New South Wales v Commonwealth | |
---|---|
Court | High Court of Australia |
Full case name | New South Wales & Ors v Commonwealth |
Decided | 14 November 2006 |
Citations | [2006] HCA 52, 229 CLR 1 |
Transcripts | Day 1 [2006] HCATrans 215 Day 2 [2006] HCATrans 216 Day 3 [2006] HCATrans 217 Day 4 [2006] HCATrans 218 Day 5 [2006] HCATrans 233 Day 6 [2006] HCATrans 235 |
Court membership | |
Judges sitting | Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon & Crennan JJ |
Case opinions | |
Decision by | Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ (par. 1–422) |
Dissent | Kirby J (par. 423–616) and Callinan J (par. 617–914) |
Keywords | |
New South Wales v Commonwealth (also called the WorkChoices case) [1] is a landmark decision of the High Court of Australia, which held that the federal government's WorkChoices legislation [2] was a valid exercise of federal legislative power under the Constitution of Australia. In essence, the majority (Gleeson CJ, Gummow, Hayne, Heydon & Crennan JJ) found the Constitution's corporations power capable of sustaining the legislative framework, while the conciliation and arbitration and territories powers were also seen as supporting parts of the law. Furthermore, the majority also held that the legislation permissibly limited State powers and did not interfere with State constitutions or functioning. A minority (Kirby and Callinan JJ) dissented.
The case attracted considerable attention before, during and after the High Court decision was delivered on 14 November 2006. As a legal precedent, it may signify a shift in the distribution of power from the States to the Federal Parliament. Thus, the decision could well be regarded by historians of Australian federalism as an important legal landmark.
From at least 1904 through to the last decade of the 20th century, the constitutional basis of most Australian federal industrial relations legislation was the conciliation and arbitration power. In general, the Federal Parliament would exercise this power to establish an independent tribunal to set minimum terms and conditions of employment by the compulsory conciliation and arbitration of interstate industrial disputes.
Another important historical fact of note is that for much of the 20th century, the States and Territories had their own workplace relations legislation setting terms and conditions for employees not affected by the arbitration of interstate industrial disputes.
In December 2005, the WorkChoices legislation was passed by Federal Parliament. There were many elements in the reforms, including some which elicited political and social controversy and consternation. In a legal sense, perhaps the two most fundamental changes were (1) the purported elimination of State and Territory workplace relations legislation from the federal industrial landscape and (2) the attempt to rely almost completely on the corporations power directly to prescribe minimum terms and conditions of employment regardless of the existence of an intrastate industrial dispute. This unprecedented (but not novel) use of the corporations power to enact federal industrial legislation was accompanied by claims that 85% of the Australian workforce would be covered by WorkChoices. [3]
A legal challenge to the constitutional basis of WorkChoices followed in short order. The plaintiffs were States of New South Wales, Western Australia, South Australia, Queensland, Victoria, and the Australian Workers' Union and Unions New South Wales. The defendant was the Commonwealth of Australia. Attorneys-General for the State of Tasmania, the Northern Territory and the Australian Capital Territory intervened in support of the plaintiffs. The Full Court of the High Court hearing the case comprised Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ.
Hearings of substantial matters began on 4 May 2006, and concluded on 11 May. The outcome of the challenge was the High Court decision of New South Wales & Ors v Commonwealth, delivered on 14 November 2006. [1]
The Commonwealth argued the WorkChoices legislation was constitutionally valid. It said the corporations power supported any law that directly created, altered, or impaired the rights, powers, duties, liabilities or privileges of a corporation. Furthermore, it was said that the power was validly exercised by any law:
The principal argument of the Government of Australia is that the legislation is supported by Section 51(xx) of the Commonwealth of Australia Constitution Act 1901, commonly known as "the corporations power", which gives the Parliament of Australia the power to make laws with respect to "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth."
Some sections of the legislation are also based on other powers in the Constitution, for example the territories power, insofar as the laws apply to territories, and sections relating to employees of the Government of Australia. Generally speaking, those sections were not challenged by the states and the unions. [4]
Shortly put, the plaintiffs argued the WorkChoices legislation was constitutionally invalid. They said that the corporations power did not support the legislative framework. In this regard, the plaintiffs argued there were three alternative limitations on the corporations power:
The states and trade unions involved in the case divided the issues between themselves, with the lawyers for each party arguing a particular part of the overall argument.
