The Federation of Labour 1937-1987

Peter Franks is a labour historian. He was the Communications & Research Officer at the Council of Trade Unions from 1994 to 1999. Below is a speech he gave to the CTU's reception commemorating the 10th Biennial Conference of the NZ Council of Trade Unions and the 70th Anniversary of the Federation of Labour. 

The Federation of Labour 1937-1987
Reception commemorating the  10th Biennial Conference of the NZ Council of Trade Unions and the 70th Anniversary of the Federation of Labour, 15th October 2007 – Peter Franks

I want to thank the CTU officers for the invitation to speak here tonight. The creation of the Federation of Labour was an important turning point in the history of trade unions in our country. Before 1937 unions were fragmented and divided. In 1937 they created a central organisation that became an influential voice for workers.

Before I talk about what happened seventy years ago, I want to talk about the FOL as I remember it. In the 1980s, FOL annual conferences filled the Wellington Town Hall. They sat for four days and were, in many ways, grand theatrical occasions. The rhetoric was strong, the resolutions were lengthy, the debates could be fierce and the media was ever vigilant to spot divisions in the ranks. The Clerical Workers’ delegation used to sit close to the Electrical Workers and, more than once, I noticed that the TV cameras started filming precisely at the moment when Tony Neary, the secretary of the Electrical Workers Union, rose to challenge Jim Knox.

The FOL stage was overflowing with people trying to get important parts but there was no question that the lead role belonged to Jim Knox. He was a man of great commitment and loyalty and he said a lot about the trade union movement of that time when he talked about ‘the working class people we represent and their wives and children’. Although things were starting to change, the FOL conferences of the 1980s were overwhelmingly male. There were few Maori, even fewer Pacifica people and most state unions were not affiliated. It was very different from today’s union movement.

I now want to go further back in history and talk about the formation of the Federation of Labour.

Before 1937 unions were divided nationally between the ‘militant’ Alliance of Labour and the ‘moderate’ Trades and Labour Councils Federation. The mass unemployment, wage cutting and social distress of the Great Depression had left unions in a very weak state. Working people rallied behind the Labour Party which swept to office in 1935.

The Labour Government strengthened the employment laws and introduced compulsory unionism. At a result of these changes, union membership trebled between 1935 and 1937. At the end of World War II 60 per cent of workers were union members.

There was a lot of support for a united central organisation of unions. But on the eve of the formation of the FOL, a public row broke out in the press between leaders of rival factions of the Alliance of Labour.

Between February and April 1937 the Wellington Evening Post published a lengthy correspondence between Fintan Patrick Walsh, representing one faction, and Arthur Cook and Jim Roberts, representing the other. No holds were barred. It began with claims about who represented the real Alliance and descended into accusations of conniving with employers, helping scabs and undermining the Labour Party. Each side denounced the other for airing their differences in the capitalist press, yet the controversy ran over 14 issues of the Post. It was an extraordinary display of bad behaviour but it certainly showed that our movement’s history is not boring.

The rival factions issued invitations to rival unity conferences, one on 23 March and the other on 2 April. While the public debate was raging, other union leaders and Labour cabinet ministers exerted pressure behind the scenes. The rival conferences were cancelled and Peter Fraser, the Deputy Prime Minister, agreed to open a national industrial conference in Wellington on 14 April. This conference was attended by over 300 delegates representing over 90 per cent of NZ’s union members and it founded the Federation of Labour.

While it was successful in uniting the movement, the conference was not without debate. One of the main issues was about how much unions should pay to the FOL in annual fees. Some argued that a fee of 1/- per member was needed to give the FOL sufficient resources. However the majority voted for a fee of 6d per member. Throughout its existence, the FOL was run on a shoestring.

The Standard, the Labour Party’s newspaper, said that with the formation of the FOL, workers had ‘a Federation in which they can repose all their hopes … the policy of the future must be to co-operate fully, actively and continuously with the Government.’

The Labour Government certainly wanted a strong union movement with a national voice but it also wanted a movement that was responsible and disciplined.

The formation of the FOL was followed by the creation of a highly centralised wage fixing system which dominated employment relations from the 1940s until the late 1960s. The FOL had a pivotal role. It negotiated with governments and took cases to the Arbitration Court for across-the-board wage increases. It helped create an egalitarian wage structure which was a key part of the Welfare State. The FOL became an important player in the national economy.

After World War II there was a challenge by militant unions against the arbitration system, which ended with the 1951 Waterfront Lockout. The FOL was uncompromising in opposing the militants, before, during and after the lockout. What the FOL did was inexcusable but throughout this period its leaders had the support of the great majority of unions.

The FOL’s main aims were the maintenance of living standards and wage bargaining. It relied on centralised wage fixing and compulsory unionism to be able to deliver to workers.

From the late 1960s on, the centralised system started to crumble. The 1970s and 1980s were a see-saw of wage controls, confrontations and compromises between the FOL, employers and governments against a backdrop of growing economic instability with rising inflation and unemployment.

The FOL started to shed some of its conservatism. Important debates about equal pay, the Vietnam war and apartheid took place at its conferences. Demands for better representation of women and Maori were first argued and advanced within the FOL. All of this was important in achieving the recognition of diversity that is part of the CTU today.

Instability in the economy and employment relations helped push the private and state sector unions closer together. In 1982 the PSA proposed a new central union organisation. After five years debate and a lot of anguish, the Council of Trade Unions was formed and the FOL and the Combined State Unions went out of existence.

In conclusion, I want to make three points. The first is that the FOL’s history shows the importance of having a national voice for workers, a central organisation that can represent their collective interests. The FOL created that voice. In bad times, as well as good, that voice has continued to be heard.

The second point is that the FOL was an organisation of and for its times. By the 1980s it was running out of steam. A new approach and a wider agenda were needed.

Finally, I want to use this occasion for an advertisement. On Friday 9 November Margaret Wilson is very kindly hosting a seminar on the history of the Federation of Labour. The seminar is being organised by the CTU and the Trade Union History Project and will be held in the Legislative Council Chamber here at Parliament. I hope that lots of you will be able to attend and take part in debating the movement’s history.

Thank you.