Ex parte H.V. McKay,Ex parte H.V. McKay (1907) 2 CAR 1. commonly referred to as the Harvester case, is a 1907 decision of the Commonwealth Court of Conciliation and Arbitration considered a landmark in Australian labour law.
The case arose under the Excise Tariff Act 1906,. an element of the Deakin government's New Protection policy. The act imposed an excise duty on goods manufactured in Australia (£6 in the case of a stripper harvester), but if a manufacturer paid "fair and reasonable" wages to its employees, it was excused from paying the excise duty. The Court therefore had to consider what was a "fair and reasonable" wage for the purpose of the act.
H.B. Higgins declared that "fair and reasonable" wages for an unskilled male worker required a living wage that was sufficient for "a human being in a civilised community" to support a wife and three children in "frugal comfort", while a skilled worker should receive an additional margin for their skills, regardless of the employer's capacity to pay.
While the High Court of Australia in 1908 held that the Excise Tariff Act 1906 was invalid in R v Barger,. the judgment nevertheless continued to be the basis for the minimum wage system that extended to half of the Australian workforce in less than 20 years. The decision was credited as the foundation for the national minimum wage included in the Fair Work Act 2009.. As well as national ramifications, the decision was of international significance.
Background In 1906 the second Deakin government was in power, with support from the Labor party. Prime Minister Deakin's "New Protection" policy was to provide tariff protection to employers in exchange for "fair and reasonable" wages for employees. In implementing this policy, the Commonwealth government introduced two bills, requires separate laws that deal exclusively with customs and with excise. that would become the Customs Tariff Act 1906,. and the Excise Tariff Act 1906, Higgins was a member of the Australian Parliament and spoke in support of the bills that imposed custom and excise duties that were payable on certain agricultural machinery, including stripper harvesters. The Excise Tariff Act 1906 contained a proviso that the excise would not be payable if the manufacturer paid "fair and reasonable" wages as follows: Provided that this Act shall not apply to goods manufactured by any person in any part of the Commonwealth under conditions as to remuneration of labour which— are declared by resolution of both Houses of Parliament to be fair and reasonable; or are in accordance with an industrial award under the Commonwealth Conciliation and Arbitration Act 1904,; or are in accordance with the terms of an industrial agreement filed under the Commonwealth Conciliation and Arbitration Act 1904; or <li>are, on an application made for the purpose to the President of the Commonwealth Court of Conciliation and Arbitration, declared to be fair and reasonable by him or by a Judge of the Supreme Court of a State or any person or persons who compose a State Industrial Authority to whom he may refer the matter.
H. B. Higgins H. B. Higgins had been a member of the Parliament of Victoria and in 1896 supported the trial introduction of a minimum wage. He successfully argued at the 1897-1898 conventions that the constitution should contain a guarantee of religious freedom, and also a provision giving the federal government the power to make laws relating to the conciliation and arbitration of industrial disputes. The industrial disputes proposal was initially unsuccessful, H Higgins at p. 782, vote at p. 793, 12 in favour, including Higgins & Isaacs, 22 opposed, including Barton & O'Connor. however Higgins was undeterred and succeeded in 1898. vote at p. 212, 22 in favour, including Higgins & Isaacs, 19 opposed, including Barton & O'Connor. Despite these successes, Higgins J had opposed the draft constitution produced by the convention as too conservative, and campaigned unsuccessfully to have it defeated at the 1899 Australian constitutional referendum.
After the federation of Australia, Higgins was a member of the Australian Parliament as a member of the Protectionist Party, but was in broad agreement with the Labor party's social reforms. When the Labor Party sought to amend the Conciliation and Arbitration Bill to cover state railway employees, Higgins was one of the radicals who supported the amendments and helped bring down Deakin's government. When Labor formed a minority government in 1904, Higgins became Attorney-General in the Labor ministry, because Labor had no suitably qualified lawyer in Parliament.
In October 1906 Higgins was appointed to the High Court and the following year O'Connor J resigned as President of the Commonwealth Court of Conciliation and Arbitration and was replaced by Higgins J.
