Latest Buzz...


Tuesday, January 30, 2018

ABC - The Harvester Judgement Story

A Fair Go Economy - Places
Australia's Centenary of Federation ABC Online stars
100 Years

Program Guide
Federation on ABC TV, Radio & Online Federation Story
100 Years A Nation News
About Federation FederActive
Stories & Games Links
Other Sources Search
This Site

 Federation Home >> Federation Story >> A Fair Go Economy >> Events

A Fair Go Economy - Events
The Harvester Judgement
Print Version Email This
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."
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'
Overview People Culture Institutions Next Section
ABC Online     Australia's Centenary of Federation

| Top | Sitemap | Credits | Text version | © 2001 | Privacy |