The challengers argued that the legislation was not a valid law under the Constitution of the Australian Commonwealth Act 1901, because it is not supported by any of the heads of power granted to the Parliament of Australia by Section 51 of the Constitution of the Australian Commonwealth Act 1901. Their principal argument was that the corporations power did not extend far enough to support the legislation.
They distinguished the WorkChoices legislation from other laws which rely on the corporations power (such as the Trade Practices Act 1974 ) on the basis that those other laws are "manifestly laws with respect to... corporations" because they have "a structure whereby the corporation is a relevant actor and the activities in question are to be in trade or commerce." [4] That is, those other laws were aimed directly at corporations, and more specifically at their trading and commercial activities. They argued that the WorkChoices legislation was really directed at industrial relations, and was only remotely connected with corporations.
The challengers argued that the limits of the corporations power had not really been tested, since the vast majority of the case law was focused on determining to which corporations the power applies.
The states also argued that since the time of Federation, the industrial relations system in Australia had been largely state run. The Commonwealth's conciliation and arbitration power is specifically limited to interstate disputes, and does not extend to disputes existing entirely within one state.
The Court ruled 5:2 in favour of the Commonwealth (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; Kirby and Callinan JJ dissenting). [1]
The majority of the High Court :
Their Honours also rejected other arguments of the plaintiffs that parts of the WorkChoices legislation
The majority declared: [5]
A law which prescribes norms regulating the relationship between constitutional corporations and their employees, or affecting constitutional corporations in the manner considered and upheld in Fontana Films [6] or, as Gaudron J said in Re Pacific Coal, "laws prescribing the industrial rights and obligations of [constitutional] corporations and their employees and the means by which they are to conduct their industrial relations" [7] are laws with respect to constitutional corporations.
The significant ideas put forward by Kirby J include:
Callinan J summarises his judgment at paragraph 913. Generally, the reasons set down in paragraph 913 include:
Media coverage and commentary on the case has been significant. The case has been "hailed as the most important constitutional case in 80 years" [3] (a probable reference to Engineers, heard 86 years prior). It has also been described as potentially one of the most important cases in the history of the Court. [8]
The case is also significant because of the politics surrounding it. Underpinning the challenge is a major political rift in Australian politics between the two major political forces: the Australian Labor Party (ALP) and the Liberal/National Coalition.
In 2006 not only did the Coalition hold the Federal Government of Australia but they also held a majority in the Senate allowing them to completely dominate the Federal Parliament. Federal Labor's poor result at the 2004 federal election provided the Coalition with control of the Senate for the first time since 1980. This gave the Coalition complete Federal legislative freedom. Conversely, Labor governments have been elected in all six states and two territories.
The Workplace Relations WorkChoices Act is itself politically contentious and perceived by some as an attack on both the Union and Labor movements, and the minimum wage setting system as a whole. The Coalition (inspired by conservative think tank the H. R. Nicholls Society) believe the step to have "bravely taken advantage of...new found legislative freedom and have created a substantially different and national industrial relations system".[ citation needed ] The ALP have been aggressive critics of the new laws. On the day the Bill was introduced into the Australian House of Representatives 11 members of the ALP were ejected during heated debate over the Bill. In this context the creation of "one national system" is seen by some as a sensible step to modernise Australia's industrial relations regime. Others see it as a coup d'état of the Labor Party's power to create union friendly legislative regimes through their respective State Parliaments.
The political (and party political) dimension has led commentators to draw comparisons between this case and two others: the Bank Nationalisation Case and the Communist Party Case, because in those cases the High Court was the final arbiter of divisive political issues.
The Case is also significant in that it had the most lawyers to ever appear in the High Court at one time (39), outstripping Wik Peoples v Queensland for the title. A picture of the proceedings has been placed on the High Court of Australia's website for this reason.
