similarly affected by the economic depression. As in Australia,
the severe fall in prices of products for exports caused difficulty
in paying interest on capital borrowed from abroad, and currency
depreciation resulted. Finally in May 1931 under special powers
granted by Parliament, requiring the Arbitration Court to take
into account the economic and financial conditions affecting trade
and industry in the Dominion, a general order was issued reducing
the rates of remuneration fixed by awards and agreements by 10
per cent. Already, earlier in the year, the salaries and wages of
persons employed in the Government service had been reduced by
10 per cent.1 The Arbitration Court system was also attacked
on the ground that its awards, which were binding on the parties
for a period of three years, gave an undue rigidity to the wage
structure, and that even the 10 per cent, wage reduction in the
crisis was made possible only by special legislation. The system
was amended by Act of Parliament in 1932 and the long-standing
compulsory arbitration of industrial disputes was replaced by
voluntary arbitration.2 When economic conditions improved, the
1931 cuts were partly or wholly restored to Government servants
and by local bodies, but no general increase took place in private
industry. Indeed, contrary to the tendency in a number of other
countries, various collective agreements lapsed and there was a
reversionto individual arrangements. This was due to the abolition
of the compulsory powers of the Arbitration Court and to the
inability of the negotiating parties to reach agreements. As
pointed out above, the system of regulating wages and conditions
of work by compulsory arbitration has been reintroduced by the
Act of 8 June 1936.3

1
A general account of the situation is given in an article on " The Depression
and Industrial Arbitration in New Zealand ", b y E . J . RICHES, International
Labour Review, Vol. X X V I I I , No. 5., November 1933.
2
Special provision was made for female workers. On receipt of an application
from a union representing such workers for an order fixing minimum rates of wages
in t h e industry or industries to which a dispute relates, the Court, after hearing
t h e parties, must make such an order, the period of validity of which shall be
from six to twelve months.
3
Cf. above, p . 116.

CHAPTER IV
INCORPORATION OF COLLECTIVE AGREEMENTS
IN THE NATIONAL ECONOMIC STRUCTURE

The previous section dealt with temporary interference by
Governments with the normal operation of collective agreements
and other collective methods of regulating working conditions
for the purpose of effecting adjustments to the economic necessities
of periods of crisis. Here a review is given of more permanent
measures taken in various countries to give collective agreements
and analogous methods a recognised responsible rôle in the national
economic structure. These developments vary from country to
country, some being merely tentative extensions of voluntarily
concluded collective agreements while others represent a considerable modification of this system. They are all based in varying
degree upon the idea of introducing greater co-ordination of working
conditions in particular industries or throughout the national
economy. Some of them are intimately associated with the planning
of the economic and industrial structure.
It has been pointed out in recent publications of the International Labour Office, particularly in the Report of the Director
that the need for " planning " — that is, for the deliberate interference by the Government with the economic structure and the
course of economic events in order to achieve certain social objectives is becoming more widely recognised. " The fatalistic faith
in the benevolent operation of economic law was everywhere
giving way to the demand for systematic collective action. . .
The old self-regulating economy was no longer likely to be tolerated unless it guaranteed the maintenance of social well-being.
When it failed to do so, it became the business of Government
1
Report of the Director to the 1935 Session of the International
p . 7.

Labour

Conference,

218

COLLECTIVE AGBBEMENTS IN THE ECONOMIC STRUCTURE

to intervene in the general interest of society. " 1 It has also been
indicated that the strength of the popular movement in favour
of State intervention iß based upon loss of faith in the economic
system as a consequence of its failure to ensure the distribution
and consumption of the present plenitude of actual and potential
supplies. Social and economic affairs are seen to be inseparable,
and social security is taking precedence over individual profit.
With this changing outlook, social legislation and collective
agreements for the regulation of working conditions are seen to
be something larger than mere protection against exploitation
and the securing of exclusive advantages by a limited group
of employers or workers. They became an essential element in
an interrelated economic and social structure. The closer integration of economic and social factors within the different countries
demands a more systematic regulation of working conditions than
in the days of small-scale production, localisation of markets as
a result of inadequate means of transportation, and a social philosophy of almost unqualified laissez-faire.
The relation between money wages, prices, purchasing power,
volume of production, employment and general economic prosperity
and social welfare is evident, and the regulation of wages whether
by collective agreements or by State machinery is seen to be one
of the essential elements in economic stability and social security.
Hours of work, which were formerly regulated to ensure a reasonable
minimum of leisure time for the worker, are now recognised as
an important link between the rate of industrial progress, demand
for labour and standards of living.
As has been indicated in Part I of this Report, wages and
hours of work represent the chief subjects of collective agreements.
Their importance in the organisation of economic life is so great
that their regulation cannot be left in a state of chaos. In a number
of industrial countries in which an adequate system of collective
agreements has not evolved, the Governments have found it
necessary to establish systems for their regulation. These systems,
the essential features of which are determined by the political,
economic and social conditions of the respective countries, differ
considerably, some of them incorporating the methods of collective
bargaining, while others are based upon alternative but analogous
principles.
The simplest form of intervention is illustrated by the British
Cotton Manufacturing Industry (Temporary Provisions) Act of
1934. The chief features of this Act have already been described

INCORPORATION IN THE NATIONAL ECONOMIC STRUCTURE

219

in Part I I of this Report. 1 Its object is to prevent a progressive
deterioration of working conditions in an industry which, in present conditions of world trade, has a considerable surplus productive capacity. Cut-throat competition was resulting in lower wages
and longer hours without causing any considerable expansion
of trade and employment. The workers and employers were
strongly organised and had established detailed agreements for
the regulation of working conditions, but these were being continually undermined by a minority of firms. Yet the solution
of the industry's problems did not Me in wage reductions which
left competition almost unchanged. Indeed the process of securing
wage reductions led to unrest and stoppages of work which aggravated the situation.
The Act of 1934 was, therefore, passed to preventa minority
of the industry from increasing the difficulties by methods of
unfair competition. It provided machinery for extending to all
undertakings the wages fixed in collective agreements concluded
by organisations representative of a majority of the employers
and workers, these wages being given statutory force. Undertakings
which have substantial reasons for demanding a modification in
their favour of the terms of the agreements are given an opportunity
of presenting their case before an impartial body. As the principle
of extending the provisions of collective agreements to third
parties is new to British legislation, the Act was passed for a short
period only, and in its application provision is made for elaborate
safeguards restricting the field of State intervention.2 Also the
parties to the agreements, and not the State, are responsible for
enforcement. The general regulation of wages in the manufacturing
section of the industry will, by restricting the competitive principle
in the adjustment of labour conditions, enable attention to be
directed to more fundamental remedies for the economic reorganisation of the industry.
By contrast with such tentative measures 3 is the elaborate
1
Reference has also been made t o similar measures t a k e n in other countries
for t h e extension of t h e provisions of collective agreements t o t h i r d parties.
a
Although the principle is new in British legislation, various demands have
been made for its application in other industries, particularly those in which Joint
Industrial Councils have been established.
3
Reference m a y also be made to two particular instances in which collective
agreements are associated with measures of an economic character.
I n the Netherlands agricultural employers are required to negotiate with
agricultural workers' organisations with regard to conditions of employment if
they wish to benefit from the emergency legislation for agriculture. I n Sweden,
under an arrangement between t h e Government and t h e sugar manufacturers,

220

COLLECTIVE AGREEMENTS IN THE ECONOMIC STKUCTUBE

integration of collective agreements in the Italian Corporative
System and in systems along somewhat similar lines established
or contemplated in Austria and Portugal. Still more complete
is the integration of trade unionism and collective agreements in
the economic life of the Soviet Union. Along different lines
extensive experiments have been made in the United States,
under the National Industrial Recovery Act, 1933, to achieve
industrial recovery and maintain a co-ordinated economic structure
and development by the establishment, industry by industry, of
standards of working conditions approved by the Government.
Both the National Industrial Recovery Act and the National
Labour Relations Act, 1935, give to collective agreements a new
importance in the industrial and economic life of the United
States. These industrial recovery measures in the United States
have not been without effect upon policy in ' other countries,
particularly Canada.
In the present section an account is given of these developments in Italy, the Soviet Union, and the United States of America, for the purpose of illustrating recent tendencies for the co-ordination of collective agreements with the whole economic structure.
A section on Germany is also included both because of the great
extent to which collective agreements were incorporated in the
economic structure of the country before the present régime,
and because, although the former system of collective bargaining
has been terminated, the provisions of the collective agreements
concluded several years ago still provide the basis for the regulation
of working conditions in many industries.

THE UNITED STATES OF AMERICA
Economic and social conditions during recent years in the
United States have shown the need for some method of regulating
and co-ordinating labour standards on a nationwide basis with
the object of encouraging national industrial recovery and of ensuring greater stability in economic life. Regulation of working conditions by collective agreements between employers' organisations
and trade unions had not made much progress, and only in a few
only those sugar-beet cultivators who undertake to pay to the workers in the beet
fields the wage rates laid down in the collective agreement (whether they belong
t o t h e employers' organisation or not) are entitled to supply the factories with
beets.

INCORPORATION IN THE NATIONAL ECONOMIC STRUCTURE 221

industries were conditions effectively regulated by such agreements.
When President Roosevelt's administration came into power only
about 10 or 12 per cent, of industrial workers were employed under
collective agreements between trade unions and employers, and
most of these agreements were between trade unions and individual
firms. The conditions of labour of approximately 80 per cent
of American industrial workers were determined by individual
agreement, while employee representation plans, restricted to the
workers of a single undertaking, were in operation for 7 or 8 per
cent, of the workers.
Throughout a very large proportion of American industry,
therefore, wages and other conditions of work were determined independently by each undertaking, and wide diversity of conditions
resulted. During the depression competition between firms became
so intense and the supply of labour so great in relation to demand
that money rates of wages were seriously reduced. If a minority
of firms in an industry reduced wages considerably, others were
compelled, owing to the severity of competition, to follow the
same course, and this was often done successively until there seemed
almost no limit to the amount of wage and price reduction. There
was danger of a disastrous disintegration of the wage and price
structure. This aggravated the depression both by reducing purchasing power and by increasing the maladjustment between the
wage and price structure and the capital obligations undertaken
earlier in the expectation that prices and wages would be maintained
at higher levels. In the absence of a developed system of collective
agreements the Government deemed it necessary to introduce a
method of regulation which would achieve somewhat similar results,
while at the same time encouraging the development of collective
bargaining.1
This was one of the purposes of the system of codes of fancompetition established under the National Industrial Recovery
Act, and, although Section 3 of this Act, which empowered the
President to promulgate such codes, has been declared unconstitutional by the Supreme Court of the United States, the value of
some method of avoiding unrestrained competition, especially in
labour standards, is so widely recognised that voluntary arrangements have been made in many of the chief industries to ensure
1
On the questions covered by this section of the Report see Labor and Relations
Boards. The regulation of collective bargaining under the National
Industrial
Recovery Act. Lewis L. LOBWIN and Arthur WtTBino. The Brookings Institution,
Washington, 1935.

222

COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

the maintenance of regulation. Shortly after the Supreme Court's
decision was announced a number of large industries and employers'
associations declared that they were in favour of maintaining
the rates of wages and hours fixed by the codes. For example, a
meeting of leaders of the iron and steel industry held at the American Iron and Steel Institute adopted a resolution indicating the
industry's determination to preserve standards of labour and fair
competition. Maintenance of basic labour standards throughout
an industry is now, however, voluntary, and numbers of undertakings in various industries are reported to have reduced wages or
increased hours as a result of the freedom given by the Supreme
Court's decision.
An outline of the code system is given here because to
some extent it replaces collective bargaining, because it
has features similar to those of collective bargaining, and
because, in association with collective bargaining, it represents
an attempt to relate the general regulation of working conditions
to the economic reconstruction of the community.1 The National
Industrial Recovery Act included the regulation of working conditions by codes and collective agreements among the chief methods
designed " to encourage national industrial recovery " and " to
foster fair competition". Among the remedies proposed for
solving the national emergency causing widespread unemployment
and disorganisation of industry and undermining the standards
of living of the American people were the maintenance of united
action of labour and management under adequate governmental
sanctions and supervision, the elimination of unfair competitive
practices, increase in the consumption of industrial and agricultural
products by increasing purchasing power, the reduction of unemployment, and the improvement of standards of labour.2
As has been indicated in Part I I of this Report, Section 7 (a)
of the National Industrial Recovery Act endeavoured to encourage
collective bargaining by providing that "employees shall have the
right to organise and bargain collectively through representatives
of their own choosing ", and giving legal protection against victimisation of workers on account of trade union membership and activities.
1
The t e x t of t h e National Industrial Recovery Act and the provisions of some
of t h e chief codes of fair competition are given in INTERNATIONAL LABOUR OFFICE,
Studies and Reports, Series B, No. 19, National Recovery Measures in the United
States. The application of the United States Government's recovery policy is
reviewed in INTERNATIONAL LABOUR OFFICE, Studies and Reports, Series B , No.
20, Social and Economic Reconstruction in the United States.
2
National Industrial Recovery Act, Title 1, Section 1, Declaration of Policy.

INCORPORATION IN THE NATIONAL ECONOMIC STRUCTURE

223

The system of codes of fair competition provided the basis
of the system of regulation, but the President of the United States
was empowered by Section 7 (b) of the Act to approve standards
as to maximum hours of labour, minimum rates of pay and other
conditions of employment freely established by mutual collective
agreement between employers and employees in any trade or
industry. Such approved standards had the same binding force as
those fixed in a code of fair competition, and violations involved
liability to fine in the same way as violations of the provisions of
a code. The President was also given direct powers to prevent
destructive wage or price cutting.
The codes themselves fixed standards both for the regulation
of productive and commercial practices and for the determination
of minimum labour standards. In both fields regulation was considered necessary to remedy the situation into which the economic
life of the country had been brought by leaving each firm entirely
free to act as it desired without considering the effects upon the
economic life of the country. It was necessary to view the problem
as a whole. Also, the National Industrial Recovery Act required
every code of fair competition to include the collective bargaining
clause (Section 7 (a)) of the Act.
The Act provided that any association truly representative of a
trade or industry could prepare a code of fair competition and
submit it to the President for approval. Thus an industrial basis
similar to that increasingly adopted for collective agreements was
established for the code system. The Administration favoured
industrial self-government rather than Government regulation of
business, and this method was adopted both in the drafting of the
codes by trade and industrial associations and in their application
by code authorities representative of a branch of trade or industry
with the Government assuming consultative and advisory functions
rather than direction and control.
Although the codes were intended to achieve some of the purposes of collective agreements, they differed from collective agreements in the relatively restricted share which the representatives
of labour played in their formulation and operation. In a few
codes the labour provisions were determined largely by direct
collective bargaining between trade unions and employers.1 Among
the chief industries in which this method was employed were build1
See The National Recovery Administration, An Analysis and an
published by The Brookings Institution, Washington, 1935, p. 430.