Hugh Victor McKay
Hugh Victor McKay was one of Australia's largest employers, manufacturing agricultural machinery, most notably the Sunshine Harvester. McKay had a reputation for discouraging union membership, and had previously closed his factory at Ballarat and moved to the Sunshine Harvester Works to avoid paying workers under the determination of a wages board. Under the Excise Tariff Act 1906, he was required to pay an excise tax unless he paid wages that were fair and reasonable. McKay applied to the Commonwealth Court of Conciliation and Arbitration for a declaration that the wages paid by him were fair and reasonable.Ex parte in the case name is used to indicate "on the application" of McKay, not in the alternate sense of being heard in the absence of a party.
The hearing in the Court of Conciliation and Arbitration McKay's was one of 112 applications by manufacturers of agricultural machinery in Victoria and his application was selected as a test case because the factory was one of the largest, and had the greatest number and variety of employees and because his application was strongly opposed by various unions.The unions were the Agricultural Implement Makers' Society; the Amalgamated Ironmoulders; the Amalgamated Iron Foundry Employees; Tinssmiths' and Iron-workers' Society; and the Iron-workers' Assistants' Society, the Federated Sawmill, Timber Yard, and General Woodworkers' Union; the Amalgamated Carpenters; the Coachbuilders' and the Wheelwrights' Society and the Certificated Engine-drivers. Other applicants were told that the Court, in dealing with their application, would be limited to the information obtained in McKay's hearing unless there was some exceptional circumstances. Several large manufacturers were represented in the hearing, but did not call any evidence. The hearing took place in Melbourne over 20 days between 7 October 1907 to 1 November 1907.
The evidence and arguments McKay's case was that fair and reasonable wages should be calculated according to the worth of each individual to the business and led evidence from eight witnesses, including from the factory superintendent, McKay's brother George. George McKay's evidence was that the workers received fair and reasonable wages that took into account their level of skill, experience, age, qualifications, complexity of work, equipment used, and level of danger. The employees at the Sunshine Harvester factory required less skill, judgement and discretion because of mechanisation which had simplified and standardised the work.
The unions, represented by Duffy and Arthur, led evidence from employees of McKay's factory and also their wives, union officials and others dealing with everything from the conditions at the factory and elsewhere to the cost of living, including the "reasonable enjoyments that a man enjoys in that state of life". Higgins J gave his judgment on 8 November 1907.
The decision Higgins J held that for McKay to pay a fair and reasonable wage meant paying his employees a wages that met "the normal needs of an average employee, regarded as a human being in a civilised community", regardless of his capacity to pay. This gave rise to the legal requirement for a basic wage. In defining a 'fair and reasonable wage', Higgins (without explicit acknowledgement) employed Pope Leo XIII's Rerum novarum of 1891, an open letter to all the bishops that addressed the condition of the working classes.Kevin Blackburn, The living wage in Australia: a secularization of Catholic ethics on wages, 1891–1907, Journal of Religious History 20 (1996), 93-113. Higgins ruled that remuneration "must be enough to support the wage earner in reasonable and frugal comfort." A 'fair and reasonable' minimum wage for unskilled workers of 7/- (7 shillings), which is around 70 cents, or 42/- per week. Later surveys showed that this minimum was adequate to provide subsistence.
Higgins's judgment read as follows: One finds that the Legislation has not indicated what is meant by 'fair and reasonable,' what is the model or criterion by which fairness and reasonableness are to be determined. It is to be regretted that the Legislature has not given a definition of the words. It is the function of the Legislature, not of the Judiciary, to deal with social and economic problems; it is for the Judiciary to apply, and, when necessary, interpret the enactments of the Legislature. But here this whole controversial problem, with its grave social and economic bearings, has been committed to a judge, who is not, at least directly, responsible, and who ought not to be responsible to public opinion. even if the delegation of duties should be successful in this case, it by no means follows that it will be so hereafter. I do not protest against the difficulty of the problem, but against the confusion of functions and against the failure to define, the shunting of legislative responsibility. It would be almost as reasonable to tell a Court to do what is 'right' with regard to real estate, and yet lay down no laws or principles for its guidance. In the course of the long discussion of this case, I have been convinced that the President of this Court is put in a false position. The strength of the Judiciary in the public confidence is largely because the judge has not to devise great principles of action as between great classes, or to lay down what is fair and reasonable between contending interests in the community; but has to carry out mandates of the Legislature evolved out of the conflict of public opinion after debate in Parliament. I venture to think that it will not be found wise to bring the judicial department within the range of political fire....
The provision for 'fair and reasonable' remuneration is obviously designed for the benefit of the employees in the industry; and it must be meant to secure to them something which they cannot get by the ordinary system of individual bargaining with employers....