The Secretary to the Prime Minister's Department has forwarded, for advice, the following memorandum:

The question has been raised as to whether the Federal Shipbuilding Tribunal has exceeded its powers in dealing with applications for increases in the rates of pay for day work, which function, it has been urged, is outside the jurisdiction of the Tribunal.

For your information, I enclose a copy of the form of agreement entered into between employer and employee, together with a copy of the printed statement referred to in clause (2) thereof.

The basis of objection in this matter is clause (5) of the agreement between employer and employee (represented as clause (6) in a similar form of agreement between employer and the union contracting for and on behalf of its members) which provides:

That the tribunals appointed as agreed to by the Shipbuilding Conference shall not have jurisdiction to deal with the day-work rates and conditions of employment prescribed by such Courts (Arbitration); but shall have exclusive jurisdiction to settle rates for piecework and all disputes as to the meaning of this agreement or arising therefrom.

A case in which it is alleged that the Tribunal has exceeded its powers is that of an application by the Federated Electrical Trades Union of Australia, New South Wales Branch, for an increase in wages over the award rates. A copy of the Tribunal's decision in this case is attached.

It will be observed that the point raised by the representative of the New South Wales Public Works Department, that clause (5) of the shipbuilding agreement prohibited the Tribunal from dealing with day-work rates, was overruled by the Tribunal, which appears to have relied upon clause (2) of the agreement providing:

That the conditions and principles in relation to shipbuilding work set out in or which may be reasonably inferred from the printed statement hereunto annexed shall be mutually binding upon the Commonwealth and the employee in relation to the work.

The Minister for Public Works, Sydney, has pointed out that the result of the Tribunal's decision in this instance, if accepted by the management at Walsh Island, is that, in spite of the plain wording of the agreement, day-work rates are now brought within the power of the Tribunal, and that whatever unions are unable to obtain from the Arbitration Court, they may secure from the Tribunal.

In a decision given in 1918, on an application for an award for employees engaged as 'day workers' at Walsh Island, it was held that the Tribunal had no jurisdiction to deal with rates of pay for day workers as the agreement expressly forbade the Tribunal fixing day-work rates.

Another case, in which the jurisdiction of the Tribunal has been questioned, is that of an application by the Federated Society of Boilermakers and Iron Shipbuilders of Australia (Victorian Branch) for the fixing of piece rates for furnace work. A copy of the decision in this case is enclosed and the Chief Executive Officer, Commonwealth Ship Construction has questioned the jurisdiction of the Tribunal to award what he considers to be obviously a time rate. In this connection, Mr Curchin bases his objection on clause (5) of the shipbuilding agreement previously referred to.

I shall be glad to be furnished with advice as to whether the matters referred to above are outside the jurisdiction of the Tribunal in the light of the shipbuilding agreement and the printed statement mentioned in clause (2) thereof.

Clause (2) of the agreement between the Commonwealth and the employee provides as follows:

That the conditions and principles in relation to shipbuilding work set out in or which may be reasonably inferred from the printed statement hereunto annexed shall be mutually binding upon the Commonwealth and the employee in relation to the work notwithstanding any rule order or direction of any union or association or the council committee or any official of any union or association to the contrary. It is not clear whether the 'printed statement hereunto annexed' includes pages 5 to 8 of the printed matter annexed. I presume, however, that it does not.

It is set out, inter alia, in paragraph 3 of the printed statement, that: 'The piecework rates will be fixed by the Tribunal, on the basis of the minimum amount of work that ought fairly be expected for the minimum wage'. It is set out, inter alia, in paragraph 4 of the statement, that: The Government gives an undertaking that a Board or Tribunal will be attached to each industry concerned in the building of ships, which will deal at once with all disputes (including demarcation disputes), and settle them without delay. When the number of men is considerable each yard will have a sectional Board. The Main Board will have power to determine the rate of wages for the persons engaged in the industry.

Sub-paragraphs (d) and (e) under the heading 'General Conditions' are as follows:

1. The Boards or Tribunals will investigate any alleged increases in the cost of living during the currency of the agreement. When such increases reach a certain point, the employees will automatically obtain a corresponding increase of wage.
2. The Government undertakes that the wages fixed in the shipbuilding industry will not be less than the basic wages fixed by the Commonwealth Arbitration Court or existing agreements.

The power given to the Main Board to determine the rate of wages extends, I think, to piecework rates only, and I am of opinion that it is not a 'reasonable inference' to be drawn from the printed statement that the Tribunal has jurisdiction to deal with day-work rates. I think further that clause (5) of the agreement between the Commonwealth and the employee simply expresses directly what may be implied from the printed statement.

That clause provides, however, that the Tribunal shall have exclusive jurisdiction to settle all disputes as to the meaning of the agreement or arising therefrom, and that its decision shall be final and accepted as such by all unions and persons engaged upon the shipbuilding work. There is, I think, no legal obligation on the Commonwealth to accept the decision of the Tribunal as final, and, where the question at issue is one of the jurisdiction of the Tribunal, it appears to be a proper one for reference to the Court of Appeal provided for in the fourth sub-paragraph of paragraph 4 of the statement.

It does not, of course, follow that because the Tribunal has not jurisdiction to deal with day-work rates as such, it cannot in any respect affect day-work rates. Under paragraph (8) of the General Conditions, it can investigate increases in the cost of living, and when the increases reach a certain point, the employees are to obtain a corresponding increase of wage automatically. This paragraph applies, in my opinion, to employees employed on day-work rates, as well as to those engaged on piecework.

As regards the cases submitted by the Secretary to the Prime Minister's Department, I am of opinion that, as regards the Electricians' case, the Tribunal had no jurisdiction ab initio; but, as regards the Boilermakers' case, the matters in dispute appear to have been the question whether piecework rates should be established. The Tribunal in this case appears to have been of opinion that no alteration should be made in the existing system, which was in substance one of payment for time employed rather than for work performed, and therefore more nearly akin to a day-work system than a piecework system. But inasmuch as the application which was made to the Tribunal was an application for the establishment of a piecework system, the Tribunal had, in my opinion, jurisdiction to deal with the application. Had the decision of the Tribunal been expressed in the form that, having considered the evidence, it considered it undesirable that piecework rates should be paid for the work in question, and therefore refused the application, the decision would have been technically unassailable. But in the form in which it is given it does appear to be open to the objection that it purports to fix time work rates (which, as pointed out above, are in the nature of day-work rates) and therefore to be outside the jurisdiction of the Tribunal.

[Vol. 17, p.49]