On 8 November 1907, the Harvester Judgment was delivered by H. B. Higgins, giving rise to the legal requirement for a basic wage which dominated Australian economic life for the next 60 to 80 years.
Ex parte H.V. McKay, commonly referred to as the Harvester case, is a landmark Australian labour law decision of the Commonwealth Court of Conciliation and Arbitration.
The case arose under the Excise Tariff Act 1906 which imposed an excise duty on goods manufactured in Australia, £6 in the case of a stripper harvester, however if a manufacturer paid “fair and reasonable” wages to its employees, it was be excused from paying the excise duty.
The Court therefore had to consider what was a “fair and reasonable” wage for the purpose of the act.
H.B. Higgins declared that “fair and reasonable” wages for an unskilled male worker required a living wage that was sufficient for “a human being in a civilised community” to support a wife and three children in “frugal comfort”, while a skilled worker should receive an additional margin for their skills, regardless of the employer’s capacity to pay.
While the High Court of Australia in 1908 held that the Excise Tariff Act 1906 was invalid in R v Barger, the judgment nevertheless continued to be the basis for the minimum wage system that extended to half of the Australian workforce in less than 20 years.
The decision was credited as the foundation for the national minimum wage included in the Fair Work Act 2009. As well as national ramifications, the decision was of international significance.
Former Prime Minister Bob Hawke described the Harvester judgment as foundationally important, stating “The philosophy was so right and so in tune with the Australian ethos that it spread.
And not just through federal jurisdiction – it became embraced by various state jurisdictions. I think it is impossible to overstate the significance of both the judgement and its author, Henry Bournes Higgins.”
Conservative commentator Gerard Henderson was critical of the decision, describing it as a deeply flawed decision representing a failed policy that was strong on sentiment that failed to consider the ability of employers to pay nor acknowledged geographical differences in the cost of living.