The conventional economic model is that both employer and employee enjoy equal bargaining power to set wages and conditions.
[3] This asserts that both parties are able to agree on a fair market price for the cost of labour free from distortions.
Regulation of employment in the early nineteenth century was simply based on the common law concepts of contract.
It was also possible under various “Master and Servant Acts” for employees who broke employment contracts to be prosecuted for a breach of the criminal law.
However, a declining labour market meant that employers were not prepared to accept arbitration and Patmore reports that only two of twenty two cases under that law were settled.
[6] In 1899 a new law made under the Conciliation and Arbitration Act[7] which gave the Minister for Labour of the New South Wales Government the power to mediate any industrial dispute.
[8] In proposing change, Bernhard Wise said:“I believe that those who have most experience of courts of law will be the first to admit that their machinery is unsuitable for dealing with these subjects.
Not only are they overburdened with business – and so there would be delay where urgency was of the utmost importance if we would prevent industrial warfare – but their forms of procedure and their rules do not readily lend themselves to dealing with these delicate questions, half of fact or entirely of fact, that would have to be determined by the tribunal called upon to interpret an industrial agreement.
It is not our judges who determine facts under our system, but our juries; and surely everyone will see that there would be a waste of time, a needless cost, and in the end a most unsatisfactory result, if it were necessary to refer on every occasion to a jury, or even to a bench of lawyers, the question whether or not an industrial agreement had been broken, or whether the altered conditions of a trade required the rate of wages to be lowered or raised.”[9]The failure of the previous systems led the New South Wales Government to introduce a new means of dealing with industrial disputes.
Industrial disputes were now to be determined by compulsory arbitration in a court, and not through voluntary conciliation or through wage boards.
Unions at the time usually advanced the argument in court that apprentice numbers should be restricted so that they could be properly trained.
President Charles Heydon rejected this argument and considered that it was only a way of unions restricting the number of members in the industry.
[16] Sexton refers to a speech by parliamentarian George Beeby where he said:“Unfortunately, the High Court, which, with all respect to the learned gentlemen that constitute it, is entirely out of touch with the industrial affairs of this country and out of sympathy with industrial unions, took a strict view of the law, and gave a certain judgment, whereas it could have given just as logical a judgment in favour of the trade-union that had the case before the court”.
[18]Charles Heydon, the former President was appointed the judge of the Court,[13] assisted by a system of Industrial Boards.