New South Wales v Commonwealth

HIGH COURT OF AUSTRALIA

GLEESON CJ,
GUMMOW, KIRBY, HAYNE, CALLINAN, HEYDON AND CRENNAN JJ

Matter No S592/2005

STATE OF NEW SOUTH WALES  PLAINTIFF

AND

COMMONWEALTH OF AUSTRALIA  DEFENDANT

Matter No P66/2005

STATE OF WESTERN AUSTRALIA  PLAINTIFF

AND

COMMONWEALTH OF AUSTRALIA  DEFENDANT

Matter No A3/2006

STATE OF SOUTH AUSTRALIA  PLAINTIFF

AND

COMMONWEALTH OF AUSTRALIA  DEFENDANT

Matter No B5/2006

STATE OF QUEENSLAND  PLAINTIFF

AND

COMMONWEALTH OF AUSTRALIA  DEFENDANT

Matter No B6/2006

AUSTRALIAN WORKERS' UNION & ANOR  PLAINTIFFS

AND

COMMONWEALTH OF AUSTRALIA  DEFENDANT

Matter No S50/2006

UNIONS NSW & ORS  PLAINTIFFS

AND

COMMONWEALTH OF AUSTRALIA  DEFENDANT

Matter No M21/2006

STATE OF VICTORIA  PLAINTIFF

AND

COMMONWEALTH OF AUSTRALIA  DEFENDANT

New South Wales v Commonwealth of Australia
Western Australia v Commonwealth of Australia
South Australia v Commonwealth of Australia
Queensland v Commonwealth of Australia
Australian Workers' Union v Commonwealth of Australia
Unions NSW v Commonwealth of Australia
Victoria v Commonwealth of Australia
[2006] HCA 52
14 November2006
S592/2005, P66/2005, A3/2006, B5/2006, B6/2006, S50/2006 & M21/2006

ORDER

In each matter:

1.The defendant's demurrer to the statement of claim is allowed.

2.Judgment for the defendant with costs.

Representation

M G Sexton SC, Solicitor-General for the State of New South Wales and B W Walker SC with J K Kirk and I Taylor for the plaintiff in Matter No S592/2005 (instructed by Crown Solicitor for New South Wales)

R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell and D J Matthews for the plaintiff in Matter No P66/2005 (instructed by State Solicitor for Western Australia)

C J Kourakis QC, Solicitor-General for the State of South Australia with G J Parker and S A McDonald for the plaintiff in Matter No A3/2006 (instructed by Crown Solicitor for South Australia)

W Sofronoff QC, Solicitor-General of the State of Queensland with G C Martin SC, R W Campbell, S E Brown and J M Horton for the plaintiff in Matter No B5/2006 (instructed by Crown Solicitor for the State of Queensland)

D F Jackson QC with A K Herbert and N J Owens for the plaintiffs in Matter No B6/2006 (instructed by Sciacca's Lawyers and Consultants)

N C Hutley SC with N Perram and B L Jones for the plaintiffs in Matter No S50/2006 (instructed by Jones Staff & Co)

P M Tate SC, Solicitor-General for the State of Victoria with M Bromberg SC, G R Kennett, M K Moshinsky, S J Moore and D I Star for the plaintiff in Matter No M21/2006 (instructed by Victorian Government Solicitor)

D M J Bennett QC, Solicitor-General of the Commonwealth and R R S Tracey QC and H C Burmester QC with J L Bourke, S B Lloyd and S P Donaghue for the defendant in all matters (instructed by Australian Government Solicitor)

Interveners

W C R Bale QC, Solicitor-General of the State of Tasmania with S K Kay intervening on behalf of the Attorney-General of the State of Tasmania in all matters (instructed by Solicitor-General of Tasmania)

T I Pauling QC, Solicitor-General for the Northern Territory with S L Brownhill intervening on behalf of the Attorney-General for the Northern Territory in all matters (instructed by Solicitor for the Northern Territory)

P M Tate SC, Solicitor-General for the State of Victoria with M Bromberg SC, G R Kennett, M K Moshinsky, S J Moore and D I Star intervening on behalf of the Attorney-General of the State of Victoria in Matter Nos S592/2005, P66/2005, A3/2006 and B5/2006 (instructed by Victorian Government Solicitor)

S J Gageler SC with G C McCarthy intervening on behalf of the Australian Capital Territory Attorney-General in all matters (instructed by Australian Capital Territory Government Solicitor)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

New South Wales v Commonwealth of Australia

Western Australia v Commonwealth of Australia
South Australia v Commonwealth of Australia
Queensland v Commonwealth of Australia
Australian Workers' Union v Commonwealth of Australia
Unions NSW v Commonwealth of Australia
Victoria v Commonwealth of Australia

Constitutional Law (Cth) – Powers of federal Parliament – Workplace Relations Amendment (Work Choices) Act 2005 (Cth) amended Workplace Relations Act 1996 (Cth) – Amending Act altered primary constitutional basis of Workplace Relations Act 1996 (Cth) so as to place reliance on s 51(xx) instead of s 51(xxxv) of the Constitution – Constitutional validity of Workplace Relations Amendment (Work Choices) Act 2005 (Cth) – Whether s 51(xx) of the Constitution confers power upon the federal Parliament to regulate the employment relationship between "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth" and their employees.

Constitutional Law (Cth) – Powers of federal Parliament – Section 51(xx) – Whether, to be supported by s 51(xx), the fact that a corporation is a foreign, trading or financial corporation must be significant in the way in which the law relates to it – Whether sufficient for law to be characterised as law with respect to constitutional corporations that it singles out constitutional corporations as the object of statutory command.

Constitutional Law (Cth) – Powers of federal Parliament – Relationship between s 51(xx) and s 51(xxxv) – Whether s 51(xx) confined in its operation by reference to terms of s 51(xxxv) – Whether s 51(xxxv) represents the totality of the federal Parliament's power to make laws with respect to industrial relations, except in relation to employees of the Commonwealth and other limited categories of employees – Whether s 51(xxxv) contains a "positive prohibition or restriction" to which s 51(xx) is subject – Whether s 51(xxxv) contains a "safeguard, restriction or qualification" to which s 51(xx) is subject.

Constitutional Law (Cth) – Powers of federal Parliament – Section 51(xxxv) – Constitutional validity of Sched 6 of Workplace Relations Act 1996 (Cth) as amended by Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ("Amended Act") – Whether Sched 6 supported by s 51(xxxv) of the Constitution.

Constitutional Law (Cth) – Powers of federal Parliament – Section 122 – Amended Act applied to any body corporate incorporated in a Territory and any person or entity that carried on an activity in a Territory so far as the person or entity

employed an individual in connection with the activity – Whether supported by s 122 of the Constitution.

Constitutional Law (Cth) – Powers of federal Parliament – Exclusion of State and Territory laws – Section 16 of Amended Act excluded certain State and Territory laws – Whether s 16 a law with respect to any head of power in s 51 of the Constitution – Whether s 16 amounted to a bare attempt to limit or exclude State legislative power – Whether s 16 impermissibly curtailed the capacity of the States to function as governments.

Constitutional Law (Cth) – Powers of federal Parliament – Section 117 of Amended Act empowered the Australian Industrial Relations Commission to restrain a State industrial authority from dealing with certain matters – Whether s 117 contrary to s 106 of the Constitution – Whether s 117 impermissibly impaired capacity of States to function as governments – Whether s 117 supported by s 51(xx).

Constitutional Law (Cth) – Powers of federal Parliament – Regulation-making powers – Sections 356 and 846(1) of Amended Act together empowered the Governor-General to make regulations specifying matters to be "prohibited content" in relation to workplace agreements made under the Act, without expressly stipulating any relevant criteria – Whether regulation-making power amounted to a "law" – Whether regulation-making power a law with respect to any identifiable head of Commonwealth legislative power.

Constitutional Law (Cth) – Constitutional interpretation – Applicable principles of interpretation – Relevance of failure of proposals to alter Constitution by referendum.

Constitution, ss 51(xx), 51(xxxv), 122.
Workplace Relations Amendment (Work Choices) Act 2005 (Cth).
Workplace Relations Act 1996 (Cth).

GLEESON CJ, GUMMOW, HAYNE, HEYDON AND CRENNAN JJ.

Introduction

1. In December 2005, the Parliament enacted the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ("the Amending Act"). The Amending Act made extensive amendments to the Workplace Relations Act 1996 (Cth) ("the Act"). The Act in its form before those amendments will be referred to as "the previous Act"; the Act in its form after those amendments will be referred to as "the new Act". The most notable change effected by the Amending Act was an alteration of the constitutional basis of the Act. Although certain provisions of the previous Act had been enacted in reliance on the power conferred by s 51(xx) of the Constitution (the corporations power), its general framework was based upon the power conferred by s 51(xxxv) (the conciliation and arbitration power). Although certain provisions of the new Act are still based on the conciliation and arbitration power, and although the Amending Act invoked other heads of Commonwealth legislative power, the new Act is now, in large part, an exercise of the corporations power. The Parliament's capacity to rely upon that power to sustain the legislation is the principal question in issue in these proceedings.

