McKell was born in the small town of Pambula, New South Wales, but grew up in Sydney. He left school at thirteen, training as a boilermaker at Mort's Dock. McKell soon became involved with the union movement, and after a brief period on the railways began working full-time as a union secretary. He sided with the anti-conscriptionists during the Labor Party split of 1916, and at the 1917 state election defeated James McGowen, a former Labor premier who had been expelled from the party. In 1920, aged 29, McKell was Minister for Justice under John Storey. He also served as a minister under John Dooley and Jack Lang.