Almost
15 years I was invited by Ray Evans to present my views on the
constitutionality of the federal Coalition's Jobsback policy to
the HR Nicholls Society. I had just completed my honours thesis
on that topic, and Professor Greg Craven had presented a paper1
to that Society's 1991 Conference which I thought was in need
of challenge.
To
say I was invited, overstates things somewhat. I had written to
Mr Evans, asking him to invite me to speak on the topic. He rang
me very promptly and, with much enthusiasm, asked me to speak.
Unfortunately he did so without obtaining the consent of the Board.
Then John Stone found out. He sent me a letter, on behalf of the
Board, explaining that I was uninvited.
It
was therefore with some surprise that I received a call from Mr
Stone a few months ago asking me to speak at this conference on
the topic of the constitutionality of the federal Coalition's
Work Choices legislation.2 He told me that he would send me a letter.
It was with some trepidation that I opened it. But I needn't have
been concerned. It stated that I was invited, that John Stone
was writing "on behalf of the Board", and that Justice
Michael Kirby would be speaking by video.
I
have not been able to find that letter of many years ago, or indeed
my honours thesis. And I am glad I was not asked to speak. There
are enough undergraduate views. In any event, SEK Hulme, QC spoke
on the topic at the HR Nicholls conference.3 Hulme
introduced his speech, as follows:
"[Craven] came to the view that legislation 'will
be attended by major constitutional difficulties', which might
not be insuperable, but which 'are undeniably grave'. I have been
invited to revisit that area for you tonight. Your organisers
having rejected my suggestion that this was not a very gentlemanly
thing to do to people who have worked hard all day and have just
had a very pleasant dinner, I fear that I must do as I was asked".
His
conclusion was that Jobsback was constitutionally sound. His criticism
of Professor Craven's paper is worth re-reading. For those who
have not read it, it concludes with a little story about Sir Owen
Dixon. Since that time there have been many academic papers on
this question. Nearly all of them support Hulme.4
The
latest paper worth mentioning is that of Dr Chris Jessup, QC.5
Dr Jessup is the leading industrial lawyer in the country. He
looked at the question of the constitutionality of Work Choices
a couple of months ago, and came to a similar view.
What is Work Choices?
It
is not possible in a paper of this nature to give a comprehensive
overview of Work Choices; however, I can mention
three aspects which are relevant to the question of constitutionality.
First,
Work Choices abandons direct reliance
upon the industrial power.6 The point of this change
is to replace, over time, the award system with a system of minimum
"fair pay and conditions". This new fair pay and conditions
standard is anchored by a cocktail of powers: the public service
power, the Territories power, the trade and commerce power and,
most relevantly for this paper, the corporations power.7
For the purposes of this paper, I intend to ignore these other
heads of power, and refer only to the corporations power.8
Thus, in simple terms, the power to resolve interstate industrial
disputes, by arbitration to create federal awards, has been removed.
The death of the industrial dispute is something about which,
I am sure, some people might feel some nostalgia. No more s. 99
dispute notifications; s. 101 findings of industrial dispute;
and no repeat of the types of challenges to those findings that
have littered the law reports.
The
second change is related to the first. Work Choices
attempts a takeover of the State award system. By applying the
federal minimum pay and conditions standard to all corporate employers,
the State award system is rendered largely irrelevant. By this
I mean that State awards are converted into federal instruments,9
and the capacity to make new and effective State awards is made
more difficult by operation of s. 109 of the Constitution.10
The power which is relied upon to do most of this State industrial
system-breaking work, is the corporations power.
Third,
bargaining on an individual and collective basis is emphasised.
I don't think it is accurate (or at least it is too early) to
say that it is made easier; it is simply that the front-end hurdles
associated with certification have been replaced with big back-end
penalties. These new bargaining provisions are now based exclusively
on the corporations power, rather than, as has been the case since
the Keating reforms, partly on the industrial power and partly
on the corporations power.
There
are many, many other changes which have been made. For example,
the new rules concerning protected industrial action (including
the secret ballot provisions), the new regime for penalising unlawful
industrial action, and the new provisions governing the regulation
of trade unions, are all areas upon which one could focus much
attention. Indeed, one could devote a paper entirely to the transitional
provisions. But, for the purpose of this paper, it seems fair
to concentrate on the three I have mentioned, and to conclude
that without the corporations power, this Work Choices
created regime of individual and collective bargaining, and the
national system of fair pay and conditions which underpins it,
would be extremely ineffective.
Indeed,
even with the corporations power, about 15 per cent of employers
may stand outside the national system. It is worth remembering
that most of the century-old law concerned with the industrial
power was generated by a desire to escape the clutches of the
federal regulators. Depending upon how the system develops over
time, that desire may remain, and much of the energy previously
devoted to devising ways of slipping out of "industrial disputes"
may instead be turned to escaping the orbit of "trading corporations".
