Harvester case

From Wikipedia, the free encyclopedia

(Redirected from Ex parte H.V. McKay)

Jump to navigation Jump to search

Harvester Judgment

Court Commonwealth Court of

Conciliation and Arbitration
Full case name Ex Parte H.V. McKay
Decided 8 November 1907
Citation(s) (1907) 2 CAR 1
Transcript(s) Mon 7 October 1907
Tue 8 October 1907
Wed 9 October 1907
Thu 10 October 1907
Fri 11 October 1907
Mon 14 October 1907
Tue 15 October 1907
Wed 16 October 1907
Thu 17 October 1907
Fri 18 October 1907
Mon 21 October 1907
Tue 22 October 1907
Wed 23 October 1907
Thu 24 October 1907
Fri 25 October 1907
Mon 28 October 1907
Tue 29 October 1907
Wed 30 October 1907
Thu 31 October 1907
Fri 1 November 1907
Case history
Subsequent R v Barger [1908] HCA 43,
action(s) (1908) 6 CLR 41
Court membership
Judge(s) sitting Higgins J
Ex parte H.V. McKay,[1] commonly referred to as the Harvester case, is a landmark Australian
labour law decision of the Commonwealth Court of Conciliation and Arbitration. The case arose
under the Excise Tariff Act 1906[2] which contained a proviso that excise would not be payable on
products if a manufacturer paid "fair and reasonable" wages to its employees. The Court therefore
had to consider what was a "fair and reasonable" wage for the purpose of the proviso.

H.B. 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.[4] The decision was credited as the
foundation for the national minimum wage included in the Fair Work Act 2009.[5][6] As well as national
ramifications, the decision was of international significance.[7]

Contents

 1 Background
o 1.1 H. B. Higgins
o 1.2 Hugh Victor McKay
 2 The hearing in the Court of Conciliation and Arbitration
o 2.1 The evidence and arguments
o 2.2 The decision
 3 Excise Act 1906 struck down by the High Court
 4 Significance
o 4.1 Contemporaneous reaction
o 4.2 McKay's criticism
o 4.3 No equal pay for women
 5 See also
 6 References
 7 External links

Background[edit]
In 1906 the second Deakin government was in power, with support from the Labor party. Prime
Minister Deakin's "New Protection" policy was to provide tariff protection to employers in exchange
for "fair and reasonable" wages for employees.[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—

a. are declared by resolution of both Houses of Parliament to be

fair and reasonable; or
b. are in accordance with an industrial award under the
Commonwealth Conciliation and Arbitration Act 1904,;[13] or
c. are in accordance with the terms of an industrial agreement filed
under the Commonwealth Conciliation and Arbitration Act 1904;
or
d. are, on an application made for the purpose to the President of
the Commonwealth Court of Conciliation and Arbitration,
declared to be fair and reasonable by him or by a Judge of the
Supreme Court of a State or any person or persons who
compose a State Industrial Authority to whom he may refer the
matter.[2]

H. B. Higgins[edit]
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.
The industrial disputes proposal was initially unsuccessful,[14] however Higgins was undeterred and
succeeded in 1898.[15] Despite these successes, Higgins J had opposed the draft constitution
produced by the convention as too conservative, and campaigned unsuccessfully to have it defeated
at the 1899 Australian constitutional referendum.[16]

After the federation of Australia, Higgins was a member of the Australian Parliament as a member of
the Protectionist Party, but was in broad agreement with the Labor party's social reforms. When the
Labor Party sought to amend the Conciliation and Arbitration Bill to cover state railway employees,
Higgins was one of the radicals who supported the amendments and helped bring down Deakin's
government. When Labor formed a minority government in 1904, Higgins became Attorney-General
in the Labor ministry, because Labor had no suitably qualified lawyer in Parliament.[16]
In October 1906 Higgins was appointed to the High Court and the following year O'Connor J
resigned as President of the Commonwealth Court of Conciliation and Arbitration and was replaced
by Higgins J.[16]

Hugh Victor McKay[edit]

Sunshine Harvester on display at the Campaspe Run Rural Discovery Centre, Elmore, Victoria, Australia.