2. The principal amendments to the Act commenced on 27 March 2006. On that day the Workplace Relations Regulations 2006 ("the Regulations") also commenced.

3. These reasons are organised as follows:

   PART I – THE LITIGATION AND THE LEGISLATION

   1The litigation [4]‑[6]

   2         The legislation [7]‑[44]

   3 The principal issue: Constitution, s 51(xx) [45]‑[55]

   4         Other issues [56]

   PART II – SECTION 51(xx)

   1         The plaintiffs' principal arguments [57]‑[60]

   2         The Commonwealth's principal arguments [61]‑[63]

   3A distinction between "external" and "internal" relationships [64]‑[67]

   4         Huddart Parker [68]‑[95]

   5         Relevant nineteenth century developments [96]‑[124]

   6         Failed referendums [125]‑[135]

   7         The course of authority after Huddart Parker [136]‑[178]

   (a)      The Banking Case [147]‑[152]
   (b)      The Concrete Pipes Case [153]‑[156]
   (c)      Fontana Films [157]‑[165]
   (d)      The Tasmanian Dam Case [166]‑[172]
   (e)      Re Dingjan [173]‑[178]

   8         Distinctive character and discriminatory operation [179]‑[182]

   9         A need to limit s 51(xx)? [183]‑[196]

   10       General conclusions [197]‑[198]

   PART III – THE RELATIONSHIP BETWEEN s 51(xxxv) AND s 51(xx)

   1         The parties' submissions [199]‑[208]

   2         Text, structure and authority [209]‑[222]

   3         The course of authority [223]‑[229]

   4 The provenance of s 51(xxxv) [230]‑[238]

   PART IV – PARTICULAR CONCLUSIONS

   1         Particular provisions and s 51(xx) [239]‑[294]

   (a) Part 7 [245]‑[246]
   (b) Parts 8 and 10, Divs 1 and 2 of Pt 12 and Pt 23 [247]‑[252]
   (c) Part 9 [253]‑[262]

   (d)Item 4 of Sched 4 to the Amending Act and Sched 8 to the new Act [263]‑[268]

   (e)      Part VIAAA [269]‑[271]
   (f)       Sections 365 and 366 [272]‑[275]
   (g)      Sections 637 and 643 [276]‑[278]
   (h) Division 5 of Pt 15 [279]‑[287]

   (i) Part 16 [288]‑[294]

   2 Particular provisions and s 51(xxxv) [295]-[327]

   (a) Parts 8, 9 and 13 [296]‑[298]
   (b) Schedule 6 [299]‑[308]
   (c)      Schedule 1 [309]‑[327]

   PART V – CONSTITUTION, s 122 – TERRITORIES

   1         Structure of the challenges [330]‑[333]

   2         Paragraph (e) of the definition of "employer" [334]‑[337]

   3         Paragraph (f) of the definition of "employer" [338]‑[344]

   PART VI – OTHER PARTICULAR CHALLENGES

   1 Section 16 – Exclusion of State and Territory laws [346]‑[377]

   2Section 117 – Restraining State industrial authorities [378]‑[394]

   3Regulation‑making powers [395]‑[421]

   PART VII – CONCLUSIONS AND ORDERS

   PART I – THE LITIGATION AND THE LEGISLATION

   1         The litigation

4. Seven actions were commenced in this Court seeking declarations of invalidity of the whole Amending Act, or, alternatively, of specified provisions. Five of the actions were commenced by the States of New South Wales, Victoria, Queensland, South Australia and Western Australia. The other two actions were commenced by trade union organisations. The statements of claim followed a substantially similar form, reciting the impugned legislation, and its legal effect, and asserting its constitutional invalidity. To each statement of claim the Commonwealth demurred, the ground of demurrer being that none of the impugned provisions was invalid. Those demurrers are now before this Court for decision. Although there were some, relatively minor, disagreements between the parties upon various points of construction of the legislation, there are no matters of disputed fact that are claimed to affect the questions of validity that have been argued. That being so, the demurrer is an appropriate procedure for the resolution of the issues of validity that arise. This procedure has been adopted on many past occasions[1], and no question of an advisory opinion or of a hypothetical case arises.

   [1]Examples include Melbourne Corporation v The Commonwealth (1947) 74 CLR 31; The State of Victoria v The Commonwealth ("the Second Uniform Tax Case") (1957) 99 CLR 575; Attorney‑General (Vict) v The Commonwealth ("the Marriage Act Case") (1962) 107 CLR 529; Victoria v The Commonwealth ("the Payroll Tax Case") (1971) 122 CLR 353; Victoria v The Commonwealth and Hayden ("the Australian Assistance Plan Case") (1975) 134 CLR 338.

5. After oral argument was concluded the parties agreed upon a joint document setting out the provisions that were challenged, which parties made the particular challenges, and the bases upon which those challenges were made.  These reasons have been prepared on the footing that the document contained an exhaustive list of the live issues in the litigation and thus reflected some narrowing of the controversies presented by the pleadings and earlier written submissions.

6. The Attorneys‑General of Tasmania, the Northern Territory and the Australian Capital Territory intervened in support of the plaintiffs.  The Attorney‑General for Victoria intervened in certain of the proceedings.  The position of the State of Victoria is affected by the Commonwealth Powers (Industrial Relations) Act 1996 (Vic) ("the Referral Act") by which the Parliament of Victoria referred powers to the Commonwealth Parliament to make laws with respect to conciliation and arbitration for the prevention and settlement of industrial disputes within the limits of the State; agreements about matters pertaining to the relationship between an employer or employers in the State and an employee or employees in the State; and minimum terms and conditions of employment for employees of the State. The Referral Act was subject to a number of exceptions.

   2         The legislation

7. The principal object of the new Act is stated in s 3 as follows:

   "The principal object of this Act is to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia by:

   (a)encouraging the pursuit of high employment, improved living standards, low inflation and international competitiveness through higher productivity and a flexible and fair labour market; and

   (b)establishing and maintaining a simplified national system of workplace relations; and

   (c)providing an economically sustainable safety net of minimum wages and conditions for those whose employment is regulated by this Act; and

   (d)ensuring that, as far as possible, the primary responsibility for determining matters affecting the employment relationship rests with the employer and employees at the workplace or enterprise level; and

   (e)enabling employers and employees to choose the most appropriate form of agreement for their particular circumstances; and

   (f)ensuring compliance with minimum standards, industrial instruments and bargaining processes by providing effective means for the investigation and enforcement of:

   (i)employee entitlements; and

   (ii)the rights and obligations of employers and employees, and their organisations; and

   (g)ensuring that awards provide minimum safety net entitlements for award‑reliant employees which are consistent with Australian Fair Pay Commission decisions and which avoid creating disincentives to bargain at the workplace level; and

   (h)supporting harmonious and productive workplace relations by providing flexible mechanisms for the voluntary settlement of disputes; and

   (i)balancing the right to take industrial action for the purposes of collective bargaining at the workplace level with the need to protect the public interest and appropriately deal with illegitimate and unprotected industrial action; and

   (j)ensuring freedom of association, including the rights of employees and employers to join an organisation or association of their choice, or not to join an organisation or association; and

   (k)protecting the competitive position of young people in the labour market, promoting youth employment, youth skills and community standards and assisting in reducing youth unemployment; and

   (l)assisting employees to balance their work and family responsibilities effectively through the development of mutually beneficial work practices with employers; and

   (m)respecting and valuing the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin; and

   (n)assisting in giving effect to Australia's international obligations in relation to labour standards."

8. The constitutional basis upon which the "framework for cooperative workplace relations" is constructed is revealed by the definitions of "employee" and "employer" in ss 5 and 6 of the new Act. Those definitions are central to the operation of much of the new Act. The definition of "employee" in s 5(1) is an individual so far as he or she is employed, or usually employed, as described in the definition of "employer" in s 6(1), by an employer. Section 6(1) provides the "basic definition" of "employer" which applies unless the contrary intention appears (as it does in certain provisions). The definition is:

   "(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; or

   (b)the Commonwealth, so far as it employs, or usually employs, an individual; or

   (c)a Commonwealth authority, so far as it employs, or usually employs, an individual; or

   (d)a person or entity (which may be an unincorporated club) so far as the person or entity, in connection with constitutional trade or commerce, employs, or usually employs, an individual as:

   (i)a flight crew officer; or

   (ii)a maritime employee; or

   (iii)a waterside worker; or

   (e)a body corporate incorporated in a Territory, so far as the body employs, or usually employs, an individual; or

   (f)a person or entity (which may be an unincorporated club) that carries on an activity (whether of a commercial, governmental or other nature) in a Territory in Australia, so far as the person or entity employs, or usually employs, an individual in connection with the activity carried on in the Territory."