Appraisal,

224

COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

ing, bituminous coal mining, and several branches of clothing
manufacture. In the great majority of industries, however, owing
to the opposition of the employers to the trade unions, the method
of collective bargaining was not used for determining the labour
provisions of the codes. This does not mean that the trade unions
had no opportunities of exerting their influence upon these provisions, but, nevertheless, organised labour consistently protested
that its participation in the drafting of the labour provisions of
codes and also in their administration was inadequate.
The first draft of a code, including its labour provisions, was
generally made by a representative association or group of industrialists. In preparing the draft the industrialists were
influenced by the known wishes of the Government, as indicated
in the President's Re-employment Agreement of 20 July 1933
which had been voluntarily adopted as an emergency measure
for the period from August to December 1933 by large numbers
of industrialists. With certain exceptions this Agreement fixed
the minimum age of employment at 16 years of age, the maximum
hours of employment in industry and commerce at 35 to 40 hours
a week, and minimum rates of pay at 12 to 15 dollars a week or
30 to 40 cents an hour ; wages in excess of the minimum at the
time of the Agreement were to be maintained or increased by
equitable readjustment. Also, price increases were to be restricted
so that profiteering advantage would not be taken of the consuming
public.
This emergency policy, therefore, consisted mainly in increasing
the number of persons in employment by reducing hours of work,
and in expanding the purchasing power of the community, thus
contributing to industrial recovery and to still more employment.
I t was recognised that, except for a short period of emergency, the
provisions of the President's Re-employment Agreement were too
standardised to meet the varying needs of the different industries,
and they were to be replaced by separate codes adjusted to these
needs. Nevertheless, the Government was determined that,
along general lines, the policy of the Re-employment Agreement
should be maintained, and it indicated that draft codes which
departed too much from this policy would not be approved. An
association of industrialists which proposed a code showing wide
variation from the Government's policy was immediately subjected
to pressure by the responsible officers of the National Recovery
Administration to make substantial adjustments.
Drafts proposed by associations of industrialists were considered

INCOKPOEATTON IN THE NATIONAL ECONOMIC STBUCTTJKE

225

at preliminary conferences and at public hearings. At the preliminary conferences a representative attended from the LabourAdvisory
Board, which was part of the structure of the National Recovery
Administration appointed by the Secretary of Labour and consisting
mainly of trade union officials.1 Organised labour also had opportunities of influencing the provisions of codes during the course
of the public hearings. These methods have been described as
a form of " indirect representative bargaining " in which proposals
on labour conditions formulated by organised employer groups
were submitted to the Government's administrative agency,
which possessed the power of final decision, and representatives
of Labour, by bringing pressure on the agency, endeavour to
influence its decision.2 However, the trade union leaders complained that the system gave the industrialists an unfair advantage
because the drafts on which the discussions were based were
prepared by the trade associations, because those associations
were in an unduly influential position in the processes of making
adjustments to meet objections raised during the public hearings,
and because the officers of the National Recovery Administration
before whom hearings were held and who mainly determined
what attention should be given to criticisms of draft codes were
largely drawn from the ranks of industrialists.
As already indicated, the administration of codes was in the
hands of code authorities, the members of which were largely
drawn from trade associations or were in other ways representative
of the industrialists. Only about 5 per cent, of the codes provided
for labour representation on the code authority. Code authorities
composed mainly of industrialists might be fairly suitable for
securing compliance with the trade practice provisions of codes,
but complaints of violation of labour provisions and the settling
of labour disputes required an impartial authority or a body
upon which labour was represented equally with industrialists.
An attempt was made to meet these needs by the establishment
of a compliance organisation within the framework of the National
Recovery Administration to deal with violation of the labour
provisions as well as with the trade practice provisions of codes.
In some industries, usually those in which labour was well organised,
1
I n the interests of industrialists and of consumers respectively, representatives
of the Industrial Advisory Board and of the Consumers' Advisory Board also
attended these conferences.
2
See The National Recovery Administration : An Analysis and Appraisal, op.
cit., pp. 427-30.

226

COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

industrial relations committees or boards equally representative
of employers and employees with an impartial chairman, were
set up to deal with labour complaints and disputes. National
machinery was also established for dealing impartially with labour
disputes by the method of voluntary arbitration, on the request
of the parties to a dispute, to regulate the operation of the collective
bargaining clause of the National Industrial Recovery Act, and
to investigate complaints of discrimination against workers because
of their trade union activities
An attempt was also made to overcome, to some extent, the
objection of the trade unions that labour was rarely represented
on code authorities, by the appointment of a labour adviser to
the Administration member of each code authority. These advisers,
appointed on the nomination of the Labour Advisory Board,
were not members of the code authorities ; they attended meetings
only on invitation, but had access to the minutes and could appear
before the code authorities to make statements on specific subjects.
The Government's hope that the codes of fair competition
fixing minimum conditions of work might be supplemented by
higher standards and the detailed regulation of wages and other
conditions for skilled workpeople by collective agreements between
employers and trade unions was not realised. Though the right
to collective bargaining was established by Section 7 (a) of the
National Industrial Recovery Act, the employers insisted that
the right to bargain individually was also implicitly preserved,
and that collective bargaining did not necessarily mean bargaining
with trade unions but that it included negotiations between the
management of a firm and representatives of the workpeople
employed by that firm. They therefore proceeded to establish
employee representation plans, criticised by organised labour as
" company unions " and as affording little protection of the workers' interests, while many firms maintained individual bargaining,
claiming that their workpeople freely preferred this method.
The membership of trade unions, however, grew rapidly and
bitter disputes occurred throughout the country on the question
whether these unions or the company unions really represented
a substantial part of the workers in particular undertakings.
Conflicts also arose about the rights of minorities of workers to
separate representation in collective bargaining in undertakings in
which ballots showed that a majority of the workers preferred
representation by trade unions. In many industries these issues
remained unsettled and conditions of work above the minima

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227

fixed by the codes generally continued to be regulated by individual
agreements or on a company basis. The elasticity of the provisions
of many codes permitted extensive evasion of the Administration's
intentions that earnings should be maintained with the shorter
working week and that existing differentials between skilled and
unskilled workers should be continued.
An attempt to meet the collective bargaining difficulty at
least in part is made by the provisions of the recently adopted
Wagner-Connolly National Labour Relations Act. This Act,
which gives statutory force to the right of employees to selforganisation and to bargain collectively through representatives
of their own choosing, is applicable only when violation of this
right would burden or obstruct interstate commerce. It sets
up a National Labour Relations Board to protect the employees
against interference or discrimination by employers on account
of their membership of a labour organisation and to prevent
employers from exercising discrimination in conditions of employment for the purpose of encouraging or discouraging membership
by an employee in any labour organisation, except that an employer
by agreement with a representative labour organisation may
require his employees to become members of such an organisation.
The Act also requires that the representatives designated or
selected for the purposes of collective bargaining by the majority
of the employees of an undertaking or other appropriate unit
shall be the exclusive representatives of all the employees of such
unit for the purposes of collective bargaining. In cases of dispute,
the Board is empowered to decide who shall be the representatives
of the employees, taking a secret ballot of the employees, if necessary, for the designation or selection of the representatives. The
Act thus attempts to remove some of the uncertainties which
arose on the application of the collective bargaining clause of the
National Industrial Recovery Act, and to make more difficult the
evasion of collective bargaining. In particular it aims to prevent
employers from encouraging their employees to become members
of " company unions ".
It is too early to reach conclusions upon the practical effects
of this measure. The Government of the United States evidently
regards as unsatisfactory the independent regulation of working
conditions by individual undertakings without any co-ordination,
and it favours the establishment of a system of collective bargaining. The terms of the President's Re-employment Agreement
and the codes of fair competition provided a foundation for such

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a system, and the collective bargaining provisions of the National
Industrial Recovery Act and the Wagner-Connolly National
Labour Relations Act are designed to facilitate the building of a
superstructure on collective lines by joint negotiation between
the employers and labour organisations.

GERMANY
An account of collective agreements and the collective regulation
of working conditions in Germany is included here both because
there was a tendency, before the advent of the National Socialist
system, for the State to intervene in the regulation of working
conditions in order to ensure their adjustment to the exigencies
of the economic situation, and because National Socialism has
introduced full control of working conditions by the State but has
in practice utilised extensively the standards determined by
collective agreements concluded before the establishment of the
new regime.
Until 1933, working conditions were widely determined by
collective agreements concluded by organisations of employers
and of workers. Under the Federal Constitution of 11 August 1919
freedom of association for the purpose of protecting and improving
conditions of employment and economic conditions was guaranteed
to every person and in every occupation. Freely formed organisations of employers and of workers played a prominent part
in the preparation and application of labour legislation, while
an extensive and detailed system of collective agreements regulated
the working conditions of workers in the chief industries throughout Germany. Individual conditions of work were not to be
less favourable to the worker than those determined by the provisions of collective agreements. Within the undertakings works
councils were set up under the Act of 4 February 1920 to protect
the common interests of wage-earning and salaried employees
in relation to their employers, and to support employers in furthering the purposes of their undertakings.
Although German labour laws attempted to secure the regulation
of conditions of employment as far as possible by negotiation
and agreement between employers and workers themselves, official
conciliation and arbitration played an important part in the
conclusion of collective agreements. A procedure was introduced
by which, in exceptional circumstances, binding awards could

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229

be declared by the competent Federal authorities. This system
of conciliation and arbitration was established by an Order of
the Federal Government issued on 30 October 1923, supplemented
by an Administrative Order of 29 December 1923.1 Provision
was made for the official appointment of conciliators and conciliation committees, the former dealing with disputes affecting
large industrial areas or which were of particular importance for
the economic system, and the latter with less serious and more
localised disputes. Conciliators were Federal Officers appointed
by the Federal Minister of Labour, either permanently for large
economic areas or temporarily for particular disputes. Conciliation
committees appointed for smaller districts usually consisted of
independent chairmen, appointed by the supreme authority of
each State, together with assessors representative in equal numbers
of employers and of workpeople. In order to avoid unnecessary
divergencies between the practices of the various conciliators
on conciliation committees, the Federal Minister of Labour was
empowered to issue general guiding principles to be taken into
consideration by the conciliation authorities.
Official proceedings with a view to the settlement of a dispute
could be initiated on application by one of the parties involved,
this being regarded as the normal method, or by the conciliation
committee or conciliator in exceptional cases when such intervention was considered necessary in the public interest. The
conciliation authorities were required to make every effort to
secure agreement between the parties by the processes of conciliation and, if successful, to embody the terms in a collective agreement. In the event of an agreement not being reached by conciliation, further proceedings could be instituted and an award
given. An award not accepted by the parties could, nevertheless,
be declared binding by the competent authorities if its provisions
appeared just and reasonable, taking into account the interests of
both parties, and if its application was desirable on economic
and social grounds. A permanent conciliator was competent to
declare binding the awards of conciliation committees within
his area or extending only slightly beyond it ; other awards of
conciliation committees and those of conciliators could be made
binding only by the Federal Minister of Labour. In practice,
the official machinery of conciliation was extensively applied,
many agreements being concluded with the assistance of the
1

These Orders were issued under the Emergency Powers Act of 13 October 1923.

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COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

conciliators and conciliation committees, and the method of
compulsory award was used in the settlement of a considerable
number of disputes.
From 1930 onwards, the industrial depression and its social
effects in Germany resulted in increased intervention in industrial
relations by the public authorities. The Government indicated
that, in particularly serious disputes, it would, if necessary in
the interests of the community, assume wider powers of intervention
than those under the system introduced in 1923. Reference has
already been made in a previous section of this Report to the
measures taken at the end of the year 1931 by the Federal Government to secure general reductions of money wages in the interests
of industry, the national finances and the preservation of civil
peace. New and wide responsibilities were given to the conciliation and arbitration authorities to facilitate the wage changes
demanded by the Government. Parties to agreements were
required to fix the new wage or salary rates by means of annexes
to their existing agreements, but if they failed to reach agreement
upon the new rates the competent conciliator was empowered,
in the last resort, to fix the wage or salary scales, and to prolong
the validity of agreements.1
Fundamental changes were made when thé National-Socialist
Government came into power. The principle of collaboration
was to be estabhshed, and methods of bargaining based upon
divergent interests and leading sometimes to industrial conflicts
were to be suppressed. At the beginning of May 1933 measures
were taken for the dissolution of the trade unions and the inauguration of the German Labour Front, which absorbed the trade
union organisations.
The German Labour Front is defined as " the organisation
of all persons engaged in labour, whether manual or mental,
without distinction of economic or social position. In it the
1
Measures affecting collective agreements were also taken by the Government
during 1932 with a view to bringing about a revival of industrial activity and a
reduction in the number of unemployed persons. By a Decree issued in September
1932 employers who increased their staffs were authorised to reduce individual
wages in accordance with a sliding scale based on the increase in employment
afforded. The Decree also empowered the official conciliators to authorise payment
of lower wages t h a n those fixed in collective agreements in cases where the precarious position of the undertaking rendered the current rates too heavy for the continued working of the establishment, b u t with t h e proviso t h a t such reductions
should not exceed 20 per cent. The arrangement for reducing individual wages
where increased numbers were employed encountered difficulties and was later
abandoned without having exercised any very important influence upon t h e wage
situation.

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231

worker and the employer are ranged side by side, instead of being
separated by organisations for the defence of particular economic
or social classes or interests. . . The Labour Front is not, however,
the place where the material questions of the daily life of labour
are decided. . . The true object of the Labour Front is to create
a working community of all Germans and to educate them in the
spirit of the National-Socialist State ". 1 All occupied persons,
including members of the former trade unions of workers and
salaried employees and members of employers' associations, may
be members of the Labour Front on a footing of complete
equality.2
Such a relationship between employers and workers was thought
to make employers' organisations unnecessary, and these dissolved
themselves.3 The system of conciliation introduced in 1923 was
also terminated. The Labour Front is under the control of the
National-Socialist Party.
With the abolition of the trade unions a new method of
regulation of working conditions became necessary, and an Act
of 19 May 1933 provided for the appointment of " labour trustees "
with power to terminate, revise or prolong collective agreements,
and to undertake the maintenance of industrial peace.
Labour Trustees are Federal officials appointed for large industrial areas and act under general instructions of the Federal
Government. Pending the inauguration of a new system, the
power to regulate working conditions was transferred from the
organisations of employers and of workers to the labour trustees»
Under their authority, however, many of the essential provisions
of the old collective agreements remained in operation during a
transitional period until the new forms of regulation could be
evolved and begin to operate effectively.
The National-Socialist conception of industrial relations and
methods of regulating working conditions was embodied in the
National Labour Regulation Act of 20 January 1934 which provides
1
Aufruf an alle schaffenden Deutschen, issued o n 27 November 1933 b y Dr.
Ley, Leader of the German Labour Front, Mr. Seldte, Federal Minister of Labour,
Dr. Schmidt, Federal Minister of Economic Affairs, and Mr. Keppler, Commissioner
for Economic Problems.
• 2 The organisation, which is directed b y t h e Leader of the Labour Front,
includes a National Chamber of Labour and eighteen regional Chambers, and
these have industrial Sections. The individual undertaking forms the basis of
the organisation.
3
The property of t h e former associations of employers a n d workers and their
affiliated organisations and undertakings controlled b y them was transferred to
the Labour F r o n t to be used as a basis for financing welfare services.