Hugh Victor McKay was one of Australia's largest employers, manufacturing agricultural machinery,
most notably the Sunshine Harvester. 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.[17][18] Under the Excise Tariff Act
1906,[2] he was required to pay an excise tax unless he paid wages that were fair and reasonable.
McKay applied to the Commonwealth Court of Conciliation and Arbitration for a declaration that the
wages paid by him were fair and reasonable.[19]
The hearing in the Court of Conciliation and Arbitration[edit]
McKay's was one of 112 applications by manufacturers of agricultural machinery in Victoria and his
application was selected as a test case because the factory was one of the largest, and had the
greatest number and variety of employees and because his application was strongly opposed by
various unions.[20] Other applicants were told that the Court, in dealing with their application, would be
limited to the information obtained in McKay's hearing unless there was some exceptional
circumstances. Several large manufacturers were represented in the hearing, but did not call any
evidence. The hearing took place in Melbourne over 20 days between 7 October 1907 to 1
November 1907.[1]

The evidence and arguments[edit]

McKay's case was that fair and reasonable wages should be calculated according to the worth of
each individual to the business and led evidence from eight witnesses, including from the factory
superintendent, McKay's brother George. George McKay's evidence was that the workers received
fair and reasonable wages that took into account their level of skill, experience, age, qualifications,
complexity of work, equipment used, and level of danger. The employees at the Sunshine Harvester
factory required less skill, judgement and discretion because of mechanisation which had simplified
and standardised the work.[21]

The unions, represented by Duffy KC and Arthur, led evidence from employees of McKay's factory
and also their wives, union officials and others dealing with everything from the conditions at the
factory and elsewhere to the cost of living, including the "reasonable enjoyments that a man enjoys
in that state of life". [21] Higgins J gave his judgment on 8 November 1907.

The decision[edit]
Higgins J held that for McKay to pay a fair and reasonable wage meant paying his employees a
wages that met "the normal needs of an average employee, regarded as a human being in a
civilised community", regardless of his capacity to pay. This gave rise to the legal requirement for a
basic wage. 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.[9][22] Higgins ruled that remuneration "must be enough to support
the wage earner in reasonable and frugal comfort." A 'fair and reasonable' minimum wage for
unskilled workers of 7/- (7 shillings), which is around 70 cents, or 42/- per week. Later surveys
showed that this minimum was adequate to provide subsistence.[23]

Higgins's judgment read as follows:[1]

One finds that the Legislation has not indicated what is meant by 'fair and reasonable,' what is the
model or criterion by which fairness and reasonableness are to be determined. It is to be regretted
that the Legislature has not given a definition of the words. It is the function of the Legislature, not of
the Judiciary, to deal with social and economic problems; it is for the Judiciary to apply, and, when
necessary, interpret the enactments of the Legislature. But here this whole controversial problem,
with its grave social and economic bearings, has been committed to a judge, who is not, at least
directly, responsible, and who ought not to be responsible to public opinion. even if the delegation of
duties should be successful in this case, it by no means follows that it will be so hereafter. I do not
protest against the difficulty of the problem, but against the confusion of functions and against the
failure to define, the shunting of legislative responsibility. It would be almost as reasonable to tell a
Court to do what is 'right' with regard to real estate, and yet lay down no laws or principles for its
guidance. In the course of the long discussion of this case, I have been convinced that the President
of this Court is put in a false position. The strength of the Judiciary in the public confidence is largely
owing to the fact that the judge has not to devise great principles of action as between great classes,
or to lay down what is fair and reasonable between contending interests in the community; but has to
carry out mandates of the Legislature evolved out of the conflict of public opinion after debate in
Parliament. I venture to think that it will not be found wise to bring the judicial department within the
range of political fire....

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....

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 an average employee, regarded as a human
being in a civilised community. If, instead of individual bargaining, one can conceive of a collective
agreement – an agreement between all the employers in a given trade on the one side, and all the
employees on the other – it seems to me that the framers of the agreement would have to take as
the first and dominant factor the cost of living as a civilised being. 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.[1] McKay did neither and
both McKay and another manufacturer of agricultural machinery in Melbourne, William Barger, were
prosecuted by the Commonwealth for failing to pay the excise. The defences of Barger and McKay
included an objection that the Excise Act 1906 was invalid. That objection was referred to the Full
Court of the High Court for hearing.[3] While this is sometimes referred to as an appeal,[9] this was not
a direct challenge to the Harvester judgement and Higgins sat as one of the five judges in the High
Court.[3]
Excise Act 1906 struck down by the High Court[edit]
The High Court found in R v Barger (1908)[3] that the Excise Act 1906, which gave rise to Higgins's
decision, was constitutionally invalid because the legislation was essentially concerned with the
regulation of employment conditions, a power not held by the Commonwealth Parliament and not
capable of being supported by the excise power.[24] The High Court further found a tax based on
compliance with certain labour conditions which could differ from State to State was a discrimination
within the meaning of section 51(ii) and a preference within the meaning of section 99.[25]
Significance[edit]
The judgment dominated Australian economic life for the next 60 to 80 years. Higgins's 1907
Harvester decision was regarded as a benchmark in Australian labour law. Despite the High Court's
reversal in R v Barger, Higgins regarded the minimum wage as sacrosanct and applied the
Harvester reasoning to subsequent judgments in his career as president of the Conciliation and
Arbitration Court.[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. And not
just through federal jurisdiction - it became embraced by various state jurisdictions. I think it is
impossible to overstate the significance of both the judgement and its author, Henry Bournes
Higgins."[26] Conservative commentator Gerard Henderson was critical of the decision, describing it
as a deeply flawed decision representing a failed policy that was strong on sentiment that failed to
consider the ability of employers to pay nor acknowledged geographical differences in the cost of
living.[27]