9. The term "constitutional corporation" is defined in s 4 to mean a corporation to which s 51(xx) of the Constitution applies. That paragraph refers to foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth. No doubt there may be room for dispute, in relation to some corporations, about whether they are constitutional corporations within the meaning of the new Act. However, in the application of par (a) of the basic definition of employer, and the corresponding definition of employee, to a given corporation, the hypothesis is that it is a constitutional corporation.

10. The definitions of employee and employer invoke other heads of power as well as the corporations power.  Even so, in its practical application the new Act depends in large measure upon the assumption that the corporations power is capable of sustaining the legislative framework.  Accordingly, the validity of that assumption was the matter to which the primary submissions of a number of the parties were directed.

11. The system introduced by the Amending Act is intended to cover all employers and employees as defined in s 6(1) and s 5(1), including those formerly bound by State based industrial instruments. It includes transitional provisions designed to cover certain employers and employees bound by federal awards who are not within the ss 6 and 5 definitions. It also contains provisions which preserve for a time the terms and conditions of employment of employees within the s 5(1) definition who would have been bound by, or whose employment would have been subject to, a State industrial instrument.

12. The States and the Commonwealth, for the purposes of the presentation of their arguments, agreed upon a description of the operation of the relevant provisions of the new Act.  That agreed description is substantially as follows.  The language of the agreement of the parties will be adopted, without supporting references to the specific legislative provisions.  It is not intended to foreclose any issues of construction.

13. Part VI of the previous Act dealt with the prevention and settlement of interstate industrial disputes by the processes of conciliation and arbitration engaged in by the Australian Industrial Relations Commission ("the AIRC"). Part VI has been repealed. Parts 7 and 10 of the new Act deal with some matters of a kind formerly dealt with by procedures for prevention and settlement of interstate industrial disputes.

14. Part 7 is headed "The Australian Fair Pay and Conditions Standard". The purpose of the Part is to set out "key minimum entitlements of employment" relating to basic rates of pay and casual loadings, maximum ordinary hours of work, annual leave, personal leave, and parental leave and related entitlements. The provisions of Pt 7 together constitute the Australian Fair Pay and Conditions Standard ("the Pay and Conditions Standard").

15. Central to the operation of Pt 7 is the Australian Fair Pay Commission ("the AFPC"), a body established by s 20 of the new Act. It is unnecessary for present purposes to go into the detail of the constitution of the AFPC save to say that Commissioners are appointed by the Governor‑General (s 38) and their terms and conditions of employment are governed by Div 2 of Pt 2 of the Act.

16. The AFPC has what is described as a wage‑setting function, which involves conducting wage reviews and exercising its wage‑setting powers as necessary depending on the outcomes of wage reviews. The objective of the AFPC in performing this function is to promote the economic prosperity of the people of Australia having regard to specified "wage‑setting parameters". Those include providing a safety net for the low paid and providing minimum wages for certain kinds of employee. The AFPC has power to determine the timing, frequency and scope of wage reviews. Division 2 of Pt 7 provides that if the employment of an employee is covered by an Australian Pay and Classification Scale ("APCS") the employee must be paid a specified basic periodic rate of pay. The AFPC adjusts, revokes and determines new APCSs. If the employment is not covered by an APCS, the employee must be paid a rate that is at least equal to the standard Federal Minimum Wage. This is described as a "guarantee of basic rates of pay". Various other "guarantees" as to wages are contained in Div 2 of Pt 7. Similarly, Div 3 of Pt 7 provides what is described as a "guarantee of maximum ordinary hours of work". In brief, an employee must not be required or requested by an employer to work more than 38 hours per week and reasonable additional hours. Factors to be taken into account in determining what is reasonable are specified. Division 4 of Pt 7 deals with annual leave, and contains what is described as a "guarantee of annual leave". Details of the entitlements are set out in s 232. Division 5 of Pt 7 prescribes certain entitlements to various kinds of "personal leave". Division 6 of Pt 7 does the same in relation to parental leave.

17. The details of the various entitlements prescribed by Pt 7 are not material to the principal issues in these proceedings. It suffices to say that the provisions of Pt 7 are much more detailed than appears from the above brief synopsis. Having regard to the scheme of Pt 7, it may be said that one of the principal issues in the case may be stated by asking whether a law that provides that a corporation of a kind referred to in s 51(xx) of the Constitution must pay its employees certain minimum wages, and must provide them with certain leave entitlements, and must not require them to work more than a certain number of hours, is a law with respect to such corporations.

18. On the commencement of Pt 7, employees (as defined in s 5) who were covered by a "pre‑reform wage instrument", such as a federal award under the previous Act, or a State award or State law, or Territory law, which contained rates of pay, continued to have a minimum entitlement to those rates of pay as the pay rates, classification, casual loading and coverage provisions of the previous instrument were converted to a "preserved APCS".

19. Part 8 of the new Act is headed "Workplace agreements". It also applies only to s 6(1) employers and their employees. It provides for the making, variation and termination of particular kinds of agreement, called workplace agreements. In the Second Reading Speech it was said that a "central objective of [the Amending Act] is to encourage the further spread of workplace agreements"[2].

    [2]Second Reading Speech of the Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service, Australia, House of Representatives, Parliamentary Debates (Hansard), 2 November 2005 at 17.

20. The previous Act, in Pt VID, provided for Australian workplace agreements ("AWAs"). The relevant Part applied where the employer was a constitutional corporation, or the Commonwealth, or where the employee's primary workplace was in a Territory and in certain other circumstances. It was an example of part of the previous legislation that was based, not on the power given by s 51(xxxv), but on the powers relied upon to support the Amending Act.

21. Part 8 of the new Act provides for certain forms of agreement that may be made between employers, employees and unions which are registered organisations. A workplace agreement may be an AWA, an employee collective agreement (an agreement between an employer and persons employed in a single business or part of a single business), a union collective agreement (an agreement between an employer and one or more organisations of employees), a union greenfields agreement (a collective agreement between an employer and one or more organisations of employees where the agreement relates to a new business), an employer greenfields agreement, or a multiple‑business agreement. Workplace agreements become operative when lodged with the Office of the Employment Advocate. As was the case under the previous Act, there is no requirement for certification or approval by the AIRC.

22. In general, workplace agreements are to include dispute settlement procedures chosen by the parties, in the absence of which a model dispute resolution process in Pt 13 will be taken to be included in the agreement. Where applicable, certain protected award conditions are taken to be included in a workplace agreement to the extent that the agreement does not expressly exclude or modify them. Workplace agreements must not contain "prohibited content". This is a topic the subject of a separate issue that will be considered below. What matters are prohibited content is the subject of the Regulations which have prescribed, for example, terms relating to the deduction from wages of union membership dues, terms which confer a right or remedy in relation to termination of employment for a reason that is harsh, unjust or unreasonable, and terms that deal with matters that do not pertain to the employment relationship. Inclusion of prohibited content results in exposure to civil penalties.

23. Under Pt 8 of the new Act, a party may terminate an agreement that has passed its nominal expiry date by giving 90 days written notice. Under the previous Act, a party could apply to the AIRC to terminate an agreement after the nominal expiry date. The AIRC was required to terminate the agreement unless such an order would be contrary to the public interest. From the date on which a workplace agreement that operated in relation to an employee is terminated until another workplace agreement comes into operation in relation to that employee, neither the terminated agreement nor an award has effect in relation to that employee. Upon termination of a workplace agreement, the minimum terms and conditions of employment are governed by the Pay and Conditions Standard and applicable "protected award conditions". A pre‑reform AWA will cease to apply when replaced by a post‑reform AWA. The Pay and Conditions Standard prevails over a workplace agreement that operates in relation to an employee to the extent that the Standard provides a more favourable outcome for the employee in a particular respect.

24. Part 9 of the new Act is headed "Industrial action". It applies only to s 6(1) employers and their employees. Division 8 of Pt VIB of the previous Act dealt with negotiations for the making of certified agreements and included a right for a party wishing to make a certified agreement to initiate a bargaining period during which a party could engage in industrial action in relation to which a limited immunity was conferred. The industrial action was described as "protected action". The AIRC had a role in suspending or terminating a bargaining period, and exercising functions of conciliation and arbitration to make an award where agreement could not be reached.

