IV. ARBITRATION AND MEDIATION BY OUTSIDE PARTIES. An important distinction which must always be borne in mind in considering the English experience as to industrial disputes is that, already explained, between conciliation and arbitration. Although the words are frequently used as synonymous they properly stand for two very different practices. Boards of conciliation usually consist of an equal number of employers and employees, and their general function is to discuss and bring about agreements to which all the members consent. Arbitration, on the other hand, implying a definite decision of disputes by some disinterested party, is naturally resorted to for the most part only after failure to bring about an agreement by conciliatory methods. In a number of the trades in Great Britain which have permanent boards of conciliation the rules provide for the reference of such matters as can not be otherwise settled to an umpire or arbitrator. The practice is indeed much more common in Great Britain than in those trades in the United States which have adopted the conciliation and agreement system on a large scale. Even general questions relating to the future conditions of labor are occassionally referred to outside arbitrators. This is the case under such important systems as that in the manufactured iron and steel trades of the North of England, the mining trade in the federated districts, and the boot and shoe trade. By some of these agreements it is provided that such arbitrators are to be specially chosen for each dispute which arises; more often the arbitrator is agreed upon in advance and retains his position for many years. Arbitrators are usually prominent public men. In some cases they are actively engaged in industry. Thus, Sir David Dale was for many years the umpire in the manufactured iron trade. More often perhaps the arbitrator is a statesman or man of letters not engaged in industry. In a few trades the decisions of these arbitrators have been frequently called for, but in a greater number of trades the occasions for action by them have proved rare, both sides being far from desirous to have the conditions of employment settled by an outside party. Indeed, it can scarcely be said that either workingmen as a class or employers as a class strongly favor, as an ordinary practice, the calling in of persons from outside the trade to determine the relations of employers or employees. (See expressions on this subject below, p. 484ff.) While apparently the decisions of arbitrators once rendered have been carried out loyally, they have yet often been a source of discontent on one side or both. So far we have been speaking chiefly of arbitration of disputes in advance of strikes and under previous agreement for their submission to such decision. In the absence of such formal arrangements for arbitration, the parties to particular disputes in Great Britain not infrequently submit them, before or after a strike or lockout has intervened, to impartial arbitrators. Indeed some very important strikes have been settled in this way. Either the disputants have agreed to submit to the decision of outside persons or the latter have themselves taken the initiative in offering mediation. The most remarkable case of this kind was that of the prolonged coal strike of 1893. So great was the public injury from the strike that Gladstone himself, then prime minister, urged the operators and owners to come to an agreement, and finally asked Lord Rosebery to act as the mediator. Through his social position Lord Rosebery was able to bring about a friendly conference between the reprensentatives of the two sides and a mutual agreement was soon effected. Again, in 1895, a great strike in the boot and shoe trade was terminated largely through the mediation of Sir Courtenay Boyle, permanent secretary of the board of trade, and in 1896 Lord James, a cabinet minister, brought about a settlement of the strike in the Clyde and Belfast shipbuilding trades. Other conspicuous instances of successful interventions of this kind were those in which a committee of distinguished persons terminated the London Dock strike of 1889, and in which the bishop of Durham brought to an end the miners' strike in that county in 1892. It has been not unusual for mayors of towns or other local authorities to offer this kind of intervention. Regular boards for the purpose of mediation have been established in a number of the larger industrial centers. These are more fully described below.' 