Without the corporations power, it would be back to the drawing
board for the government. And this would probably mean, back to
the industrial power.
The
High Court challenge
I
am lucky to be speaking to you this Sunday morning, because the
High Court challenge to the legislation wound up just over two
weeks ago. One of the wonders of modern times is the Australasian
Legal Information Institute. Transcripts of all High Court proceedings
are available on the austlii.edu.au site, free of charge, within
a day or so of the hearing.
The
High Court proceedings ran for six days,11 and anyone
in Australia (or indeed the world) can click on and follow the
proceedings. The most interesting parts are the answers by counsel
to interjections by the Justices. The argument in the High Court,
and particularly the interchanges between bar and bench reflect,
to some extent, the debate between Hulme and Craven over a decade
ago. It is a debate between those who simply took the constitutional
law as they found it, and those who did not like where this took
them. Indeed, there is a respectable argument that the challenges
of each of the (Labor) States to Work Choices, are grounded more in policy
than in law (in particular Victoria, which ceded legislative power
to Canberra in this area, and yet still joined in the challenge).12
It
is not possible in a paper such as this to do more than touch
on the legal arguments. For those who want to look at these questions
more closely, it is perhaps most convenient to start with Dr Jessup's
paper, then the High Court transcripts, the articles to which
I have made reference, and of course the cases themselves.
The
modern law concerning the corporations power starts with the Barwick
High Court's decision to uphold (after some minor re-drafting)
the Barwick-inspired trade practices legislation in Strickland
v. Rocla Concrete Pipes Ltd,13
and stretches over the last 35 years. Unfortunately much of the
debate concerning this question ignores this fact: the long-standing
jurisprudence concerning this subject. This is a point to which
I will return, after mentioning the legal arguments.
The
legal arguments
Bearing in mind Hulme's
suggestion that it is not a very gentlemanly thing to require
a group of people who should be enjoying a day of rest to listen
to constitutional arguments concerning Work Choices,
I will deal with this part of the paper as quickly as possible.
As to the three aspects
of the legislation that I have identified as important, the legal
questions seem to be fairly straightforward. Dr Jessup has identified
the question raised by the minimum standards and agreement-making
provisions as follows:
"The
constitutional question presented by [the minimum standards] provisions,
then, is whether a law which obliges a s. 51(xx) corporation to
pay its employees at least a rate of wage specified in a defined
manner is a law with respect to such a corporation....The constitutional
question presented by [the agreement making] provisions in turn
is whether a law which permits a s. 51(xx) corporation to make
industrial agreements with its employees, or with trade unions
representing its employees, and provides for the content and enforcement
of those agreements, is a law with respect to such a corporation".
Dr Jessup concluded
as follows:
"The
position remains, therefore, that, if the law is as stated by
Brennan, Toohey and McHugh JJ in Re Dingjan, one might confidently give an affirmative answer
to the [agreement making] provision. If so, there seems no reason
why one might not likewise answer affirmatively the [minimum standards]
question, namely, whether the Parliament has power to make a law
imposing an obligation upon a s. 51(xx) corporation to meet certain
minimum employment standards".14
The questions, said
by the High Court to be raised by the minimum standards and agreement-making
provisions, were couched in similar terms to those which were
said to be raised by Dr Jessup. Perhaps they can be summarised
in this interchange between Justice Gummow and one of the Commonwealth's
counsel:
"Gummow J: Can I just put this to you, Mr Burmester.
I do not think it cuts across what you are saying but it will
help me. The critical provision is 6(1)(a),15 is it
not?
"Mr Burmester: Yes, your Honour.
"Gummow J: That postulates and takes as a given, if you
like, a constitutional corporation.
"Mr Burmester: Yes.
"Gummow J: There are not any at the Bar table as it happens,
but as time goes on I imagine it would be possible that a corporation
will put its hand up at some stage and say, 'I am not a constitutional
corporation. This Act has nothing to do with me and I want prohibition'.
"Mr Burmester: Quite likely.
"Gummow J: But that is not today's argument because this
is a demurrer.16 So we posit a constitutional corporation,
whatever that phrase means, but we posit there is such a creature
and then we ask: is it employing or usually employing individuals?
"Mr Burmester: Yes.
"Gummow J: Then we take the next step and we look at
various legislative norms that are then imposed on that relationship
in one way or another and then we ask: are those particular norms
which bear upon this employment relationship, are they laws with
respect to the constitutional corporation?
"Mr Burmester: That is correct, your Honour.
"Gummow J: Is that not it?".
Indeed
to me, that does seem to be it. And the answer, based upon the
last 35 years of authority, seems to be that the minimum standards
and agreement-making provisions constitute a valid exercise of
the corporations power. That these provisions are constitutionally
valid seems to be implicit in the following interchange, between
the Chief Justice and one of the Commonwealth's counsel (and note
Justice Gummow's contribution at the end):
"Gleeson CJ: Let us confine it to trading corporations.
