Federated Municipal and Shire Council Employees' Union of Australia v. Melbourne Corporation

26 CLR 508

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(Decision by: ISAACS J (2), RICH J (2)) Court:

Judges: Griffith CJ
Barton J (1)
Barton J (2)
Isaacs J (1)
Isaacs J (2)
Higgins J (1)
Higgins J (2)
Gavan Duffy J (1)
Gavan Duffy (2)
Powers J (1)
Powers J (2)
Rich J (1)
Rich J (2)

Judgment date: 20 June 1919

MELBOURNE

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Decision by:
ISAACS J (2)
RICH J (2)

The first branch of this case has already been disposed of. Before dealing with the second branch, however, reference may usefully be made to some cases decided in England and Scotland, under the Income Tax Act, in which municipalities claimed exemptions which were denied, as to certain matters, on the principle that the municipalities were not, qua these matters, exercising Crown functions. They are Attorney-General v Scott [ 4 ], Adam v Maughan [ 5 ] and Brown v Smith [ 6 ]. The second branch raises the question whether the dispute referred to in the case stated is an "industrial dispute" within the Act and the Constitution.

Recent amendments of the Act have so widened it as to make any contention that the matter is not, within its provisions, practically unarguable. It cannot be denied that from the standpoint of the municipalities the works in question are "undertakings," nor can it be contended that the employees are not carrying on an industry within the meaning of the Act. The argument ultimately rested on the construction of pl. XXXV. of s. 51 of the Constitution. The matter is certainly extremely important not only to the municipalities as corporations, and to the large and ever-increasing body of workers in their employ, but to the whole community. The special responsibility of this Court, under s. 74 of the Constitution, interpreted by the case of Jones v Commonwealth Court of Conciliation and Arbitration [ 7 ], in delimiting Commonwealth authority over State corporations demands a close examination of the matter.

The respondents' contentions may be thus stated: (a) they say that in 1900, when the Constitution was passed, the phrase "industrial dispute" meant "trade dispute," and that "trade dispute" meant a dispute in "trade" carried on by the employer for profit; (b) they also say that "trade disputes" as then known were limited to disputes between employers and workmen, or workmen and workmen, meaning by "workmen" manual labourers only; (c) they further say that an organization of workmen disputing with the employer, must, in order to create "a trade dispute," be one composed exclusively of workmen of that particular trade. For these reasons, it is said, the Act, assuming it to include by its terms the present dispute, goes beyond the Constitution.

It must be evident that, with the industrial progress of this Commonwealth, the respondents' argument would lead to the result that recognized later industrial disputes within every State, if they in fact extended over the continent so as to become one Australian dispute and therefore assumed a unity of character beyond the control of each and every State, would also be beyond Commonwealth control (see Builders' Labourers' Case [ 8 ]). To place such a limitation on the unqualified expression of the Constitution, "industrial disputes," would lead to serious public loss and, indeed, to anarchy. What is it that should drive the Court to that construction? It would be pedantic to quote the many observations we find in American cases-approved by this Court-as to the breadth of construction to be given to constitutional powers by reason of the nature and object of a Constitution. The words of O'Connor J. on this subject in the Jumbunna Case [ 9 ] and the Saw-millers' Case [ 10 ], approved in Australian Tramway Employees' Association v Prahran and Malvern Tramway Trust [ 11 ], should, however, be specially borne in mind. Reference may also be made to "the commanding principle" of construction stated so clearly by Lord Shaw in Butler v Fife Coal Co [ 12 ], at p. 178-179. His Lordship's words were quoted in the Builders' Labourers' Case [ 13 ], and need not here be repeated.

One case, however, of great authority, and not yet cited, deserves special mention. In Keates v Lewis Merthyr Consolidated Collieries [ 14 ] the House of Lords had to consider the construction of the Employers and Workmen Act 1875 (38 & 39 Vict. c. 90) under which the County Court has power to adjust claims on the part of either employer or workmen arising out of or incidental to the relation between them. With the particular facts we are unconcerned; but the principles of construction laid down for such a case are of great importance. Lord Atkinson observed [ 15 ]: "In the construction of a Statute it is, of course, at all times, and under all circumstances, permissible to have regard to the state of things existing at the time the Statute was passed, and to the evils which, as appears from its provisions, it was designed to remedy." The question was how far the Court could exercise its powers as to certain matters in the absence of a claim as to those matters. Lord Atkinson added [ 16 ]: "It is obvious that this peculiar quasi-parental jurisdiction was conferred in the interest of industrial peace, and should not be hampered by rules of pleading." Then, with great appositeness to an argument we have heard, that industrial disputes as they exist now, under the influence of later legislation, are wider than those known in 1900, the learned Lord observes [ 17 ]: "And I think nothing could be more unsafe or more misleading than to allow oneself to be deterred from putting upon a Statute the particular construction which the consideration of these things would lead one to adopt, by the apprehension of the prejudicial effect it might have on rights and privileges conferred by subsequent legislation, unthought of at the time the particular Statute was passed." In other words, the fact that incidents unthought of at the time the legislation is passed are not, for that reason, to be excluded if within the natural meaning of the Act construed with reference to its purpose. The same learned Lord, by way of construing the Act in the light of its purpose, says [ 18 ]: "I think that the object of the Statute being, as in my opinion it obviously is, to promote industrial peace, and, with that end, in the case of any dispute between employer and workman coming before the County Court to secure the adjustment of all claims for debt or damages, wages, or other liability subsisting between them, whether connected with this dispute or not, one's attention ought to be directed to see whether there is any provision of the Statute so clear and imperative as to prohibit the exercise of the benevolent jurisdiction conferred by it in such a case as the present." Lord Robson says [ 19 ]: "It is a Statute dealing with industrial disputes, and it seeks to provide certain Courts with a means of checking or composing such disputes so far as they are concerned with small pecuniary claims." Lord Robson continues [ 20 ]:"The first sub-section aims at settling disputes by the adjustment of all subsisting claims, and the second aims at the same object by summary termination of contracts which it may have become irksome and dangerous to enforce. The scope of the Statute being thus wide, there seems to be no ground on which the first sub-section can properly be read in a more restricted sense than its literal wording imports." And as to the effect of subsequent changes by legislation, Lord Robson proceeds [ 21 ]:"It has been pointed out that if the magistrates acted up to the full extent of the jurisdiction given to them by this Statute we might have the most inconvenient consequences. When the Statute was passed the claims between employer and workman were, for the most part, simple in character and small in amount. Since then they have become numerous, complicated, and substantial, and are no longer such as can be conveniently or properly disposed of by a magistrate acting under this sub-section, but most of them are confined to special tribunals, and I doubt if the mischief suggested would be serious in extent. The jurisdiction of the magistrate, however, is discretionary, and it is difficult to think that he would be so unreasonable as to exercise it in some of the extreme and inappropriate cases that have been suggested. In any event we have no power to construe this Statute otherwise than according to its plain intent, and I think this appeal fails." Lord Loreburn L.C. agreed with both judgments.

