Report of the Commission on Industrial

Relations in Great Britain

[Footnotes will be found at end of report]

The President's instructions in his letter of June 16, 1938, to the members of the Commission were as follows:

In view of the many comments that have come to my attention relative to industrial relations in Great Britain, I feel that there is a definite need for an impartial report which will adequately portray the real situation that prevails in British industry. I trust that, through conferring with Government officials, industrial leaders, and labor officials, you will be in a position to report to the Secretary of Labor not only on the exact status of laboremployer relations in England, but also on the evolution of the established procedures that account for the current state of industrial relations in that country.

I. THE COMMISSION'S STUDIES IN GREAT BRITAIN

1. In Great Britain employers in the major industries are generally members of industry-wide associations, which negotiate collective agreement with labor unions, or with groups or associations of unions.

2. The Commission held conferences with officials of the employers' associations and of the principal unions or associations of unions in the following industries: Engineering (which in Great Britain includes manufacturers of machinery products, such as automobiles, electrical apparatus and appliances, aircraft, radios, machine tools and so forth), iron and steel, pottery, newspaper publishing, boots and shoes, coal mining, shipping, cotton textiles, printing, some distributive trades, and transportation. The Commission also conferred with officials of the National Confederation of Employers Organizations (which deals with the broader aspects of labor relations and labor policies only) and with officials of the Trades Union Congress and the Scottish Trades Union Congress, which are general confederations of unions; as well as with officials of the Transport and General Workers Union, the National Union of General and Municipal Workers and the National Union of Distributive and Allied Workers, and with a number of individual employers in different industries, including some who have no union agreement. 3. As the report will show, a number of trade boards, composed of representatives of employers, workers, and the public, have been created under the Trade Board Acts with the power and duty of fixing minimum wages, determining normal working hours, and fixing overtime rates in trades where the wage standards are low and where organization of employers and workers is ineffectual. The Commission met with representatives expressing the point of

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view of employers and workers toward the trade boards, and attended a session of one of these boards. A session of the Industrial Court, which adjudicates controversies submitted to it by the parties, was similarly attended.

4. Much documentary material was supplied to the Commission by representatives of employers' associations and trade-unions and by the Ministry of Labor.

5. The salient features of the situation that now prevail in British industry, as set forth in this report, are easily discernible. In their broader outlines they were pictured for us without substantial variation by the Ministry of Labor, by the officials of the National Confederation of Employers Organizations, and of the Trades Union Congress, and by the responsible officials of the 10 employer associations and the labor unions in the industries listed above. Our conferences with these people left no room for doubt about the existence or the nature of these salient features of employer-worker relations in Great Britain. As to their social effects, we endeavored to check the views of the persons directly engaged in them by conference with individuals less directly concerned but conversant from various points of view with current affairs; including students of government and law, publicists, prominent economists, leaders of the Labor Party, and several representatives of the dominant political party and of the left wing in politics and in labor unions. We know that laboremployer relations have ramifications as wide as society itself, and we are not unconscious of the fact that, by the very nature of the methods available to us, it was not possible to unearth, or to make any adequate cross-sectional test of, the reaction of the rank and file of workers or of the average citizen to these dominant factors in employer-worker relations. On the other hand, our investigation, within its practictable scope, has not lacked the virtue of self-criticism; nine times repeated from our different points of view.

6. As to the evolution of the established procedures in British employer-worker relations, that is a matter of historical research for which we have had to depend upon currently available studies (which are considerable in number, and authoritative in character), plus such confirmation as has come to us from the personal knowledge of those with whom we have conferred and from the factual evidence of documents such as constitutions of unions and confederations of unions and of employers associations, printed copies of collective agreements, Royal Commission reports and so on.

7. Throughout our investigations we received most helpful cooperation from the officials of the Ministry of Labor. They responded promptly and generously to every call we made upon them for information, statistical and otherwise. We take this opportunity to express to them our appreciation; and at the same time to add that we met with like generous and helpful cooperation from all of the officials of employers' associations and of unions, as well as the individual citizens, with whom we came in contact; and we here express also our appreciation of their assistance and courtesy.