25. Most of Pt 9 of the new Act deals with the taking of lawful industrial action ("protected action") in limited circumstances and for the specific purpose of bargaining for a collective agreement. Part 9 also prohibits industrial action not permitted by the Act and prohibits the making and acceptance of certain payments relating to periods of industrial action. It extends the circumstances in which bargaining for a collective agreement may be terminated by the AIRC. In the event of such termination the AIRC may make a "workplace determination" that provides for the matter in issue. The new Act establishes additional requirements in order for industrial action to be "protected action". The action must be preceded by a "protected action ballot" in which the proposed industrial action is approved by a majority of employees, voting at a secret ballot. The new Act also confers a power on the Minister to terminate a bargaining period if satisfied of certain matters, including that the industrial action is threatening, or would threaten, to endanger the life, the personal safety, or the health or welfare, of the population or part of it, or to cause significant damage to the Australian economy or an important part of it. The new Act requires the AIRC to make an order that industrial action stop, not occur and not be organised if it appears to the AIRC that industrial action by an employee, employees or an employer is not, or would not be, protected action. The new Act imposes a similar obligation on the AIRC in relation to industrial action taken by employees and employers within the ordinary meaning of those terms who do not fall within s 5(1) and s 6(1) where the industrial action will, or would, be likely to have the effect of causing substantial loss or damage to the business of a constitutional corporation.

26. Part 10 of the new Act is headed "Awards". It applies only to s 6(1) employers and their employees. By definition, an award may be either an award made by the AIRC under s 539 or a pre‑reform award. Schedule 4 to the Amending Act dealt with the operation of awards in force before the reform commencement. It provided for the creation of a "pre‑reform award", that is, an instrument to take effect from the reform commencement in the same terms as an original award of the AIRC in force immediately before the reform commencement binding relevantly only employees and employers within the meaning of s 5(1) and s 6(1) respectively and each organisation that was bound by the original award immediately before the reform commencement. Awards may be made by the AIRC to give effect to the outcome of an "award rationalisation process" following a request by the Minister. The AIRC can make an award only to give effect to the outcome of an award rationalisation process and not otherwise. Awards, whether pre‑reform awards or rationalised awards, as under the previous Act, may only include terms about "allowable award matters", but the number of such matters has been reduced from 20 to 15. The conditions provided for by the Pay and Conditions Standard (including rates of pay) and other prescribed matters cannot be included in awards.

27. Part 12 of the new Act is headed "Minimum entitlements of employees". It supplements the minimum conditions of employment established by the Pay and Conditions Standard provided for by Pt 7. Some of the additional minimum entitlements established by Pt 12 apply to employers and employees as defined in s 6(1) and s 5(1), and the balance apply to all employers and employees. Division 4 of Pt 12 deals with termination of employment. Subdivision B of Div 4 provides that employees as defined in s 5(1), to the extent that they are not otherwise excluded, have a right to make application to the AIRC for relief in respect of the termination of their employment on the ground that the termination was harsh, unjust or unreasonable ("unfair dismissal"). State unfair dismissal jurisdictions are intended to be excluded by the Act in so far as they apply to s 6(1) employers and their employees. Subdivision C prohibits an employer from terminating an employee's employment for any one of a range of specified reasons ("unlawful dismissal"). Subdivision D enables the AIRC to make orders against an employer where the employer had decided to terminate the employment of 15 or more employees for reasons of an economic, technological, structural or similar nature and yet failed to consult each relevant trade union before terminating.

28. Part 13 of the new Act is headed "Dispute resolution processes". Its objects are to encourage employers and employees who are parties to a dispute to resolve it at the workplace level, and to allow the parties to determine the best forum in which to resolve disputes. It includes a model dispute resolution process.

29. Division 5 of Pt 15 is headed "Entry for OHS purposes". In Pt 15 the terms "employer" and "employee" have their ordinary meaning. Division 5 prohibits the exercise by an official of a registered organisation of the right to enter premises conferred by an "OHS law" (that is, an occupational health and safety law of a State or Territory prescribed as such by the Regulations) unless the official holds a permit under Pt 15 of the new Act and exercises the right during working hours. Contravention results in exposure to a civil penalty. The issue of a permit by an Industrial Registrar or Deputy Industrial Registrar depends upon the Registrar's satisfaction that the official is a fit and proper person having regard to certain matters. Division 5 applies, inter alia, to premises that are occupied or otherwise controlled by constitutional corporations or in circumstances where the right of entry under the law of the State or Territory relates to requirements to be met by a constitutional corporation, conduct to be engaged in, or activity undertaken or controlled, by a constitutional corporation, or by an employee of a constitutional corporation, or by a contractor providing services for a constitutional corporation or the Commonwealth, or the exercise of the right will have a direct effect on any such persons.

30. Part 16 of the new Act is headed "Freedom of association". In this Part, the terms "employer" and "employee" have their ordinary meaning. It seeks, among other things, to provide relief to employers and employees and independent contractors who are prevented or inhibited from exercising their rights to freedom of association. Divisions 3 to 8 prohibit a range of conduct by persons in relation to forming, or being or not being a member of, industrial associations, or participating or not participating in industrial action. For example, s 789 prohibits persons from organising or taking (or threatening to organise or take) any action against another person with intent to coerce that person or a third person to become or not become (or remain or cease to be) an officer or member of an "industrial association". The prohibitions extend to conduct by or against a constitutional corporation; or conduct that adversely affects a constitutional corporation; or conduct carried out with intent to adversely affect a constitutional corporation; or conduct that directly affects (or is carried out with the intent to directly affect) a person in the capacity of an employee, or prospective employee, a contractor, or prospective contractor of a constitutional corporation; or conduct that consists of advising, encouraging or inciting a constitutional corporation to take or not to take (or threaten to take, or not to take) particular action in relation to another person.

31. Part 23 of the new Act is headed "School‑based apprentices and trainees". It applies only to s 6(1) employers and their employees. It provides, subject to certain qualifications, for persons who are employed as "school‑based apprentices" or "school‑based trainees" to be entitled to any additional conditions to which a full‑time apprentice or employee doing the same kind of work, in the same location and for the same employer would be entitled, calculated by reference to the proportion of hours worked on the job by the employee.

32. The following provisions of the new Act were also the subject of argument.

33. Section 16 expresses the intention that the new Act is to apply to the exclusion of a range of State and Territory laws that would otherwise apply in relation to an employer and employee. The excluded laws include a "State or Territory industrial law" of a kind specified, together with an Act of a State or Territory "that applies to employment generally" and has a main purpose of either regulating workplace relations; providing for the determination of the terms and conditions of employment; providing for the making and enforcement of agreements determining the terms and conditions of employment; providing for rights and remedies connected with termination of employment or prohibiting conduct that relates to whether a person is a member of an industrial association. It will be necessary to make further reference to the provisions excluding State and Territory laws when dealing with the arguments on that topic.

34. Section 117 provides that a Full Bench of the AIRC has the power to make an order restraining a State industrial authority from dealing with a matter which is the subject of a proceeding before the AIRC.  If such an order is made, the new Act provides that the State industrial authority must cease dealing with the matter and any order the State industrial authority makes in contravention of the restraint is invalid to the extent of the contravention.

35. Between 14 December 2005 and 27 March 2006, the new Act included Pt VIAAA, which sought to render of no effect an obligation contained in any State law, State award, State authority order or Territory law requiring a "relevant employer" with fewer than 15 employees to pay redundancy pay.  In the case of a State law or award or authority order "relevant employer" meant a constitutional corporation.  In the case of a Territory law, it meant any employer.  Although the provision was repealed on 27 March 2006, it could have affected persons before its repeal, and its validity was challenged.

36. It is necessary now to refer to certain Schedules. That which was the subject of most argument is Sched 1, headed "Registration and Accountability of Organisations". Much of the substantive content of this Schedule was in the previous Act, but under the previous Act the constitutional basis for the regulation of organisations of employers and employees was s 51(xxxv)[3].  The basis has now changed, even though the scheme of regulation remains, in large part, substantially the same.

    [3]Jumbunna Coal Mine, No Liability v Victorian Coal Miners' Association (1908) 6 CLR 309.

37. Schedule 1 provides for the registration and regulation of organisations of employees and employers.  It is unnecessary for present purposes to go into the detail of the regulation.  The provisions relating to registration are central to the scheme.  The associations which may apply for registration under the new Act are those which are "federally registrable".  An association of employers is federally registrable either if it is a constitutional corporation or if the majority of its members are "federal system employers".  Federal system employers include constitutional corporations, employers in relation to "public sector employment", employers in Victoria, or employers in relation to an enterprise that operates principally from or within a Territory, or is engaged principally in interstate trade or commerce.  Federally registrable employee associations are those which are constitutional corporations or which have as a majority of their members "federal system employees".  Federal system employees are persons employed by constitutional corporations, or employed in public sector employment, or employed in Victoria, or in certain kinds of enterprise including those which operate principally from or within a Territory or are engaged principally in interstate trade and commerce.

38. Federally registrable enterprise associations include constitutional corporations and associations the majority of whose members are federal system employees.  An association may apply to the AIRC for registration.  If the application is successful, the association becomes an "organisation", which is deemed to be a body corporate.