Now, if, in the interests of industrial peace, so wide a construction can be given to a limited Statute of that character, and with reference to inferior tribunals, how can we, conformably to recognized rules of legal construction, attempt to limit, in an instrument of self-government for this Continent, the simple and comprehensive words "industrial disputes" by any apprehension of what we might imagine would be the effect of a full literal construction, or by conjecturing what was in the minds of the framers of the Constitution, or by the forms industrial disputes have more recently assumed? By the light of history, not only Old World history but also Australian history up to 1900 - much of which can be found in the Badge Case [ 22 ] and the second Tramways Case [ 23 ]-the subject matter is seen to be one which it is essential to the very existence of the nation to control. "Industrial warfare" is no mere figure of speech. It is not the mere phrase of theorists. It is recognized by the law as the correct description of internal conflicts in industrial matters. It was adopted by Lord Loreburn L.C. in Conway v Wade [ 24 ]. Strikes and lock-outs are by him correctly described as "weapons"; and it must be borne steadily in mind that, just to the extent that the term "industrial disputes" in the Constitution should be held to fall short of the actual "industrial disputes" which take place today, and will in all human probability take place in the future, to that extent, since neither State nor Commonwealth can have authority to intervene, force-not national force, but private force-must prevail. To that extent, the strike and the lock-out would be what Lord Loreburn calls "weapons allowed by the law," and, to that extent, the Australian people would be without the means of authoritatively intervening for their own protection by composing the disastrous differences that disorganize their industrial life and carry their injurious consequences into every quarter of the social structure. These are strong and, indeed, irresistible reasons why this Court in discharging its great responsibility of construing pl. XXXV. should not weaken in the smallest degree what Lord Atkinson terms the quasi-parental jurisdiction conferred by the comprehensive literal force of the two simple words "industrial disputes" as they have come down to us in history.

Approaching the construction of that placitum with these considerations, what is the material upon which the mind of the Court should operate in order to mark out the ambit of the expression "industrial disputes"? We apprehend that mere etymology is misleading. The claimant says that "industrial" means simply relating to "industry" in the abstract, whether it be in the exercise of trade, commerce, science or learned professions. Nor can the matter be determined by any theory of convenience or balanced considerations framed by a judicial tribunal either on its own views of fairness and appropriateness or on the speculations of economic or social thinkers. Judges have no personal opinions on those matters; or, what is the same thing, they have no right to express them, or act on them. They must take facts and law as they find them. "Industrial disputes" were, in 1900, matters of fact known to and recognized by the community. They in fact possessed certain essential characteristics. The particular manifestation of such a dispute, while possessing those essentials, might vary from every predecessor in almost every outward respect; but individual differences are consistent with identity of species.

Where, then, are we to look for the criteria of industrial disputes? No better source, we apprehend, exists than what may be called the historians of industrial movements. Among these, the contemporary historians are to be preferred; and of their works, original documents and particularly official documents are par excellence the governing sources. In Australia in 1900 the language of industrialism was precisely that of England: some advance, it is true, had been made here in remedial legislation beyond that of the Imperial Parliament; but the industrial structure, its terminology and its conflicts were similar, and the evils to be guarded against or cured were identical. The very expression "industrial disputes" was in use in both countries, and meant the same thing, in protean forms. From a careful examination of English official records from 1894 to 1914, and a perusal of works of economic and municipal history, as well as the common knowledge of Australian history, the conclusion is reached that the respondents' contentions are not well founded.

One thing is very clear: that the phrase "industrial disputes" had the same inherent signification in 1894 as it had in 1900, and as it has today. Environment does not alter the essential nature of an "industrial dispute," but it necessarily alters its growth, its methods, its circumstances, its proximate causes, its participants and its area of operations, and, if allowed to go unchecked, its remedies. "Industrial disputes" as introduced into the Federal Constitution was a concept applicable to all forms of future industrial conflict that assumed national character and was not an institution in a state of arrested development.