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that, in place of the relations of employer and worker, there shall
be established in each undertaking the conception of the " works
community " with the owner of the undertaking as " leader "
and the salaried and wage-earning employees as his followers.
These shall work together for the furtherance of the purposes of
the establishment and for the benefit of the nation and the State in
general. The leader of the establishment makes decisions for his
followers in all matters affecting the establishment in so far as they
are governed by the Act. He must promote the welfare of his
followers, who are required to be loyal to him as fellow members
of the works community.1 The interests of the undertaking are
subordinate to those of the State. In undertakings which employ
at least twenty persons a number of " confidential men " must
be appointed from among the followers to advise the leader. Under
his presidency they become the " confidential council " of the
undertaking.2 These councils give advice on measures directed
to increase the efficiency of the undertaking, and on conditions of
employment, and must endeavour to settle all disputes within
the works community.
Under the present system, it is intended that the normal
basis for the regulation of working conditions, including wages,
shall be the individual undertaking, this being in contrast with
the former method of collective agreements extending to a number
of undertakings. In each undertaking labour conditions are regulated by the leader who, in all undertakings employing twenty or
«more wage-earning and salaried employees, must issue " establish1
The National Labour Regulation Act instituted a system of Social Honour
Courts to deal with gross breaches of the social duties in t h e works communities.
A court is established in each of t h e regions for which a labour trustee is appointed,
a n d a Federal Honour Court has also been set up to hear appeals from the regional
courts. The courts deal with cases referred to them b y the labour trustees, where
t h e leader of an establishment or any other person in a position of supervision
abuses his authority in t h e establishment by maliciously exploiting t h e labour
of his followers or wounding their sense of honour, or where a follower endangers
industrial peace in the establishment by maliciously provoking others. The
penalties include a warning, reprimand, fine or removal from t h e post occupied.
2
These councils differ in various respects from the works councils which were
set up in many establishments under the Works Councils Act, 1920. Whereas
t h e works councils consisted of representatives of t h e workers t o protect their
interests and to support the employer in furthering the purposes of t h e undertaking,
the confidential councils include t h e head of t h e undertaking. Their chief d u t y
is to strengthen mutual confidence within the works community. Members of
works councils were elected b y secret ballot b y the workpeople ; while, for t h e
new confidential councils, lists of candidates are drawn up by t h e head of the
undertaking in agreement with the chairman of the National-Soeialist cell
organisation in t h e undertaking, a n d t h e workpeople decide b y secret ballot for
or against the list. I n the event of disagreement, the members of t h e council are
appointed by the labour trustee.

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233

ment rules " in writing.1 His decisions are taken after hearing the
advice of the confidential council ; the followers, therefore, have
opportunities for making known their opinions, but the terms of
employment do not take the form of an agreement between them
and the leader.
Without safeguards, such a system might lead to frequent
disputes, and, as industrial conflicts are now prohibited in Germany,
the State must be prepared to intervene in the regulation of wages
and other conditions of employment with the object of preserving
industrial peace, apart from the necessity for intervention in the
general economic interests of the country. Provision is, therefore,
made by the Act of 20 January 1934 for confidential councils to
appeal against their establishment rules to the labour trustee,
who may cancel the rules and issue others to replace them.
The labour trustee may also, after consulting an advisory
council of experts,2 lay down guiding principles on conditions of
employment, thus exerting influence, without compulsion, over the
social policy of the undertakings in his area. The provision for
consulting the council of experts, which includes members of the
confidential councils of undertakings in the area, ensures that the
views of leaders and followers shall be taken into consideration
during the preparation of guiding principles.
Labour trustees have still wider powers of regulation. If the
laying down of minimum conditions of employment is urgently
needed for the protection of the persons employed in a group of
undertakings within their areas, they may issue collective rules.
These collective rules automatically replace any establishment
rules which fix lower standards. This method thus makes possible
the collective regulation of working conditions in circumstances
of urgent necessity, but such collective rules differ from the former
collective agreements in being legally binding acts of the State
1
Where the rules fix the remuneration of workers and employees, the rates
must be minima so as to allow scope for the remuneration of individual members
of the undertaking according to their efficiency. This permits considerable variation of wage conditions within the individual undertaking.
2
The labour trustees appoint these advisory councils from the various branches
of industry in their areas. Three-fourths of these experts must be chosen from
lists of candidates nominated b y the German Labour Front, which must p u t forward
in the first instance a considerable number of suitable members of t h e confidential
councils of the undertakings of t h e area, with due regard to the various occupational
groups and branches of industry. The lists must include leaders of undertakings
and other members of t h e confidential councils in approximately equal numbers.
The trustees m a y appoint one-fourth of t h e experts from among other suitable
persons in his district. I n addition t o t h e councils of experts, which are permanent
bodies to advise on general questions, temporary committees of'experts m a y be
appointed to advise on narrower problems.

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and not standards based upon negotiations between organisations
of employers and of workpeople.
In practice, the desire to avoid difficulties likely to result from
widespread changes in the conditions established by the former
collective agreements has led to the continued operation of these
conditions over a large part of German industry, whether as a
result of decisions of the leaders of individual undertakings or of
the influence and control exercised by the labour trustees. During
1933, the Government indicated its policy in the statement that
the abolition of collective agreements must in no case give rise
to any arbitrary determination of conditions of employment,
and that it regarded as an important matter the maintenance
of the stability of wage levels. The maintenance of existing wage
rates was emphasised as one of the most important duties of the
labour trustees, changes being allowable only in exceptional cases
and if the existing rates were no longer either socially or economically justifiable. This policy of avoiding or restricting changes in
wages and other conditions of employment inevitably involved
continuing in force substantially over a large part of German industry the standards established by the old collective agreements.
Subsequently, when the National Labour Regulation Act came
into force on 30 April 1934, the Minister of Labour ordered that
collective agreements in existence on that date should be promulgated without alteration as collective regulations in order to
secure continuity in the regulation of working conditions. The
time for which the validity of these provisions was prolonged was
not stated, but it was intended that they should remain in force
only for a transitional period during which the labour trustees
would undertake the modification of these regulations according
to circumstances.
An important change was made early in 1935 when the scope
of the Labour Front was enlarged to include the system of economic
organisation established by an Act of 27 February 1934 and an
Order of 27 November 1934. This extension of scope was effected
by an agreement of 26 March 1935. The agreement provides that
collaboration between these hitherto independent systems must
take place at every stage of the organisation of production and
labour. The Council of the National Economic Chamber, in which
are represented the heads of the national economic groups and the
district economic chambers, was combined with the Labour Council,
composed of heads of undertakings and provincial administrators
of the Labour Front, to form the National Economic and Labour

INCORPORATION IN THE NATIONAL ECONOMIC STRUCTURE

235

Council, the main task of which is to discuss economic and social
questions. Similarly in the districts, the councils of the economic
chambers were combined with those of the district organisations
of the Labour Front. The general object of the organisation is
to recommend solutions and establish the conditions necessary
for the formation of a true community of production and labour,
and it thus provides a means for the co-ordination of economic
and social policies.

ITALY

In Italy, the system of collective agreements for the regulation
of working conditions is highly developed and forms an integral
part of a co-ordinated national economic structure. Indeed, the
provisions of agreements, with the supporting authority of the
State, have become more and more assimilated to rules of law.
Also, as they are binding upon persons who are not members
of the organisations participating in their negotiation, they should
be regarded strictly as collective rules or arrangements rather than
collective agreements.
In order to appreciate the position of collective agreements
in the Fascist corporative system it is necessary to review some
of the underlying principles of State policy in Italy. The corporative system is based upon the principle of collaboration of all
the producing groups in the national economy and the superiority
of the interests of the whole over sectional interests. The State
is regarded as an organism having aims, life, and means of action
superior in power and duration to those of the separate individuals
or groups within it. Unlike State Socialism, the corporative
system regards private industry and initiative in the field of
production as the most efficient and useful instrument for the
national welfare, and it attempts to promote co-operation and
solidarity between the various classes. On the other hand, capitalism is believed to be facing a crisis and the purpose of the
corporative system is to bring into the economic world that element
of discipline which has hitherto been lacking. The Fascist economic
system is a reaction against liberalism, under which the organisation
of production was considered to be purely a question of private
interest. This is abolished, the methods of laissez faire being
thought to involve a deplorable waste both of energy and of
material resources.

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The system permits a form of planned economy to be established, and the activities of individuals and groups, which
hitherto had been left entirely free or subject only to haphazard
intervention, are controlled and directed by rules and regulations
established centrally in the national interest. Intervention,
however, takes place only when private industry is inadequate
or when the political interests of the State are at stake. It may take
the form of supervision, encouragement, or direct management ;
but, if suggestion, persuasion and propaganda should not be enough,
the Fascist régime would not hesitate to exercise restrictive and
coercive action, even on economic forces.
An elaborate mechanism of collaboration and control has
been established. This includes trade associations, federations
and confederations representing the group interests respectively
of employers and workers in particular branches of production.
These bodies, which negotiate collective agreements, are under
the supervision, co-ordination and control of corporations representing wider interests. Higher still in the hierarchy is the National
Council of Corporations, while the whole system is subject to the
authority and veto of the Minister of Corporations and the Head
of the Government. The essential features of this system are
outlined below.
At the basis of the system are provincial or local associations
of employers and of workers respectively in a given branch of
economic activity. These occupational associations are grouped
into inter-provincial associations and into national trade federations, and national federations are combined into confederations.
These various bodies include employers only or workers only,
except that persons engaged in the arts and Uberai professions
cannot be separated in this way. Legal recognition is accorded
to confederations and to national trade federations, which thereby
become institutions under public law.1 Recognition is accorded
only to one employers' federation and one workers' federation
in any defined industry or other category of economic activity.
These federations represent the whole of the employers and
of the workers respectively in the category, and may conclude
collective agreements upon working conditions or upon the regulation of economic relations. Agreements are binding upon all
persons, whether members of federated associations or not. Local
1
Exceptionally, t h e inter-provincial and provincial associations of professional
workers and artists are legally recognised, as well as the corresponding national
associations and the Confederation, and they may conclude collective agreements.

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associations within a federation may only conclude agreements
if this power has been delegated to them by the federation. The
federations and their associations undertake the organisation of
public employment exchanges, the operation of sickness insurance
and public relief systems and the education and training, particularly the vocational training, of the persons they represent,
and they support the activities of the national workers' spare
time institutes. They are also required to promote the technical
and economic development, in the general interests of the nation,
of the branch of economic activity which they represent. The
associations, federations and confederations direct their actions
to the defence of the occupational interests of their members,
but these must be brought into harmony with the national interests.
The attempt has been made to form a complete and comprehensive structure covering all branches of economic activity,
including persons working on their own account in handicraft
trades. In the establishment of this structure, in accordance
with the Act of 3 April 1926, the creation of organisations was
necessary among employers in most branches except large scale
industry, and among the workers especially in agriculture. Freedom of association is not prohibited, and no person is required
to become a member either of a recognised association or of any
other association, but legally recognised bodies have the exclusive
right of legal representation. As collective agreements apply to
persons who are not members of associations, a unity of employment contracts in each industry and district is ensured, and
the terms of individual contracts must correspond with those of
the collective agreements except where the terms of the individual
contract are more favourable to the worker.
As already indicated, the federations are grouped into Confederations, the number of which is nine. Each of the four great
branches of economic activity (industry and transport, agriculture,
commerce, and credit and insurance) has one Confederation
representing the employers and one representing the workers.
The ninth Confederation represents professional workers and artists.
The number of federations in a Confederation varies widely, the
greatest numbers being forty-five in the employers' Confederation
of Industry and twenty in the Confederation of Industrial Workers,
while the smallest numbers are in the agricultural Confederations,
the workers and the employers each having four federations in
their respective Confederations. The Confederations, in collaboration with the National Fascist Party and in accordance

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with powers delegated by the Minister of Corporations, exercise
political supervision and control over their constituent federations
and associations. Collective agreements concluded by federations
are subject to approval by the Confederations. Confederations
may also conclude collective agreements.
The principal negotiations of collective agreements of national
application, whether by federations or Confederations, are usually
presided over by the Under-Secretary of State in the Ministry of
Corporations. National agreements often take the form of principles or standard rules of employment to be applied locally by
associations to which power has been delegated to conclude local
agreements. The structure of trade associations and collective
agreements was used to effect the general reduction of wages
at the time of the stabilisation of the lira in 1927, to which reference
is made above in the section dealing with State intervention in
periods of economic crisis. It is claimed that the success achieved
was due in large measure to unity of political action and disciplined
trade organisation.
Reference has also been made to general reductions in hours
of work in Italy in 1934. The method by which these reductions
were effected illustrates the working of the Italian collective
system. For industry, a general agreement was signed on 11
October 1934, to be valid until 16 April 1935, between the Confederation of Industry (employers) and the Confederation of Industrial Workers, with a view to distributing the available opportunities for employment among a larger number of workers.
This agreement was brought into operation within a few weeks
by means of over fifty separate collective agreements in as many
branches of industry. It established the principle of the fortyhour week, without upward adjustment of wages but with payment
of allowances to workers on the shorter working week who are
fathers of large families. Other general agreements on reductions
of hours were concluded by the Confederations in commerce,
agriculture, and credit and insurance. In the light of experience
of the reduction of hours, the Fascist General Council decided
on 16 February 1935 that the change should be made permanent.
It was also this method of general agreements which was resorted
to in 1936 when nominal wages were increased by 10 per cent.
Whereas the associations, federations and Confederations
(except that of artists and professional workers) represent employers
only or workers only and have as primary purpose the safeguarding
of the interests of the occupational groups which they represent,

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239

the corporative system includes organisations for unifying the
forces of production. These " central co-ordinating bodies " are
known as corporations. Their establishment was envisaged in the
Act of 3 April 1926 on the regulation of collective relations in
connection with employment, but they were not set up until 1934
when a special Act on the organisation of corporations was passed
(5 February 1934). The corporations go beyond the special
interests of occupational groups and attempt to transform occupational aims into public ends. As recognised organs of the State
they may issue binding rules for regulating relations between
employers and workers, and may promote and encourage measures
for co-ordinating and improving the organisation of production.
They may lay down general rules for conditions of employment
in the undertakings which they cover, subject to previous agreement
with the representatives of the employers and the workers.
Corporations can intervene whenever a monopoly or other privileged
position makes intervention necessary to protect consumers or
in the wider interests of the national economy. They also have
extensive advisory functions which they exercise on requests
by competent public administrative departments. Among their
other activities is the conciliation of disputes.1
Corporations, which are national in scope, have been set up
by Decree for each of the main branches of production, including
services, the total number of corporations being twenty-two.
Each corporation has a council, the number of members of which
varies according to the branch of production, the smallest council
consisting of fifteen members and the largest of more than sixty.
Members are appointed by Ministerial Decree. Employers and
workers are represented in equal numbers, these members being
nominated by the trade organisations grouped in the corporation.
Other members are nominated by the National Co-operative
Institute, while three representatives of the National Fascist
Party are nominated as members of each of the twenty-two
corporations. Representatives of Ministries interested, and experts
in the branches of production covered by any particular corporation
attend its meetings.
During 1935 a number of corporations began their work.
Most of them concentrated their attention mainly upon economic
problems, including expansion of production, improvement and
1
Their scope also includes t h e regulation of apprenticeship, vocational training,
and organisation of employment agencies.