Queensland Premier Peter Beattie has said that if the Commonwealth were successful in the case, it would pave the way for the Commonwealth to use the corporations head of power to move into other areas of law traditionally within the purview of the States, such as transport, education and health. He has stated that this "would leave the federation in confusion" and has suggested that a Constitutional Convention would be necessary if that situation arose. [9]
Ian David Francis Callinan AC is a former Justice of the High Court of Australia, the highest court in the Australian court hierarchy.
The Australian Industrial Relations Commission (AIRC), known from 1956 to 1973 as the Commonwealth Conciliation and Arbitration Commission and from 1973 to 1988 as the Australian Conciliation and Arbitration Commission, was a tribunal with powers under the Workplace Relations Act 1996 that existed from 1956 until 2010. It was the central institution of Australian labour law. The AIRC replaced a previous system of industrial courts, which broadly speaking, was engaged in the same functions, but with superior independence and powers.
Australian labour law sets the rights of working people, the role of trade unions, and democracy at work, and the duties of employers, across the Commonwealth and in states. Under the Fair Work Act 2009, the Fair Work Commission creates a national minimum wage and oversees National Employment Standards for fair hours, holidays, parental leave and job security. The FWC also creates modern awards that apply to most sectors of work, numbering 150 in 2024, with minimum pay scales, and better rights for overtime, holidays, paid leave, and superannuation for a pension in retirement. Beyond this floor of rights, trade unions and employers often create enterprise bargaining agreements for better wages and conditions in their workplaces. In 2024, collective agreements covered 15% of employees, while 22% of employees were classified as "casual", meaning that they lose many protections other workers have. Australia's laws on the right to take collective action are among the most restrictive in the developed world, and Australia does not have a general law protecting workers' rights to vote and elect worker directors on corporation boards as do most other wealthy OECD countries.
Australian constitutional law is the area of the law of Australia relating to the interpretation and application of the Constitution of Australia. Legal cases regarding Australian constitutional law are often handled by the High Court of Australia, the highest court in the Australian judicial system. Several major doctrines of Australian constitutional law have developed.
R v Kirby; Ex parte Boilermakers' Society of Australia, known as the Boilermakers' Case, was a 1956 decision of the High Court of Australia which considered the powers of the Commonwealth Court of Conciliation and Arbitration to punish the Boilermakers' Society of Australia, a union which had disobeyed the orders of that court in relation to an industrial dispute between boilermakers and their employer body, the Metal Trades Employers' Association.
WorkChoices was the name given to changes made to the federal industrial relations laws in Australia by the Howard government in 2005, being amendments to the Workplace Relations Act 1996 by the Workplace Relations Amendment Act 2005, sometimes referred to as the Workplace Relations Amendment Act 2005, that came into effect on 27 March 2006.
Section 51(xx) of the Australian Constitution is a subsection of Section 51 of the Australian Constitution that gives the Commonwealth Parliament the power to legislate with respect to "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth". This power has become known as "the corporations power", the extent of which has been the subject of numerous judicial cases.
The reserved powers doctrine was a principle used by the inaugural High Court of Australia in the interpretation of the Constitution of Australia, that emphasised the context of the Constitution, drawing on principles of federalism, what the Court saw as the compact between the newly formed Commonwealth and the former colonies, particularly the compromises that informed the text of the constitution. The doctrine involved a restrictive approach to the interpretation of the specific powers of the Federal Parliament to preserve the powers that were intended to be left to the States. The doctrine was challenged by the new appointments to the Court in 1906 and was ultimately abandoned by the High Court in 1920 in the Engineers' Case, replaced by an approach to interpretation that emphasised the text rather than the context of the Constitution.
Section 51(xxxvii) of the Constitution of Australia is a provision in the Australian Constitution which empowers the Australian Parliament to legislate on matters referred to it by any state. As Australia is a federation, both states and the Commonwealth have legislative power, and the Australian Constitution limits Commonwealth power. Section 51(xxxvii) allows for a degree of flexibility in the allocation of legislative powers.
