Opting Out from Within: Industrial Agreements Under the Conciliation and Arbitration Act 1904

Abstract

One of the recommendations of the Hancock Report is that Part X of the Concilia tion and Arbitration Act be amended to allow parties to 'opt out' of the arbitration system by entering into comprehensive industrial agreements immune from the opera tions of the arbitral tribunals. It is argued that the framers of the Act always intended Part X to operate in this fashion, but after the Arbitration Court lost the power to make common rules in 1910, the 'opting out' mechanism—at that time used extensively—threatened the existence of the arbitration system. In response, in 1913, the High Court (greatly influenced by Isaacs and Higgins, who were themselves ardent supporters of arbitration) effectively put an end to 'opting out' by severely limiting the scope of Part X. Thus, contrary to popular mythology, our industrial relations system has not been centralizedfrom the beginning, and in 1913 the High Court remade the system in its own preferred image—a highly judicialized form, not the more voluntary form envisaged by the framers of the Act.