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grading of products, extension of markets at home and abroad
and co-ordination of the different branches (primary production,
manufacturing and commerce) covered by any corporation. Other
subjects discussed included training and apprenticeship, employment exchange services, and methods of social assistance.
Although the various corporations do not represent the
separate occupational interests of employers or of workers, they
are nevertheless sectional in the sense that each corporation represents a particular branch of production and trade or service.
To ensure the fullest co-ordination, harmony and efficiency of the
national economy the corporations work under the guidance
and control of the National Council of Corporations and of the
Ministry of Corporations. The National Council, which was set
up under an Act of 20 March 1930, includes representatives of
various Ministries and of political interests, as well as of the
National Confederations (in equal numbers of employers and
workers) and of certain social welfare organisations. The National
Council occupies a central position among the organs of the Fascist
State. General questions are discussed in the General Assembly
of the National Council, but the Central Corporative Committee
of the National Council, which has been granted full powers,
usually acts on its behalf.
The functions of the National Council are partly advisory
and partly the making of rules for the regulation of economic,
labour, and social conditions. The Council may draft rules for
the co-ordination of measures covering employment relations
laid down by collective agreements, for the regulation of collective
economic relations, and for the co-ordination of all other regulative
activities of corporations. In practice the National Council has
only rarely made changes in the provisions of collective agreements.
The whole of the collective structure for the regulation of
economic and labour relations is under the general direction of
the Ministry of Corporations, which is the supreme body of the
corporative system. It issues decrees defining the powers and
functions of the corporations, and during the period before the
corporations were established the Ministry directly undertook
the work of conciliation of industrial disputes. A number of
agreements of national scope were concluded under the auspices
of the Ministry as a result of its intervention in large-scale collective
disputes.
The general control which the corporative system exercises
over collective agreements is supplemented by the method of

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241

settling of industrial disputes. Strikes and lock-outs are prohibited,
it being claimed that in the Italian system State justice takes the
place of the class struggle. Disputes connected with the regulation
of collective labour relations, whether concerned with the application of collective agreements or other regulations in existence or
with demands for new conditions of employment, are brought by
legally recognised trade organisations before the competent labour
court. Disputes are, however, referred to the courts only as a
last resort when direct methods of conciliation have failed to
achieve agreement. If necessary in the public interest, disputes
may be brought before the courts by the public prosecutor. An
attempt at conciliation must be made before a decision is issued.
In issuing decisions upon new conditions of employment the
courts, while taking into account the interests of the employers
and those of the workers, must have regard to the superior interests
of production. In practice, the great majority of new agreements
are concluded by direct negotiation or by processes of conciliation,
while for only a very small number has resort to the method of
arbitration been necessary.

UNION OF SOVIET SOCIALIST REPUBLICS *
The history of collective agreements in pre-revolutionary
Russia is closely bound up with that of the legally recognised
trade unions. In consequence, collective agreements were extremely
rare before the Revolution. Among the more outstanding agreements, attention may be called to those concluded in 1905 at
Kharlöv and Moscow, the first between a locomotive works and the
workers it employed, the second between the electricians' union
and the owners of technical offices. The collective agreement
concluded at Moscow in 1906 between the workers and owners
of water-supply and sanitary engineering undertakings is also
worthy of mention.
The period of reaction which followed (1907-1912) was marked
by a complete standstill in trade union activity and a total absence
of collective agreements.
It was only after the Revolution of February 1917, when the
formation of trade unions was legally authorised, that the tendency
to conclude collective agreements began to become general. Then
1
This p a r t of t h e Report was prepared b y Mr. J a n Abel, Chief of t h e Wages
Section of the Central Council of Trade Unions of the U.S.S.R.

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it was t h a t one of the largest trade unions — the metal workers' —
concluded twenty-one local collective agreements bearing on wage
rates and covering 600,000 workers. These agreements included
three for the Leningrad (then Petrograd) district, eight for the
Moscow district (including the Sormovo subdistrict), six for the
Donetz Basin and four for the Volga district. These early collective
agreements were called " w a g e a g r e e m e n t s " , for their main
object was to establish a definite minimum wage for the various
classes of workers according to their trade and qualifications.
These agreements, concluded by local trade union sections,
fixed wage rates which, in certain cases, differed for workers
belonging to the same branch of industry and the same district.
For this reason, the trade unions endeavoured from 1917 onwards
to centralise the wage-fixing machinery and to abolish where
possible differences in wages for workers of the same district.
To this end, the metal workers' union referred to above organised
in 1917 a series of regional conferences to discuss wage rates.
Conferences of this sort were held, for example, in the industrial
districts of the Donetz and Krivorog, for the industrial area of
central Russia, and in Perm (for the Motovilikhin works) and in
the village of Kamensk (for the Briansk Makeevsk and Kadieff
works and for the Dumot and Hartmann factories).
The standardisation of rates by district was fully achieved
during the years 1918-1921. This period was marked by the complete disorganisation of the economic structure of the country,
this being a direct result of the world war, the Russian Civil War
and foreign intervention. The shortage of raw materials and
foodstuffs made it necessary to centralise the distribution of
such commodities and to pay the greater part of wages in kind.
Methods of centralisation were likewise applied to cash wages,
the necessary measures being carried out by the trade unions,
which issued compulsory rules concerning wage rates. These
rules, which extended to the whole territory of the Soviet Union,
covered the general body of wage-earning and salaried employees
in each industry, from ordinary labourers to engineers and technical
managers. Once this method was established, collective agreements
h a d no further reason to exist.
The return to the system of collective agreements dates from
the introduction of the " new economic policy " (1922). State
undertakings were then called upon to take steps to avoid running
at a loss ; each undertaking had to be organised on a profit-making
basis and wages had to be established in relation to profit and output.

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243

I t thus became impossible to apply uniform rates of wages,
and separate rules had to be made for each industry and each
undertaking, on the basis of working results and possibilities of
future expansion.
The fundamental conquests of the Revolution in the field of
labour protection were already enshrined in the Labour Code
of 1922 (8-hour day for all workers ; 6-hour day for persons
employed on unhealthy work, and for young persons under 18
years of age ; annual holiday of from 2 to 4 weeks for salaried
employees ; measures for the protection of the work of women
and children surpassing those adopted in any other country ;
increased rights for trade unions ; introduction of social insurance,
etc.). As the existence of this legislation guaranteed minimum
working conditions, there was no further drawback to allowing
actual working conditions to be fixed on the basis of local rules,
quite apart from any idea of centralisation. Rules relating to
wages and conditions of labour were no longer necessary except
for trusts and large economic groups and they then took the form
of general collective agreements covering the whole body of workers
in the undertakings included in the trust or the economic group
concerned (1922-1923).
I t soon became necessary, however, to fix by collective agreements not only the general conditions of labour and wages for
each trust or economic group as a whole but also for each undertaking. The regional trade union committees were thus authorised
t o conclude, apart from the general collective agreements entered
into by the central trade union committees with the management
of the trust or economic groups, supplementary agreements with
the managements of individual undertakings. I t should be noted,
moreover, t h a t the General Council of Trade Unions concluded
collective agreements only with trusts, economic groups or institutions of importance throughout the whole territory of the Soviet
Union ; in the case of regional trusts and institutions, the collective
agreements were concluded by the regional trade union committees,
and for district or local trusts and institutions by the district
committees.
Subsequently, the decentralisation of collective agreements
was carried still further, and at the present time such agreements
are concluded by the manager of each undertaking with the local
works council of the trade union, after the clauses of the agreement
have been discussed by the workers of the undertaking.
I t is to be observed t h a t in general the part played by trade

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COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

unions in the Soviet Union, especially with regard to the conclusion
of collective agreements, is absolutely different from what it is
in capitalist countries, and t h a t the actual character of the collective agreements is also quite other. The duties of the trade
unions on the morrow of the October Revolution were defined
a t the first Trade Union Congress of the Union of Soviet Socialist
Republics (Petrograd, 7-14 J u n e 1918).
The first Trads Union Congress declared that the trade unions
were not to be considered as simple weapons of combat to be
used to obtain an improvement in the conditions of the working
classes under a capitalist regime, b u t t h a t it was their duty " to
fight side by side with the other organisations of the working
classes to establish the dictatorship of the proletariat and to
hasten the advent of socialism ".
Under the rule of the Soviets, which is a dictatorship of the
proletariat, the trade unions have become the training ground
of communism ; they enable the proletarian masses to take a
share in the management of industrial affairs and group them
in organisations which co-operate closely in the work of all Government departments and which exercise their influence in all fields
of public activity, ever ready to protect the momentary and
lasting interests of the proletariat and to oppose» any lapses into
bureaucratic methods.
The special situation of the trade unions in the proletariat
State naturally influences the p a r t they take in the conclusion
of collective agreements. In capitalist undertakings, the conclusion
of collective agreements leads to a clash between the conflicting
interests of two opposed classes, but the State industry of Soviet
Russia knows no class rivalry, for the means of production are
t h e property of the working classes. In the undertakings of the
Soviet Union, collective agreements are agreements as to the
reciprocal obligations of the workers and the management of the
undertaking, in which the two contracting parties are united by
common interests and aims. The trade unions which take part
in the conclusion of collective agreements on behalf and as the
representatives of the working classes do not by their action
oppose the State — as they would do under a capitalist regime —
b u t endeavour by all means in their power to strengthen the
Soviet State and its industry. I n the case of private undertakings
or establishments working under a concession, the position of the
trade union is quite other, being the same as that of trade unions
in capitalist countries ; t h a t is to say, their aim is to protect

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245

by means of collective agreements the various economic interests
of the proletariat.
Before the periodical renewal of the collective agreements,
it is customary for the Central Council of Trade Unions, acting
in conjunction with the People's Commissariats concerned, to
draw up guiding principles fixing the fundamental tendencies
and the essential aims of the future collective agreements. The
central trade union committees then conclude with the central
administrative departments of the various branches of the industry
general agreements defining the work assigned to each undertaking
in the field of economy and production, the output of the undertaking, the average level of wages, the amount of the wage fund
for each class of worker and the amount of money to be devoted
to the building of dwellings, social and cultural measures, and the
protection of labour. On the basis of the general agreement,
the works council of each undertaking concludes a collective
agreement with the management of the undertaking. The conclusion of the agreement is preceded by discussions organised
among the workers of the various sections and workshops, concerning the new tasks assigned to the production services and the
other clauses of the agreement.
I n order to be sure t h a t the workers as a whole take part in
the discussion of the clauses of collective agreements, the trade
unions make use of a number of methods such as the organisation
of general conferences for factory workers, the study of the proposed
agreement by meetings of workers and salaried employees arranged
by sections or workshops, the presentation by the workers of
proposals and observations bearing on the conditions of the new
collective agreement, the discussion of rationalisation and production plans, and of the measures for the protection of labour,
technical measures, safety measures, etc. Observations and
proposals p u t forward by workers are discussed at workers' meetings and the results of such discussions have a definite influence
on the final drafting of collective agreements.
I n order to avoid undue uniformity in collective agreements
and to make sure t h a t the workers have as large a share as possible
in the drafting of such agreements, the trade unions refrain from
establishing standard contracts of employment.
The Labour Codes of the Federated Socialist Republics of the
Soviet Union embody general provisions which declare null and
void all clauses of collective agreements which prescribe conditions
of work that fall short of the standards fixed by legislation. The

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COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

inclusion in the collective agreements of clauses making provision
for conditions of work identical to those established by law would,
moreover, be superfluous. The collective agreements therefore
contain as a general rule only such clauses as ensure for workers
advantages which are not laid down in existing labour legislation.
The agreements do, however, regulate all conditions of labour which
are not already covered by legislation ; in this case the rules laid
down in the collective agreements have force of law, and infringements of rules thus established entail penal responsibilities for
the employer.
The collective agreements of the various undertakings mention,
in addition to the figures fixed by the State Economic Plan (relating
to the number of workers, increase of output and wages, wage
funds, amounts allocated for the protection of labour, technical
safety, cultural and social measures, the construction of dwellings,
etc.), the rates of wages, the system of remuneration of work, the
measures actually to be taken with regard to labour protection and
technical safety, social and cultural organisation, the construction
of dwellings, and the vocational training of workers and salaried
employees.
In addition to certain other details, collective agreements
also determine the maximum and minimum wage rates on the
basis of plans drawn up by the State organs in collaboration with
the trade unions. The establishment of wage limits is made in the
following manner :
The Council of People's Commissaries of the Union of Soviet
Socialist Republics (Sovnarkom) establishes in accordance with
information provided by the State Planning Commission (Gosplan)
the general wage fund and the level of wages for the whole industrial system and for each People's Commissariat (Norkomat),
with particular reference to the People's Commissariat for Heavy
Industry, the People's Commissariat for Light Industry, the
People's Commissariat for Railway Transport, the People's
Commissariat for the Food and Drink Trades, etc. For certain
key industries (coal, iron and steel, engineering, chemicals, transport) provision is made for higher wage rates.
The People's Commissariats, in turn, divide the amounts allocated to them between the central administrative departments
(Glavkam) under their jurisdiction ; the latter then make a final
distribution between the individual undertakings, giving preferential treatment, here again, to undertakings of essential importance
or playing a capital part in industrial affairs, and establishing the

INCORPORATION IN THE NATIONAL ECONOMIC STRUCTURE

247

wage funds for the various classes of workers employed in the
undertakings : workers, salaried employees, engineers and technical
workers, auxiliary staff and apprentices.
The trade unions take part in all stages of the establishment
of the labour standards required by the State Economic Plan,
and are thus in a position to bring their influence to bear on the
fixing of wage rates for the various branches of industry and
for each individual undertaking.
Under this system, the only function left to collective agreements
in connection with wages is to fix the wage rates of the various
classes of workers and salaried employees for each individual
undertaking, keeping within the limits of the wage funds allotted
to them.
For this purpose, the collective agreement fixes the wage payable
for the least skilled work in each class (i.e. the lowest grade)
and the normal relation between the wages paid for the various
classes of skilled labour and the wage for the least skilled work*
In order to enable the worker's degree of skill to be defined,
the State economic institutions, acting in conjunction with the
trade unions, establish classification tables for skilled work, which
show the various qualifications and standards required.
In establishing the respective wage rates for a given undertaking,
the State economic institutions and the trade unions adhere strictly
to the socialist principle of payment by quantity and quality ;
the higher the worker's skill the higher the pay, while special
favour is shown in establishing wage rates for the occupations
and specialised trades which are most important for the industry
in question and for occupations involving arduous or unhealthy
work.
The use of different wage scales in different districts was
fairly common in the past, at a time when the price of foodstuffs
and other commodities varied greatly from one region to another.
The difference in prices is considerably ¡ess nowadays although
divergencies still exist, especially in remote parts of the country
with a severe climate (islands in the Arctic Ocean, the Sakhalin
Peninsula, Kamchatka, etc.). Under special provisions issued by
the Government, moreover, wage rates of workers in the FarEastern territories of Russia, Eastern Siberia, and in the autonomous Socialist Republic of Yakutsk, are much higher relatively
than those of workers in other parts of the Union.
In the Soviet Union, there are no differences of wages based on
age, sex, race or nationality ; everyone is paid in accordance with