1 Webb, Industrial Democracy, I, 240, V. GENERAL BOARDS OF CONCILIATION AND ARBITRATION IN MUNICIPALITIES. In several English manufacturing centers boards of conciliation, or perhaps more properly of mediation, have recently been established, usually more or less under the influence of the local board of trade, but sometimes apparently at the instance of the city government. Thus there is in Leicester what is known as the mayor's arbitration board, composed of men of entirely different trades. In connection with this general board individual boards of arbitration are provided for in the particular trades, with right of appeal to the higher board. În Bradford and Leeds boards have been established of a somewhat similar nature, under the leadership of the chamber of commerce. These boards, not resting formally upon agreements between employers and employees, have no final power unless disputes be submitted to them by common consent, and their general intention appears to be to bring parties to labor disputes into conference with one another.1 The number of these district boards of conciliation and arbitration is fully 20, but their activity has hitherto been very limited. The report of the British board of trade on strikes and lockouts scarcely mentions a single strike which has been settled by these boards during the past five years, and the number of cases of minor disputes not resulting in strikes which have come before them is also insignificant. Nevertheless the movement is interesting, as showing the general desire for industrial peace, and doubtless it has had an influence in bringing about the establishment of trade boards in certain cases. In the opinion of the Royal Labor Commission the system appears to be especially well adapted to places where a number of different industries are carried on, while trade boards of conciliation seem most suited to those staple industries which are carried on in special districts by large masses of men. The most important of these district boards of conciliation is the London Conciliation Board, which was a direct outcome of the great strike of dock laborers in London in 1889. It was organized at the instance of the London board of trade. Each of the leading groups of trades in the city has a separate conciliation committee, composed of an equal number of employers and employees, to which any dispute in the trade may be submitted, if both sides agree to do so, with provision for appeal to a central board composed of 12 members chosen by employers and 12 by employees, together with 1 representative of employers and 1 of employees from each body or trade in the city representing more than 1,000 persons. If this board can not reach an agreement, or if its decision is not accepted, it offers to the parties facilities for arbitration, although, of course, there is no compulsion upon them to arbitrate. It has been found that it is considered a sign of weakness for one contestant to appeal for the good offices of the board, so that its activity has chiefly been in the direction of mediation on its own initiative. The amount of work accomplished is therefore somewhat limited." I. That a permanent body be constituted, to be called the London conciliation board, which shall be affiliated to the London chamber of commerce, and that its composition shall be as follows, viz: (a) Twelve members representing capital or employers to be elected by the council of the chamber. (b) Twelve members representing labor, to be elected by the employed. (e) To these shall be added representatives from the separate trade-conciliation committees as hereinafter referred to. (d) Four members, viz, the lord mayor of London, or some member of the corporation to be nominated by him, the chairman of the London county council, or some member of the council to be nominated by him, and two representatives of London labor organizations to be selected by the labor representatives on the board. The formation of the board shall date from its first meeting, on December 12, 1890. Its original members shall hold office for not exceeding three years, as may have been or may be from time to time determined by the electing bodies, respectively. II. The duties of the London Conciliation Board shall be as follows: (a) To promote amicable methods of settling labor disputes and the prevention of strikes and lockouts generally, and also especially in the following methods: 1. They shall, in the first instance, invite both parties to the dispute to a friendly conference with each other, offering the rooms of the chamber of commerce as a convenient place of meeting. Members of the board can be present at this conference, or otherwise, at the pleasure of the disputants. 2. In the event of the disputants not being able to arrive at a settlement between themselves, they shall be invited to lay their respective cases before the board, with a view to receiving their advice, mediation, or assistance. Or should the disputants prefer it, the board would assist them in selecting arbitrators, to whom the questions at issue might be submitted for decision. 