If it is not a trading corporation, end of story.
"Mr Burmester: Yes.
"Gleeson CJ: If it is a trading corporation, its relations
with all its employees, regardless of what particular activity
they perform, are a matter of business, are they not?
"Mr Burmester: Yes, quite likely, your Honour, in
this context.
"Gleeson CJ: A contract of employment between a municipal
council and a health inspector is a business relationship, is
it not?
"Mr Burmester: Yes, your Honour, and we would say .....
"Gleeson CJ: Just as much as is a contract of employment
between a council and the man who sells refrigerators.
"Mr Burmester: Yes, your Honour, and it may be that
all your Honours need to decide for the purpose of upholding
the provisions in this case is that particular provisions operate
on a business activity or relationship with a constitutional corporation
... and on that basis the law is valid.
"Gummow J: So it may be encapsulated by the last sentence
of paragraph 83 of Justice Gaudron's reasons in Pacific
Coal 203 CLR 346
at 375. What she is doing I think in that paragraph is giving
content to, as you are attempting to do here, I think, ... what
will be with respect to this given of a trading corporation, and
that 'laws prescribing the industrial rights and obligations of
corporations and their employees and the means by which they are
to conduct their industrial relations' will be laws with respect
to the corporation".
Turning then to the
third aspect of the legislation, upon which I have focused attention,
the view of Dr Jessup was that the attempt to exclude State industrial
tribunals was constitutionally sound. Like the interchanges I
have referred to above concerning the constitutionality of the
minimum standards and the agreement-making provisions, the ease
with which the Commonwealth's submissions were treated, on the
question of the exclusion of State laws, might contain some clue
as to the likely result on this inconsistency point:
"Mr Burmester: We accept there has to be a head of power.
It clearly links back to the heads of power that support the definitions
of 'employee' and 'employer' in sections 5 and 6. We say
that the principle in Wenn has not
been contradicted in later cases, but in cases like the Native
Title Act Case, Western
Australia v. Commonwealth (1995) 183 CLR 373 particularly at 464 to 468,
and in the Botany Municipal Council v. Federal Airports Corporation (1992) 175 CLR 453
at 464 to 465, one finds statements that, in our submission, are
consistent with those in Wenn, and which indicate that there is an ability to exclude State
laws even though the Commonwealth may not have made its own detailed
provisions on the subject.
"The issue is one of power---is it a law with respect
to a head of power?---rather than whether there is a prohibition
on excluding State law. In our submission, one cannot characterise
section 16, given the way in which it is drafted, the laws
to which it applies, which confine it to section 5 employees
and section 6 employers, as a bare attempt to prevent State
law making......
"Gummow J: Can we
just go back to the Native Title Act Case for a minute?
"Mr Burmester: Yes,
your Honour.
"Gummow J: Do you
rely on the passage at 467 in 183 CLR?
"Mr Burmester: The
passage from O'Reilly
that has been quoted, your Honour?
"Gummow
J: The first paragraph, 'The critical question.....'.
"Mr Burmester: 'The
critical question is the scope of Commonwealth legislative power.
Provided the power supports a Commonwealth law making its regime
exclusive and exhaustive, the law may validly exclude in terms
the application of State law to the subject matter'.
"Yes, your Honour.
Then there is a reference to the Botany Municipal Council that
I also referred to.
"Gummow J: Botany
is a useful illustration of that, is it not?
"Mr Burmester: Yes,
your Honour. We exclude the State environmental law and particular
planning approvals and so on and put our own limited regime in
place".
It seems likely, in
my view, that the three central aspects of the legislation that
I have identified will survive this challenge. Other parts of
the legislation might not survive, and indeed these three central
parts (like the trades practices legislation post-Rocla Concrete
Pipes)
might have to be slightly re-cast. However, one would think that
the legislation looks to be on fairly safe constitutional ground.
There is nothing particularly
controversial about this conclusion. It is similar to the conclusion
that Dr Jessup came to a couple of months ago, and to the conclusion
that Hulme (and I) came to over a decade ago. Moreover, the first
academic paper suggesting that the Commonwealth had power to regulate
the contract of employment, through the corporations power, is
now almost 30 years old.
It may have been because
the legal position is seemingly so strong, that much of the debate
in the High Court was concerned with policy issues. Indeed at
times, as I have stated above, the debate seemed to be between
those who simply took the constitutional law as they found it,
and those who did not like where this led them. The reason of
those who did not like the legal conclusions was, of course, the
impact that this would have on the federal / State balance.