39. Item 4 of Sched 4 to the Amending Act was included among the transitional provisions, and dealt with the operation of pre‑reform awards.

40. Schedule 6 to the new Act provides transitional arrangements for certain employers and employees bound by federal awards. It is based upon the power given by s 51(xxxv). It provides in effect that employers who do not fall within s 6(1), and their employees, will continue to be bound by a federal award which applied to them before the reform commencement for a transitional period of up to five years, as a transitional award. During that period the AIRC can vary transitional awards but is prohibited from making new awards. There are limits on the content of transitional awards.

41. Schedule 8 preserves for a time the terms and conditions of employment of those employees within the meaning of s 5(1) who, but for the commencement of the reforms, would have been bound by, or whose employment would have been subject to, a State employment agreement, a State award or a State or Territory industrial law. Its object also is to encourage the making of workplace agreements under the new Act during that time. It creates a new federal instrument called a "notional agreement preserving State awards" containing the terms of the original State award or State or Territory industrial law. The pay rates, casual loading provisions, classification and coverage provisions in pre‑reform wage instruments are converted to a preserved APCS pursuant to Div 2 of Pt 7. The notional agreement ceases to operate three years from the date of the reform commencement, or otherwise ceases to operate in relation to an employee if a workplace agreement comes into operation in relation to the employee, or if the employee becomes bound by an award. A term of a notional agreement that deals with a matter for which provision is made by the Pay and Conditions Standard is not enforceable. State employment agreements are converted into Preserved State agreements taken to have come into operation on the reform commencement. The new Act provides that industrial action must not be taken until after the date on which the agreement would have expired, or the end of three years, whichever is the sooner. The Pay and Conditions Standard does not apply to those covered by a Preserved State agreement. State industrial authorities are prohibited from exercising any function in respect of the converted instruments.

42. There are general, and specific, regulation‑making powers, the terms of which will be mentioned when considering challenges to those powers and to regulations.

43. The State of Victoria joined in most of the challenges made by the other States. In one important respect, however, the application of the new Act to Victoria is different, and is covered by Pt 21. Reference has already been made to the Referral Act, and the exceptions to which it was subject.

44. Part 21 establishes a regime particular to Victoria. In its amended statement of claim, and its written submissions in chief, Victoria challenged s 898 of the new Act, which is in Div 13 of Pt 21, and deals with the exclusion of Victorian laws, on the ground that it purported to express an intention to exclude Victorian laws on matters which were excluded from the referral of powers under the Referral Act, and also on the ground that it purported to exclude Victorian laws which pertain to the essential functions of government. The Commonwealth, in its written submissions, advanced certain arguments relating to the construction of the Acts and stated certain intentions as to the making of regulations. In its written submissions in reply, Victoria stated that, in the light of those "submissions and concessions", Victoria did not persist with its challenge to s 898.

    3         The principal issue: Constitution, s 51(xx)

45. In the Explanatory Memorandum circulated when the Workplace Relations Amendment (Work Choices) Bill 2005 was introduced, the first of the major changes to be implemented by the Bill was said to be to "simplify the complexity inherent in the existence of six workplace relation jurisdictions in Australia by creating a national workplace relations system based on the corporations power that will apply to a majority of Australia's employers and employees".  The Explanatory Memorandum, citing a report of the Australian Bureau of Statistics[4], said that "[u]se of the corporations power, together with other heads of power such as the Territories power and powers referred by Victoria, to expand the federal system would mean that up to 85 per cent of Australian employees would be covered by the federal system".  Large and medium sized businesses in Australia are almost invariably incorporated.  The figure of 85 per cent was accompanied by an assertion that 49 per cent of small businesses employing staff are currently incorporated.

    [4]Australian Bureau of Statistics, Employee Earnings and Hours, May 2004 (Cat No 6306.0).

46. In its submissions, the Commonwealth was concerned to make the point that reliance on the corporations power to support legislation relating to industrial relations matters and terms and conditions of employment in 2005 was not novel.  At least since 1993, the Parliament has included provisions enacted in reliance on s 51(xx) in its industrial relations legislation.  In Victoria v The Commonwealth (Industrial Relations Act Case)[5], Victoria, Western Australia and South Australia challenged a substantial number of the provisions of the previous Act, but they conceded that s 51(xx) empowered the Parliament to make laws governing the industrial rights and obligations of constitutional corporations. They conceded that s 51(xx) supported Div 4 of Pt VIB of the previous Act. Part VIB was substantially similar to Pt 8 of the new Act, which is now said to be invalid. New South Wales, which intervened in the case, adopted the submissions of the Commonwealth. These concessions do not preclude the States from advancing the arguments made in the present case, but they draw attention to the fact that reliance on the corporations power to sustain parts of the new Act is not unprecedented. It is the extent of the reliance that is new, but if the argument for the States in this case is correct, then it applied also to that earlier legislation. In the Industrial Relations Act Case, Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ said[6]:

    "It is not in issue that the Parliament may validly legislate as to the industrial rights and obligations of persons employed by constitutional corporations as defined in s 4(1) of the Act. Clearly, the constitutional powers which authorise laws in that regard also authorise laws defining those rights and obligations by reference to a specified happening or event. And they authorise laws specifying that they are exclusive of other rights and liabilities, whether that specification is express or implied." (footnotes omitted)

    [5](1996) 187 CLR 416.

    [6](1996) 187 CLR 416 at 540.

47. Electrolux Home Products Pty Ltd v Australian Workers' Union[7] concerned Pt VIB of the previous Act and, in particular, Divs 2 and 8 of that Part.  The relevant provisions concerned "certified agreements" made between employers who were constitutional corporations and unions or made directly between such employers and their employees.  The constitutional underpinning of the legislation was noted, but not questioned[8].  McHugh J said[9] that "[t]he corporations power provides a broader basis upon which s 170LI may operate".  The validity of Pt VIB of the previous Act was upheld in 2001, by the Full Court of the Federal Court, in Quickenden v O'Connor[10].

    [7](2004) 221 CLR 309.

    [8](2004) 221 CLR 309 at 344 [75] per McHugh J, 361 [133] per Gummow, Hayne and Heydon JJ, 387 [216] per Kirby J.

    [9](2004) 221 CLR 309 at 344 [75].

    [10](2001) 109 FCR 243.

48. In 1909, in Huddart, Parker & Co Pty Ltd v Moorehead[11], this Court dealt with a challenge to the validity of certain provisions of the Australian Industries Preservation Act 1906 (Cth), which prohibited corporations of the kind referred to in s 51(xx) from engaging in certain forms of anti‑competitive behaviour. In substance the power which the Parliament then exercised, or purported to exercise, was no different from the power that sustains much of the Trade Practices Act 1974 (Cth). The Court was divided in opinion. The majority, strongly influenced by the now discredited doctrine of reserved State powers, held that s 51(xx) was to be read down because of the provisions of s 51(i), which empowers the Parliament to make laws with respect to trade and commerce with other countries, and among the States. The impugned legislation covered anti‑competitive activity (by constitutional corporations) in intra‑State trade. Plainly, it was a law with respect to trade and commerce, but not only with respect to trade and commerce of the kind described in s 51(i). The question was whether it also was a law with respect to corporations of the kind described in s 51(xx). Griffith CJ, who was in the majority, said[12]:

    "It is common ground that [the relevant sections of the Australian Industries Preservation Act], as framed, extend to matters relating to domestic trade within a State, and the question is whether the power to make laws with respect to 'foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth' extends to the governance and control of such corporations when lawfully engaged in domestic trade within the State.  If it does, no limit can be assigned to the exercise of the power.  The Commonwealth Parliament can make any laws it thinks fit with regard to the operation of the corporation, for example, may prescribe what officers and servants it shall employ, what shall be the hours and conditions of labour, what remuneration shall be paid to them, and may thus, in the case of such corporations, exercise complete control of the domestic trade carried on by them."

    [11](1909) 8 CLR 330.

    [12](1909) 8 CLR 330 at 348.

49. By "domestic trade", Griffith CJ meant "domestic trade within the State", that is, trade other than trade of the kind referred to in s 51(i). He treated, as part of such trade, contracts made between constitutional corporations and their employees. He read down s 51(xx) by reference to the limitations inherent in s 51(i). The foundation of the reasoning of the majority in Huddart Parker was undermined by Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ("the Engineers' Case")[13] in 1920, but the decision was not formally overruled until 1971, when Strickland v Rocla Concrete Pipes Ltd ("the Concrete Pipes Case")[14] held that Huddart Parker was wrongly decided. Since then, the corporations power has provided the constitutional basis for legislation prohibiting anti‑competitive conduct by constitutional corporations, including conduct in what Griffith CJ called "domestic trade", notwithstanding the limitations upon the power of the Parliament to pass laws with respect to such trade contained within s 51(i).