The concept may be thus formulated: Industrial disputes occur when, in relation to operations in which capital and labour are contributed in co-operation for the satisfaction of human wants or desires, those engaged in co-operation dispute as to the basis to be observed, by the parties engaged, respecting either a share of the product or any other terms and conditions of their co-operation. This formula excludes the two extreme contentions of the claimant and the respondents respectively. It excludes, for instance, the legal and the medical professions, because they are not carried on in any intelligible sense by the co-operation of capital and labour and do not come within the sphere of industrialism. It includes, where the necessary co-operation exists, disputes between employers and employees, employees and employees, and employers and employers. It implies that "industry," to lead to an industrial dispute, is not, as the claimant contends, merely industry in the abstract sense, as if it alone effected the result, but it must be acting and be considered in association with its co-operator "capital" in some form so that the result is, in a sense, the outcome of their combined efforts. It also implies that "an industry," in the relevant sense, is not confined to a single enterprise, but means a class of operations in which all persons, employers and employees, are engaged on the same field of industry-not necessarily of commerce-provided by the society in which they exist.

It will be convenient to apply in order to each of the contentions advanced by the respondents, the test of recorded precedent, observing only that the references given are, of course, not exhaustive. The fact that the time at our disposal has not been unlimited is in itself a sufficient reason for that.

1. Whether Industrial Disputes are limited to Operations carried on for Profit.

-It is needless to trace the course of the industrial development by which the worker in a trade ceased to carry on a handicraft in which he naturally passed from apprentice to journeyman, and then to master, and became, by force of the application of various inventions, a mere animated cog in the capitalist's machinery. What is called the "industrial revolution" of the latter part of the eighteenth century and particularly of the nineteenth century so transformed his position as to drive him into combination. The details of the struggles which led to the Acts of 1825, 1871, 1875, 1896 and 1906 in England would be tedious. But the broad fact that emerges is that the position of industrialists, by a singular reversal of what has been thought to be the general current of history, has been gradually changing from one of pure contract to one of status. This, which is the irresistible conclusion from a broad survey of the stream of industrial effort (see Badge Case [ 25 ]), is emphasized by the views of Mr. Sidney Webb in a recent work (The Works Manager Today, at pp. 103 and following). The "industrial revolution" for a long time (see Kidd's Social Evolution pp. 6 and following, and Professor Macgregor on The Evolution of Industry, pp. 43-62) made the workman's labour a mere marketable commodity to be bought at the lowest price that individual competition between workers would permit. The degradation and suffering that ensued, the revolt against the system, the repression of illegal acts, the amelioration of the law, the organization of labour, the gradual recognition of collective bargaining, the introduction of private conciliation and arbitration as well as of industrial laws securing better conditions for workers, are all well-known historical facts.

From about 1882 to 1896 industrial conditions in Australia, by reason of sweating and strikes, received great public and parliamentary attention. Previous judgments have covered portion of the ground. The rest can be read in the report of Mr. Aves to the Imperial Government in the House of Commons Papers for 1908, vol. LXXI. It is sufficient to say here that about 1890 and onwards industrial disputes assumed such importance and magnitude both in England and in Australia and New Zealand as to demand special public attention. In 1890 a Royal Commission was appointed in England, which, after four interim reports, made in 1894 its fifth and final report. (See House of Commons Papers 1894, vol. XXXV., pp. 9 and following) This report has been referred to several times in previous cases, and has formed the basis of much argument here. It is extremely valuable for the present purpose. It shows that "trade disputes," as they were originally called and almost exclusively called, have a larger signification than disputes respecting the "trade" of the employer. They are also called "industrial disputes." For instance, on p. 16 (we shall in all cases, except where otherwise expressed, refer to the continuous ink pagination), there are the expressions "conditions of industry" as the causes of dispute; "industrial disputes," and "industrial interests." So, also, on p. 46, "causes of industrial disputes."

The questions for consideration, as the Commission states them, are these:

(1)

What are the leading causes of modern disputes between employers and employed; out of what conditions of industry do they arise; and what is the effect upon them of organizations on either side?

(2)

By what means or institutions can they be prevented from arising, or, if they do arise, can they be most pacifically settled, without actual conflict in the shape of strikes and lock-outs?

(3)