II. PRESENT PROCEDURE IN WORKER-EMPLOYER RELATIONS

(a) UNIONS AND EMPLOYERS ORGANIZATIONS

8. Labor-union development in Great Britain has been gradual over a long period of time. It began at least as far back as the repeal of the combination laws in 1825. Its growth is briefly traced in part III of this report, in connection with the historical evolution of collective bargaining. At the end of 1936 there were in existence in Great Britain and Ireland 1,041 trade-unions, with a stated membership of 5,308,000,2 representing roughly one-third of the workers estimated as eligible for union membership. About half of the total union membership belonged to unions which were grouped, for purposes of collective bargaining, into 63 federations of varying size and composition. The Trades Union Congress affiliates most of these unions in a large confederation, and most of the Scottish unions are in addition affiliated to the Scottish Trades Union Congress.

9. The formation in Great Britain, first locally and then on an industry-wide basis, of employers' associations for dealing with labor matters, has also covered a long period of time. They were initiated in response to, and originally to combat, the growth of unions. Subsequently, after periods of more or less severe conflict, they entered into collective agreements with the unions-a development which, as is shown in part III, was already well under way in the nineties and continued steadily thereafter, reaching substantially its present form and scope by the end of 1921. At the end of 1936 there were 266 general federations or associations of employers, designed to cover the whole of an industry or service, and to deal exclusively with labor matters. In addition, there were 1,550 other such employers' associations, chiefly of a local or district character. Many of these are affiliated to the general associations. Most of the general associations are members of the National Confederation of Employers' Organizations, which deals with the broader aspects of labor relations and labor policies."

10. On both the employer and the workers' side these organizations differ in structure and in their internal regulation. Among the employers' associations some, like the Mining Association, are quite homogeneous; some, like the Engineering and Allied Employers' National Federation, bring together many different types of manufacturing; some like the Wholesale Clothing Manufacturers Association, affiliate both district associations and individual firms; some, as in the textile industry, consist of particular divisions of an industry according to materials or processes or both. Among the union federations, some are very loosely organized and others are so highly developed that they differ little from amalgamations; they may bring together unions in different industries, or local unions in a single industry, or associations of national unions in a single industry.

11. This diversity of structure is the result of long historical growth reflecting the different customs, practices, and traditions in the various industries.

(b) COLLECTIVE AGREEMENTS

12. The employers' associations and the unions have long since become an integral part of a collective-bargaining system in which they respect one another and mutually attribute real value to the agreements and to the relations that have been built up between them. In Great Britain the expression "collective agreement" does not mean an agreement between a single employer and his workers, or even an agreement between a single employer and a union. It means an agreement negotiated collectively by representatives of a group or association of employers (commonly an industry-wide association), and representatives of a union or a group or association of unions.

13. Great diversity appears in the collective agreements; in the provisions for wages, hours, and working conditions, and in the procedure for the settlement of disputes. Many of the agreements with employers' associations are national in scope, regulating the terms of employment of the members' employees, both union and nonunion, in the categories covered by the agreements. Other agreements, though less frequently, are between unions and district, rather than national, associations of employers. Moreover, even in industries where national agreements define the terms of employment with great precision, supplementary district or local agreements often exist. In the case of nonfederated employers, individual agreements may be negotiated with the unions; when they are negotiated they generally conform to the national agreements. The extent to which standards set in the national agreements are observed by nonfederated employers depends on the extent of union organization in the particular trade or locality.

14. The wage provisions in collective agreements are multiform. In the case of time rates they are sometimes expressed as minima and sometimes as standard rates which in practice are the prevailing rates; they are frequently differentiated according to locality. In the case of piece rates the agreements sometimes specify the actual rates in lists which may cover a large number and variety of articles and operations, while other agreements are less detailed. Generally the piece rates are calculated to yield to an average or an ordinary worker a certain minimum percentage above the agreed time rates. Provisions are also made in some agreements for group piece work, for bonus payments dependent on output, and for the automatic adjustment of wages in accordance with variations in selling price or in the proceeds of the industry (restricted to coal mining) or in the cost-of-living indices of the Ministry of Labor. Increases in wages have generally been made by a flat amount of so much per hour or per week, and this has had the effect of decreasing the percentage difference between the unskilled and the skilled worker. At the same time, the differences between skilled workers in different trades are becoming less. In those trades where a cost-of-living bonus is applied (which is usually in the form of so many shillings per week rather than a percentage on the wages) this tendency of decreasing the percentage difference is again observed. The same tendency is found in the action of the trade boards in the very low-wage classes. Hours are generally fixed by industry-wide agreements, usually from 44 to 48, but in some cases less. There are many differences in the