McKay,[1] commonly referred to as the Harvester case, is a landmark Australian labour law decision of the Commonwealth Court of Conciliation and Arbitration.

Higgins declared that "fair and reasonable" wages for an unskilled male worker required a living wage that was sufficient for "a human being in a civilised community" to support a wife and three children in "frugal comfort", while a skilled worker should receive an additional margin for their skills, regardless of the employer's capacity to pay.

While the High Court of Australia in 1908 held that the Excise Tariff Act 1906 was invalid in R v Barger,[3] the judgment nevertheless continued to be the basis for the minimum wage system that extended to half of the Australian workforce in less than 20 years.

[8][9] In implementing this policy, the Commonwealth government introduced two bills,[10] that would become the Customs Tariff Act 1906,[11] and the Excise Tariff Act 1906,[2] Higgins was a member of the Australian Parliament and spoke in support of the bills that imposed custom and excise duties that were payable on certain agricultural machinery, including stripper harvesters.

[12] The Excise Tariff Act 1906 contained a proviso that the excise would not be payable if the manufacturer paid "fair and reasonable" wages as follows: Provided that this Act shall not apply to goods manufactured by any person in any part of the Commonwealth under conditions as to remuneration of labour which— H. B. Higgins had been a member of the Parliament of Victoria and in 1896 supported the trial introduction of a minimum wage.

He successfully argued at the 1897-1898 conventions that the constitution should contain a guarantee of religious freedom, and also a provision giving the federal government the power to make laws relating to the conciliation and arbitration of industrial disputes.

McKay had a reputation for discouraging union membership,[9] and had previously closed his factory at Ballarat and moved to the Sunshine Harvester Works to avoid paying workers under the determination of a wages board.

The employees at the Sunshine Harvester factory required less skill, judgement and discretion because of mechanisation which had simplified and standardised the work.

In defining a 'fair and reasonable wage', Higgins (without explicit acknowledgement) employed Pope Leo XIII's Rerum novarum of 1891, an open letter to all the bishops that addressed the condition of the working classes.

The provision for 'fair and reasonable' remuneration is obviously designed for the benefit of the employees in the industry; and it must be meant to secure to them something which they cannot get by the ordinary system of individual bargaining with employers....

If A lets B have the use of his horses on the terms that he gives them fair and reasonable treatment, I have no doubt that it is B's duty to give them proper food and water, and such shelter and rest as they need; and, as wages are the means of obtaining commodities, surely the State in stipulating for fair and reasonable remuneration for the employees means that the wages shall be sufficient to provide these things, and clothing and a condition of frugal comfort estimated by current human standards.Higgins also said the following.

I regard the applicant's undertaking as a marvel of enterprise, energy and pluck… he is allowed – if my view of the Act is correct – to make any profits that he can and they are not subject to investigation.

But when he chooses, in the course of his economies, to economise at the expense of human life, when his economy involves the withholding from his employees of reasonable remuneration, or reasonable conditions of human existence, then, as I understand the Act, Parliament insists on the payment of the Excise duty.Higgins J thought the probable effect of the decision would be that McKay must elect between paying wages according to the standard he set or paying the excise duties.

[9] Former Prime Minister Bob Hawke described the Harvester judgment as foundationally important, stating "The philosophy was so right and so in tune with the Australian ethos that it spread.

The Worker described it as a triumph of Equity and that it marked the beginning of an epoch, with the inclusion of the last phase of human life left outside the scope of law.

The work of packing at the factory was "essentially adapted for women with their superior deftness and the suppleness of fingers" and this apparently justified a lower minimum wage of 9 pence per hour, which would provide for the woman's food, shelter and clothing but not that of her family.