(c) To report whether any external assistance is required to allow of the present rates of wages to the workers being maintained.

The parties undertook that the findings of the Court affecting the question of wages reduction would be adopted at the works other than the 30 per cent. mentioned above, at which losses had been heaviest, and that these findings would be binding until 31st March, 1926. It was understood with regard to the 30 per cent. that both sides agreed that for the time being, at any rate, there could be no question of their re-opening, until it was possible to operate them without loss. It was further understood that on questions (a) and (b), if the Court found in favour of the employers, a 10 per cent. reduction would come into operation immediately. If, on the other hand, the workpeople's contentions were supported by the Court, wages should remain at their previous level.

The Court held their first public sitting on 17th December, in Glasgow, and subsequent sittings were held on 18th, 19th, 21st and 29th December. After the Court had been in session two days, in view of the time which would necessarily elapse before the report could be issued and the desire of both parties to secure immediately as complete a resumption as possible, the parties came to an agreement, at the instance of the Court, that work should be resumed forthwith, as far as practicable, at the 70 per cent. of works and mines where losses had been least severe, and that pending the issue of the Court's report, wages should be 5 per cent. less than those in operation prior to the dispute. An agreement on these lines was signed by the parties on 21st December and work commenced the following day.

The report of the Court was received on 13th March, 1926.

Courts of Inquiry.

During the year Courts of Inquiry were set up under Part II of the Industrial Courts Act in connection with three disputes. as follows:

(i) Steel Houses.

(ii) The Coal Mining Industry.

(iii) Railway Shopmen-London and North Eastern Railway and Cheshire Lines.

Particulars of these disputes are given below:

(i) Steel Houses.

Disputes having been threatened in connection with the erection of houses of a type faced externally with steel sheeting, the Minister of Labour appointed a Court of Inquiry on 14th March to inquire into and report upon the causes and circumstances thereof.

The Court, which consisted of Lord Bradbury (Chairman), Mr. C. T. Cramp and Mr. D. Milne Watson, issued their report on 23rd April (Cmd. 2392).

The report explains the development and details of the scheme of Messrs. Weir, recites the circumstances of the threatened disputes at Leeds, Sheffield and Glasgow in regard to the proposed erection of Weir houses, and summarises the contentions of the parties. Messrs. Weir informed the Court that the essence of the scheme is that it is the application of engineering methods to the production of houses by manufacturing them in a factory and is not building trade work in the generally accepted sense, the scheme having been so designed as to avoid impinging on the building industry. They claimed that all the processes, both in the manufacture in the factory and of the assembly on the site, have been so simplified that they can be carried out by men possessing no special skill, and that the methods adopted mark a departure from those in general operation in the building industry. Accordingly, building trade rates of wages are not applicable to the men employed, to whom it is fair and reasonable to pay the rates of their own trade. In the opinion of Messrs. Weir the methods and operations lend themselves admirably to a system of payment by results, by means of which the earnings of the men employed will be considerably enhanced and the output of houses increased. They hold that by observing engineering rates and conditions they are conforming to the requirement of the Fair Wages Clause, that in the absence of recognised rates of wages and hours of labour those which in practice prevail among good employers shall be observed. They further contend that their scheme is a definite contribution towards helping to reduce the numbers of unemployed, as their labour is recruited wholly from the unemployed and, in particular, from amongst the unemployed craftsmen in the trades hardest hit by the present industrial depression, namely, the engineering, shipbuilding and iron and steel trades.

On the other hand, the main contention of both the employers and operatives in the building industry was that rates of wages and conditions of employment in that industry are determined by a national agreement of May, 1920, that any firm coming into the industry must conform to those agreed rates and conditions, and that means exist within the rules governing the building industry for determining the rates of wages for new operations introduced into the industry and for adapting existing conditions to changes in the industry. The employers and operatives are in agreement that the methods and operations of Messrs. Weir do not represent a departure from the recognised practice in the building industry. Both employers and operatives contend that the building industry is making a great effort to meet the housing needs of the nation, with the result that arrears are being overtaken and a greater number of houses will be built this year than in any previous year; also the building

industry is enlarging its ranks very considerably by means of an extended system of apprenticeship agreed by the Building Industry Committee, which is composed of representatives of employers and operatives in the industry. The operatives regard the Weir scheme as an attempt to undermine the Fair Wages Resolution of the House of Commons and to break down trade union rates and conditions which are at present safeguarded by the Fair Wages Resolution. Any system of payment by results or piecework is opposed by the operatives, as in their view it is not appropriate to the building industry. On the other hand, the employers in the main favour a system of bonus on output. Other evidence was given by the General Secretary of the Federation of Engineering and Shipbuilding Trades, who explained that in general an engineering craftsman claims to follow the trade to which he has been apprenticed, wherever it takes him. If, owing to slackness of trade in the engineering industry, such a man is unable to obtain employment as an engineer, the man's union would raise no objection to his accepting some other job which is not engineering, but the union would be concerned in the rate of wages which is offered to him. The General Manager of Messrs. Braithwaite and Company informed the Court that in the construction of the Telford all-steel house the manufacture of the carcase of the house is done under engineering trade conditions, whilst for the erection work constructional engineering rates are paid. When the carcase has been erected the other crafts complete the work, building trade rates being paid.