The federal / State balance arguments
It
is submitted that the following extract of the interchange between
the Commonwealth Solicitor-General and Justice Kirby, with the
Chief Justice and Justice Gummow joining in the debate on the
side of the Commonwealth, best captures the argument and the counter-argument
on this federal / State balance point. The Solicitor-General starts
by explaining how changes in the make-up of a society might impact
upon the federal / State balance (by referring to the Commonwealth's
bankruptcy,17 quarantine18 and defence19
powers), as follows:
"Mr Bennett: ... the examples of bankruptcy in the Depression,
quarantine during a pandemic, defence during a war.
"Kirby J: But it is a tricky argument because, at least
on one view, it runs so far that the corporation and the corporations
power on your theory has expanded so greatly that its very expansion
causes one to think, what effect do we give to this power within
the context of a federal Constitution, and within the context
of a power that is directed to persons and in a constitutional
document that requires us, both by its character and form and
by its words, to have regard to what is elsewhere provided in
the Constitution.
"Mr Bennett: Your Honour, that is the necessary
consequence. If Australia came to be populated 99 per cent
by people who were aliens who chose not to become citizens, the
same thing would apply.....
"Gleeson CJ: ...With
these developments it appears the position of the Commonwealth,
the federal government has waxed; and that of the States has waned.
"Mr
Bennett: Yes: that the Commonwealth would, as time went on, enter
progressively, directly or indirectly, into fields that had formerly
been occupied by the States, was from an early date seen as likely
to occur.
"Kirby J: Yes, but
at least a responsible constitutional court, when the waning comes
to the point of almost extinction, has to then ask, is this the
sort of waning that the Constitution had in mind in its text?
"Mr Bennett: Your Honour, in my submission, it does not
have anything like that effect.
"Kirby J: If you could affect every trading corporation
by name and everything it does and everything everybody associated,
or certainly its employees and those who trade with it, who deal
with it, who contract with it, who have come within its physical
boundaries, who have any association with it in your list of constitutional
powers, then the waning has gone to a point, that at least if
you adhere to a federal notion of our polity, you have to pause.
At least that is the role of this Court, as I can see.
"Mr Bennett: Your Honour, the effect of the Constitution
was that certain powers were given to the federal Government.
They were powers which even at the time had a very significant
effect on the economic life of the community. If one takes a world
in which only economics are looked at, the Federal Compact was
one which was very largely one-sided in that respect. It is not
as if section 51 said (a) economic matters. It did not go
as far as that, but in many ways it did, and the quantitative
analysis your Honour puts to me limits the world to the world
of economics. In the world outside the world of economics the
dramatic effect is not as great.....
"Kirby J: I am not so sure about that. Music is performed
and art is performed by corporations. Increasingly the business
of government is privatised and sent out so it is done by corporations.
"Mr Bennett: Yes.
"Kirby J: I am just saying that that is the importance
of this case, that what began in a sense in the Engineers'
Case and led to the
waxing of the Commonwealth in its hey day and was very important
for the building of the nation, has come to the point that the
waxing has overwhelmed the States and we have to, as it were,
pause and say, is that what the structure and purpose of the Constitution
and the text subject to this Constitution mean? That is the importance
of this case.
"Mr Bennett: Well, your Honour, it does. Another example
of how it has occurred is in the area of income tax, where the
changes in the way tax has been levied over the years has resulted
in a growth in the economic significance of the Commonwealth at
the expense of the States. Now, that has happened, that has been
upheld, and it was always inherent in the Constitution that it
could occur as, we say, is this development. The issues that are
being debated are issues. But we submit, the mere fact that the
effect of changes that have occurred in society is to make a power
more significant is not a reason for reading down that power.
"Gleeson CJ: If you want to look at the way the relationship
between the Commonwealth and the States was envisaged 100 years
ago, you do not need to go past section 94 of the Constitution.
"Mr Bennett: No, precisely, your Honour. The original
idea was that a sum of money was levied by the Commonwealth, was
spent on certain things, and the surplus was returned to the States.
That provision is still in the Constitution but changes.....
"Gummow J: Unhappily it says "may".
"Gleeson CJ: Yes. It was originally envisaged that the
surplus that we saw being dealt with yesterday would be given
back to the States to spend.
"Mr Bennett: Yes, it was, your Honour. Modern accounting
methods have rather dealt with that fairly effectively.
"Kirby J: I know these jocular examples. All I am saying
is that we have reached a point where the joke is beginning to
become a bit of a worry. There are great arguments for Federation,
as the federations of the world demonstrate. They divide power
and that is a very important protection for liberty.
"Mr Bennett: Yes, and one fairly standard consequence
of Federation, which one sees in the United States, one sees
in Australia and no doubt sees in other federations, is that where
one starts with a division of powers, in many ways the federal
powers are going to become more important, and what is either
left to or granted in some Constitutions to the States is going
to become less important. That is part of, if one likes, a local
aspect of globalisation. It is a natural trend. It is what Justice Windeyer
was referring to, and referring to, we would respectfully submit,
with great accuracy, in Victoria v. The Commonwealth.