Can any of these causes of dispute be wholly or partly removed by practicable legislation, due regard being had to the general interests of the country? What is extremely important is this: The report deals with those questions on the basis that the disputes are "labour disputes," that the fundamental consideration is the relation of labour to capital, and that the disputes they are investigating are "trade conflicts" in the sense that they are generally conflicts between those engaged in industry on opposite though co-operating sides. For instance, on p. 17, in the General Review of the Evidence, the first division is "conditions of labour." At p. 46 is par. 100, which has in a previous case been partly quoted, but which throws so much light on the matter as we have to deal with it now that it should be fully quoted. It is as follows: "The essence of most of the disputes between employers and employed is, of course, the shares in which the receipts of their common undertaking shall be divided. By far the largest proportion of disputes, strikes and lock-outs, have direct reference to the increase or diminution of the standard of wages, or the introduction of fixed price lists. Many other disputes relate to the standard of hours, a question which in many cases forms part of a conflict with regard to wages. Other conflicts are undertaken by trade societies with a view to compel employers to recognize them, to strengthen and enlarge their organization, to limit the number of youths entering the trade, to prevent the employment of non-unionists, or sometimes that of women and children, to defend unionist colleagues, or assert unionist rules and customs, and, generally speaking, to protect the monopoly of workmen already in the organization. As has already been indicated, the ultimate object of all this policy is by increasing their strength and securing as far as possible a monopoly of employment to obtain as large a share as possible of the receipts of the industry, and to exercise a voice as to the general conditions under which it is carried on. Many disputes are connected with special customs or circumstances in particular works, with attempts to alter or prevent the alteration of various working arrangements, with questions of piece-work, overtime, holidays, meal-times, and the introduction or abolition of systems of fines, deductions and so forth. Some are of a merely personal nature, being connected, for instance, with the unpopularity of particular officials. `Sympathy' or `on principle' strikes, of which much has lately been heard in connection with the less skilled industries, are those in which men engaged in one occupation strike, without alleging any special grievance of their own, expressly in order to support men engaged in some other occupation who are involved in a conflict with their employers. A common instance of this kind of strike, in recent times, has been the refusal of dock labourers to discharge or to coal ships manned by non-unionist crews. There are also instances of a number of employers closing their works for a time in order to support a particular employer against whom a strike is being directed. Finally, there are the `demarcation disputes' in which organized bodies of workmen employed in some complex trade like ship-building, as, for instance, shipwrights and joiners, are at issue with regard to the province of work belonging to each section. In this last case employers, although not directly concerned in the disputes, yet have to bear the inconvenience and expense of the strikes or stoppages of work to which they lead." On p. 49 (par. 105) this is said: "The essential point of discord between employers and workmen being the mode and proportions in which the net receipts from the sale of produce shall be divided, the machinery by which this is settled has great influence upon the character of the relations between them. Other causes of dispute are, usually, only secondary, and in more or less near connection with the main issue. If workmen consider that they are being treated with openness and justice, and if they find the employers disposed to look upon them rather in the light of industrial partners than as servants, it seems from the evidence that contentment and friendliness on the whole exist."

It is evident that the Commission regarded the question of "industrial disputes" or "trade disputes" or "labour disputes" (see p. 65, par. 159) as involving the struggle of labour to attain recognition as a co-operator with capital, in other words, of its "status." And the immediately succeeding pages after p. 49 of the report refer to the "machinery," as it is called, for settling or avoiding the disputes-such as sliding scales, wages boards, co-operative trading, conciliation, arbitration, both voluntary and compulsory, and industrial agreements: so that at bottom the comprehensive nomenclature reached by, at all events, 1894, is "labour dispute." In their concluding observations at p. 120, the majority, who include the Duke of Devonshire, Sir Michael Hicks-Beach, Lord Courtney, Jesse Collings, Sir Frederick Pollock, Professor Marshall, Mr. Gerald Balfour, Mr. Burt, Mr. Plimsoll and others, say as follows: "We desire to say in conclusion that, in our opinion, many of the evils to which our attention has been called are such as cannot be remedied by any legislation, but we may look with confidence to their gradual amendment by natural forces now in operation which tend to substitute a state of industrial peace for one of industrial division and conflict. The growth and development of large industrial establishments during the present century has necessarily resulted in the creation of considerable bodies of workmen more or less separated in their lives and pursuits from those under whom they work. In those manufactures, which in modern times have been carried on upon a great scale with costly machinery, there cannot exist the intimate relation between the employer and workman and between the workman and his work which is to be found in some small industries where the workman owns, or may hope some day to own, after serving as apprentice and journeyman, his tools, workshop, and material. The mutual ignorance arising from this separation is, we believe, a main reason why so many conflicts take place, turning upon the division of the receipts of the common undertaking between the owners of the machinery and material, and the workmen who supply the labour. ... It is, however, precisely in these industries where the separation of classes and, therefore, the causes of conflicts are most marked, that we observe the fullest developments of that organization of the respective parties which appears to us to be the most remarkable and important feature of the present industrial situation. Powerful trades unions on the one side and powerful associations of employers on the other have been the means of bringing together in conference the representatives of both classes enabling each to appreciate the position of the other, and to understand the conditions subject to which their joint undertaking must be conducted. The mutual education hence arising has been carried so far that, as we have seen, it has been found possible to devise articles of agreement regulating wages which have been loyally and peacefully maintained for long periods. We see reason to believe that in this way the course of events is tending towards a more settled and pacific period in which, in such industries, there will be, if not a greater identification of interest, at least a clearer perception of the principles which must regulate the division of the proceeds of each industry, consistently with its permanence and prosperity, between those who supply labour and those who supply managing ability and capital. We cannot deny the possibility of organizations of employers and of workmen combining together to control an industry injuriously to the public interest; but it may be hoped that such combinations would in the end either fail from within or be defeated by competition arising from unexpected quarters, or be destroyed by changes in methods of production. ... The various agencies on which we have been dwelling are, in their various degrees, especially noteworthy in dispelling the jealousies and antipathies which formerly characterized industrial disputes, and in producing a frank and open treatment of the circumstances provoking a struggle. A more cordial understanding, and one based on a better knowledge of the relations between employers and employed, is growing up. This better knowledge is passing outside the ranks of the combatants themselves, and is tending to spread throughout the nation; and the public opinion thus developed reacts upon special industrial disputes and operates to bring about a pacific solution of them. We may, indeed, say that all the causes tending to industrial peace which we have reviewed unite in producing this common spirit running through all classes of the kingdom, which is the best promise and assurance of the realization of peace in the future." In later official reports, for instance in 1895 and 1900, the expressions "trade disputes" and "labour disputes," and with increasing frequency the latter, are used as synonymous.