In their considerations and conclusions the Court state that the dispute is not a labour dispute in the ordinary sense of a difference between an employer and his own workmen as to rates of wages or conditions of employment. So far as Messrs. Weir and those whom they are employing or proposing to employ are concerned, no trouble has arisen or is apprehended. The real cause of the threatened stoppage of work is the employment by Messrs. Weir, on the manufacture and assembly of their houses, of men at rates of wages and conditions of employment not in conformity with those obtaining in the building trade. The stoppage of work, had it taken place, would have applied to all building work in the districts of Leeds and Sheffield, and a position would have arisen in which all housing and other building work carried on in those districts by building trades employers would have been stopped, whereas the work on the Weir houses would have continued, injury thus being inflicted on the employers in the building industry in spite of the fact that they entirely agreed with the operatives' point of view. The report proceeds :

"This action appears to us to be entirely inappropriate and illogical. It was submitted to us that before such an extraordinary position could come about, the conciliation machinery of the building industry would have come into

operation, and we were assured that every effort would be made by those in the industry to prevent a stoppage of work and that the conciliation machinery would be used to the full. This assurance is valuable, and we are confident that the good sense of employers and operatives would have endeavoured to avoid such a position as that indicated above."

The

The Court state that all contracts entered into by Messrs. Weir with Local Authorities for the erection of houses will be subject to the standing orders of the Corporations, and will consequently contain, in practically all cases, a Fair Wages Clause. question whether in connection with any particular contract Messrs. Weir are carrying out their obligations under the Fair Wages Clause depends upon the terms of the particular clause and the facts relating to the particular case, and is a matter to be determined on this basis by the Local Authority concerned. The Court then state that

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there appears to us to be no reason why the Local Authorities should not proceed at once with their arrangements for the erection of the demonstration Weir houses. It is very desirable in the interests of the community that the recommendations of the Moir Committee for the erection of houses of a type faced externally with steel sheeting in sufficient numbers to enable the system to be properly tested, should be carried out at the earliest moment.

"The question of the rates of pay which should be assigned to the different classes of workmen engaged in the various operations in the housing factory and upon the sites and the conditions of their employment is, in our judgment, a matter which ought to be, and can be, settled by agreement between Messrs. Weir and the trade unions representing the men employed on the work; rates and conditions thus determined would appear to us to meet the obligations imposed in connection with the observance of the Fair Wages Clause. It is not, in our view, a case for the automatic and rigid application of rates and conditions which have. been established in respect of the ordinary methods of the building trade."

The Court proceed to examine separately the stages of the manufacture of the houses within the factory and the erection on the site, and state that within the factory Messrs. Weir have evolved a highly standardised and sectionalised system of manufacture, and have developed the processes on such lines that there are practically no skilled operations to be performed, and in accordance with the principles of mass production the men in the factory are, in general, called upon to do one job only. A comparison of a typical factory in the building trade and Messrs. Weir's factory leads the Court to the conclusion that Messrs. Weir's methods of manufacture are essentially different

from the traditional methods of the building trade. With regard to the stage of erection on the site, the process of erecting an ordinary house is compared with the process of erecting a Weir house, and the conclusion is reached that, just as in the development of many forms of mechanical engineering, the standardisation of house-parts by Messrs. Weir has reached a stage at which all that is required for the erection of the house is the assembly of standardised parts prepared by mass production methods in the factory of a character so simplified that there is no longer need to call for the skill of the craftsman.

With regard to payment by results, the Court state that—

"There can be no doubt that payment by results-a recognised feature in the engineering industry-is peculiarly appropriate to the methods both of manufacture and assembly followed by Messrs. Weir in house construction, and we are convinced that such a system, worked out in conjunction with the men's trade unions, will, if put into operation by Messrs. Weir, result in advantage both to the firm and to the men employed."

Finally, the report proceeds

Messrs Weir have, in fact, devised a way of supplementing the supply of houses by utilising the methods of the engineering trade, just as that trade in the production of motor vehicles or of steel bridges supplemented the supply of vehicles and bridges formerly produced by skilled wheelwrights and masons respectively. The firm have definitely and purposely avoided the use of building trade labour for their special purposes, one of their objects being to avoid taking men from an industry which is admittedly overburdened at the present time. As we have indicated above, it seems to us clear that their system of mass production of houses by the application of engineering methods, both on the manufacture and on the erection of the houses, involves substantial departures from the traditional methods of the building industry.

"Regard being had to these departures from traditional building trade methods, it appears to us that both rates of pay and conditions of labour must be adjusted to the new conditions by the procedure we have suggested above. The position of the workmen employed can, in our opinion, be fully safeguarded by their own trade unions, in consultation, on matters in which the interests of the building trade proper appear to be affected, with the building trade

unions.

"It is proper to take into account the wide social aspects of the question. The two greatest domestic problems before the nation are unemployment and housing, and Messrs. Weir's scheme has the merit of assisting towards a lessening of the former difficulty whilst making a material contri