"Kirby J: It is a natural trend, but when it comes to
the point of threatening viability and relevance of the States,
then you have what we see before us: every one of them here objecting
to what is being done. We have to resolve it. Anyway, I think
these are generalities, and though it is proper that they be exposed
because they, as it were, lie at the bedrock of the reasoning
that one uses to approach specific constitutional problems, they
do not solve the problem. They merely expose the concern that
lies behind the search.
"Mr Bennett: Your Honour, at the end of the day
we submit this case does not really go any further than a wealth
of existing authority in this Court, including Tasmanian Dam,
Dingjan, CLM.....
"Kirby J: My point is they were written in earlier times
and, ultimately, lawyers who follow logic have to ask where it
has led them and where it is leading them and, more importantly,
where it is leading the Commonwealth.
"Mr Bennett: Most of those cases, your Honour, are
not very much earlier times. Most of the cases on which we rely,
unlike Huddart Parker, which
some people attempt to resuscitate, were decided in the last 30 or
40 years and some in the very recent past. We submit there
is no giant step here from the legal point of view.
"Kirby J: A giant step is not now needed. It is little
steps that are taken that accumulate that amount to the giant
step. When you are in the midst of it, you often do not notice
it.
"Mr Bennett: Your Honour, that is the process of
the development of the law and particularly the development of
constitutional law".
Though
I am quite sympathetic to his concerns regarding the federal /
State balance, I think that the approach to legal reasoning suggested
by Justice Kirby is quite improper. I hold this view for four
reasons. First, one cannot pretend that the Engineers'
case20 was never decided, and
that Rocla Concrete Pipes and
the 35 years of jurisprudence which has built upon it, does not
exist. As Justice Gummow observed during the argument:
"Gummow J:
.... When we are talking in this context about the Constitution,
we mean the Constitution as it is operating, as it is construed
from time to time by the Court. That is what the Constitution
explicitly recognises in Chapter III. When you talk about
the Constitution requires this, that or the other, you cannot
just look at the text at any point of time; you have to know what
the Court doctrine is in construing it from time to time".
Secondly, the judicial
method requires proper respect to be provided to the reasoning
and thus the received wisdom of the judges who have gone before.
Justice Kirby is not entitled to dismiss the "wealth
of existing authority in this Court" on the basis that "they
were written in earlier times". The prevailing Court doctrine
constituted by these cases cannot be air-brushed away, because
they "were written in earlier times". The fact that
they "were written in earlier times" means that they
constitute the relevant Court doctrine. The current judges are
not entitled to arrogate to themselves a blank slate and commence
interpreting the Constitution as if they were the first judges
to be set that task. As Gibbs J said in Queensland v. The Commonwealth:21
"No Justice is entitled to ignore the decisions and reasoning
of his predecessors, and to arrive at his own judgment as though
the pages of the law reports were blank, or as though the authority
of a decision did not survive beyond the rising of the Court".
Thirdly,
ideas such as constitutional originalism (which I understand is
a form of interpretation with some adherents in the United States),
are simply a way of by-passing the collective wisdom of the 10
former Chief Justices and 34 Justices to have sat on the Court,
over the last century.
I
agree with Justice Kirby's views, when he states:
"There are great arguments for Federation, as the federations
of the world demonstrate. They divide power and that is a very
important protection for liberty".
However,
I don't agree with Justice Kirby's next step: using the so-called
"original" (federal) nature of the Constitution as a
means of avoiding 35 years of jurisprudence. By lifting himself
onto a plane upon which he does not have to dirty himself with
the prevailing law, he can more easily get to a result that is
inconsistent with the prevailing Court doctrine. The result is
that, under the guise of applying the law, the decision-maker
simply ignores it. While such an approach is no doubt very liberating,
it is hardly consistent with administration of justice according
to law. David Marr caricatured Sir Garfield
Barwick's views as: "no case is a precedent unless I agree
with it".22 The "originalist" approach
to the corporations power proceeds from a similar assumption.
Fourthly,
Justice Kirby's implied criticism of the traditional judicial
method, of approaching matters on a case by case basis, is strange.
In Rocla Concrete Pipes,
Barwick CJ noted:
"We were invited in the argument of these
appeals to set as it were the outer limits of the reach of the
power under this paragraph of s. 51. This for my part I am not
prepared to do: and indeed I do not regard the Court as justified
in doing so. The method of constitutional interpretation is the
same as that with which we have been long familiar in the common
law. The law develops case by case, the Court in each case deciding
so much as is necessary to dispose of the case before it.
"The limits of the power can only be ascertained
authoritatively by a course of decision in which the application
of general statements is illustrated by example".: R v.