The inevitable conclusion, as it seems to us, from this is that in 1894 it was well understood that "trade disputes," which at one time had a limited scope of action, had, without altering their inherent and essential nature, so developed as to be recognized better under the name of "industrial disputes" or "labour disputes," and to be more and more founded on the practical view that human labour was not a mere asset of capital but was a co-operating agency of equal dignity-a working partner-and entitled to consideration as such. It is at the same time, as is perceived, contended on the part of labour, that matters even indirectly prejudicially affecting the workers are within the sphere of dispute. For instance, at p. 70 (par. 175 (4) (a)) one of the competing contentions is thus stated: "Long hours proceed from the competition of employer with employer in the same trade. Employers ought to be prevented from competing in this way at the expense of their workmen." As a fact in a later year, Lord James of Hereford, in an award, held that one employer in a certain trade must conform to the practice of others. What must be borne steadily in mind, as evidenced by the nature of the claims made, is that the object of obtaining a large share of the product of the industry and of exercising a voice as to the general conditions under which it shall be carried on (par. 100) covers all means direct and incidental without which the main object cannot be fully or effectively attained. Some of these will be particularized, but in the meantime it should be said that they will show in themselves, and from the character of the disputants this will be confirmed, that so long as the operations are of capital and labour in co-operation for the satisfaction of material human needs, the objects and demands of labour are the same whether the result of the operations be money or money's worth. It is immaterial to the worker whether the capitalist employs him to make a profit or to carry out a scheme on the basis of not making a loss: whether it is a public or a private employer, whether, if public, the working capital is recouped by individual payments or by compulsory rates, the worker is still a co-operator, he is still a human being, with needs and desires of his own; and (as we took pains to express in the Badge Case [ 26 ]) his disputes are for his personal welfare, be it health or leisure or a larger share of combined production. That is always the central idea. And neither on principle nor on precedent can we find any jurisdiction for excluding him in any of the cases mentioned, on the ground of legal distinction (for that is all we have to consider here) from the operation of the constitutional provision. At p. 85 (par. 227) of the report of 1894, the majority of the Commission, speaking of preventive remedies suggested by witnesses for the evils under consideration, mention "the extension of State and municipal employment in the sphere of productive industry; and the substitution, more or less gradual, of public authorities in the place of private employers competing with one another for profit." That substitution, of course, might or might not be accompanied with profit-making; probably profit-making was mainly in contemplation of the witnesses who testified. At the same time the absence of profit-making was also in view. This appears at p. 93 (par. 249 (1)) of the report of 1894. One of the opposing arguments proceeded thus: "The more just and impartial view of the claims of labour, expected to be taken by employers who are under no necessity of making a profit, might too often come to mean, in practice, the taxing of the community for the benefit of the particular classes of workmen who happened to be in the public service." Again, in par. 249 (2), this passage occurs: "No doubt too, any disputes that did arise between employers and employed would take a different form under Government management." See also the summary at p. 739 (end of par. 691 in Appendix 2, "State and Municipal Employment of Labour"). See further, the minority report of Mr. Abraham, Mr. Mann and others, at p. 137. In subsequent years the terminology is the same. For instance, in 1895 House of Commons Papers, vol. XCII., p. 352, under heading "General List of Labour Disputes" we find a sub-heading "Municipal Employment," and then, under that, items 780 and 781 are respectively disputes of lamplighters and ashpit cleaners with the municipalities employing them.

In House of Commons Papers 1896, vol. LXXX., part 2, p. 140, the heading of the page is "Average rate of wages in various Industries. On p. 141 there is a sub-heading, "Employees of Local Authorities, Gas and Water Companies"; and then under that we find this table: Police, 27s. 5d.; Roads, pavements, and sewers, 20s. 9d.; Gasworks, 27s. 2d.; Waterworks, 24s. 9d. In House of Commons Papers 1898, vol. LXXXVIII., p. 620, under appellations indiscriminately "Labour Disputes" and "Trade Disputes," are included lamplighters and nightmen in dispute with municipalities. In the same volume, at p. 697, are found "Trade Unions grouped by Industries." Table 2, "Number and Membership of Trade Unions," includes under the sub-heading "Groups of Trades" thus: "Employees of Public Authorities." In House of Commons Papers 1900, vol. LXXXIII., p. 425, under the heading of "Miscellaneous Trades and Employees of Local Authorities" are found eleven disputes of employees of local authorities. In House of Commons Papers 1901, vol. LXXIII., p. 606 (Appendix, p. XVI.), under "Groups of Trades" are included "Employees of Public Authorities" Disputes in 1896, 1897, 1898, 1899 and 1900. In House of Commons Papers 1902, vol. XCVII. (Cd. 1124, printed page 57), there is a list of "Changes in Hours of Labour Classified by Industries," 1897 to 1901. Under that are included "Public Authorities." That is the general and official view in England of municipal undertakings from 1894 to 1902, and it continues.