Contemporaneous reaction[edit]
Then, as now, the reaction to the Harvester decision was mixed. 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.[28]

McKay's criticism[edit]
In response to the High Court decision, McKay stated "The Excise Act was declared to be ultra vires
- The Federal Parliament had gone beyond its powers, all the ingenuity and eloquence spent on the
measure, all the litigation devoted to its practical enforcement, and all the elaborate conditions laid
down by the Arbitration Court and by the Customs authorities, crumbled to nothing."[29]

In 1922, McKay wrote to Prime Minister Hughes on the subject of wages boards and collective
bargaining, stating "I do not agree with the basic wage for the Commonwealth. In other parts of the
world it is a minimum wage for the minimum man and a maximum wage for the maximum man -
each man according to his ability and capacity. God did not make men equal - it is no use trying to
pretend He did, or to make laws as though He did, or to pay people according to their requirements
instead of according to their services."[30]

No equal pay for women[edit]

The Court determined that a fair and reasonable wage was to be determined according to the needs
of a male worker not according to the worker's value to the employer. What then was a fair and
reasonable wage for a female worker? Higgins J considered this in 1912 in the Fruit pickers case,[31]
rejecting an application for equal pay for women, deciding that this would represent equal pay for
unequal work. His Honour held that women should only be awarded the full male rate where there
was the risk of cheap female labour displacing men, setting a common rate for fruit pickers of 1
shilling per hour. 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.[31] Until World War II, the female basic wage was, generally speaking, approximately 54
per cent of the male basic wage.[32] The assumptions of a male bread winner and female domestic
carer have been criticised as a deliberate policy of discouraging women in the paid workforce,
reflecting a flawed understanding of work and care where the normative worker of the labour market
is without responsibilities to care for others. It thus ensured the continuance of the women's inferior
place in the paid work force, only entitled to equal wages if their work threatened the position of
men.[33][34]
See also[edit]

 White Paper on Full Employment in Australia

References[edit]

1. ^ Jump up to: a b c d Ex parte H.V. McKay (1907) 2 CAR 1.

