9a["Good Wages Court", The Independent (Footscray, Vic.), Saturday 09 November 1907, page 2]

GOOD WAGES COURT

EXCISE EXEMPTION CERTIFICATE.

ME H. V. McKAY's APPLICATION REFUSED.

Mr. Justice Higgins, as President of the Good Wages Court, delivered judgment yesterday on the application of Mr H. V. McKay, of the Sunshine Harvester Works, for a certificate of exemption from payment of duty on machines manufactured under the provisions of the Excise Tariff Act. His Honor, in the course of his judgment said:--My sole duty is to ascertain whether the conditions of remuneration submitted to me are "fair and reasonable." I have not the function of finding out whether the rates of wages have or have not been, in fact, paid since the 1st January 1907, when this Act came into force. I selected Mr McKay's application out of some 112 made by Victorian manufacturers, because I found the factory was one of the largest, and had the greatest number of employees, and because his application was keenly fought. The Act left me free to inform my mind as best I could, and I was at full liberty to limit the evidence: or even to act without evidence.

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 they cannot get by the ordinary system of individual bargaining with employers. If Parliament meant that the conditions shall be such as they can get by individual bargaining, it meant that those conditions are to be fair and reasonable which employees will accept and which employees will give in contracts of service, and there would have been no need for the provision. The remuneration could safely have been left to the usual but unequal contest--the "higgling of the market" for labor, with that pressure for bread on one side and the pressure for profits on the other. The standard of "fair and reasonable" must therefore be something else, and I cannot think of any other standard appropriate than the normal needs of the average employee, regarded as a human being, living in a civilised country[sic].

I cannot think that an employer and a workman contract on an equal footing or make a "fair" agreement as to wages when the workman submits to work for a low wage to avoid starvation or pauperism (or something like it) for himself and his family; or that the agreement is "reasonable" if it does not carry a wage sufficient to ensure the workman food, shelter, clothing, frugal comfort, provision for evil days, etc., as well as a special reward for the special skill of an artisan.

It was strongly urged before me that I should compel the applicant to disclose his books so as to enable the objectors to see what are his profits; and that if the profits are large the wages should be large also. The applicant objected to such disclosure and I declined to compel him. I cannot find anything in the Act to suggest such a scheme of profit-sharing.

There is far more ground for the view that under this section the fair and reasonable remuneration has to be paid before profits are ascertained--that it stands on the same level as the cost of the raw material of the manufacture.

Some very interesting evidence has been given by working men's wives and others as to the cost of living, and the evidence has been absolutely uncontradicted. . . . There is no doubt that there has been within the last year or two a progressive rise in rents and in the price of meat, and in the price of many of the modest requirements of the worker's household. Taking the rent at 7s, the necessary average weekly expenditure for a laborer's home of five persons would seem to be about 1/12/5, but this expenditure does not include light, clothes, boots, furniture and utensils (being casual and not weekly expenditure), rates, life insurance, savings, etc. If the wages are 6s a day the balance is only 3/7 to cover all this.

His Honor, continuing, said that he found that the ruling rate among public bodies for laborers was 7/- a day. His 7/6, which was the rate paid in Adelaide to laborers in this very industry. He, however, put the minimum at 7/-, and said that he could not declare an employer's remuneration fair and reasonable where it was less than that wage, as was the case with Mr McKay.

"I could stop here," continued His Honor, "take no further trouble, and simply refuse to declare that the applicant's conditions as to remuneration are fair and reasonable. But this course would leave the applicant in the dark as to the wages paid to his other employes. He might hereafter pay the 7/- to his laborers, and come again for exemption, and then find that his other wages are regarded I as too low."

His Honor then addressed himself to each class of labor indicated in the standard, . . .

9b[http://www.abc.net.au/federation/fedstory/ep3/ep3_events.htm]

...

In 1906 the Protectionist Party and the Australian Labour Party were united in an effort to introduce measures that would guarantee workers the right to fare and reasonable wages and working conditions. It was called 'New Protection'. The Constitution did not give the Commonwealth direct power to legislate on these matters. So, in order to sidestep, the Excise Tariff (Agricultural Machinery) Act was established. It created an excise on locally made machinery that would be waived if workers were paid 'fair and reasonable' wages.

In 1907 Melbourne based manufacturer and owner of the Harvester Company, Hugh Victor McKay applied to the Federal Conciliation and Arbitration Court for a remission of the excise duty established under the Excise Tariff (Agricultural Machinery) Act. He claimed that his workers already received 'fair and reasonable' wages. The Agricultural Implement Makers Society, the union that covered McKay's workers, opposed the application.

Reasonable And Frugal Comfort

The Harvester hearing took place in Melbourne from October 7 until the November 8, 1907. The Arbitration Court's newly appointed president, Henry Bournes Higgins, heard the case.

"... (Higgins had) courtly manners and a scholarly mind with ultra radicalism, almost priggish lofty principles and quixotic independence- he had a deep compassion for the under privileged."

P.G. McCarthy, 'Justice Higgins and the Harvester Judgement' in Jill Roe (ed) 'Social Policy in Australia 1901 - 1975', Cassell, 1976

A definition of a 'fair and reasonable wage' had to be established. Higgins employed Pope Leo XIII's encyclical Rerum Novarum, establishing that remuneration "must be enough to support the wage earner in reasonable and frugal comfort". He heard evidence from workers and their wives. Following, he accounted for light, clothes, boots, furniture, life insurance, union pay, sickness, books, newspapers, alcohol, tobacco, transport fares and so on.

Higgins settled on a figure of 2 pounds and 2 shillings per week or 7 shillings a day as a minimum wage. This was higher than what McKay's employees were receiving. McKay was ordered to pay 20,000 pounds in duty.