Burgess; Ex parte Henry (1936)
55 CLR 608, at p 669 per Dixon J (at p 490).....
"Of course frequently in order to dispose
of a case the Court must state and discuss general principles
or express concepts which are of value in subsequent cases. But
that is a very different thing from setting out to decide at one
blow the full ambit of a constitutional power".
You
will recall the Solicitor-General suggested that "there is
no giant step here from the legal point of view". You will
also recall Justice Kirby's response:
"A giant step is not now needed. It is little steps that
are taken that accumulate that amount to the giant step. When
you are in the midst of it, you often do not notice it".
This
seems to me to be a manufactured concern. What is small, gradual,
step by step reasoning, in
which the law develops case by case, with the Court in each case
deciding so much as is necessary to dispose of the case before
it, to be replaced with? A giant step of course, presumably in
a direction of Justice Kirby's choosing; unanchored by the "little
steps" that have led away from the chosen direction.
In this case, the Chief
Justice indicated that he was not interested in doing anything
other than simply deciding this case and nothing more (despite
Justice Kirby's suggestions to the contrary):
"Heydon J: ... do we have to bother with the ambitious
submission?
"Mr Bennett: Your Honours do not, probably. It is
a convenient way of dealing with much of the Act but it is not.....
"Gleeson CJ: It is a convenient way of arguing the next
case.
"Kirby J: It is what we always have to keep our eye on.
"Mr Bennett: Yes.
"Gleeson CJ: And what we have always said we will never
decide".
In
my view, in a case such as this, the Court should try to keep
its collective eye on the judicial questions which arise for decision,
and nothing more. The Court should decide the questions asked
of it by reference to the application of (and if necessary the
development of) the prevailing law with the benefit of focused
argument. It should do so by carefully considering the arguments
made and (not least) the legislation under challenge. To try to
imagine the battle lines which might next be drawn in some federal
/ State contest, and to attempt to head off those battles even
before the lines are drawn or the battles fought, is a task which
is more appropriately left to politicians and the political process.
Thoughts on the federal / State balance in
industrial affairs
As
I have discussed, many of the concerns expressed about the impact
of the corporations power upon the federal / State balance are
directed to the possible future use of the power. Some, however,
are directed to the impact on the federal / State balance of this
particular legislation. I believe these more narrow concerns are
overstated. Indeed, I think they will prove to be unfounded. The
reason is two-fold. Firstly, while it is likely that charities
and other non-trading corporations will fall outside the scope
of the new legislation, the federal industrial power has captured
such bodies since the Social Welfare Union
Case.23
Secondly,
employers who take the form of, for example, partnerships, trusts
and natural persons, have been roped into "paper" interstate
industrial disputes for almost 100 years, even though they are
not corporations. Under the previous regime it was fairly easy
to manufacture such a dispute and thereby to obtain an award.
What may change over time is that employers may incorporate to
try to bring themselves within the scope of the federal law, and
one might surmise that in order to facilitate this, the cost of
incorporation has been reduced to $400.
I
accept that, as a matter of practice, it is likely to be easier
for an employer to incorporate than to become party to an interstate
industrial dispute. However, even bearing this in mind, I think
it likely that the national coverage of the corporations power
will remain less comprehensive than that potentially afforded
by the industrial power.
Indeed,
the federal industrial power was used in this broad way to emasculate
the Kennett Government's Work Choices style industrial reforms, by allowing traditionally
State-regulated workers to "escape" to the federal system.
Many were Social Welfare Union Case-type
employees. After five years of fighting and upon the election
of the Howard Government, the Kennett Government ceded its industrial
powers to the federal government. The lesson from those events
was that even a State government, spending millions, could not
escape the clutches of the interstate industrial dispute.24
The
Commonwealth could and did, with relative ease, use the industrial
power to suppress labour market deregulation in a State, just
over a decade ago. This fact does not appear to have attracted
the attention in this latest debate about the impact of the corporations
power upon the federal / State balance in industrial affairs that,
in my view, it deserves. Indeed, the Commonwealth government could
have used its industrial power to do what Senator Cook did to
Jeff Kennett---but in reverse. It could have legislated to allow
employers to "escape" to the federal system but it is
using the corporations power instead.
Presumably
it chose not to use the industrial power, because it prefers the
"Canberra club" to the "industrial relations club";
the Fair Pay Commission to the Industrial Relations Commission.
It is true that the use of the corporations power allows a more
direct form of regulation than that afforded by the industrial
power. The use of the industrial power invariably brings with
it a third party arbitrator.
Ultimately,
I think the point remains. The federal / State balance in industrial
affairs will not be significantly altered if the High Court gives
the all-clear to the use of the corporations power, because the
Commonwealth could have achieved its national system by use of
the industrial power. Indeed, the reach of the corporations power
might prove to be slightly smaller than that which may have been
possible had the Commonwealth chosen to employ the industrial
power.
