The first Award: 1906 Steamship Crew

Updated time

Last updated

10 January 2017

The Merchant Service Guild of Australasia v. The Commonwealth Steam-ship Owners' Association

(1906) 1 CAR 4, O’Connor J, President, 12 December 1906


The Commonwealth Court was established by the Conciliation and Arbitration Act 1904, first sat in 1905, and made its first award in 1906 in the maritime industry. The first two awards made by the Court were made with respect to the industries of the Great Strikes of the 1890s—maritime and shearing. There were to be some bitter and difficult disputes in these industries, but they were not as severe as the 1890s strikes had been.

In this case the Court of Conciliation and Arbitration made the first federal award. It would apply to employees and officers of shipping companies engaged in interstate and some overseas trade.

The court considered what wages were fair and reasonable:

In determining what is fair and reasonable certain rights of the parties must be kept in view. The right of the combination of employees given by the Act is, when the dispute is brought before the Court, to have an award of fair wages, not, as is sometimes urged by those who confuse the constitution of the wages fund with the right to wages, a right to be awarded a fair proportion of the profits. Except in co-operative concerns employees are in no sense partners with their employers. They run no financial risks, and incur no liabilities. On the other hand the right of the employer is to manage his business in his own way without interference of any kind except in so far as the Court may deem it necessary to interfere for the purpose of making effective the right given by the Act to the combination of employees to fair wages ... The question therefore resolves itself into this — are the masters and officers getting fair pay for the work they are doing? [p.25]

The court discussed the applicable test for fair rates of pay:

In considering whether the rates paid are fair, the first question for solution is what test is to be applied ... the respondents suggested that the market value of the services rendered is the true and only test. That cannot be so. The whole body of modern legislation against sweating is founded on the experience that competition, which fixes market value, may under certain conditions produce a market rate of wage which literally is not enough to keep body and soul together. Market value therefore cannot be the only test — but market value must always be the most important element in any test which is to be applied. In my opinion the soundest basis of comparison and the one I have adopted is this. Take the market value of masters’ and officers’ services on ordinary deep sea voyages. To that must be added something for the increased responsibility and risk of constant coast and harbor navigation, and the management of ships in pilotage waters — there must also be added something for the increased cost of living in Australia, not only by reason of the higher cost of some of life’s necessaries, but also by reason of the increased comfort of living and the higher standard of social conditions, which the general sense of the community in Australia allows to those who live by labour. [p.27]

For an appropriate guide for fair and reasonable wages, the court looked to New Zealand:

Having thus determined that the present pay of masters and officers ought to be increased, but cannot in fairness be very largely increased, I have now to fix the amount. In doing so, I have been much aided by the terms of the agreement under which the Union Steam-ship Company of New Zealand, paying higher rates than the companies of the respondent Organization, has for some years regulated the pay of masters and officers, apparently to the satisfaction of all parties concerned ... It may, I think, be fairly inferred that the rates fixed in this agreement, which has worked so satisfactorily for years, represents what ship-owners, masters and officers consider fair and reasonable. Living conditions, business conditions, and shipping conditions in New Zealand and Australia are practically identical ... Under these circumstances I have no hesitation in following the guidance of this voluntary agreement fixing rates for masters and officers, and I have adopted it as the basis of my award on this part of the claim. [pp.31–32]

The court then turned to a claim for easier working conditions:

The evidence has established conclusively that in every branch of the interstate trade officers have been compelled at times to remain unduly long hours on duty, and that in certain ports ... where cargoes have to be handled within a limited period to keep a time-table of sailing dates the officers in charge of the hatches ... have been frequently kept at work day and night until the ship was ready to sail. In cases where exceptionally heavy cargoes were handled, or where, by reason of bad weather, the ship arrived late in port, 18, 24, and even 30, hours continuously on duty supervising cargo work with short intervals for meals, were not unusual incidents of a voyage. And these long hours were in some cases worked in port after port on the same voyage. It was proved that in many instances the officer began his long stretch of work after coming off his usual sea watch without rest, and in other cases it was proved that after long and continuous hours of duty on cargo — so long and continuous as to have almost exhausted the power of physical endurance — it was not an unusual thing for an officer to be obliged to take up without rest his usual see watch for 4 hours. [p.34]

[I]t is quite clear that under the present system officers in the interstate trade are as a matter of ordinary routine called upon to work unreasonably long hours. [p.35]

The parties conferred on this issue and the court acknowledged their conciliatory nature:

It is much to the credit of the respondent Organization that when this ground of complaint was brought under their notice by the complainants in these proceedings they voluntarily provided a certain measure of relief by putting on special shore officers at some of the principle ports to supervise night work ... I have embodied the system agreed upon in the award, following as far as possible the language which the parties themselves have used. In a few words its effect will be to insure that under ordinary circumstances an officer's work in port will not be unduly prolonged, and that he shall have a reasonable opportunity of rest before taking his first sea watch out of port. [p.35]