Australia’s history of arbitration and industrial relations has evolved since the days of the Master Servant relationship between employer and employee of the mid 1800’s This paper will discuss the opposing perspectives of each and question if Industrial Relations be seen as a manipulative form of management control with arbitration as the governance layer of social change. It will look at the level of political intervention of these systems evident between employers, employees and third parties such as unions, and state governments.
Since 1907, an arbitration system that sets minimum wages was favoured by the social democrats with the result being the Arbitration Courts and Wage Boards of the 1890’s. The early courts were used to settle industrial disputes with binding agreements, whereas the Wage Boards brought together representative groups of employers and employees under an independent Chair. The idea was to agree minimum wages and conditions for workers that employers could implement. The early Wage Boards had no power to intervene in strike action which was the dominate form of industrial action in early Australia. After the 1890’s there was an increased desire for a faster conflict resolution remedy than the traditional ‘strike’ and ‘lock out’ mentality. Both Arbitration and Industrial Relations were designed to ‘de-politicise’ employment relations, but there were lingering concerns that politicians would continue to interfere with the democratic politics of these systems. (MacIntyre 1985) .
Around this time (1907), the President of the Arbitration Court, Henry Borne Higgins devised the “living wage’ that was based on what he determined to be the minimum amount required for a man with a wife and 3 children to live ‘frugally’. Mr Justice Higgins based his calculations on his expectation that all adults would marry, and that men were always the primary wage earners. Women supporting families through desertion or their husband’s death were only paid the equivalent of a single females wage instead of that equivalent to the “living wage”, and this caused extreme hardship for many families with a female breadwinner. Single females wage already half that of a single man’s in most cases although there were, some exceptions for women employed in agricultural roles. This inequality would be the start of unequal pay between men and women in Australia that continues today with women’s earnings less than men’s for the same work, often leaving many women in poverty. “The patriarchal phraseology reveals the underlying fear: the market threatened not just the sanctity of the home but the earning capacity and authority of its male head” (MacIntyre 1985: pg58).