248 COLLECTIVE AGREEMENTS IN THE ECONOMIC STRUCTURE

output and the quality of his work. Children and juveniles, however,
receive full wages for a reduced working day throughout the whole
period of their apprenticeship.
Workers who are partially incapacitated are transferred,
on the advice of a medical board, to other employment entailing
less arduous work. Disabled workers are covered by a social
assistance scheme financed by the State.
As already stated, collective agreements aim at ensuring
the payment of wages corresponding to the quantity and quality
of the work.
The system of payment in the Union of Soviet Socialist Republics is based on piece rates. Wages are paid by the hour or by
the day only when it is impossible to apply a piece rate system,
such being the case for most classes of office employees.
I n order to encourage the general adoption of piece rates,
collective agreements generally provide higher scales (hourly or
daily) for workers engaged on piece work than for those paid by the
hour or day. The difference in the wages fixed by collective agreements for these two classes of workers varies from 20 to 25 per
cent.
Collective agreements also fix different rates of remuneration
for piece work carried out on the basis of technical output standards
or on the basis of experimental or statistical standards. I n view
of the fact that technical standards are higher and therefore more
difficult to exceed than experimental or statistical standards, the
trade unions generally allow, in collective agreements, a higher
rate of remuneration (15 to 20 per cent, as a rule) for work carried
out on the basis of the former.
Again, collective agreements establish for workers employed
in arduous or unhealthy work higher wage rates (20 to 25 per cent.
as a rule) than for workers employed in normal conditions.
The collective agreement further lays down the methods of
establishing output standards and standard piece or job rates
(keeping strictly in the latter case to the scales fixed for each class
of worker), and regulates the procedure and the time-limits to be
observed for the review of output standards. After revision,
standards of output and remuneration remain in force for at least
one year as a rule and cannot be altered during t h a t period except
when changes made in the technical processes or the adoption
of rationalisation measures lead to a considerable increase in
output.
In a certain number of particularly important branches of

INCORPORATION IN THE NATIONAL ECONOMIC STRUCTURE

249

industry, collective agreements make provision for progressive
wages for piece or job work ; this system of payment, which provides
further material encouragement to increase output, has proved
to be extremely successful in Soviet undertakings and its use is
becoming more and more widespread.
Collective agreements also make provision for various systems
of bonuses which allow the worker's remuneration to be increased
with the quahty of his work. Bonus systems are introduced to
encourage a reduction of wastage, a reduction in the cost of fuel
and motive power, a reduction in the frequency of work stoppages, etc.
The fact that the basic laws of the Union of Soviet Socialist
Republics regulate in satisfactory fashion the working hours of
all classes of workers (hours are 6, 7 or 8 in the day) makes it
unnecessary to mention the question of working hours in collective
agreements. The basic laws also define the number of hours that
may be worked at night, the hours of children and young persons,
the length of the breaks to be granted to mothers nursing their
children, etc., and therefore collective agreements generally make
no mention of such matters.
As a general rule, recourse to overtime is forbidden. The law
authorises overtime — up to a maximum of 120 hours a year
per person — only in the following exceptional cases : (1) for
the performance of work absolutely necessary for the protection
of the Republic and the prevention of public disasters or dangers ;
(2) for the performance of absolutely necessary work in connection
with the water supply, lighting, drainage, communications, and
the postal, telegraph and telephone services ; (3) to complete
work the suspension of which would entail damage to materials
or plant ; (4) to effect temporary repairs or adjustments of machines
or apparatus, if their deterioration is likely to entail a cessation
of work for a large number of workers.
The law prohibits the employment of children and juveniles
under 18 years on overtime work.
Special authorisation must be obtained in each case from the
factory inspectorate when it is proposed to work overtime.
Collective agreements do not therefore fix the maximum amount
of authorised overtime or the total amount of overtime allowed
during a given period. The rates of remuneration for overtime
or work performed on rest days or public holidays, and for night
work, are regulated by the labour codes of the Federated Republics.
In the section devoted to the improvement of working con-

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COLLECTIVE AGREEMENTS TN THE ECONOMIC STRUCTURE

ditions from the standpoint of health, the collective agreement
defines the obligations of the administration as to the adoption
of health and sanitary measures likely to reduce the frequency
of injury and sickness, and the necessary technical safety measures.
Provision is made in collective agreements for the organisation
of classes in industrial safety for the workers. A large number
of collective agreements also require new apprentices to be examined
by a vocational selection committee and to undergo periodical
medical examinations during apprenticeship. In many cases the
managements agree to set up their own factory medical services.
The clauses referring to the measures to be taken with regard
to housing facilities and the cultural and social arrangements to
be made for the workers of the undertaking form an important
part of the collective agreement. Such clauses must define the
measures to be taken within the limits of the funds granted by
the State and determine the use to be made of such funds to ensure
a continuous improvement in the living and social conditions of
all the workers of the undertaking in general and of each class
of worker in particular.
The managements undertake in this connection to bear the
cost of the building of dining rooms and the organisation of canteens, the construction of dwellings for workers and salaried
employees, and to share the cost of establishing workers' clubs,
sports grounds, nurseries, maternity schools, etc.
The management of the undertaking also agrees, in collective
agreements, to organise vocational training of workers so as to
allow the latter to become acquainted with the technical side of
industry and to improve their knowledge of their trade. It further
undertakes to provide specialised workers with opportunities for
improving their scientific knowledge.
According to the definition given in Soviet legislation, a
collective agreement is taken to mean an agreement concluded
between a trade union as representative of the wage-earning and
salaried employees on the one hand, and the management of an
undertaking, institution or business concern on the other. As the
law does not make the conclusion of collective agreements compulsory, the latter are in the nature of voluntary agreements.
The law provides for the conclusion of general collective agreements covering the whole of a given branch of industry or the
whole national economic system, and local collective agreements
limited to a single undertaking, institution or business concern,
similar to those mentioned above. Collective agreements come

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251

into operation on the date of their signature or at a date specified
in the agreement.
Provisions in collective agreements which specify conditions of
work less favourable than those in force under existing labour
legislation are null and void. In order to allow a check to be
kept on collective agreements and at the same time to give them
force of law, the Labour Code requires all collective agreements
to be registered by the organs of the People's Labour Commissariat ;
since the amalgamation of the People's Labour Commissariat with
the Central Council of Trade Unions, registration formalities are
carried out by the territorial or regional inter-trade union organisations, that is to say, by the Trade Union Councils. The organs
responsible for registration are entitled to annul any part of a
collective agreement which is in contradiction with the provisions
of labour legislation, or which lays down less favourable conditions
than those established by such legislation. Collective agreements
which are not registered have no force of law.
If a dispute arises during the conclusion of a collective agreement, the parties to the dispute may by common consent appoint
judges (and referees) to settle the matter. An arbitration board
may be set up at the joint demand of the disputants, or, in the
absence of agreement, by order of the referee. The parties have
the same right to apply for arbitration in the case of disputes
arising out of the interpretation of the clauses of a collective
agreement already in operation.
In cases of dispute or disagreement with State undertakings
or institutions, an arbitration court may be constituted at the
demand of one of the parties (the administration of the undertaking or the trade union). In such cases, the award of the arbitration court is binding for both parties.
The law makes no provision for compulsory arbitration in
the case of disputes concerning the revision or cancellation of
clauses of a collective agreement prior to its date of expiry, unless
both parties agree to submit the matter to arbitration.
In addition to collective agreements, provision is made by
law for individual contracts of employment ; these may be concluded, verbally or in writing, between a worker and the administration of an undertaking, whether a collective agreement
exists or does not exist. Individual contracts of employment
may not, however, establish less favourable conditions of work
than those laid down by existing labour legislation or the collective
agreements in force.

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COLLECTIVE AGREEMENTS EST THE ECONOMIC STRUCTURE

Contracts of employment may be concluded (a) for an indefinite
period ; (b) for a specified period not exceeding three years ;
(c) for the time required to carry out specified work.
The violation of the clauses of a collective agreement or an
individual contract of employment or the failure by the parties
to observe the obligations undertaken may, even under the Soviet
system, lead t o a dispute. The trade unions consider, however,
that in view of the common interests of the working, classes and
the Soviet State, a strike in a State undertaking cannot be admitted
as a method for the settlement of a dispute, and they endeavour
in every case to find an amicable settlement.
For the settlement of disputes, assessment and disputes committees appointed on a basis of joint representation are set up in all
undertakings and institutions. The awards of these bodies are
made by agreement between both parties and are final. Decisions
taken in contradiction with labour legislation and collective
agreements may be cancelled by the factory inspectorate.
In default of agreement between the persons forming an
assessment or disputes committee, disputes concerning the establishment of labour conditions may be referred to a conciliation board
or arbitration court.
Workers employed in undertakings and institutions may
bring a dispute before a special session of the People's Court
without referring it to an assessment and disputes committee,
provided the dispute does not concern a question which by law
comes under the competence of a joint institution.
Deliberate infringements of the clauses of collective agreements
may entail penal sanctions.
The law lays down certain time-limits within which disputes
relating to working conditions must be brought before the competent authorities. Disputes about the dismissal of a worker, the
termination of a contract by a worker on account of the nonpayment of wages within the proper period, or unjustified conduct
on the part of the administration of an undertaking must be
notified within 14 days, and all other disputes within three months
of their occurrence.
Attention must also be called to another important feature
of collective agreements in the Union of Soviet Socialist Republics
which affects all undertakings and institutions without exception.
I t is the fact t h a t in Soviet Russia trade unions are organised
by economic branch and not by trade, and that, consequently,
there is only one collective agreement for each undertaking,

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253

this agreement covering all wage-earning and salaried employees
in the undertaking while defining conditions of labour and wage
rates for each special class of worker.
Collective agreements in the Union of Soviet Socialist Republics
also have the distinctive feature of being effective not only for
members of the trade unions b u t also for workers who do not
belong to the unions (membership of the unions is optional in
Russia). The Soviet trade unions thus extend their protecting
care to workers who are not members of a union. I t does not
follow, however, that trade unionists in Soviet Russia do not
enjoy any special privileges as compared with non-unionists.
On the contrary, under social insurance legislation, trade unionists
receive higher benefits in case of temporary incapacity, incapacitated unionists are entitled to pensions under social insurance,
while unionists requiring care and rest are sent at the cost of the
unions to rest homes and sanatoria.
I n the above summary of the legislation wbich, in the Soviet
Union, governs collective agreements and the practice followed
in their conclusion, an effort has been made to bring out the
features which distinguish the Soviet State (a community of
workers' and State interests with a planned organisation of all
branches of national economy and an extensive labour legislation)
and which by their influence on all aspects of economic life confer
on collective agreements an importance which is unequalled in
any other country. Collective agreements which establish bilateral obligations guarantee steady improvement in social and
living conditions for the working masses as a whole and organise
all grades of workers so t h a t they carry out or even exceed the
plans made for each individual undertaking and thus contribute
to the betterment of the material, cultural and social standards
of the Russian worker. I t is just these characteristics t h a t give
them their wide economic and political significance in t h a t country.

PART IV
COLLECTIVE AGREEMENTS
AND INTERNATIONAL LABOUR CONVENTIONS

I. — COLLECTIVE AGREEMENTS AND THE RATIFICATION
OF INTERNATIONAL LABOUR CONVENTIONS

In earlier parts of this Report an increasingly close relationship
has been shown to exist in many countries between collective
agreements and national labour legislation. It has also been
shown that certain countries have found it necessary in the organisation of their economic life to introduce, with the authority
of the State, systems for the regulation of working conditions
which are based upon collective bargaining or which possess some
of the features of collective agreements. This interrelation between
collective agreements and national legislation suggests that such
agreements might also provide a useful basis both for the
preparation and the ratification of international labour
conventions.
In accordance with the Constitution of the International
Labour Organisation, each State which ratified an International
Labour Convention is responsible for securing its effective observance within its jurisdiction. Each State is entirely free to decide
upon the methods it will adopt for securing the effective observance
of a Convention, and the question may be raised whether, and
under what conditions, the system of collective agreements could
be utilised to a greater extent than at present to enforce the
obligations resulting from ratification.

256

COLLECTIVE AGREEMENTS AND

Provided proper observance were secured, would it be practicable for States in which collective agreements are well developed
to base their application of certain Conventions on this system,
while other States in which these agreements are less effective
could use other methods ? If this procedure should prove possible,
it would enable some countries, where certain conditions of work
are normally regulated by collective agreements and not by
legislation, to ratify Conventions, which otherwise they would
be precluded from ratifying.
Neither the Constitution of the
International Labour Organisation nor the terms of particular
Conventions require States to apply the same methods for securing
observance.
I n considering the possibility of using collective agreements
as a basis for the ratification of Conventions reference may be
made at the outset to two main points. The first is that in some
countries the standards of working conditions which a convention
is designed to establish for some industry or group of industries
may be effectively applied by collective agreements. I n such
circumstances, the essential purpose of the Convention is in fact
secured. The second point is that whereas a collective agreement,
unless its authority has been extended by the State, represents
a mutual obligation only between the parties to the agreement,
the ratification of an International Labour Convention involves
an obligation by the State to all other States which have ratified
the Convention.
Is it possible for the State to assume responsibility for a collective agreement, using it as a basis for ratification, without
destroying the freedom of relations between employers' organisations and trade unions and the adaptability to changing conditions which have been outstanding features of the system of
collective agreements % An affirmative answer to this question
depends upon a further evolution of collective agreements, a
development of the relation between collective agreements and
State regulation of working conditions, and an adaptation of
Draft Conventions to the system of collective agreements.
There seems no unsurmountable obstacle to these adjustments
and adaptations. As indicated in previous parts of this Report,
the necessary evolution has already begun and has indeed made
considerable progress in several countries. Collective agreements
in a number of countries are no longer localised and monopolistic
contracts based upon craft associations, the State no longer limits
its intervention in the regulation of labour standards to protection

INTERNATIONAL LABOUR CONVENTIONS

257

against industrial accidents and disease and against a few other
of the worst abuses of unregulated competition ; while the system
of international draft conventions is still a very recent development. In a world of change the conscious continuous adaptation
of systems and methods is necessary and there would seem to
be many advantages in the mutual adjustment of draft conventions
and collective agreements for the most effective national and
international regulation of working conditions. Parties to an
agreement might be willing to modify its provisions if this would
lead to the application of similar standards in other countries
by the ratification of an international labour convention.

II.