    [13](1920) 28 CLR 129.

    [14](1971) 124 CLR 468.

50. No party to these proceedings questioned the authority of the Engineers' Case, or the Concrete Pipes Case, or the validity of the Trade Practices Act in its application to the domestic (intra‑State) trade of constitutional corporations. Necessarily, however, the plaintiffs experienced difficulty in accommodating their submissions to those developments. If s 51(xx) is not affected by the limitations inherent in s 51(i), why is it affected by the limitations inherent in s 51(xxxv)? If, in the exercise of its powers under s 51(xx), the Commonwealth Parliament can regulate the terms and conditions on which constitutional corporations may deal with their customers, or their suppliers of goods or services, why can it not, in the exercise of the same powers, regulate the terms and conditions on which constitutional corporations may deal with employees, or with prospective employees? If, as Griffith CJ recognised, a corporation's dealings with its employees are part of its trading activities, how can it be that the Parliament has power to prohibit constitutional corporations from engaging in some forms of business activities (such as anti‑competitive behaviour) but not others (such as engaging in certain industrial practices)? Why is not use of the corporations power to regulate aspects of intra‑State trade just as much an incursion into State legislative power as use of the corporations power to regulate aspects of industrial relations?

51. The answers to these questions must be found in the accepted principles of constitutional interpretation established in the previous decisions of this Court. Close and detailed attention must be given to the previous decisions of the Court in which s 51(xx) has been considered. Moreover, effect must be given to some basic principles of constitutional interpretation that were not challenged in this litigation. In particular, it is necessary to give effect to the well‑established proposition that a law may be characterised as a law with respect to more than one of the subject‑matters set out in s 51. To describe a law as "really", "truly" or "properly" characterised as a law with respect to one subject‑matter, rather than another, bespeaks fundamental constitutional error. That error is compounded if the conclusion which is reached about the one "real" or "true" or "proper" character of a law proceeds from a premise which assumes, rather than demonstrates, a particular division of governmental or legislative power, or if it proceeds from the mischaracterisation of the subject‑matter of s 51(xxxv) as "industrial relations". Resort to undefined concepts of "industrial affairs", "industrial relations", and "industrial matters" (all of which have somewhat different meanings) should not be permitted to obscure the fact that s 51(xxxv) uses none of those expressions; it speaks of "industrial disputes".

52. To say, as appears accepted on all hands in this litigation, that the Constitution is to be read as a whole and as the one coherent document does not necessarily advance the argument on either side of the record. It merely occasions further inquiry with respect to the particular issue to be determined. Early in the history of the Court, Griffith CJ stressed that the foundation of the Commonwealth of Australia involved much more than "the establishment of a sort of municipal union" resembling "the union of parishes for the administration of the Poor Laws, say in the Isle of Wight"; it involved a federation of national character exercising the most ample power[15].

    [15]Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR (Pt 2) 1087 at 1108.

53. The arguments of the plaintiffs[16] included a submission that the power conferred by s 51(xx) was restricted to a power to regulate the dealings of constitutional corporations with persons external to the corporation, but not with employees (or, apparently, prospective employees). It was also submitted that s 51(xx) should be read down, or restricted in its operation, by reference to the presence in s 51 of par (xxxv). That paragraph confers on the Parliament the power to make laws with respect to "conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State". Just as Griffith CJ in Huddart Parker read down s 51(xx) by reference to the terms of s 51(i), so the plaintiffs invited the Court to read down the general scope of s 51(xx) by reference to the terms of s 51(xxxv). Alternatively, it was argued that, even if the presence of s 51(xxxv) did not affect the general ambit of s 51(xx), at least it operated to restrict the capacity of the Parliament to enact a law that can be characterised as a law with respect to the prevention and settlement of industrial disputes. It will be necessary to amplify these and other challenges to the Commonwealth's reliance on the corporations power in due course.

    [16]For some purposes it is not necessary to distinguish between the plaintiffs or to deal separately with the interveners' submissions; it suffices to speak generally of "the plaintiffs".

54. Underlying all these arguments there was a theme, much discussed in the authorities on the corporations power, that there is a need to confine its operation because of its potential effect upon the (concurrent) legislative authority of the States. The Constitution distinguishes in s 107 and s 109 between legislative powers exclusively vested in the Parliament of the Commonwealth and inconsistency between federal and State laws made in exercise of concurrent powers. Section 107 does not vest exclusive powers in the State legislatures. It will be necessary also to return to that topic[17].  It is immediately useful to bear in mind what Windeyer J said in Victoria v The Commonwealth ("the Payroll Tax Case")[18]:

    "The Colonies which in 1901 became States in the new Commonwealth were not before then sovereign bodies in any strict legal sense; and certainly the Constitution did not make them so. They were self‑governing colonies which, when the Commonwealth came into existence as a new Dominion of the Crown, lost some of their former powers and gained no new powers. They became components of a federation, the Commonwealth of Australia. It became a nation. Its nationhood was in the course of time to be consolidated in war, by economic and commercial integration, by the unifying influence of federal law, by the decline of dependence upon British naval and military power and by a recognition and acceptance of external interests and obligations. With these developments the position of the Commonwealth, the federal government, has waxed; and that of the States has waned. In law that is a result of the paramount position of the Commonwealth Parliament in matters of concurrent power. And this legal supremacy has been reinforced in fact by financial dominance. 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. This was greatly aided after the decision in the Engineers' Case, which diverted the flow of constitutional law into new channels." (footnote omitted)

    These were the observations of a distinguished legal historian.  References to the "federal balance" carry a misleading implication of static equilibrium, an equilibrium that is disturbed by changes in constitutional doctrine such as occurred in the Engineers' Case, and changes in circumstances as a result of the First World War.  The error in implications of that kind has long been recognised.  So much is evident from Alfred Deakin's Second Reading Speech on the Judiciary Bill in 1902[19] and his comparison between the difficulty of amending the Constitution by referendum, and this Court's differing but continuing role in determining the meaning and operation of the Constitution.

    [17]Particularly at [192].

    [18](1971) 122 CLR 353 at 395‑396.

    [19]Australia, House of Representatives, Parliamentary Debates (Hansard), 18 March 1902 at 10967‑10968.

55. The challenge to the validity of the legislation enacted in reliance on the corporations power does not put in issue directly the characteristics of corporations covered by s 51(xx).  It does not call directly for an examination of what is a trading or financial corporation formed within the limits of the Commonwealth[20].  (Plainly, a foreign corporation is a corporation formed outside the limits of the Commonwealth.)  No party or intervener called in question what was said about trading and financial corporations in R v Federal Court of Australia; Ex parte WA National Football League[21], Actors and Announcers Equity Association v Fontana Films Pty Ltd[22], State Superannuation Board v Trade Practices Commission[23] or Fencott v Muller[24].

    4         Other issues

    [20]See [58] and [185].

    [21](1979) 143 CLR 190.

    [22](1982) 150 CLR 169.

    [23](1982) 150 CLR 282.

    [24](1983) 152 CLR 570.

56. The other principal issues between the parties may be identified as follows. Section 6(1) of the new Act, in pars (e) and (f), invokes the power conferred by s 122 of the Constitution (the territories power). There is a question whether the territories power supports the operation given to the new Act in connection with Territories by the definitions of employee and employer. As has been noted above, Sched 6 of the new Act continues reliance on the conciliation and arbitration power. There is a question whether that power enables the Commonwealth to maintain in force a limited conciliation and arbitration system, or to legislate with respect to the dismantling of the previous industrial relations system. There is a question whether s 16(1) and s 16(4) of the new Act validly exclude State and Territory laws in so far as they apply to employees and employers as defined in ss 5 and 6. There is a question whether s 117 of the new Act validly empowers the AIRC to make orders which restrict the actions of State industrial authorities. As was noted above, there are questions as to the validity of various provisions empowering the making of regulations.

    PART II – SECTION 51(xx)

    1         The plaintiffs' principal arguments

57. The plaintiffs' submissions about s 51(xx) were directed principally to identifying what were said to be relevant limits to the power.  There were three principal strands to the submissions.  First, it was submitted that s 51(xx) permits the making of a law with respect to only the external relationships of constitutional corporations, not their internal relationships, and that the relationship between a constitutional corporation and its employees should be classified as "internal".  Secondly, both in amplification of and as an alternative to the first submission, it was submitted that it is insufficient for a law to be characterised as a law with respect to constitutional corporations that the law confers rights or imposes obligations upon them. If a positive test is to be adopted, the preferred test was said to be a distinctive character test – that the nature of the corporation is significant as an element in the nature or character of the laws. Thirdly, as indicated earlier, it was submitted that s 51(xx) is to be read down, or confined in its operation, by reference to s 51(xxxv), with the consequence that the Parliament has no power to legislate with respect to the relationship between a constitutional corporation and its employees except pursuant to s 51(xxxv).