3. The utmost efforts of the board shall in the meantime and in all cases be exerted to prevent, if possible, the occurrence or continuance of a strike or lockout, until after all attempts at conciliation shall have been exhausted. The London Conciliation Board shall not constitute itself a body of arbitrators, except at the VI. RESPONSIBILITY OF TRADE UNIONS IN CONNECTION WITH Undoubtedly one of the chief reasons why the system of conciliation and arbitration has been more successful in Great Britain than in any other country is the strong organization of trade unions and their consequent moral responsibility. Employers are willing to negotiate with organizations which are able and likely to carry out their agreements or to abide by the decisions of arbitrators. To be sure, as we shall see elsewhere, p. 619, trade unions in Great Britain are expressly relieved from legal responsibility for their acts and agreements in connection with relation to employers. It is not because of any power to fine or to punish the members of the unions, or the body collectively, for failure to carry out agree express desire of both parties to a dispute, to be signified in writing, but shall in preference, should other methods of conciliation fail, offer to assist the disputants in the selection of arbitrators chosen either from its own body or otherwise. Any dispute coming before the board shall, in the first instance, be referred to a conciliation committee of the particular trade to which the disputants belong, should such a committee have been formed and affiliated to the chamber, (b) To collect information as to the wages paid and other conditions of labor prevailing in other places where trades or industries similar to those of London are carried on, and especially as regards localities either in the United Kingdom or abroad where there is competition with the trade of London. Such information shall be especially placed at the disposa. of any disputants who may seek the assistance of the London Conciliation Board. III. The separate trade conciliation committees shall be composed of equal numbers of employers and of employed. Each trade shall elect its own representatives, employers, and employed voting separately for the election of their respective representatives. The number of members and the general rules of procedure shall be determined by each particular trade, subject to the approval of the London Conciliation Board. The trade conciliation committees shall be affiliated to the London Chamber of Commerce, and shall be represented upon the London Conciliation Board. Any trade conciliation committee constituted as above, representing a body or trade in the metropolitan districts of more than 1,000 individuals, shall send 2 representatives to sit on the London Conciliation Board, 1 being an employer and the other an operative workman, each to be separately elected by employers and employed, respectively. In the case of trade conciliation committees representing bodies or trades in the met ropolitan districts smaller in number than 1,000 individuals, two or more such committees may unite together to elect joint representatives to the London Conciliation Board. It shall be the duty of the trade conciliation committees to discuss matters of contention in their respective trades; to endeavor amicably to arrange the same, and in general to promote the interests of their trade by discussion and mutual agreement. In the event of their not being able to arrange any particular dispute, they will refer the same to the London Conciliation Board, and in the meantime use their most strenuous endeavors to prevent any strike or lockout until after the London Conciliation Board shall have exhausted all reasonable means of settlement. They may from time to time consider and report to the London Conciliation Board upon any matter affecting the interests of their particular trade upon which it may be thought desirable to employ the action or influence of the London Chamber of Commerce as a body. IV. The London Chamber of Commerce places its rooms at the disposition of the London Conciliation Board of the trade conciliation committees for holding their meetings. Any alterations in the rules and regulations of these bodies, which may be from time to time proposed, shall be submitted for approval to the council of the chamber. V. The above regulations shall be subject to by-laws, to be specially framed for the purpose, and which shall be open to amendment as required from time to time, on agreement between the council of the chamber of commerce and the London Conciliation Board. BY-LAWS. Trade conciliation committees. 1. Any trade carrying on its operations within the metropolis or in any port of London, or within a reasonable distance thereof, can form a conciliation committee of its own trade under the foregoing rules. 2. Each committee shall elect its own chairman, who may be either a member of the committee or a person chosen from outside the committee. Should the chairman be a member of the committee, he shall not have a second or casting vote. If the committee, however, should elect a chairman not being a member of the committee, either as general chairman, or to preside on any special occasion, he shall not vote with the committee, and the committee shall decide at the time of his election whether he shall have a casting vote or otherwise. The committee shall also elect a vicechairman who shall, in the absence of the chairman, exercise the same power as the chairman. 3. In the event of any question being put to the vote at any meeting where the number of representatives of the employers and employed shall not happen to be equal, any member present shall have the right to claim that the voting power of each order shall be equal, irrespective of the numbers present. In this case the chairman shall call upon the order whose numbers predominate to exclude from the voting such a number of their order for the time being as shall suffice to produce an equality of voting between the two orders, the chairman counting himself as one of the order to which he belongs. 