New South Wales v Commonwealth (2006)

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New South Wales v Commonwealth
High Court of Australia
Full case name	New South Wales & Ors v Commonwealth
Date decided	14 November 2006
Citations	[2006] HCA 52
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
Judges sitting	Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon & Crennan JJ
Case history
Prior actions:	none
Subsequent actions:	N/A
Case opinions
(5:2) WorkChoices is constitutionally valid (per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ)

See also: New South Wales v Commonwealth

New South Wales & Ors v Commonwealth is a High Court of Australia case that challenged the constitutional validity of the federal government's WorkChoices legislation. The case was brought by the States of New South Wales, Western Australia, South Australia, Queensland and Victoria, along with the Australian Workers' Union and Unions New South Wales. The state of Tasmania, the Australian Capital Territory and the Northern Territory intervened in the case, but were not parties.

Hearings of substantial matters began on 4 May 2006, and concluded on 11 May. The court handed down its decision on 14 November 2006, with the majority of the Court finding WorkChoices constitutionally valid. Justices Kirby and Callinan dissented.

Contents 1 Background to the case 1.1 WorkChoices legislation 1.2 Corporations power 2 Arguments 2.1 Commonwealth 2.2 States and unions 3 The Judgment 3.1 Majority Judgment 3.2 Kirby J (Dissenting) 3.3 Callinan J (Dissenting) 4 Significance and controversy 5 See also 6 References

[edit] Background to the case

[edit] WorkChoices legislation

Main article: WorkChoices

The WorkChoices legislation is a package of amendments to existing labour legislation, altering the industrial relations system. The package substantially replaces the existing systems run by the states of Australia, and would cover about 85% of the Australian workforce.^[1]

Some aspects of the package have been very controversial, such as the exemption of companies with fewer than 101 employees from unfair dismissal laws, and reductions in the minimum conditions of employment.

[edit] Corporations power

Main article: Section 51(xx) of the Australian Constitution

Section 51(xx) of the Australian Constitution, commonly known as "the corporations power", gives the Parliament of Australia the power to make laws "subject to this Constitution" with respect to "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth." Historically this power was interpreted narrowly, but after the Concrete Pipes case of 1971, the High Court has taken an increasingly broad view of the power.

There has been little case law on the extent of the corporations power, in terms of what activities or aspects of a corporation can be regulated, at least as opposed to the amount of law on the definition of the power, in terms of which corporations are subject to it.^[2] Laws regulating the trading activities of corporations have been held to be within the power, and also laws regulating activities for the purpose of trading activities, have previously been held valid, but the question of whether laws not directly or even indirectly connected with the trading activities of corporations are valid is yet to be answered conclusively.^[2]

[edit] Arguments

[edit] Commonwealth

The principal argument of the Government of Australia is that the legislation is supported by Section 51(xx) of the Australian Constitution, 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 are not being challenged by the states and the unions.^[3]

[edit] States and unions

The states and trade unions involved in the case have divided the issues between themselves, with the lawyers for each party arguing a particular part of the overall argument.

The challengers argue that the legislation is not a valid law under the Constitution of Australia, because it is not supported by any of the heads of power granted to the Parliament of Australia by Section 51 of the Australian Constitution. Their principal argument is that the corporations power does not extend far enough to support the legislation.

They have 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."^[3] That is, those other laws are aimed directly at corporations, and more specifically at their trading and commercial activities. They argue that the WorkChoices legislation is really directed at industrial relations, and is only remotely connected with corporations.

The challengers argue that the limits of the corporations power have not really been tested, since the vast majority of the case law is focused on determining to which corporations the power applies.

The states have also argued that since the time of Federation, the industrial relations system in Australia has been largely state run. The Commonwealth does have the conciliation and arbitration power in the Constitution, but that section is specifically limited to interstate disputes, and does not extend to disputes existing entirely within one state.

[edit] The Judgment

The Court ruled 5:2 in favour of the Commonwealth (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; Kirby and Callinan JJ dissenting). The full judgment can be read on Austlii.

[edit] Majority Judgment

The significant reasons put forward by the majority include:

• At paragraph 198: a law which regulates the relationship between a constitutional corporation and its employees or affects constitutional corporations in the manner upheld in Fontana Films is a law with respect to a corporation under the corporations power.

[edit] Kirby J (Dissenting)

The significant ideas put forward by Kirby J include:

• At paragraph 481-3: it is unnecessary for this case to outline or define the scope of the corporations power. The corporations power is restrictions placed on laws regarding industrial disputes by s51(xxxv). What is forbidden is basing a law on one head of power (i.e. corporations power) when it is clearly a law with respect to another head of power (i.e. industrial disputes);
• At paragraph 607: laws with respect to industrial disputes must fit within the two safeguards in s51(xxxv) namely interstateness and independent resolution;
• At paragraph 609 (titled Preserving Industrial Fairness): the idea of a fair go that was at the heart of federal workplace laws is destroyed which has the potential to effect the core values that shaped the Australian Community and Economy; and
• At paragraph 613: the high court should be attentive to the federal character of the Constitution.

[edit] Callinan J (Dissenting)

Callinan J summarises his judgment at paragraph 913. Generally, the reasons set down in paragraph 913 include:

• The Constitution should be read as a whole;
• The substance of the legislation in question is with regards to industrial affairs;
• The industrial affairs power includes the two safe guards;
• As much as the corporations power may purport to support the legislation, the power is still subject to the restrictions of the industrial affairs power for industrial affairs legislation;
• To affirm the validity of the Act would be to trespass on the functions of the states; and
• The validation of the Act would result in an unacceptable distortion of the federal balance.

[edit] Significance and controversy

Media coverage and commentary on the case has been significant. The case has been "hailed as the most important constitutional case in 80 years"^[1] (a probable reference to Engineers, heard 86 years ago) It has also been described as potentially one of the most important cases in the history of the Court.^[4]

Some feel that this media coverage may be slightly overstated, but it is generally agreed that the case is the most important case regarding the scope of the Federal Parliament's power since the Tasmanian Dams Case in 1983.

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 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. [1] 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, 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. [2]

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. ^[5]

[edit] See also

• Australian constitutional law
• Australian labour law

[edit] References