58. All of the plaintiffs' submissions about the validity of the Amending Act took as their premise that there are constitutional corporations (whether foreign corporations, or trading or financial corporations formed within the limits of the Commonwealth) which would be the subject of, or affected by, the various norms of behaviour for which the Amending Act provides. There was, therefore, no occasion to debate in argument, and there is no occasion now to consider, what kinds of corporation fall within the constitutional expression "trading or financial corporations formed within the limits of the Commonwealth". Any debate about those questions must await a case in which they properly arise.

59. Constitutional corporations are juristic persons recognised by the law as separate from their corporators. Such juristic persons are able to act only through human actors. The Amending Act deals with the relationship between those juristic persons which are constitutional corporations and one particular class of actors through whom those corporations may act – the corporation's employees. The Amending Act also deals with the relationship between certain other kinds of employer (including the Commonwealth, certain Territory employers, and certain persons engaged in interstate or international trade or commerce) and their employees. But it is the provisions which regulate the relationships between constitutional corporations and their employees to which attention must be given in considering the plaintiffs' challenges to the sufficiency of s 51(xx) as support for the Amending Act.

60. Once it is recognised that the Amending Act prescribes norms which regulate or affect the relationship between constitutional corporations and a class of those through whom those corporations may act, it may be seen that the plaintiffs' submissions require consideration of what is meant by a law "with respect to" the subject‑matter of constitutional corporations, rather than identification of the metes and bounds of the subject‑matter of the relevant head of power. That is, when it is said by the plaintiffs that s 51(xx) permits the making of a law with respect to only the external relationships of constitutional corporations, the contention is one that seeks to identify what is meant by a law "with respect to" the specified kinds of corporation, and seeks to limit such laws to laws with respect to external relationships. And the alternative submissions about what is not, and what is, sufficient to characterise a law as a law with respect to constitutional corporations have the same focus.

    2         The Commonwealth's principal arguments

61. The Commonwealth submitted that a law "directed specifically to constitutional corporations", in the sense that the law creates, alters or impairs the rights, powers, liabilities, duties or privileges of such a corporation, is supported by s 51(xx).  This the Commonwealth described as "a 'direct' connection".  The Commonwealth further submitted that previous decisions of this Court showed that other, less direct, forms of connection between a law and constitutional corporations are not so "insubstantial, tenuous or distant"[25] as to deny its characterisation as a law with respect to that subject‑matter.  Four forms of connection were said to be supported by authority:

    (a)a law relating to the conduct (in the relevant capacity) of those who control, work for, or hold shares or office in constitutional corporations[26];

    (b)a law relating to the business functions, activities or relationships of constitutional corporations[27];

    (c)a law protecting a constitutional corporation from conduct that is carried out with intent to, and the likely effect of which would be to, cause loss or damage to the business of[28], or interfere with the trading activities of[29], a constitutional corporation; and

    (d)a law which otherwise, in its practical operation, "materially affect[s]" or has "some beneficial or detrimental effect on" a constitutional corporation[30].

    In addition to these connections, said to be taken from the decided cases and said not to set the boundaries to what would be a sufficient connection, the Commonwealth submitted that there was a sufficient connection between certain provisions of the Amending Act and s 51(xx) on any of three further bases. First, provisions relating to conduct carried out or proposed to be carried out with intent to cause loss or damage to a constitutional corporation; secondly, provisions relating to conduct where there is a real, not merely remote, prospect that the conduct will have a material effect on a constitutional corporation; and, thirdly, provisions relating to conduct that is carried out or proposed to be carried out with intent to benefit a constitutional corporation, were all said to be within power.

    [25]Melbourne Corporation (1947) 74 CLR 31 at 79; Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 369 per McHugh J; Leask v The Commonwealth (1996) 187 CLR 579 at 601‑602 per Dawson J, 621 per Gummow J.

    [26]Re Dingjan (1995) 183 CLR 323 at 369 per McHugh J.

    [27]Re Dingjan (1995) 183 CLR 323 at 364 per Gaudron J (with whose reasons Mason CJ and Deane J agreed), 369‑370 per McHugh J. See also Quickenden v O'Connor (2001) 109 FCR 243 at 257‑258 [38]‑[40] per Black CJ and French J, 274‑275 [115] per Carr J.

    [28]Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 at 183 per Gibbs CJ, 195 per Stephen J, 208 per Mason J, 212 per Murphy J, 219 per Brennan J.

    [29]Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 557 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ.

    [30]Re Dingjan (1995) 183 CLR 323 at 340 per Brennan J, 365 per Gaudron J, 370 per McHugh J.

62. In its submissions, the Commonwealth used shorthand descriptions (such as "the 'intention to damage' connection") for each of the forms of connection it identified.  The adoption of such descriptions was a convenient means of presenting both written and oral argument.  It is not proposed, however, to use them in these reasons, lest their use distract attention in this case, or subsequently, from the questions that must be decided by inviting consideration of the adequacy or applicability of the shorthand.

63. The Commonwealth submitted that many of the impugned provisions of the Amending Act were directed specifically to constitutional corporations (in the sense identified in the Commonwealth's submissions) and for that reason were laws with respect to that subject‑matter. The Commonwealth further submitted that other impugned provisions were to be supported in one or more of the ways identified as providing a sufficient connection between a law and s 51(xx).

    3         A distinction between "external" and "internal" relationships

64. The first of the three principal submissions made by the plaintiffs about s 51(xx) (seeking to distinguish between "external" relationships and "other" or "internal" relationships) was put in a number of different ways.  The plaintiffs, rightly, recognised the difficulties and dangers in attempting to state comprehensively the scope of the power.  Nonetheless, they submitted that the "essential scope and focus of the corporations power" could be gathered from the Convention Debates, the early text writers, what has been said in the cases, including, in particular, New South Wales v The Commonwealth (The Incorporation Case)[31], and general principles of constitutional construction.  It was said that the mischief to which the power was addressed was:

    "a concern about enabling proper regulation of artificial corporate entities of particular types, especially insofar as they operated in jurisdictions other than the ones in which they have been created, along with a concern about the need to regulate their interaction with the public in the conduct of their business activities, particularly in light of the economic strength and usual limited liability characteristic of such bodies corporate." (emphasis added)

    These relevant ideas, it was said, could be encapsulated in different ways, but to much the same effect, and the plaintiffs pointed to a number of statements made in the cases which it was said did that.  They submitted:

    "Following Isaacs J it can be said that the power is directed to regulating 'the conduct of the corporations in their transactions with or as affecting the public', that is, 'the conduct of the corporations in relation to outside persons'.[32]  Alternatively, it may be said that the power is directed to authorise the regulation of matters peculiar to constitutional corporations, namely matters going to peculiarly corporate characteristics along with the engagement of foreign, trading and financial corporations in trading or financial (broadly business) activities.  That is essentially a way of saying that 'the nature of the corporation to which the laws relate must be significant as an element in the nature or character of the laws',[33] or 'the fact that a law binds constitutional corporations does not make it law upon the subject of constitutional corporations unless the personality of the persons bound is a significant element of the law itself',[34] or that the law must discriminate by reference to the relevant character of the corporations in question.[35]"

    [31](1990) 169 CLR 482.

    [32]Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 395, 396 (original emphasis).

    [33]Fontana Films (1982) 150 CLR 169 at 182 per Gibbs CJ.

    [34]Re Dingjan (1995) 183 CLR 323 at 349 per Dawson J.

    [35]Re Dingjan (1995) 183 CLR 323 at 337 per Brennan J.

65. In dealing with these submissions it will be convenient first to say something more about this Court's decision in Huddart Parker, next to look at some matters of nineteenth century history, including the Convention Debates and some aspects of the drafting history of s 51(xx), then to deal with an argument based on some failed referendum proposals, and finally to consider the course of this Court's decisions, about s 51(xx), after Huddart Parker.

66. The examination of those matters will reveal that a distinction of the kind relied on by the plaintiffs, between the external relationships of a constitutional corporation and its internal relationships, does not assist the resolution of the issues presented in these matters.  It is a distinction rooted in choice of law rules which cannot, and should not, be transposed into the radically different area of determining the ambit of a constitutional head of legislative power.  It is a distinction which finds no support in the Convention Debates or drafting history of s 51(xx).  It is a distinction of doubtful stability but, if it were to be adopted, there seems every reason to treat relationships with employees as a matter external to the corporation.

67. In so far as the distinction between external and internal relationships is proffered as a means of limiting what the plaintiffs assert would otherwise be too broad a reach for s 51(xx), it is necessary to consider whether the assertion assumes the answer to the question presented. And in any event it is necessary to examine carefully the context in which such assertions have been made. In that regard, it is essential to recognise the fundamental and far‑reaching legal, social, and economic changes in the place now occupied by the corporation, compared with the place it occupied when the Constitution was drafted and adopted, and when s 51(xx) was first considered in Huddart Parker.