Conclusion
As
I have stated above, for my own part, I think the constitutional
challenge will fail (at least in relation to the main parts of
the legislation). However, the use of the corporations power does
not, in my view, significantly alter the current federal / State
balance in industrial affairs. Although I accept (in general terms)
that this development will probably present opportunities for
the Commonwealth to further degrade the federal nature of our
constitutional compact, I would much rather see these problems
addressed through political action than through the courts.
Working
in close contact with lawyers, I fear (undemocratic) judicial
activism much more than I fear (democratic) centralism. The courts
should simply apply the law as they find it, and leave questions
as to the federal balance for the politicians and the political
process.
I
have drawn attention to Justice Kirby's interjection, that it
"is little steps that are taken that accumulate that amount
to the giant step. When you are in the midst of it you often do
not notice it". I think the Solicitor-General's response:
"Your Honour, that is the process of the development of the
law and particularly the development of constitutional law",
encapsulates, in one sentence, the points I have tried to make
in this paper.
1.
G Craven, Voluntary Industrial Agreements: You Agree,
I Agree, But Will The High Court Agree?:
http://www.hrnicholls.com.au.
2.
The post-Work Choices
workplace relations legislation is (still) the Workplace Relations
Act 1996 ("the Act"),
albeit amended and renumbered. The changes to the Act were introduced
by the Workplace Relations Amendment (Work Choices) Act 2005 (No 153) (hereinafter "Work Choices").
3.
SEK Hulme, A Constitutional Basis for the Federal Coalition's
Industrial Relations Policy and Related Matters: http://www.hrnicholls.com.au.
4.
The Parliament of Australia, Parliamentary Library contains
the following references at http://www.aph.gov.
au/library/intguide/law/workchoicesbill.htm, under the heading
"Journal articles on the constitutionality of a national
employment law":
·
A Gray, Precedent and Policy: Australian Industrial
Relations Reform in the 21st Century Using the Corporations Power, Deakin Law Review, vol. 10, no. 2, 2005,
pp. 440c59.
·
R McCallum, The Australian Constitution and the Shaping
of Our Federal and State Labour Laws,
ibid., pp. 460c9.
·
G Williams, The Constitution and a National Industrial
Relations Regime, ibid, pp. 498c510.
·
A Stewart, Workplace Relations: The Revolution begins
here, New Matilda, 1 June, 2005.
·
L Johns, National IR system is logical, HR Monthly, April, 2005, pp. 36c7.
·
D McCann, First head revisited: a single industrial
relations system under the trade and commerce power, Sydney Law Review, 26(1), March 2004, pp. 75c106.
·
G Williams, The first step to a national industrial
relations regime? Workplace Relations Amendment (Termination of
Employment) Bill 2002, Australian Journal
of Labour Law,
2003, 16(1), May, 2003, pp. 94c8.
·
G Williams, Submission to the Senate Employment, Workplace
Relations & Education Committee Inquiry into the Provisions
of the Workplace Relations Amendment (Termination of Employment)
Bill 2002, 6 February, 2003.
·
N Williams and A Gotting, The interrelationship between
the industrial power and other heads of power in Australian industrial
law, Australian Bar
Review, 20(3), February,
2001, pp. 264-82.
·
S Eichenbaum, What chance a single industrial relations
system in Australia?, Law Institute
Journal, 76(6), July, 2002,
pp. 66-9.
·
P Lane, Commonwealth control of corporate industrial
relations, Australian Law
Journal, 75(11), November,
2001, pp. 670-2.
·
A Stewart, Federal labour law and new uses for the corporations
power, Australian Journal
of Labour Law,
14(2), September, 2001, pp. 145-68.
·
W J Ford, Using the corporations power to regulate industrial
relations, Employment Law
Bulletin, 6(9), January, 2001,
pp. 70-7.
·
W J Ford, Reconstructing Australian labour law: a constitutional
perspective, Australian Journal
of Labour Law,
10(1), March, 1997, pp. 1-30.
·
W J Ford, The Constitution and the reform of Australian
industrial relations, Australian Journal
of Labour Law,
7(2), August, 1994, pp. 105-31.
·
S E K Hulme, A constitutional basis for the federal
coalition's industrial relations policy---and related matters, Economic and Labour Relations Review, 4(1), June, 1993,
pp. 62-76.
·
A Stewart, Federal regulation and the use of powers
other than the industrial power,
in ACIRRT Monograph No. 9, A New Province for Legalism: Legal
Issues and the Deregulation of Industrial Relations, Proceedings of a Conference, 30 April, 1993.
·
G Lindell, The corporations and races powers, Federal Law Review, 14(3), March, 1984,
pp. 219-52.
·
D Rose, Comment on the corporations power and the races
power, Federal Law Review, 14(3), March, 1984,
pp. 253-7.
