He would not think that an employer and a workman contracted on an equal
footing, or made a fair agreement as to wages, when the workman submitted to
work for a low wage to avoid starvation or pauperism...for himself and his family,
or that the agreement was reasonable if it did not carry a wage sufficient to ensure
the workman food, shelter, clothing, frugal comfort, provision for evil days, etc.^12Using the small survey of household expenses presented as evidence during
the case, and guessing (inaccurately) that the average household consisted of a
husband, wife, and three children, Higgins ruled that the minimum living
wage should be 7 shillings a day.
Although George Shaw was not surprised by this decision and, indeed,
privately welcomed it, his cousin was outraged. McKay was even angrier
when the Commonwealth followed up with a demand for £20,000 in excise
on the grounds that his wages had not been fair and reasonable, even though
he had increased his wages to 7s a day following Justice Higgins’judgement.
George Shaw realized that the only way out was to challenge the validity of the
Excise Tariff Act. In March 1908, when the case was heard by the High Court,
McKay’s barristers argued that the Act was unconstitutional. The High Court
agreed by a majority of three to two (with Higgins one of the dissenters), and
in late June the Act was thrown out.^13
However, while this decision saved McKay from having to pay excise, the
principles set out in the Harvester judgement were maintained by the Con-
ciliation and Arbitration Court and became the foundation of the Australian
industrial relations system for many decades. The basic wage was set as the
minimum wage for an adult male to support himself and his family in frugal
comfort, and, on top of this, there developed a complicated system of margins
for skill, hard physical labour, and so on.
12.3 The Context
The Harvester judgement struck a strong chord with public opinion in
Australia. The belief that the state had a role in adjudicating wages, rather
than leaving the matter to the‘higgling of the market’and the‘unequal
contest’between employer and individual worker was not new—state wages
boards had been introduced from the 1880s. But Higgins’declaration that a
minimum‘fair and reasonable’wage should be an absolute amount reflecting
a family’s cost of living was something quite new.
The fact that George Shaw agreed with the Harvester decision goes a long
way towards explaining its quick and widespread acceptance. George Shaw
(^12) See‘Harvester Judgement.“Fair and Reasonable Remuneration”’(1907).
(^13) For the High Court decision, see‘“New Protection”Invalid’(1908, p. 12).
Peter Yule