The Federal Court of Australia is an Australian superior court which has jurisdiction to deal with most civil disputes governed by federal law, along with some summary and indictable criminal matters. Cases are heard at first instance mostly by single judges. In cases of importance, a full court comprising three judges can be convened upon determination by the Chief Justice. The Court also has appellate jurisdiction, which is mostly exercised by a Full Court comprising three judges, the only avenue of appeal from which lies to the High Court of Australia. In the Australian court hierarchy, the Federal Court occupies a position equivalent to the supreme courts of each of the states and territories. In relation to the other courts in the federal stream, it is superior to the Federal Circuit and Family Court of Australia for all jurisdictions except family law. It was established in 1976 by the Federal Court of Australia Act.
Common rule awards are a particular form of industrial award used in Australia to regulate minimum terms and conditions of employment. Awards are the end product of the processes of conciliation and arbitration where an industrial tribunal makes an award in settlement of an industrial dispute. Whereas awards are legally binding on all parties to the dispute which are named in the award, with common rule awards all employers in the industry or occupation covered by the award are bound by it.
Combet v Commonwealth, was an Australian court case commenced in the original jurisdiction of the High Court of Australia by Greg Combet, then the secretary of the Australian Council of Trade Unions, and Nicola Roxon. The plaintiffs challenged the Australian Government's use of public funds to advertise the new Work Choices legislation. The High Court found that the expenditure was authorised by the Appropriation Act 2005–2006.
The Court of Arbitration was the first court in New South Wales, a state of Australia which dealt exclusively with industrial relation disputes in the early twentieth century. Justice Lance Wright claims that it perhaps was the first court of its type in the world. The court was unique at that time as it was the first court of its type to deal with labour relations between employer and employees on a compulsory basis. Previous arbitration measures between employer and employee had been on a voluntary basis or had been based on the criminal justice system through the use of criminal penalties. The conventional economic model is that both employer and employee enjoy equal bargaining power to set wages and conditions. This asserts that both parties are able to agree on a fair market price for the cost of labour free from distortions. However, where employers or employees group together, these outcomes can be distorted particularly in “boom” or “bust” economic conditions. The purpose of the court was to change the manner in which employers and employees negotiated pay and conditions. It was an attempt to reduce the power imbalances between employer groups or employee unions that arose from using collective bargaining, and the resulting use of that market power to influence wages, and also to reduce the threat of lockout or strikes to achieve those ends.
The Commonwealth Conciliation and Arbitration Act 1904 (Cth) was an Act of the Parliament of Australia, which established the Commonwealth Court of Conciliation and Arbitration, besides other things, and sought to introduce the rule of law in industrial relations in Australia. The Act received royal assent on 15 December 1904.
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Australian Boot Trade Employees Federation v Whybrow & Co, commonly known as Whybrow's case or the Boot Trades case, was the third of a series of decisions of the High Court of Australia in 1910 concerning the boot manufacturing industry and the role of the Commonwealth Court of Conciliation and Arbitration in preventing and settling industrial disputes. In doing so the High Court considered the constitutional power of the Federal Parliament to provide for common rule awards and the jurisdiction of the High Court to grant prohibition against the Arbitration Court. The majority held in Whybrow that the Arbitration Court could not make an award that was inconsistent with a State law, but that different minimum wages were not inconsistent as it was possible to obey both laws. In Whybrow the High Court established the doctrine of ambit, with the emphasis on the precise claim made and refused, and the practice with respect to "paper disputes" being treated "prima facie as genuine and real", with the majority holding that the High Court had power to order prohibition to correct jurisdictional error as part of its original jurisdiction. Finally in Whybrow the High Court unanimously held that the Federal Parliament had no constitutional power to provide for common rule awards.
Federated Sawmill Employees Association v James Moore & Sons Pty Ltd, commonly known as the Woodworkers case or the Sawmillers case was a decision of the High Court of Australia in 1909 concerning the question whether the Commonwealth Court of Conciliation and Arbitration could make an award that was inconsistent with a State wages board determination. The High Court was divided 2:2 and thus the decision of the Chief Justice prevailed, in what is sometimes described as a statutory majority. Griffith CJ, O'Connor J agreeing, held that the Arbitration Court could not make an award that was inconsistent with the minimum wages fixed by a Wages Board under a State law.
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