·
J O'Donovan, Can the contract of employment be regulated
through the corporations power?,
Australian Law Journal, 51(5), May, 1977, pp. 234-46.
5.
C N Jessup, Work Choices and the Constitution, (unpublished paper
2 March, 2006, given to the Law Council of Australia, 5 March,
2006).
6.
The industrial power is s. 51(xxxv) and states that the
Commonwealth Parliament shall "have power to make laws ...
with respect to: .....(xxxv) Conciliation and arbitration for
the prevention and settlement of industrial disputes extending
beyond the limits of any one State".
7.
See section 6 definition of "employer" at Endnote
15 (below).
8.
The corporations power is s. 51(xx) and states that the
Commonwealth Parliament shall "have power to make laws ...
with respect to: .....(xx) Foreign corporations, and trading or
financial corporations formed within the limits of the Commonwealth".
9.
Known as a "notional agreement preserving State awards"
("NAPSA").
10.
See also, supra,
Dr Jessup's paper, at paras [40-5], especially last sentence in
para [45].
11.
High Court Proceedings: 4, 5, 8, 9, 10 & 11 May, 2006:
4 May: http://www.austlii.edu.au/au/other/HCATrans/
2006/215.html.
5 May: http://www.austlii.edu.au/au/other/HCATrans/
2006/216.html.
8 May: http://www.austlii.edu.au/au/other/HCATrans/
2006/217.html.
9 May: http://www.austlii.edu.au/au/other/HCATrans/
2006/218.html.
10 May: http://www.austlii.edu.au/au/other/HCATrans/
2006/233.html.
11 May: http://www.austlii.edu.au/au/other/HCATrans/
2006/235.html.
12.
See Part 21 of the Act, which is headed "Matters referred
by Victoria".
13.
[1971] HCA 40; (1971) 124 CLR 468.
14.
Para [19] of Dr Jessup's paper states:
"The judgments of Brennan, Toohey and McHugh JJ in
Re Dingjan would probably provide
a reasonably solid base upon which one could conclude that the
central provisions of Part VB of the Act are valid. Although their
Honours held that the operation of s. 127C(1)(b) was outside s.
51(xx), their reasoning would support the view that a law which
operated upon agreements entered into between constitutional corporations
and their employees (or unions representing, or potentially representing,
those employees) would be within power",
but is then qualified by paras [20-1].
15.
Section 6 is headed "Employer" and states as
follows:
"Basic definition
(1) In
this Act, unless the contrary intention appears: "employer" means:
(a)
a constitutional corporation, so far as it employs, or
usually employs, an individual". (Emphasis added).
16.
These days, a more common name for a "demurrer"
is a "strike out" or "summary dismissal".
17.
The bankruptcy power is s. 51(xvii) and states that the
Commonwealth Parliament shall "have power to make laws ...
with respect to: .....(xvii) Bankruptcy and Insolvency".
18.
The quarantine power is s. 51(ix) and states that the Commonwealth
Parliament shall "have power to make laws ... with respect
to: .....(ix) Quarantine".
19.
The defence power is s. 51(vi) and states that the Commonwealth
Parliament shall "have power to make laws ... with respect
to: .....(vi) The naval and military defence of the Commonwealth
and of the several States, and the control of the forces to execute
and maintain the laws of the Commonwealth".
20.
Amalgamated Society of Engineers v. Adelaide Steamship
Company Limited (1920) 28 CLR 129.
21.
Queensland v. The Commonwealth (1977)
139 CLR 585 at 599.
22.
D Marr, Barwick,
George Allen & Unwin Australia Pty Ltd, Sydney, 1981, at 218.
23.
The Queen v. Coldham; Ex Parte Australian Social Welfare
Union [1983] HCA 19; (1983)
153 CLR 297.
24.
I have not ignored the impact of Re AEU. But that principle would apply to legislation
under s. 51(xx) as well. The full title of the case, Re Australian
Education Union and Australian Nursing Federation and Others,
Health Services Union of Australia and Others, Re Australian Liquor,
Hospitality and Miscellaneous Workers Union and Others, Re State
Public Services Federation and Another, Re Printing And Kindred
Industries Union of Australia and Another, and Australian Federal
Police Association and Another; Ex Parte The State of Victoria
and Others
[1994] HCA 26; (1995) 128 ALR 610; (1995) 69 ALJR 451, gives some
clue to the extent of the federal takeover of the Victorian system.
As does the reasoning in (e.g.) para [49]:
"To say that the limitation protects the existence
of the States and their capacity to function as a government is
to give effect more accurately to the constitutional foundation
... [To go further] would protect a substantial part of a State's
workforce from the impact of federal awards, notwithstanding that
the operation of those awards in relation to school teachers,
health workers and other categories of employees would not destroy
or curtail the existence of the State or its capacity to function
as a government".