When we remember that labour disputes are only one phase of social evolution, and part of that social evolution is the gradually increasing assumption by municipalities of enterprises formerly carried on entirely by private capital, and when it is once admitted, as it must be, that if municipalities carry on their enterprises for profit "industrial disputes" can occur, the burden lies on those who assert that the profit making is the discrimen, to establish it. Neither reason nor precedent can be found to support that distinction. Reference was made to a work by Mr. Knoop, called Principles and Methods of Municipal Trading, in support of that distinction. But an inspection of that work tells the other way. For instance, at p. 46, s. 8, the author speaks of cases of trading enterprises, apart from water, gas, electricity, tramways and markets. He groups them into five classes. In the first class (s. 9), which he says consists of "subsidiary trades or industries," he includes (p. 47) paving streets, laying sewers and erecting any buildings required for municipal purposes. The function of road making and maintenance is, in its inherent nature, one in direct aid of commerce. It is as clearly within the true meaning of "industrial enterprise" as a railway or a tramway. Mr. Knoop is clearly accurate in describing it as a subsidiary industry to others, such as agriculture, or coal mining, or manufacturing or transport. When tolls were charged by persons who undertook to keep roads in order, no one could doubt it came within the sphere of private enterprise. Any work of public utility can be so undertaken. As Mr. Gomme in his Principles of Local Government (1897), at p. 153, says: "Any municipal service can be made to pay dividends on private capital, if only the means of levying a revenue are granted to private owners." Cemeteries, as he points out, are, in England, sometimes in the hands of the State, sometimes in the hands of municipalities and sometimes in the hands of private owners. Taxation is not profit-making, and if the service is recouped by taxation it is not profit earning. But it may be an industry. And because in the case of cemeteries private capital is repaid out of the proceeds of taxation-that is, a specialized tax-he holds it is not "trading" because not profit making in the strict sense. But that does not alter the nature of the enterprise as an "industrial enterprise." In Professor Macgregor's recent work The Evolution of Industry, chap. VIII., beginning at p. 210, it will be seen that "industries" are still called "industries" by whomsoever or howsoever they are carried on. For instance, he says: "The Post Office and the Coinage are as yet our only nationalized industries." Again he says: "Although labour disputes in public services cannot be entirely avoided, municipal ownership helps to prevent their arising or being discussed simply from the standpoint of immediate material gain."

The question of profit-making may be important from an income tax point of view, as in many municipal cases in England; but, from an industrial dispute point of view, it cannot matter whether the expenditure is met by fares from passengers or from rates. In each case the municipality is performing a function; and in the one case it performs it with a variation in contrast with the other. If trade unions as recognized under the English Act are to be taken as a test-as was urged for the respondents-the position is greatly strengthened. For instance, in the House of Commons Papers 1902, vol. XCVII. (Cd. 1348, p. 116 (printed page)), we find that in 1894 there was a recognized trade union called "Municipal Employees' Association," showing a recognition of such employees as a distinct trade within the meaning of the English Act. At the end of 1901 it had 40 branches. It is item 1480. It also there appears that in 1896 there was another trade union registered, the Glasgow Corporation Tramways Employees (item 1481); and that in 1899 the Liverpool Corporation Workmen (item 1485) and in 1900 the Westminster Municipal Labour Union (item 1488) were registered. Further, in the House of Commons Papers 1900, vol. LXXXIII., p. 912, we find several Government employees' trade unions: "1895, 4,885 persons; 1896, 7,980 persons; 1897, 15,200 persons; 1898, 8,250 persons; 1899, 7,900 persons." These include Ship Constructive Association, Southampton Government Workers, Army Clothing Department Employees, Waltham Abbey Gunpowder Employees and Portsmouth Dockyard Trades Council. Others of the same kind are there mentioned. Further, in the House of Commons Papers 1912-1913, vol. XLVIL, at pp. 828 and 832, we find other Government employees' trade unions: for instance, under heading of Admiralty Employees, "Item 1280, Government Labourers, Chatham, 1889; Devonport 1890; Portsmouth 1894."

In the face of these considerations it is quite impossible to draw an imaginary line at profit undertakings and say that the power of making laws under pl. XXXV. of s. 51 for the peace, order, and good government of the Commonwealth was intended to be limited by that, and that, on the other side of that imaginary line, in inter-State disputes private force alone was left to act.

2. Are Trade Unions confined to Manual Workers?

-It was contended that they are. Sir Edward Mitchell urged very strongly that in Webb's monumental work on trade unionism it so appeared. In the first place, the same work, as was pointed out during the argument itself, makes some and sufficient reference to the contrary. But, further, there is overwhelming evidence that both before and after 1900 the construction given by the responsible authorities, and everyone else concerned, to the Trade Union Act of 1871 includes more than manual workers. More than that, under the Trade Disputes Act of 1896 disputes between trade unions not manual workers' were recognized as such by the Board of Trade, both in their official reports and by their official action. Some recorded instances will prove this.