— CONDITIONS NECESSARY TO PERMIT THE SYSTEM

OE COLLECTIVE

AGREEMENTS

TO BE UTILISED AS A MEANS

OF APPLYING INTERNATIONAL

LABOUR

CONVENTIONS

The developments necessary to permit the system of collective agreements to be linked up with that of the application
of international labour conventions will now be examined.
This procedure would only be practicable in those countries
in which collective agreements are highly developed. A national
agreement for an industry, or a series of separate district agreements
which are, however, similar in their provisions and which together
cover all parts of the country is the necessary basis. Few if any
agreements apply to all undertakings and all workpeople in an
industry or branch of industry, and, further, undertakings are
usually free to withdraw from the association and so release themselves from the obligations of an agreement. Some agreements,
however, apply to a very large proportion of an industry. In
such cases it might be possible to extend the agreements by
State authority to the minority not covered by the agreement.
This method has been frequently adopted, it is often welcomed
by the parties to the agreement, and it does not restrict their
freedom in bargaining ; it does, however, interfere with the
freedom of the minority. Where this method is in operation there
would be no fundamental difficulty in ratifying an international
labour convention, provided the standard fixed by the collective agreement is not below that of the convention. Other
methods might perhaps also be found which would link conventions
with collective agreements.
17

258

COLLECTIVE AGREEMENTS AND

If collective agreements are to provide a basis for the ratification of international labour conventions, the scope and content
of the agreements and conventions must correspond. As already
indicated, collective agreements and also analogous systems of
regulating working conditions are framed for separate industries,
which ensures that the special conditions of an industry receive
full consideration. On the other hand, until recently a large part
of labour legislation has been of general application to workers
in many industries. The scope of most international labour conventions has also been general. Thus the Washington Hours
Convention, the Conventions on night work of women and young
persons, on social insurance, weekly rest, minimum wage fixing
machinery and other conventions apply to all industries, or to
all branches of commerce. Certain conventions, however, apply
to workers in particular industries or branches of industry ; for
example, dockers, coal miners, automatic sheet-glass workers,
and workers in glass-bottle manufacture ; the seamen's Conventions
may also be included in this group. These correspond more closely
in scope with collective agreements.
General regulations which apply to many different branches
of production are of value in establishing basic standards for the
whole or a large section of the community. Inevitably, however,
these standards represent the least common denominator of
conditions in the various sections of industry covered. Higher
standards are applied in many branches and the general regulations
may be of little or no practical significance for these branches.
As already indicated, collective agreements are concluded for
particular branches of industry, and if national legislation and
international labour conventions are to supplement general standards by special standards they must deal with the problems
industry by industry and secure the co-operation of the representatives of employers and workpeople within each industry.
In this co-operation the collective agreements already established
have a special value. In national legislation and also in the international field the importance of supplementing general standards
by special standards is being increasingly recognised. This is illustrated by the procedure recently adopted by the International Labour
Conference in dealing with the problem of the shorter working
week. For the detailed application of the general principle a series
of special conventions for particular industries was seen to be
necessary.

INTERNATIONAL LABOUR CONVENTIONS

259

If international labour conventions are to deal increasingly
with special branches of industry, it will be necessary to develop
machinery for consultation with representatives of employers'
and workers' organisations in the industries concerned and to
utilise the provisions of collective agreements in operation. Certain
methods of consultation have already been established. Experts
from particular industries are included in national delegations,
while preparatory technical conferences on hours of work in coal
mines and on maritime questions have been held. In addition,
committees of experts in the textile industry, in iron and steel
and in glass-manufacturing have met. It might be practicable
to secure the adoption of methods, in part based upon international
collective bargaining, although finally using the form of the draft
convention for purposes of international obligation.
Until recently the questions regulated by collective agreements
have differed somewhat from those regulated by national legislation
and international conventions. Thus, social insurance has been
of minor importance in most collective agreements but has been
a prominent feature of national legislation and international
labour conventions. On the other hand, rates of wages and methods
of wage payment have been of outstanding importance in collective
bargaining but, with a few notable exceptions, have been relatively
neglected by the State. Regulation of hours of work is in an
intermediate position, being included in most collective agreements
and also being important in national legislation and in international
labour conventions.
Although no arbitrary line of demarcation separates the subjects
for which collective agreements are appropriate from those for
which national legislation and international conventions are
suited, there are certain questions for- which the methods of
collective agreement are particularly appropriate. If progress is
to be made in the effective regulation of these questions nationally
and internationally, there must be adaptation to the system
found by experience in the negotiation and application of collective
agreements to be workable. The chief of these questions is wages,
but that of hours of work, including the regulation of overtime,
is important, while various other subjects may be selected from
the complete list reviewed in Part I of this Report. Certain of
the subjects dealt with by collective agreements are, however,
of only specialised or local interest.
Here the regulation of wages may be considered both because

260

COLLECTIVE AGREEMENTS AND

of its importance and its difficulty.1 It will illustrate the nature
of the adjustments necessary if the system of collective bargaining
is to be integrated or co-ordinated with national legislation and
international conventions. Of all questions regulated by collective
agreements, rates of wages are most frequently subject to revision.
Even in periods of stability of currency values and of economic
conditions, rates of wages are rarely fixed for longer periods than
twelve months. If notice to terminate the agreement is not then
given the provisions usually continue in force, but the essential
point is that the parties are free to demand the consideration
of revision. Therefore, even if the parties were willing to agree
that the State might ratify an international labour convention on
the basis of a collective agreement which they had concluded,
the ratification could be effective only for the period covered
by the agreement.
Hitherto, international labour conventions have been adopted
with a view to their application for long periods, and in most
of them the possibility of revision only once in ten years is envisaged. If, however, conventions are to deal not only with general
standards suitable for long-term application but with the more
specific standards of particular industries, and especially if the
wage problem is ever to be dealt with in detail, a much shorter
period for the validity of ratifications of certain conventions
will be necessary, with, however, facilities for renewal from period
to period if the conditions of the agreements remain in conformity
with the provisions of the conventions. Without such a shortening
of the period, States would either find it impossible to use collective
agreements as a basis for ratification of conventions, or, by ratifying conventions for a longer period than those of the agreements,
would interfere with the freedom of the parties to the agreements.
Objection to such interference would be raised in many countries
both by the employers' organisations and trade unions.
1
In the Reports on Reduction of Hours of Work submitted to t h e 19th Session
of t h e International Labour Conference, reference is made to difficulties which
w o u l d ' b e encountered in t h e international regulation of wages. The Reports
indicate that, in many cases, Governments are not in a position to undertake the
regulation of wages, and t h a t in most countries neither Governments, employers nor
workers desire t h a t the fixing of wages should become a Government responsibility.
At the present time international exchanges are subject to continual fluctuations
which might a t any time destroy the basis of any agreement reached. Also, the
levels of wages in any country, being affected by international competition, by
internal economic conditions and changes in the cost of living, are subject to
frequent readjustment, and the operation of international obligations on wage
rates would entail a detailed and complicated intervention b y t h e State in the
determination of wages.

INTERNATIONAL LABOUR CONVENTIONS

261

Already, the International Labour Conference has recognised
the need for a shorter period than ten years for the validity of
certain Conventions. Thus the Hours of Work (Coal Mines) Convention, 1931, provided for the consideration of revision on certain
points within three years and for denunciation of ratifications
after the expiration of five years. A still further shortening of
the period of operation of conventions would be necessary if
conventions are to deal with conditions in particular industries
which may require regular and frequent adaptation to changes
in economic conditions. An acceleration of the processes of ratification would also be necessary. A study of the progress of ratifications shows that a period of four or five years usually elapses
before a convention adopted by the Conference is ratified by a
substantial number of countries. If conventions are more and more
to regulate standards of importance to particular industries in
their international competition it will become necessary to evolve
methods for rapid and also for simultaneous ratification.
Not all of the subjects regulated by collective agreements
are Hable to change so frequently as rates of wages. Although
collective agreements are often subject to change each year, many
of the provisions are renewed year after year. While rates of
wages may be frequently changed, the provisions regulating
methods of wage payment, hours of work, overtime, Sunday and
holiday work, apprenticeship, discipline and many other questions
may continue with little or no modification for several years.
On such questions the employers' organisations and trade unions,
in consultation with the Government, might be willing to sign
agreements for three or five years, leaving rates of wages and other
subjects which are liable to frequent change to be dealt with
in separate agreements. This would in no way restrict the freedom
of the parties to agreements but it might facilitate the ratification of conventions on certain subjects for periods of several
years.
Complications would be avoided in the establishment of a
liaison between collective agreements and international labour
conventions if the conventions (which certain countries would
doubtless be more ready to ratify if they could do so on the basis
of collective agreements) dealt with only one subject or a few
closely related subjects. Many collective agreements are long
detailed documents covering a wide range of subjects which vary
from industry to industry and from country to country. It would
be impracticable to attempt to deal in one convention with the

262

COLLECTIVE AGREEMENTS AND

whole or even a considerable part of the field often covered by
a single collective agreement.
In addition to preparing conventions in such a way as to facilitate their ratification by countries in which collective agreements
play an important part in the regulation of working conditions,
the question may be considered whether there would be value
in the adoption of Draft Conventions or Recommendations dealing
with the scope, structure and content of collective agreements,
and also with methods of conclusion and revision of agreements.
It is recognised that one of the chief qualities of the system of
collective agreements is flexibility and variety and no attempt
should be made in the interest of greater uniformity to override
differences based upon variety in the industrial conditions with
which the agreements deal. But there are many variations in
the form and method of agreements which have no real foundation
or which are based upon real differences which no longer exist.
It might be useful on the basis of experience in different industries
and countries to reach certain conclusions upon the structure
and methods which have given the best results. These might
be embodied in a Recommendation which could be used by Governments in the processes of conciliation and arbitration and
in any other relations which they may have with the adoption
of collective agreements. Such indications would also be useful
to employers' organisations and trade unions when engaged in
remodelling the form of their agreements.
The question of the operation and enforcement of conventions
on the basis of collective agreements may now be considered.
Governments no doubt rely for enforcement mainly on an official
inspectorate or on a system of State administration, for example,
in the application of conventions on social insurance. The International Labour Conference has not, however, excluded methods
in which the collaboration of organisations of employers and of
workpeople is expressly provided for. The Placing of Seamen
Convention, 1920, provides that the system of employment offices
contemplated may be organised and maintained, either by representative associations of shipowners and seamen jointly under the
control of a central authority, or, in the absence of such joint
action, by the State itself. Article 2 of the Hours of Work (Industry)
Convention, 1919, provides that employers' and workers' organisations may, by agreement, fix working hours on certain days of
the week at more than eight but not more than nine hours, provided that the hours on other days are less than eight and that

INTERNATIONAL LABOUR CONVENTIONS

263

the limit of forty-eight hours in the week is not exceeded. In
the Sheet-Glass Works Convention, 1934, and the Reduction of
Hours of Work (Glass-Bottle Works) Convention, 1935, provision
is made that, where additional hours are worked in certain special
circumstances, adequate compensation shall be granted in such
manner as may be determined by national laws or regulations
or by agreement between the organisations of employers and
workers concerned. The evidence available seems to show that
in an industry in which employers and workers are strongly
organised the standard of observance of agreements is high.
In some countries the Government is unwilling to intervene
or considers it unnecessary to do so in the application of standards
of working conditions in industries in which strong organisations
of employers and of workers have been established. Also the
organisations themselves often prefer to control the operation of
agreements. In the application of conventions Governments
would be free to decide, in consultation with the organisations
concerned, whether effective observance of a convention can be
secured by the organisations alone, or whether the measures taken
by the organisations should be supplemented by State supervision.
This might take the form of inspection specially directed to those
undertakings and districts in which the organisations are weak.
The recent British legislation already mentioned, which establishes
methods for giving statutory authority to the rates of wages
fixed by collective agreement in the manufacturing section of
the cotton industry and for extending their application to all
undertakings in this section, leaves the organisations free to secure
enforcement without any direct intervention by the State. There
are many other industries in Great Britain and in a number
of other countries where effective observance of the provisions of agreements is ensured by the parties to the agreements
alone.
In some countries the method of regulating working conditions
by joint consultation and agreement between employers' organisations and trade unions has been effective for many years.
It ensures adjustment of working conditions to the needs of each
branch of industry by those who are best informed about the
conditions. By methods of voluntary conciliation and arbitration
or by giving statutory force to conditions approved by representatives of employers and workers in an industry the State
can support the system and extend its usefulness. The question

264

COLLECTIVE AGREEMENTS

is therefore being asked whether, as the system of collective
agreements is capable of giving results comparable with those of
legislation, means could not be found, perhaps along the lines
indicated above, for States in which working conditions are
extensively regulated by collective agreements to be able to make
greater use of these instruments, possibly in conjunction with
legislation, with a view to the ratification of international labour
conventions.

CONCLUSIONS

The evidence brought together in this Report serves to show
the increasing importance of the collective agreement as an element
in the -social and economic structure of the modern industrial
community. The growth of the movement for regulating conditions
of work by means of collective agreements has been particularly
marked since the war, and in many countries the collective agreement is now a recognised method of determining working conditions.
The movement is primarily based on the desire of employers
and workers to settle for themselves the conditions in their industries, but it has proved to be not inconsistent with various
forms of the co-operation, the regulation or the control of the
State. Although the collective agreement has become widely
established in a large number of countries as an integral part of
the industrial system, it has discharged its important functions
on the whole so smoothly and efficiently that the full extent of
its influence on national life is often overlooked.
The present Report indicates, as a result of a careful analysis
of the available facts, that collective agreements and analogous
methods of regulating conditions of work constitute in many
countries a highly co-ordinated system of agreed working arrangements affecting large numbers of workpeople and defining, often
in great detail, almost every aspect of industrial relations.
On the basis of the detailed information contained in the
Report, it would seem possible to draw certain general conclusions,
which may be briefly summarised.
1. The questions actually regulated in the various countries
by collective agreements, and these questions are very numerous,
fall into two main classes, first, those relating to conditions of
labour, such as wages, hours of work, conditions of engagement
and dismissal, apprenticeship, insurance and so forth, and secondly,
those dealing with the relations between the contracting parties,

266

CONCLUSIONS

whether in the particular undertaking or in the industry as a
whole, for example, works regulations, disciplinary methods,
penalties, and the settlement of individual labour disputes, and
the prevention and settlement of collective disputes arising out
of the application, interpretation or renewal of collective agreements.
In practice, the Report indicates, two of these many questions
are of particular importance from the standpoint of regulation by
collective agreement.
(a) The first is wages. Collective agreements have always
been and still are primarily wage agreements. This is because
the question of wages has for obvious economic reasons been
generally considered unsuitable for uniform and general regulation
by law. The level of wages in each country and in each industry
is determined both by considerations of international competition
and by all the influences affecting the domestic market and the
cost of living. Wage rates everywhere are subject to constant
readjustment. Wages, which constitute the essential element in
the determination of the standard of living of the workers, remain,
with relatively few exceptions, outside the field of legislative
action and are settled by agreement between the parties. It is
thus natural that no other question should have played so important
a part in relations between employers and workers and should
have been dealt with in so much detail by collective
agreements.
(b) The second question is hours of work. Although hours
of work are often regulated by legislation, collective agreements
also play an extremely important role in this field. In some countries they take the place of legislation ; in others they supplement
legislation, by regulating matters of detail not dealt with by
legislation, by fixing higher standards than those laid down in
the basic legislative codes, or by applying to particular industries
or branches of industry the general principles established by
legislation.
2. After indicating the importance, in actual practice, of
collective agreements, the Report passes in review the development of national legislation on collective agreements. It shows
that, apart from the few countries where collective agreements
have evolved without any sort of regulation, legislation on collective
agreements has exercised a considerable influence on practical
developments. Although the various legal measures which exist

