‘fair and reasonable’wages were, but left this to the new Commonwealth
Conciliation and Arbitration Court to decide.
H. V. McKay applied to the Court for remission of excise on his products and
the president of the Court, Justice Henry Bournes Higgins, selected his appli-
cation for a test case to decide what‘fair and reasonable’wages really were.
When the hearing of the Harvester Case began in Melbourne in 7 October
1907, George Shaw set to work to prove that McKay’s existing wages were fair
and reasonable, while the Agricultural Implement Makers Union, which rep-
resented a minority of McKay’s workers (most were not union members),
argued that wages were far too low. The case ran for twenty days and forty-
nine witnesses gave evidence, most of them called by the union.^10
The union’s leaders instructed their barrister to seek wage justice on the
basis of McKay’s huge profits, but Justice Higgins refused to accept this
approach. Rather, he insisted that the case was not about profit-sharing but
about the payment of wages before profits were calculated. Higgins believed
that an employer who could not pay fair and reasonable wages should not be
in business.
Higgins began exploring what the cost of living was in Melbourne in order
to ascertain what a fair and reasonable wage should be. His research was
amateurish. He took some calculations of the weekly budget of a family of
five by Vida Goldstein (1907), a prominent socialist, Christian Scientist and
feminist, and then prompted the union to produce the budgets of eleven
supposedly random households to show how much it cost for a family to live.
While the case was being heard, George Shaw wrote a letter to a friend:
I have come to the conclusion that we are sure to have our wages put up. Between
you and me I would not be particularly sorry at the result, if I were not battling for
McKay. I do not think he could support the wages he pays if he had all the KCs
[King’s Counsels] in the world. (Shaw 1963, p. 166)Shaw’s anticipation that he would lose the case was correct. Justice Higgins
found that the wages paid by McKay to his unskilled workers were not fair and
reasonable. He then set about defining‘fair and reasonable’. He consciously
and deliberately took no account of market forces or profitability in deciding
the case. The judge reasoned that the Act specified that employers should pay
‘fair and reasonable’wages and that these words must mean something more
than the level set by what he saw as the‘barbarous higgling of the market’.
Higgins concluded:‘I cannot think of any other standard than the normal
needs of the average employee, regarded as a human being, living in a civilised
community.’^11 He argued that:
(^10) A good account of the progress of the Harvester Case is in Lack and Fahey (2008).
(^11) See‘Harvester Excise. Mr Justice Higgins’Decision’(1907).
The Industrialist, Solicitor, and Justice Higgins