4. A quorum shall consist of not less than one-third of each order. London Conciliation Board. 5. The board shall elect its own chairman and vice-chairman, who shall vote with the board, but shall not have a second or casting vote. 6. The regulations of by-law 3, as laid down for the guidance of the trade conciliation committees, shall also apply to the London Conciliation Board. 7. The chairman shall be selected from the employers of labor on the board and the vice-chairman from among the employed. ments or to abide by the decision of arbitrators, that trade unions are more responsible in Great Britain than elsewhere. The responsibility grows out of the fact that the unions, from long experience, recognize that if they desire to retain the respect of their employers they must carry out their agreements. The influence of public opinion is likewise extremely strong in forcing them to do so. Again, the control of the union over its members is made strong in various ways. The organizations are so extensive and so powerful that if any small number of members should leave rather than carry out the order of their officers, these members would probably be unable to find employment in their trades. Moreover, the English unions mostly have an important system of benefits. If a member severs his connection with the union, refusing to carry out its agreements, he forfeits the right to these benefits and loses the advantage of the contributions which he has made from year to year in order to secure them. There are those, indeed, who advocate an increase in the legal responsibility of trade unions. It is true that agreements have not always been carried out faithfully and that unions as a body, or groups of their members, have at times refused to abide by the decisions of joint boards of conciliation or of outside arbitrators. The Royal Commission on Labor, while recognizing this difficulty, was unable to agree in recommending measures for increasing the legal responsibility of unions. An important minority, headed by the Duke of Devonshire, did strongly urge legislation making unions capable of entering into legally enforceable agreements. This minority, however, was composed wholly of employers or of members of the leisured class, and their proposition was strongly opposed by the labor members of the commission. The views of the royal commission and the other views just referred to are more fully set forth in the section on the legal position of trade unions, p. 622. VII. UNIONS OF EMPLOYERS AND EMPLOYEES. Considerable attention has lately been attracted to a new form of industrial combination which is now becoming prominent in Great Britain, and which owes its origin and strength largely to Mr. E. J. Smith, of Birmingham. An important feature of the system is the establishment of joint wages and conciliation boards. The chief trades mentioned in this connection are those engaged in the manufacture of bedsteads, spring mattresses, fenders, electrical fittings, brass cased tubes, and china furniture. Conciliation and arbitration have also been employed extensively by the National Society of Amalgamated Brassworkers. (Bulletin Department of Labor, pp 536–540.) The following extracts from a statement by Mr. Walter T. Griffin, United States commercial agent at Limoges, summarize the system: ' "To prevent manufacturing being carried on at a pecuniary loss, a minimum scale is adopted. A representative article, like a certain pattern of bedstead or one dozen plates of a given size and shape, is taken as a basis to ascertain how much it costs to manufacture; the manufacturers agree on the minimum rate at which it can be made; then a certain percentage is added for profits, and this forms the minimum selling price for that article. The manufacturers bind themselves by the rules of the alliance not to sell without the consent of the alliance below this minimum price. The workmen are also offered certain interests in the success of the business, and, both parties being mutually dependent, there is no occasion for strikes, lockouts, or trade disputes. * * * * "The rules of the alliance, as carefully laid down, are as follows: "First. A thorough examination into the costs of production is made in every trade. * Up to date Mr. Smith has had before him some 20 trades for examination, and he says that he has not yet found a trade in which one-third of the manufacturers had learned or practiced the art of cost taking. * "Second. The cost taking includes the fixing of uniform rates for working expenses, carriage, cash discounts, selling commissions, merchants' allowances, rebates to large buyers, and all the incidental costs of trading. Large buyers are given a rebate according to the amount of their purchases from the combination every 6 months. This is obtained from the secretary of the alliance only, and is granted on all purchases, thus enabling the buyer to distribute his orders throughout the whole alliance if it suits his purpose to do so. The system of fixing transportation charges places every member of the combination on an equal footing all over the world, no matter where his works may be situated. To all of these expenses is added a proportion of profit which is accepted as the minimum. 