CONCLUSIONS

267

are of the most diverse character, ranging from mere indirect
regulation to the total and systematic organisation of labour and
economic relations, the Report leads to the conclusion that there
are two questions of fundamental importance on which a considerable measure of agreement exists.
(a) Legal recognition is accorded to collective agreements in
a considerable number of countries.
The effect of legal recognition is that the conditions of employment laid down in collective agreements necessarily or automatically form part of any individual contracts of employment subsequently concluded between employers and workers belonging to
the contracting organisations. As they have binding effect, no
departure from these conditions is permitted except in the interest
of the workers.
It should be noted that the legal confirmation of collective
agreements does not interfere in any way with the freedom of
action of the parties concerned, for they may or may not conclude
collective agreements and they may determine their substance
and duration as they desire.
(b) Legal provision is made, also in a considerable number
of countries, for the possibility of the extension of collective agreements to third parties within the limits of their scope.
Legislation providing for the possible extension of collective
agreements to third parties serves the same purpose as legal
recognition in that it merely supports the efforts made by the
parties to make their agreements as wide in scope and as stable
in character as possible. Whatever method the legislation prescribes — optional extension at the express request of the parties
concerned or automatic extension in accordance with the law —
the sole purpose is to extend to all persons, employers or employed,
in the undertakings, occupations or industries covered by the
collective agreement those minimum conditions that were freely
agreed upon by the parties.
3. The Report then goes on to examine the place of collective
agreements in the economic structure of the community. It draws
attention to the tendency in the modern industrial community
towards greater standardisation of working conditions, especially
within each industry. This provides an economic basis facilitating
the collective regulation of working conditions whether by voluntary
agreements or by State action. Illustrations are then given of
recent State intervention in the normal regulation of working

268

CONCLUSIONS

conditions in order, by rapid and uniform measures extending
over a wide industrial field, to bring these conditions into proper
adjustment with other factors of the national economic life. The
review of such emergency measures is followed by an account
of more permanent measures taken by certain States to incorporate
collective agreements in the national economic structure.
This survey of the increasing significance of the role assigned
to the collective agreement in the economic organisation of the
modern industrial community leads to the conclusion that the
recognition that the collective agreement is of importance not
only from the point of view of industrial relations, but also in
connection with economic developments, is a particular aspect of
the growing consciousness of the interrelation of the social and
the economic to which in the last few years the International
Labour Conference has devoted much attention.
4. There remains one question with regard to collective
agreements which is of obvious importance to the International
Labour Organisation : how and to what extent can collective
agreements be utilised in relation to International Labour Conventions ?
Some of the Conventions already adopted, such as the Hours
of Work (Industry) Convention (1919), assimilate collective
agreements to legislation for the purpose of the apphcation of
certain clauses of the Convention. It has thus been recognised
that in certain respects collective agreements are an effective
means of securing the enforcement of regulations in those countries
and industries where the employers' and workers' organisations
have attained a degree of development and stability sufficient to
allow such a function to be entrusted to them.
If, as seems likely, collective agreements are destined to play
an increasingly important-part in the future, and if industrial
self-government is to be still more firmly established, it is clear
that the State will allow the collective agreement to play an
increasingly large part in the regulation of conditions of work.
Such a development could not fail to have important consequences
for the establishment and enforcement of international labour
legislation.
The various problems that would arise in this connection are
carefully examined in the Report, and various tentative suggestions
are made with a view to indicating some of the important questions
to which the International Labour Conference may wish to devote

CONCLUSIONS

269

some discussion. In particular, the question is asked whether
means could not be found for States in which working conditions
are extensively regulated by collective agreement to be able to
make greater use of these instruments, possibly in conjunction
with legislation, with a view to the ratification of international
labour conventions.

APPENDICES

APPENDIX I
REPORT OF THE COMMITTEE ON COLLECTIVE AGREEMENTS
IN AGRICULTURE, SUHMITTED TO THE INTERNATIONAL
LAROUR CONFERENCE AT ITS SEVENTEENTH SESSION

The Committee which was instructed to examine the Keport of
the International Labour Office on collective agreements in agriculture,
submitted to the International Labour Conference in fulfilment of
Resolutions adopted at the Eleventh and Sixteenth Sessions, was
constituted by the Conference on 15 June 1933 and held two sittings,
on 15 and 19 June 1933. The Committee was composed of 18 members,
namely, 6 Government members, 6 Employers' members and 6 Workers'
members.
The Committee elected Mr. Koláf, Government Delegate of Czechoslovakia, as Chairman and Reporter.
The Committee, the duties of which were limited to an examination
and report to the Conference on the Report mentioned, did not have
to formulate definite proposals.
The Committee noted the general accuracy of the description of
the facts concerning collective agreements in agriculture given in the
Report. At the same time, attention was drawn to the fact that the
" Conclusions " of the Report took account almost exclusively of the
importance of those collective agreements which result from a free
bargaining between organisations of employers and workers or of
agreements or guiding principles serving as a basis for individual
contracts drawn up under the auspices or with the assistance of public
authorities, but that they did not sufficiently note other forms of
collective regulation where State action or State initiative played a
large part and which in certain circumstances can be considered at
least as efficacious. Thus, it was pointed out that, in countries where
attempts to introduce collective bargaining in agriculture have failed,
systems of regulating wages by minimum wages committees instituted
by law have produced fairly satisfactory results ; it was also argued
that the corporative system has successfully surmounted various
defects in collective bargaining systems which the Report had noted,
such as the fact that unorganised employers can escape the obligations
contained in collective agreements and that it is difficult to extend
the scope of these agreements to employers and workers other than
those in large undertakings.
All speakers agreed that the collective regulation of labour condi18

274

APPENDIX I

tions offers advantages to agricultural workers. But the importance
to be attributed to such a method of regulating these conditions varies
according to the situation in each country. In no case does collective
bargaining by itself provide sufficient protection for agricultural labour.
While in a certain number of countries questions of wages, hours, and
annual holidays can be adequately settled by this method, other questions, such as social insurance problems or the protection of women
and children,• can be properly dealt with only by means of legislation,
at least in most cases.
I n conformity with the different opinions expressed in the Committee
as to the relative value to agricultural workers of the method of collective
bargaining, several suggestions for the future treatment of this question
by the International Labour Organisation were put forward by the
Workers' members of the Committee. A proposal was made to invite
the Conference to draw the attention of Governments to the Report
of the International Labour Office and to suggest to them that they
should take the necessary steps to encourage the method of collective
bargaining in agriculture and to remove the difficulties which the
introduction of this method at present encounters, or at least to invite
the Governing Body to examine the possibility of putting this item
on the Agenda of a future Session of the Conference with a view to
the adoption of an international Convention or Recommendation.
Other proposals emphasised special aspects of the problem of the
collective régulation of agricultural labour conditions and stressed
the need either for investing the terms of collective agreements with
legal force for the purpose of affording sufficient protection to agricultural
workers, or else for adopting a minimum wage legislation in agriculture
as the basis of a collective regulation of labour conditions.
The Committee ventures to suggest that the Conference should
forward its report to the Governing Body of the International Labour
Office for consideration by its Agricultural Committee, account being
taken of all the observations made in the Committee and of all the
suggestions set forth in its report.
Geneva, 19 June 1933.
(Signed) : Dr. Rudolf KoLÂft,
Chairman and B&fotter.

APPENDIX II
STATISTICS CONCERNING COLLECTIVE AGREEMENTS

Tables I and II give statistics concerning collective agreements
between employers' and workers' organisations for the period 19271934 in 10 countries. The first table relates to statistics of collective
agreements in force on a given date in each year and shows the number
of agreements and the number of workers covered by them, and where
possible the number of establishments covered. The second table
gives statistics concerning agreements concluded, renewed or modified
during each year, and classified into number of agreements, number
of workers and number of establishments covered. Despite the
importance of collective negotiations in the field of industrial relations,
only a few countries compile statistics of this kind.1 The meaning
of the term " collective agreement ", however, is not always the same,
and the definition may be based on the establishment as a technical
unit, an economic unit or a geographical unit. The number of persons
covered is sometimes taken to be the number of members of the trade
unions party to the agreement, and sometimes the number of workers
to whom the provisions of the agreement apply, either in law or at
least in actual fact.2

1
For a general analysis of the methods of compiling statistics of collective
agreements, cf. INTEBNATIONAL LABOTXB OFFICE : Methods of Compiling Statistics
of Collective Agreements, Studies and Reports, Series N, No. 11 (Geneva, 1926).
2
These statistics are reprinted from the I.L.O. Year-Book, 1934-35. For notes
on sources and methods, see that publication, pp. 245-247.

276

APPENDIX

TABLE I. — COLLECTIVE AGREEMENTS IN FOEOE
GERMANY

Year

1927
1928
1929
1930
1931
1932
1933
1934

Agreements Establishin force
ments
on 1 Jan.
covered
.
.
.
.

AUSTRIA

.
.
.
.

.
. .
. .
. .

7,490
8,178
8,925

807,300
912,006
997,977

*
*

Workers
covered

10,970,120
12,267,440
12,276,060

804,788

12,006,255

Agreements Establishin force
ments
at end
covered
of year

Workers
covered

2,737
2,976
2,791
2,259

147,596
163,594
192,546
219,246

1,007,723
989,884
957,940
824,568

1,989
1,552
1,660

196,206
188,312
174,067

639,841
514,105
489,480

1
For Germany, new series. — ' This figure relates to establishments covered by manual
workers' agreements only ; the number of establishments covered by salaried employees*
agreements was 266,209.

AUSTRALIA

Year

1927
1928
1929
1930
1931
1932
1933
1934

.
.
.
.
.
.
.
.

NORWAY

RUMANIA

Agreements
in force
at end
of year

Workers
covered

744
777
605
601
614
625
653

846
1,017
1,501
1 629
1,522
1,923
2,418
2,534

122,536
122,756
141,535
159,651
162,184
169,177
177,965
203,502

—

NETHERLANDS

Year

1927
1928
1929
1930
1931
1932
1933
1934

.
.
.
.
.
.
.
.

894
1,016
1,254
1,546
1,496
1,325
1,221
1,132

16,976
17,209
18,548
23,528
23,427
21,720
23,241
25,431

Workers
covered

281
220
293
287
292

87,793
73,316
94,950
95,876
84,252

—
—
—,

—
—
—

SWEDEN

Agreements Establishments
in force
covered
on 1 June

Agreements
in force
during
the year

Workers
covered

267,791
279,597
291,738
385,783
358,972
251,715
243,821
258,185

Agreements
in force
Employers
at end
covered
of year
2,960
3,326
3,916
4,422
5,288
5,806
5,635
6,288

16,502
17,388
19,316
20,185
23,819
24,630
22,782
25,864

Workers
covered

494,625
512,542
541,403
580,931
618,034
636,138
596,563
674,700

APPENDIX

277

TABLE LT. — COLLECTIVE AGREEMENTS CONCLXTDED, RENEWED
OR MODIFIED
AUSTRALIA

GERMANY

Year

AgreeEstablishments
ments
concluded covered
Dr renewed

Workers
covered

Agreements
noti fled

AUSTRIA

Agreements

Establish- Workers
ments
covered
covered

5 3 , 6 2 0 ! 327,0141

1927 . .

3,284.

410,538

7,395,737

137

599 >

1928
1929
1930
1931
1932
1933
1934

3,377

470,384

5,376,009

128
109
110
112
53
64
66

925»
813»
572»
468»
551»
611»

.
.
.
.
.
.
.

*
*
*
*

*
*
*
•
*
*

*
*
*
•
*

139,480»
42,033 »
102,597»
20,922»
40,712»
50,711 »

451,346»
373,609»
276,240»
186,602»
186,152»
228,977 »

1
Agreements concluded, not including renewals. — * Agreements concluded, including
renewals.

FRANCE

Year

1927.
1928 .
1929.
1930.
1931 .
1932 .
1933 .
1934 .

ITALY

LATVIA

NETHERLANDS

National
ProvinAgree- Establishand interAgreecial
Agreements
Workers
provincial
ments
agreements
ments
concluded agreements
ments concluded concludcovered covered
e
d
'
notified
concluded
102
99
112
72
17
23
17
24

•
107"
71
103
119
166
91
215

t
t
t
t

4
40
17
32
1
27

1,744
1,156
1,535
1,484
1,517
1,538 t
1,499 t

512
344
1,034
295
471
398
434

8,266
9,979
16,691
9,903
6,428
9,103
16,245

74,272
185,496
283,748
137,319
63,336
47,623
124,701

1
Agreements notified since 6 May 1928. — * Year between 2 June of the preceding
year and 1 June of the year indicated.

Year

1927 .
1928 .
1929 .
1930.
1931 .
1932 .
1933 .
1934 .

POLAND

RUMANIA

SWEDEN

AgreeWorkers
ments
concluded covered

Agree- Employers Workers
ments
covered
concluded covered
1

523
565
336
160
189
197
240

296,882
337,672
120,252
41,502
117,090
215,077
227,711

148
135
218
174
177
101
80
92

41,505
46,956
76,495
46,461
50,670
25,296
23,693
24,154

607
868
990
1,476
1,405
1,588
1,445
1,500

4,355
3,613
4,322
7,084
4,555
4,787
10,769
8,540

94,176
133,922
112,541
169,763
126,408
257,905
198,000
139,641

APPENDIX III
LIST OF LAWS CONCERNING COLLECTIVE AGREEMENTS

ARGENTINA
A c t N o . 2426 t o issue r e g u l a t i o n s g o v e r n i n g e m p l o y m e n t . D a t e d 2 J a n u a r y
1935.
(L.S.', 1935, Arg. 1.)
AUSTRALIA
Commonwealth
C o m m o n w e a l t h Conciliation a n d A r b i t r a t i o n A c t 1904-1928 (consolidated
text).
(L.S., 1928, Austral. 2.)
Amendment.
(L.S., 1930, Austral. 11.)
New South Wales
Industrial Arbitration

A c t , 1912-1926 (consolidated t e x t ) .
(L.S., 1926, Austral. 7.)

Subsequent amendments.
(L.S., 1927, Austral. 2 and 7.)
(L.S., 1929, Austral. 5.)
(L.S., 1930, Austral. 2, 3 (B) and 12.)
(L.S., 1931, Austral. 13.)
(L.S., 1932, Austral. 5.)
(L.S., 1935, Austral. 4.)
Queensland
I n d u s t r i a l A r b i t r a t i o n A c t of 1916 ; a m e n d e d b y A c t of 1923 (consolidated text).
(L.S., 1923, Austral. 1.)
Subsequent amendments.
(L.S., 1924, Austral. 2.)
(L.S., 1925, Austral. 4 and 6.)
(L.S., 1926, Austral. 9.)
I n d u s t r i a l Conciliation a n d A r b i t r a t i o n A c t of 1929. A s s e n t e d t o 2 3
D e c e m b e r 1929.
(L.S., 1929, Austral. 6.)
Amendments.
(L.S., 1930, Austral, 9.)
(L.S., 1932, Austral. 1.)
1

INTERNATIONAL LABOUB OFFICE, Geneva:

Legislative Series.

279

APPENDIX TO

An Act to provide for the encouragement of employment and the
rehabilitation of industry ; to constitute and establish a Bureau of Industry ;
and for other purposes. Assented to 15 December 1932.
(L.S., 1932, Austral. 7.)

Industrial Conciliation and Arbitration Act of 1932. Assented to 6 J a n u a r y
1933.
(L.8., 1933, Austral. 1.)

Amendment.
(L.8., 1934, Austral. 5.)

An Act No. 3 to amend the Industrial Conciliation and Arbitration
Acts, 1932 to 1934, in certain particulars. Assented to 17 October 1935.
(L.S., 1935, Austral. 7.)