In House of Commons Papers 1912-1913, vol. XLVII., at pp. 824 and 826, these appear: Agents (Life Assurance, etc): item 1211, National Life Assurance Agents, registered Union 1884; item 1213, Prudential Assurance Agents, registered Union 1893; item 1214, British Federation of Assurance Agents, registered Union 1900. Musicians, Theatrical etc Employees: item 1229, National Theatrical Employees, registered Union 1890; item 1230, Amalgamated Musicians, registered Union 1893; item 1232, Variety Artistes' Federation, registered Union, 1906; item 1235, Actors, registered Union 1907. Journalists: item 1228, National Journalists, registered Union 1907, with 67 branches at end of 1910 - having 1,925 members. In connection with insurance agents it may be noticed that in House of Commons Papers 1895, vol. XCII., Appendix 1, headed "General List of Labour Disputes," we find (at p. 309) this entry: "Insurance Agents, Walsall District. Against new conditions of employment. One establishment and 17 persons affected for 9 days." The result was a compromise. It does not appear that the men were in a trade union. In House of Commons Papers 1897, vol. LXXXIV., p. 446, under heading of "Disputes" and sub-heading "Other Trades" we find: "Item 1005, Musicians," the cause being "refusal of men to leave their Union." In House of Commons Papers 1907, vol. LXXX., pp. 268 and 355, reference under the head of "Trade Unions" is made to one by musicians. In House of Commons Papers 1907, vol. LXXX., p. 57, a dispute is referred to which took place at certain London music halls affecting artistes, musicians and stage-hands. Mr. (now Sir George) Askwith arbitrated and his award is given. In House of Commons Papers 1914, vol. LXXIX., pp. 176 and 177, in the 11th report of the Board of Trade under the Conciliation Act of 1896, reference is made to a dispute of the variety artistes to have the 1907 award revised. The artistes applied to the Department for arbitration, the manager concurred, and the Chief Industrial Commissioner acted as arbitrator. This was a statutory function, and the Act means the same now as it did in 1896. In the case of Rickards v Bartram [ 27 ] the Variety Artists' Federation or Trade Union was made liable for defamation.

The reason of the matter rejects the contention. Even as far back as 1868 the House of Lords, in Wilson v Merry [ 28 ], acted on the principle that all fellow servants were collaborateurs whatever their grade. Lord Colonsay said [ 29 ]:"The constantly-increasing scale on which mining and manufacturing establishments are conducted, by reason of new combinations and applications of capital and industry, has necessarily called into existence extended organizations for management-more gradations of servants, more separation or distribution of duties, more delegation of authority, and less of personal presence or interference of the master. The same personal superintendence and supervision by owners or masters, common and beneficial in some minor establishments, is in many cases unattainable, and, even if attainable, would not be beneficial. The principles of the law, however, have sufficient elasticity to enable them to be applied, notwithstanding such progressive changes in the manner of conducting business." An observation to be noted. In 1891, in Johnson v Lindsay [ 30 ], the House of Lords confirmed the principle.

Now, once we remember that industry becomes every day more diverse and complex and interrelated, that every day brings, even to the most radical and elementary industries of production and extraction, the application of inventive science and skill, it is evident that such a rule as is contended for would, day by day, tend to withdraw more and more from the operation of the constitutional power industries that were at its enactment admittedly within it. The true rule is that stated in the observation made by Lord Colonsay. And in Mr. Sidney Webb's later work, The Works Manager Today (1917), we find some observations very pertinent to more than one branch of this case. He points out that the works manager has a distinct function, different from the craftsman, from the inventor, from the clerical staff. It is the function of direction-the management of human nature. He says (p. 4): "This function of management, which is needed as soon as two or three are gathered together in a common task, is recognized as indispensable when we come to enterprises in which numbers are engaged." At p. 5 he says: "Nor is it only for the sake of the profit-making proprietors, who still so often control our factories and our industries, and still so often intervene personally in their administration, that management is indispensable. The co-ordination of energies that the manager secures, that efficiency in production which is his object, is as necessary when the proceeds of the enterprise are shared exclusively among the producers, as in the so-called self-governing workshop, or (as in the rapidly increasing development of State or municipal or co-operative production) are appropriated for the common benefit of the community, as they are when they enrich the private capitalist. Management is involved in the avoidance of any waste of human effort." At p. 6 he observes: "Whether the factories are owned by individual proprietors or by joint-stock companies, by gigantic Trusts or by the Government of the State; whether industry is conducted by private employers, or by State Departments, or by municipalities, or by co-operative societies, or even, as some of the younger thinkers now propose, by the trade unions developed into national guilds; finally, whether the net product is made for the capitalists or is in one or other way shared among any particular group of producers or among the whole community, that expert direction and co-ordination of the wills and energies of all the producers which we call management will always be necessary. The manager, superintendent, and foreman may have what designations we please; they may be selected and appointed in this way or that; their authority may be enlarged or diminished as their duties may be varied; they may become to a lesser or a greater extent `profiteers,' or be exclusively salaried functionaries; but they will, we may be quite sure-like the conductor of an orchestra-henceforth always exist, and always have their function in industrial enterprise." But there is no suggestion that the manager is other than the highest, the commanding officer, so to speak, in the army serving the employer, whoever he may be. And as to all below the manager, it is clear that whether they are brain workers or muscle workers, they are in the ranks of labour, they are among "the producers." It is very clearly expressed by Marshall on Economics, at p. 179, s. 2, where he thus expresses it: "The head of a large business can reserve all his strength for the broadest and most fundamental problems of his trade: he must indeed assure himself that his managers, clerks and foremen are the right men for their work, and are doing their work well; but beyond this he need not trouble himself much about details. He can keep his mind fresh and clear for thinking out the most difficult and vital problems of his business; for studying the broader movements of the markets, the yet undeveloped results of current events at home and abroad; and for contriving how to improve the organization of the internal and external relations of his business."