1 Quoted in Bulletin of the National Association of Wool Manufacturers, September, 1899, pp. 282-286, I C-VOL XVII-01-31 "Third. Rules are drawn up which govern the alliance and arrange for the investigation of complaints (or even suspicions) of underselling or departure from the regulations. The defendant never knows who his complainant is, * * * * * so that friction is avoided and inquiry encouraged. * "Fourth. In many of the combinations compensation against loss is guaran teed to all members. It is very significant, however, that not a single application has been made. Various grades of selling prices are also adopted whenever a trade depends upon the quality of the goods and the reputation of makers, so that the unknown and less skillful maker may have a fair chance. It is an automatic arrangement, however, which is adjusted every 6 months, so that no onecan abuse a privilege by selling in a lower grade and taking away the trade of a competitor. Fifth. Every combination has a large fund for fighting and other purposes. This fund is secured by means of a guaranty at a bank, so that the money does not have to be drawn from the business. Each member guarantees in proportion to his standing in the trade, and he is responsible only for the amount against his 66 name. * * * 'Sixth. The ordinary expenses of management are met by quarterly levies, made in the same way. "Seventh. A foreign committee is appointed for the collection of statistics and examination into competition. It also makes recommendations, from time to time, as to how to meet this competition. * 66 * * Eighth. There is no attempt at monopoly or at making a close trade in any of the combinations; due regard is paid to claims of an applicant for admission to a combination. * * * "Ninth. The inducements offered to the work people are as follows: 66 ‘(a) The wages, hours, and conditions of labor existing at the time the employers' alliance is completed are guaranteed as long as the alliance lasts. * * "(b) A wages and conciliation board is formed, in which the workmen have an equal right in every way. This board has absolute power to settle all disputes which can not be arranged in the respective works, on terms in keeping with the rules of each alliance. * But in all new questions its power is absolute; and if an agreement can not be reached an arbitrator is called in, whose decision must be accepted by both parties. So far, an arbitrator has never been needed. Until the dispute is settled the workmen accept the employers' terms under protest. When the question is settled by the board the decision is retroactive, so that the delay necessary to adjust the matter is not prejudicial to either party. Strikes and lockouts are thus made impossible. 66 * * * (c) The first rearrangement of the selling prices carries with it a wage bonus for the workman in proportion to the amount of the average advance. Generally speaking, the first advance on the selling price carries with it a bonus of 10 per cent on the wages, but this varies with the proportion of the wages included in the cost of production; sometimes it is only 5 per cent bonus. Any additional advance in the selling price must be made by the consent of the whole board, and carries with it a bonus on the wages, in a proportion agreed upon by the original alliance, and depending mainly on the proportion which wages bear in the selling prices of the articles. Generally it is a per cent bonus on a 10 per cent advance. This, however, is subject to a sliding scale; i. e., in the event of a reduction being necessary in the selling price, from any reason whatsoever, the bonuses are reduced, proportionately, until the first bonus is reached. "(d) The employers, having formed a union amongst themselves, give their support to trades unionism in every way. They employ none but unionists, so that the workmen must form a union if none exists. On the other hand, the workmen refuse to work for any but associated employers. If, therefore, any member of an alliance leaves it or is expelled for any just reason, his workmen must leave his employment. While such a dispute lasts, the cost is shared equally between the two associations." * Mr. Smith has written a little book known as "The New Trades Combination Movement" defending his proposed plan. Especially as regards its effect upon the condition of the workmen, he uses, in part, the following language: "The new combination scheme aims at an improvement in the condition of the work people, the recognition of their right to participate in the benefits arising from increased profits, and the drawing into close bonds of unity employers and employed. This object, however, is advanced as being part of a business transaction. Philanthropy, as such, is not pleaded as being part even of the motive. 1 E. J. Smith, The New Trades Combination Movement, London, 1899, pp. 51-65. |