South Australia
Industrial Acts, 1920-1925.
(L.S., 1925, Austral. 1.)

Tasmania
An Act to consolidate and amend the law relating to Wages Boards,
and for other purposes. Dated 24 December 1920. An Act to amend the
Wages Boards Act of 1920. Dated 13 March 1924.
(L.S., 1924, Austral. 1 and Appendix.)

Subsequent amendments.
(L.S., 1929, Austral. 1.)
(L.S., 1934, Austral. 3.)
(L.S., 1936, Austral. A.)

Victoria
An Act to consolidate the law relating to the supervision and regulation
of factories and shops and to other industrial matters. Assented to 12
February 1929.
(L.S., 1929, Austral. 13.)

Western Australia
Industrial Arbitration Act, 1912-1925 (consolidated text).
(L.S.. 1925. Austral. 12.)

Amendment.
(L.8.. 1930, Austral. 7.)

AUSTRIA
Act respecting the Establishment of Conciliation Boards and respecting
collective agreements. Dated 18 December 1919.
(L.S., 1920, Aus. 22.)

Federal Act respecting the right to work and the right of assembly. Dated
5 April 1930.
(L.S., 1930, Aus. 1.)

Order of the Federal Government respecting the regulation of collective
employment relations for public constructional works. Dated 13 J u n e
1933
(L.S., 1933, Aus. 7 [B].)

Order No. 132 to establish the Trade Union Federation of Austrian
Wage-Earning and Salaried Employees. Dated 2 March 1934.
(L.S., 1934, Aus. 3.)

280

APPENDIX IH

Act respecting the establishment of works councils. Dated 12 July 1934.
(L.S., 1934, Aus. 7.)

Act No. 290 respecting the establishment of the Federation of Austrian
Manufacturers. Dated 17 October 1934.
(L.S., 1934, Aus. 12.)

Act to amend the Act of 12 July 1934 respecting the establishment
of works councils. Dated 11 July 1935.
(L.S., 1935, Aus. 3.)

BRAZIL
Decree No. 21761, to institute collective agreements. Dated 23 August
1932.
(L.S., 1932, Braz. 6.)

BULGARIA
Legislative Decree on collective agreements. Dated 22 September 1936.
(Drjaven Vestitile, 22 Sept. 1936.)

CANADA
Alberta
The Industrial Standards Act, 1935.
(The Labour Gazette of Canada, June 1935.)

Quebec
Act respecting the extension of collective labour agreements. Assented
to 20 April 1934.
(L.S., 1934, Can. 5.)

An Act to amend the Act respecting the extension of collective labour
agreements. Assented to 18 May 1935.
(L.S., 1935, Can. 6.)

Ontario
An Act respecting industrial standards. Assented to 18 April 1935.
(L.S., 1935, Can. 3.)

CHILE
Legislative Decree No. 178 to ratify the Labour Code (consolidating
the Acts relating to labour). Dated 13 May 1931.
(L.S., 1931, Chüe 1.)
Act No. 5405, to amend Legislative Decree No. 178 of 13 May 1931,
which consolidated the Acts relating to labour. Dated 8 February 1934.
(L.S., 1934, Chüe 1.)

CHINA
The Collective Agreement Act.
Enforcement 1 November 1932.

Dated 28 October 1930.

Date of

(Chinese Labour Laws, p. 23.)

CUBA
Legislative Decree No. 446 respecting contracts of employment. Dated
24 August 1934.
(L.S., 1934, Cuba 7 [A].)

APPENDIX

281

CZECHOSLOVAKIA
Order No. 102 for the temporary regulation of the conditions of employment of workers in the textile industry. Dated 29 April 1935.
(L.S., 1935, Cz. A.)
Order respecting the extension of collective agreements. Dated 20
February 1936.
(L.S., 1936, C. 2.)
DENMARK
Act No. 17 to prolong (until 1 February 1934) the operation of agreements
between employers and employees and to prohibit stoppages of work.
Dated 31 January 1933.
(L.S., 1933, Den. 1.)
Act No. 5 respecting intervention in labour disputes. Dated 18 January
1934.
(L.S., 1934, Den. 1.)
Act respecting the settlement of the dispute between the Danish Employers' Association and the Danish Federation of Trade Unions, the Danish
Employers' Association and organisations outside the Danish Federation
of Trade Unions, and other organisations of employers and employees.
Dated 29 March 1936.
(Will be published in the Legislative Series 1936.)
ESTOMA
Act respecting collective contracts. Dated 26 March 1929.
(L.S., 1929. Est. 4.)
FINLAND
Act respecting collective contracts. Dated 22 March 1924.
(L.S., 1924, Fin. 2.)
FRANCE
Act of 25 March 1919 ; Act of 25 J u n e 1919 respecting collective agreements. Cf. Chapter IV bis, Art. 31 to 31 x, and 32 of the Labour Code.
(L.S., 1919, Pr. 1.)
Act of 24 June 1936 respecting collective agreements. (Cf. Book I ,
Part TJ, Chap. IV bis, Division IV bis, sees. 31 v (a) to 31 v (g).
(L.S., 1936, Fr. 7.)
GERMANY
Order relating to collective contracts. Dated 23 December 1918.
(L.S., 1923, Ger. 2.)
Act to amend the Collective Contracts Order, Dated 28 February 1928.
(L.S., 1928, Ger. 2.)
Act for the organisation of national labour. Dated 20 January 1934.
(L.8.. 1934, Ger. 1.)

282

APPENDIX HI

GREAT BRITAIN
An Act to make temporary provision for enabling statutory effect to be
given to rates of wages agreed between representative organisations in the
cotton manufacturing industry ; and for purposes connected with the matter
aforesaid. Dated 28 J u n e 1934.
(L.S., 1934, G.B. 7.)
GREECE
Act respecting collective contracts of employment. Dated 16 November
1935.
(L.S., 1935, Gr. 7.)
Act of 16 November 1935 respecting the settlement of collective labour
disputes.
(L.S., 1935, Gr. 10.)
HUNGARY
Order No. 52000/1935 of the Minister of Commerce respecting the
establishment and operation of the Wage Boards competent to fix minimum
wages for certain trades. Dated 30 July 1935.
(L.S., 1935, Hung. 6.)
INDIA
The Bombay Trade Disputes Conciliation Act, 1934. Assented to 27
August 1934.
(L.S., 1934, Ind. 4.)
IRISH FREE STATE
Act on Conditions of Employment.

Dated 14 February 1936.
(L.S., 1936, I.F.S. 1.)

ITALY
Act No. 563 : legal regulation of collective relations in connection with
employment. Dated 3 April 1926.
(L.S., 1926, It. 2.)
Royal Decree No. 1130, issuing rules for the administration of Act No.
563 of 3 April 1926, respecting the legal regulation of collective relations in
connection with employment. Dated 1 July 1926.
(L.S., 1926, It. 5.)
Labour Charter. Dated 21 April 1927.
(L.S., 1927, It. 3.)
.Royal Decree No. 1251; to issue rules for the filing and publication of
collective contracts of employment. Dated 6 May 1928.
(L.S., 1928, It. 3.)
Royal Decree No. 200, to amend items (a) and (b) of Section 41 of
Royal Decree No. 1130 of 1 July 1926, issuing rules for the administration
of the Act respecting the legal regulation of collective relations in connection
with employment. Dated 15 J a n u a r y 1931.
(L.S., 1931, It. I.)
Act No. 437, to extend the legal regulation of collective relations in connection with employment to share contracts in agriculture and for smallholdings. Dated 3 April 1933.
(L.S., 1933, It. 7.)

APPENDIX TU

283

Act No .163, respecting the constitution and functions of the corporations.
Dated 5 February 1934.
(L.S., 1934, It. 1.)

Royal Legislative Decree No. 441 respecting the powers of the Central
Corporative Committee. Dated 18 April 1935.
(L.S., 1935, It. 5.)
LATVIA
Order respecting collective labour agreements. Dated 4 October 1927.
(L.S., 1927, Lat. 3.)

LUXEMBURG
Order for the establishment of a National Labour Council. Dated 23
January 1936.
(L.S., 1936, Lux. 1.)

MEXICO, UNITED STATES OF
Federal Labour Act. Dated 18 August 1931.
(L.S., 1931, Mex. 1.)

Decree to amend various sections of the Federal Labour Act. Dated
19 J a n u a r y 1934.
(L.S., 1934, Mex. 1 [B].)

NETHERLANDS
Act to issue detailed regulations respecting collective agreements.
Dated 24 December 1927.
(L.S., 1927, Neth. 2.)

Act to set up industrial councils. Dated 7 April 1933.
(L.S., 1933, Neth. 1.)
NEW ZEALAND
An Act to consolidate certain enactments of the General Assembly
relating to the settlement of industrial disputes by conciliation and arbitration. Dated 1 October 1925.
(L.S., 1925, N.Z. 1.)

Industrial Conciliation and Arbitration Amendment Act, 1932. Assented
to 27 April 1932.
(L.S., 1932, N.Z. 1.)
Act to amend the Industrial Conciliation and Arbitration Act, 1925.
No. 6 of 1936. Dated 8 June 1936.
(L.S., 1936, N.Z. 1.)

NORWAY
Act respecting labour disputes. Dated 5 May 1927 (Sections 3, 4, 5
and 6, subsections 1, 2 and 40, relate to collective agreements).
(L.S., 1927, Nor. 1.)
Act to amend the Act of 5 May 1927 respecting industrial disputes. Dated
26 June 1934.
(L.S., 1934, Nor. 1.)

Act to amend the Act respecting labour disputes. Dated 29 March 1935.
(L.S., 1935, Nor. 1.)

284

APPENDIX H I

POLAND
Order of the President of the Republic : Code of Obligations. Dated
27 October 1933.
(L.S., 1933, Pol. 6.)

PORTUGAL
Legislative Decree No. 23048, to promulgate the National Labour
Statute. Dated 23 September 1933.
(L.S., 1933, Port. 5.)
Legislative Decree No. 25701, to authorise the Under-Secretary of State
for Corporations to fix minimum wage rates wherever it is observed that
there is a regular decline in wages in consequence of unrestricted competition
in any branch of commerce or industry and t h a t the said wages are falling
below a reasonable rate. Dated 1 August 1935.
(L.S., 1935, Port. 5.)
RUMANIA
Act respecting contracts of employment. Dated 28 March 1929. Regulations for the administration of the Act respecting contracts of employment.
Dated 31 December 1929. (Part IV A and B relate to collective contracts. )
(L.S., 1929, Rum. 2 [A] and [B].)

Act to amend certain sections of the Act respecting contracts of employment. Dated 10 October 1932.
(L.S., 1932, Rum. 3.)

SOUTH AFRICA, UNION OF
Act to make provision for the prevention and settlement of disputes
between employers and employees by conciliation ; for the registration and
regulation of trade unions and private registry offices and for other incidental
purposes. No. 11 of 1924. Assented to 26 March 1924.
(L.S., 1924, S.A. 1.)

Act to amend the Industrial Conciliation Act, 1924. Assented to 28
May 1930.
(L.S., 1930, S.A. 5.)
Act to amend further the Industrial Conciliation Act, 1924. Assented
to 7 March 1933.
(L.S., 1933, S.A. 1.)
Act to amplify the powers of the Wage Board and of the Minister
in regard to the fixing of minimum remuneration for piece work, and to
validate and amplify certain wage determinations made under the Wage
Act, 1925. No. 16 of 1935. Gazetted 10 April 1935.
(L.S., 1935, S.A. 1.)
SPAIN
Act respecting contracts of employment. Dated 21 November 1931.
(L.S., 1931, Sp. 14.)
Act respecting joint boards for industrial and rural labour, rural property
and agricultural production and industries. Dated 27 November 1931.
(L.S., 1931, Sp. 15.)

Decree to consolidate the law relating to joint boards. Dated 29 August
1935.
(L.S., 1935, Sp. 3.)

APPENDIX in

285

Act of 30 May 1936 to repeal the Act of 16 July 1935 and to enforce anew
the Act of 27 November 1931.
(Will be published in the Legislative Series 1936.)

SWEDEN
Act respecting collective contracts. Dated 22 June 1928.
(L.S., 1928, Swe. 2.)

Act respecting the Labour Court. Dated 22 June 1928.
(L.S., 1928, Swe. 3.)
Act to supplement Act No. 245 of 28 May 1920 respecting conciliation
in industrial disputes. Dated 28 June 1935.
(L.S., 1920, Swe. 6-8.)
(L.S., 1935, Swe. 4.)

SWITZERLAND
Federal Code of Obligations : Art. 321-323.
TURKEY
Labour Act, No. 3008. Dated 8 June 193G.
(L.S., 1936, Tur. 2.)
UNITED STATES OF AMERICA
An Act to encourage national industrial recovery, to foster fair competition, and to provide for the construction of certain useful public works
a n d for other purposes. Approved 16 June 1933.
(L.S., 1933, U.S.A. 2.)

An Act to diminish the causes of labor disputes burdening or obstructing
interstate and foreign commerce, to create a National Labor Relations
Board, and for other purposes. Approved 5 July 1935.
(L.S., 1936, U.S.A. 1.)

U.S.S.R.
Order of the A.R.C.E.C. respecting the bringing into operation of the
Labour Code of the R.F.S.S.R. (1922 edition). Dated 9 November 1922.
(L.S., 1922, Busa. 1.)

Regulations and Orders : Collective Contracts. Dated 2 February, 19
February, 14 June, 17 October and 14 November 1923.
(L.S., 1923, Russ. 7.)

Order of the Council of Labour and Defence of the Union of Soviet
Socialist Republics concerning the conclusion of collective contracts and
the settlement of disputes in the principal industrial undertakings. Dated
6 June 1924.
(L.S., 1924, Ruse. 8.)
Order of the All-Russian Central Executive Committee and the Council
of People's Commissaries of the Russian Socialist Federative Soviet Republic,
to amend Section 101 of the Civil Code, Section 266 of the Civil Procedure
Code, and Section 93 of the Labour Code. Dated 11 August 1924.
(L.S., 1924, Russ. 5.)

286

APPENDIX

III

Order of the Council of Labour and Defence respecting the procedure
for the conclusion of collective contracts by State industrial undertakings
of importance to the whole Union, and the settlement of disputes arising
in connection with the conclusion and carrying out of the said contracts.
Dated 8 December 1926.
(L.S., 1926, Rues. 8.)

Order No. 108 of the People's Labour Commissariat of the Union of
Soviet Socialist Republics, respecting the procedure for the registration of
collective contracts. Dated 18 February 1928.
Regulations No. 419 approved b y the People's Labour Commissariat
of the U.S.S.R., respecting the conditions of employment of congress
stenographers. Dated 21 July 1928.
(L.S., 1928, Bliss. 12 [A] and fJB].)

Order No. 129 of the People's Labour Commissariat of the U.S.S.R.,
respecting the compulsory registration of general agreements and liability
for delay in the registration of collective agreements. Dated 10 July 1932.
(L.S., 1932, Russ. 4.)

VENEZUELA
Labour Law, of 16 July 1936. (Part I I , Chap. I l l , sees. 32 to 37).
(L.S., 1936, Ven. 2.)

YUGOSLAVIA
Industrial Act. Dated 5 November 1931.
(L.S., 1931, Yug. 4.)