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The Harvester Judgement
The Harvester Judgment, as it is known in shorthand, was
the result of a case in the industrial courts, fought between
a powerful industrialist and social ideologues, that paved
the way for the establishment of the principle of the 'basic
wage' in Australia.
The Harvester judgement is often referred to as a founding
story, from which arguments and debates can hang, rather than
a story in its own right. It has also become shorthand for
what it was not: it was not about equal pay for women, for
example. But here, we draw out the story of the judgment itself,
the characters behind it, the workers behind it and the material
objects themselves; the 'harvesters' and their significance.
In 1906 the Protectionist Party and the Australian Labor
Party were united in an effort to introduce measures that
would guarantee workers the right to fair 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.
Hugh Victor McKay was well known for his anti-union attitudes
and discouraged union membership. In evidence the union revealed:
"About 5 months ago (probably April or May), a meeting
of men employed at McKay's was held during lunchtime, in protest
against having to work overtime for ordinary rates, at Braybrook.
George Bishop was deputed to wait on McKay and state the case.
George McKay said that the firm had given a bonus to employees
at the end of last year and therefore it was not fair to expect
extra pay for overtime. Overtime was abolished for a while.
McKay did not mention that the bonus was paid mostly to the
foremen and others whose duty was to extract the greatest
amount of work from the men ... "
Noel Butlin Archives, Canberra, Harvester File,
1906
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.
In his judgement, Higgins stated:
"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."
[p.8]
McKay responded:
"The maximum price that they could charge customers was
fixed by statute, and the rates for labour were left to be
determined by the whim of the arbitration Court. The only
parties considered were the consumer and the worker. The work
of the Arbitration Court was entrusted to a newly appointed
judge of the High Court, who came equipped with admirable
ideals, and a high resolve to achieve them, but whose previous
career and associations were not of the kind to fit him for
dealing with such involved problems. No question as to his
desire to do what was right is raised, but he allowed the
predilections he had nursed for years to follow him to the
Bench, and without regard to consequences, he set up new standards
and conditions of his own. The results of his decision were
momentous ... "
Hugh Victor McKay, Museum of Victoria, Old
Mckay Archives, B6/81
Opinion Divided
Media was divided over the Higgins judgement. On November
14, 1907, 'The Worker' declared the Higgins Judgement "momentous'.
The Argus of November 11, 1907 was less supportive.
"In practice, Commonwealth regulation of wages was bound
to do injustice and grave injury to industry - the 7 shillings
per day for unskilled labourers - will be used as a justification
for demanding higher wages over a wider industrial are than
that which it actually applies."
'The Argus', 11 November 1907
McKay refused to pay the duty demanded of him. He appealed
to the High Court in a challenge to the constitutionality
of the Excise Tariff (Agricultural Machinery) Act.
The High Court ruled in McKay's favour, 3:2. Justices Higgins
and Isaacs dissented.
Higgins asked,
"Why should the Commonwealth Parliament be able to levy
taxation with a view to the benefit of the manufacturers,
and not be able to levy taxation with a view to the benefit
of their employees?"
Gary Souter, 'Acts of Parliament', Melbourne
University Press, 1988, p.101
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."
Hugh Victor McKay, Museum of Victoria, Old
Mckay Archives, B6/81
Despite his victory in the High Court, Victor McKay spent
the next years of his life defending his business actions.
The Harvester judgment had made an impact.
In 1913 he said:
"Although I have given employment to many thousands,
and though I have retained the goodwill of those who worked
for me, I in some way incurred the hostility of labour organisations.
I was made the target for their combined artillery, and through
their kind offices ... I claimed the right to employ whom
I pleased, without reference to the question whether my workers
were unionists or not ... There was no dispute about wages,
hours or other conditions. The only question was my right
to employ non-unionists ... "
1913 Election Statement, Museum of Victoria,
Old McKay Archives, b7/4
In 1922:
"I do not believe 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."
Letter to William Morris Hughes, 10 March 1922,
Museum of Victoria, OMA, B/5/25
Higgins was the ultimate victor. He regarded the minimum
wage as sacrosanct and applied it to subsequent judgements
in his long and distinguished career as president of the Conciliation
and Arbitration Court.
"The Harvester judgment and Higgins are foundationally
important. 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."
Bob Hawke in Paul Kelly, 100 Years- The Australian
Story, Allen and Unwin, Sydney, 2001, p.107. From interview
recorded for TV series '100 Years: The Australian Story'
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