2. ^ Jump up to: a b c d "Excise Tariff Act 1906". Commonwealth of Australia..
3. ^ Jump up to: a b c d ,R v Barger [1908] HCA 43, (1908) 6 CLR 41.
4. ^ Hamilton, RS, ed. (2011). "Waltzing Matilda and the Sunshine
Harvester Factory" (PDF). Fair Work Australia.
5. ^ Fair Work Act 2009 (Cth).
6. ^ "Fair Work Bill 2008". Parliamentary Debates (Hansard).
Commonwealth of Australia: House of Representatives. 25 November
2008. p. 11189.
7. ^ Ford, Olwen (2001). Harvester Town: The making of Sunshine 1890-
1925. Sunshine & District Historical Society Incorporated. ISBN 0-
9595989-4-4.
8. ^ Clarke, F G (1992). Australia: A Concise Political and Social History
(2nd ed.). p. 188. ISBN 0729513092.
9. ^ Jump up to: a b c d e "The Harvester Judgement". Federation Story: A
Fair Go Economy. ABC. 2001. Archived from the original on 18 February
2002.
10. ^ Constitution (Cth) s 55 requires separate laws that deal exclusively
with customs and with excise.
11. ^ "Customs Tariff Act 1906". Commonwealth of Australia..
12. ^ "Excise Tariff (Agricultural Machinery) Bill" (PDF). Parliamentary
Debates (Hansard). Commonwealth of Australia: House of
Representatives. 21 September 1906. pp. 5138–5150.
13. ^ "Commonwealth Conciliation and Arbitration Act 1904".
Commonwealth of Australia.
14. ^ "Official Record of the Debates of the Australasian Federal
Convention, Adelaide, 17 April 1897". H Higgins at p. 782, vote at p.
793, 12 in favour, including Higgins & Isaacs, 22 opposed, including
Barton & O'Connor.
15. ^ "Official Record of the Debates of the Australasian Federal
Convention, Melbourne, 27 January 1898". vote at p. 212, 22 in favour,
including Higgins & Isaacs, 19 opposed, including Barton & O'Connor.
16. ^ Jump up to: a b c Rickard, John (1983). "Higgins, Henry Bournes (1851–
1929)". Australian Dictionary of Biography. Canberra: Australian
National University. Retrieved 22 October 2016.
17. ^ "The strangling tariff". The Age. 8 October 1904. p. 11 – via National
Library of Australia.
18. ^ "New Wages Boards". The Age. 9 August 1906. p. 8 – via National
Library of Australia.
19. ^ Ex parte in the case name is used to indicate "on the application" of
McKay, not in the alternate sense of being heard in the absence of a
party.
20. ^ The unions were the Agricultural Implement Makers’ Society; the
Amalgamated Ironmoulders; the Amalgamated Iron Foundry Employees;
Tinssmiths’ and Iron-workers’ Society; and the Iron-workers’ Assistants’
Society, the Federated Sawmill, Timber Yard, and General
Woodworkers’ Union; the Amalgamated Carpenters; the Coachbuilders’
and the Wheelwrights’ Society and the Certificated Engine-drivers.
21. ^ Jump up to: a b Robbins et al, p 488-9.
22. ^ Kevin Blackburn, The living wage in Australia: a secularization of
Catholic ethics on wages, 1891–1907, Journal of Religious History 20
(1996), 93-113.
23. ^ Pat Thane (1982). Foundations of the Welfare State. Longman. p. 383.
ISBN 0-58229515-7.
24. ^ Dr Andrew Frazer (28 May 2002). "The Federal Conciliation and
Arbitration Power: from Cradle to the Grave?". Law Internet Resources.
Parliament of Australia, Parliamentary Library. Retrieved 2009-08-28.
25. ^ Bernard Pulle (7 March 2000). "Dairy Industry Adjustment Bill 2000-
Constitutional Issues (Current Issues Brief 14 1999-2000)". Law Internet
Resources. Parliament of Australia, Parliamentary Library. Retrieved
2009-08-28.
26. ^ Paul Kelly (2001). 100 Years- The Australian tory. Sydney: Allen &
Unwin. p. 101. ISBN 9781865085319..
27. ^ Gerard Henderson (18 December 2007). "Failed policy strong on
sentiment". Sydney Morning Herald. Retrieved 2009-08-28.
28. ^ "The Harvester Excise and Human progress". The Worker. 14
November 1907. p. 12 – via National Library of Australia.
 29. ^ Hugh Victor McKay, Museum of Victoria, Old Mckay Archives, B6/81
30. ^ "Letter from HV McKay to William Morris Hughes". 10 March 1922 –
via Museum of Victoria.
31. ^ Jump up to: a b Rural Workers’ Union v Mildura Branch of the Australian
Dried Fruits Association (Fruit pickers case) (1912) 6 CAR 61.
32. ^ Equal Remuneration Case [2011] FWAFB 2700 at [189].
33. ^ Owens, R Owens, Rosemary J "Women, 'Atypical' Work Relationships
and the Law" [1993] MelbULawRw 18 at .
34. ^ Chapman, A "Industrial Law, Working Hours and Work, Care and
Family" [1993] MonashULawRw 31.

External links[edit]

 "Waltzing Matilda and the Sunshine Harvester Factory". Fair Work

Commission. Retrieved 29 October 2016.
 WM Robbins; I Harriss; R Macklin (February 2005). "Fact and myth:
Reflections on why Higgins made the Harvester decision" (PDF).
www.airaanz.econ.usyd.edu.au/papers.html.
 Full text of Judgment in Ex Parte H.V. McKay
Categories:
 1907 in Australian law
 Employment compensation
 Arbitration cases
 1907 in case law
 1907 in politics
 1907 in economics
 Industrial agreements
 Australian labour case law
 Employment in Australia
Navigation menu
 Not logged in
 Talk
 Contributions
 Create account
 Log in
 Article
 Talk
 Read
 Edit
 View history
Search
 Go

 Main page
 Contents
 Featured content
 Current events
 Random article
 Donate to Wikipedia
 Wikipedia store
Interaction
 Help
 About Wikipedia
 Community portal
 Recent changes
 Contact page
Tools
 What links here
 Related changes
 Upload file
 Special pages
 Permanent link
 Page information
 Wikidata item
 Cite this page
Print/export
 Create a book
 Download as PDF
 Printable version
Languages
 Polski
Edit links
 This page was last edited on 28 February 2019, at 21:50 (UTC).
 Text is available under the Creative Commons Attribution-ShareAlike License; additional
terms may apply. By using this site, you agree to the Terms of Use and Privacy Policy.
Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit
organization.
 Privacy policy
 About Wikipedia
 Disclaimers
 Contact Wikipedia
 Developers
 Cookie statement
 Mobile view