In the result, the words "industrial disputes" in the Constitution are shown to have had inherently in 1900 a signification large enough to embrace every form of dispute coming within the formula above stated.

3. The Validity of the Organization.

-It follows also from the facts and considerations above stated that, whether we treat the organization as registered under s. 55 (1) (b) or (c), Parliament has full power to permit industrial employees to group themselves in any way it thinks convenient to carry out arbitration and conciliation for the prevention or settlement of industrial disputes extending beyond the limits of any one State. Some misapprehension appears to exist as to the meaning of collective bargaining. It was argued as if collective bargaining was simply a bargaining by all an employer's workpeople en masse as to their several terms and conditions of employment, instead of leaving each one to bargain for himself separately. That is a mistake; and, unless it is corrected, a wrong notion will exist as to the real meaning of collective bargaining, or, bringing it closer to us, as to what is meant by an industrial agreement. This is essential, because, once that is understood, the argument as to the invalidity of s. 55 (1) (c) disappears.

In 1912 the English Industrial Council, under the presidency of Sir George Askwith, the Chief Industrial Commissioner, were asked by the Government to report on industrial agreements. The report is found in House of Commons Papers for 1913, vol. XXVIII, pp. 1 and following, along with the evidence on which it is based. The report is most valuable as indicating the true nature of a collective industrial agreement. We quote its language at p. 4:Par. 6.-"It may be of advantage at the outset to consider what might be regarded as a working definition of an industrial agreement. (It is understood that there is no legal definition of the term.) An industrial agreement may be described as an arrangement arrived at by employers and workpeople with a view to formulating the general conditions of employment in a particular trade and district. It is essentially different from (though to a large extent it forms the basis of) the contract of service entered into between an individual employer and an individual workman. It is, in most cases, arrived at because the employers and workpeople think that a collective agreement is a desirable method of formulating what they have agreed shall be (for the time being, or for some period mentioned in the agreement) the principal terms governing the contracts of service between individual employers and individual workmen. As a matter of practice, agreements are usually made between Associations of Employers and Associations of Workpeople, and the extent to which these Associations in the various cases cover the whole of the trade concerned differs in almost every instance." Par. 7.-"It is to be noted that industrial agreements, considered as contracts between employers and employed, cannot fairly be compared with the ordinary commercial contracts made between individuals or corporate bodies. In the case of ordinary commercial contracts the persons who enter into the contracts are the principals directly concerned, or at least persons acting under well-defined authority from principals. Industrial agreements, on the other hand, are frequently made-especially on behalf of the workpeople-by representatives who, by reason of the numbers involved, and the circumstances which surround trade movements, find it difficult to obtain well-defined authority to enter into a settlement, or even to ascertain, beforehand, the exact wishes of those whom they represent. This fact is necessary to keep clearly in mind in the consideration of the questions now under review."

The essence of the matter is that collective bargaining by making an industrial agreement is not confined to bargaining between employer A and his own actual employees for the time being, it extends to bargaining with them as to future conditions of employment of any employee in the future, and to bargaining with any recognized body representative of their class in the industry, and whether that representative body has or has not obtained formal authority from the individuals affected, so long as it-much as in chancery proceedings-can be considered in the circumstances fairly to represent their interests. (Taff Vale Railway Co v Amalgamated Society of Railway Servants [ 31 ], at p. 438; Parr v Lancashire and Cheshire Miners' Federation [ 32 ], at p. 375.) If they have a "common interest" they may fairly be so considered. O'Connor J., in Federated Engine-Drivers and Firemen's Association of Australasia v Broken Hill Proprietary Co [No. 1] [ 33 ], held that "industry" in s. 55 (1) (a) meant a class of industrial enterprise, and said "the common interest" of employers arose from "their employing labour in carrying on the same class of industrial enterprise." But even that broad aspect was limited to the Act, that is, to "industry" as intended by the Act. It does not follow that the common interest of either employers or employees is restricted by the Constitution now, or for all time, to their own specific class of enterprise. Specialization of function proceeds rapidly, and industrial community of interest exists wherever by interrelation of industries any of them may be mutually affected. The words of the learned Chief Justice in R. v Commonwealth Court of Conciliation and Arbitration; Ex parte Broken Hill Proprietary Co [ 34 ], at p. 431, are noteworthy. His Honour said:" The first objection taken formally is that there was no dispute in an industry extending beyond the limits of any one State. I only remark upon that that those are not the words of the Constitution, and that a priori I do not see why there may not be one dispute embracing or extending over several industries, just as much as there may be several disputes within the limits of one industry. It is not however necessary to express any decided opinion upon the point." The view expressed is clearly right. Each day's experience more and more confirms it; and, collective bargaining once admitted as a principle, the basis being that organization of labour strengthens it in its demands on capital, and organization of capital, and organization of capital strengthens it in maintenance of its own demands, it is as impossible to lay down a fixed line beyond which community of interest is unlawful to pass, as it was for King Canute to set bounds to the waves of the sea. Their "industry" in its broadest practical aspect is the "nexus" both for employers and employees. As long as that "nexus" can be shown, the body is representative of all workers of the class. And Parliament, having full discretion over incidentals, is not bound to segregate them from other persons who are representatives of other classes, and who join them in order to obtain a more effective organization. The doctrine of misjoinder is not applicable.

There is no reason, therefore, for limiting the Constitution in the way suggested, and, if not, the statutory provision is necessarily valid.

We answer the question submitted in the affirmative.