By the time Britain declared war on Germany in September 1939 developments in federal arbitration had created the need for employer cohesion. Such cohesion was not easy to arrive at and attempts, emanating largely from the CCEA, to create a permanent national peak council of employers were never seriously pursued by other employer groups. Instead, a loose ad hoc Interstate Conference of Employers had been established for the purpose of co-ordinating the increasing number of national ‘test cases’. Also, by the end of the 1930s, the major national umbrella organisations – the CCEA, and the ACMA – had both experienced internal schisms over the issue of uniform federal regulation of wages and hours of work. The Chamber of Manufactures of New South Wales, and the federations in that state and in Victoria, actively sought federal regulation. The other chambers and federations continued to support state regulation.

Developments during the war and immediate post-war periods, which are examined in the first part of this chapter, generated added reasons for employer solidarity and cohesion. Wartime regulation created the need for unified political activities to ensure that employers' long-term prospects were not jeopardised. Of great importance in this context was the return to government of Labor in 1941, during a period in which it was not constrained by the limiting industrial powers of the Constitution.