    4         Huddart Parker

68. There are at least two reasons why it is important to examine what was said about s 51(xx) in Huddart Parker. First, the decision is important for what it reveals concerning assertions made about what the framers of the Constitution intended. Secondly, as noted earlier, the dissenting reasons of Isaacs J were the acknowledged source of one of the principal strands of the plaintiffs' arguments about the construction and effect of s 51(xx).

69. Huddart Parker was argued in October 1908 and March 1909, little more than five years after the Court first sat in October 1903. The membership of the Court had been increased in 1906, with the appointments of Isaacs and Higgins JJ, but all five members of the Court had been leading participants in the Constitutional Conventions. All are properly seen as among the framers of the Constitution although, of course, each played a different part in that work.

70. Huddart Parker concerned the validity of three provisions of the Australian Industries Preservation Act 1906 (Cth) – ss 5, 8 and 15B. Sections 5 and 8 were held to be invalid; s 15B was held to be valid. Sections 5 and 8 created offences. Section 5 prohibited "[a]ny foreign corporation, or trading or financial corporation formed within the Commonwealth" from making any contract or engaging in any combination:

    "(a)with intent to restrain trade or commerce within the Commonwealth to the detriment of the public, or

    (b)with intent to destroy or injure by means of unfair competition any Australian industry the preservation of which is advantageous to the Commonwealth".

    Section 8 was directed to the same persons, and prohibited such corporations monopolizing, or attempting to monopolize, or combining or conspiring to monopolize, any part of the trade or commerce within the Commonwealth, with intent to control the supply or price of any goods or services. Section 15B[36] gave power to the Comptroller‑General of Customs to require persons believed to be capable of giving information in relation to an alleged offence against Pt II of the Australian Industries Preservation Act to answer questions and produce documents in relation to the alleged offence.

    [36]Introduced into the principal Act by the Australian Industries Preservation Act 1907 (Cth), s 4.

71. All members of the Court agreed that s 15B was valid. Four Justices (Griffith CJ, Barton, O'Connor and Higgins JJ) held ss 5 and 8 to be invalid; Isaacs J disagreed. The five members of the Court gave separate reasons for judgment. The headnote writer for the Commonwealth Law Reports rightly records[37] that four separate views of s 51(xx) are to be identified in the reasons.

    [37](1909) 8 CLR 330 at 331‑332.

72. All members of the Court concluded that s 51(xx) does not give power to the Parliament to make a law providing for the creation of trading or financial corporations[38].  This was an important first step in the reasons of all members of the Court and its taking was prompted by the way in which argument had been presented.  As O'Connor J noted[39], counsel for the respondent, supporting the validity of the impugned provisions, had initially submitted[40] that s 51(xx) gave the Parliament "authority to create corporations and to make laws with respect to everything which has relation to the powers and scope of corporations".  The real question, so the argument proceeded[41], was whether the impugned provisions "are in fact legislation dealing with corporations or legislation dealing with some other subject and applying it to corporations".  Section 51(xx) was said to extend "to regulating the internal management and restraining the external affairs of corporations [and] to enabling Parliament to forbid corporations doing certain things"[42].

    [38](1909) 8 CLR 330 at 348‑349 per Griffith CJ, 362 per Barton J, 369 per O'Connor J, 394 per Isaacs J, 412 per Higgins J.

    [39](1909) 8 CLR 330 at 368‑369.

    [40](1909) 8 CLR 330 at 339.

    [41](1909) 8 CLR 330 at 339.

    [42](1909) 8 CLR 330 at 339.

73. The respondent in Huddart Parker also advanced an alternative, less expansive, contention, that assumed that the power of creating all of the kinds of corporation with which s 51(xx) deals rested either in the States (in the case of trading or financial corporations formed within the limits of the Commonwealth) or in a foreign jurisdiction (in the case of foreign corporations).  But the respondent's broader contention, that the Parliament has power to regulate what constitutional corporations can or cannot do within the Commonwealth, because it has power to create trading or financial corporations, informed much of what was said by the Justices in their reasons in Huddart Parker.  In particular, it seems plain that it was this argument that prompted consideration, by some members of the Court[43], of what Westlake had written in 1905[44], on the subjects of the law which regulated an artificial person, like a corporation, in matters "concerning only itself or the relations of its members, if any, to it and to one another" as distinct from the law which governed its entry into relations, in another country, with "outside parties".

    [43](1909) 8 CLR 330 at 353 per Griffith CJ, 370‑371 per O'Connor J, 395 per Isaacs J.

    [44]A Treatise on Private International Law, 4th ed (1905) at 358‑359.  See also Dicey, A Digest of the Law of England with reference to The Conflict of Laws, (1896) at 485‑486.

898. Under the Commonwealth Powers (Industrial Relations) Act 1996 (Vic), the Victorian Parliament referred legislative competence over various industrial matters to the Commonwealth Parliament[1209].  Other matters were expressly excluded from the reference[1210].  The matters referred are these:

     [1209]Set out in ss 4 and 4A.

     [1210]Set out in s 5.

     "4.       Reference

     (1)A matter referred to the Parliament of the Commonwealth by a sub-section of this section is so referred subject to the Commonwealth of Australia Constitution Act and pursuant to section 51(xxxvii) of that Act.

     (2)The matter of conciliation and arbitration for the prevention and settlement of industrial disputes within the limits of the State, to the extent to which it is not otherwise included in the legislative powers of the Commonwealth, is referred to the Parliament of the Commonwealth for a period commencing on the day on which this sub-section commences and ending on the day fixed under or by section 6 as the day on which the reference of that matter under this Act terminates but no longer.

     (3)The matter of agreements about matters pertaining to the relationship between an employer or employers in the State and an employee or employees in the State, to the extent to which it is not otherwise included in the legislative powers of the Commonwealth, is referred to the Parliament of the Commonwealth for a period commencing on the day on which this sub-section commences and ending on the day fixed under or by section 6 as the day on which the reference of that matter under this Act terminates but no longer.

     (4)The matter of minimum terms and conditions of employment for employees in the State, to the extent to which it is not otherwise included in the legislative powers of the Commonwealth, is referred to the Parliament of the Commonwealth for a period commencing on the day on which this sub-section commences and ending on the day fixed under or by section 6 as the day on which the reference of that matter under this Act terminates but no longer.

     (5)The matter of termination, or proposed termination, of the employment of an employee, other than a law enforcement officer, to the extent to which it is not otherwise included in the legislative powers of the Commonwealth, is referred to the Parliament of the Commonwealth for a period commencing on the day on which this sub-section commences and ending on the day fixed under or by section 6 as the day on which the reference of that matter under this Act terminates but no longer.

     (6)The matter of freedom of association, namely the rights of employees, employers and independent contractors in the State to join an industrial association of their choice, or not to join such an association, to the extent to which it is not otherwise included in the legislative powers of the Commonwealth, is referred to the Parliament of the Commonwealth for a period commencing on the day on which this sub-section commences and ending on the day fixed under or by section 6 as the day on which the reference of that matter under this Act terminates but no longer.

     (7)The matter of the setting and adjusting of minimum wages for employees in the State within a work classification that, immediately before the commencement of this sub-section is a declared work classification under the Employee Relations Act 1992, or has been declared, by the Commission within the meaning of that Act, to be an interim work classification, who are not subject to an award or agreement under the Commonwealth Act, to the extent to which that matter is not otherwise included in the legislative powers of the Commonwealth, is referred to the Parliament of the Commonwealth for a period commencing on the day on which this sub-section commences and ending on the day fixed under or by section 6 as the day on which the reference of that matter under this Act terminates but no longer.

     (8)The matter of attempting to settle, conciliate or arbitrate, or exercising any other power in relation to, an industrial matter or industrial dispute, being an industrial matter or industrial dispute that arose before the commencement of Part 3 and in relation to which the Employee Relations Commission of Victoria exercised, or could have exercised, powers (other than an industrial matter or industrial dispute in respect of which that Commission in Full Session had made a decision before that commencement), to the extent to which it is not otherwise included in the legislative powers of the Commonwealth, is referred to the Commonwealth for a period commencing on the day on which this sub-section commences and ending on the day fixed under or by section 6 as the day on which the reference of that matter under this Act terminates but no longer.

     4A.     Further reference – common rules

     (1)The matter of the making of an award or order as, or declaring any term of an award or order to be, a common rule in the State for an industry, but so as not to exclude or limit the concurrent operation of any law of the State, to the extent to which it is not otherwise included in the legislative powers of the Commonwealth, is referred to the Parliament of the Commonwealth for a period commencing on the day on which section 52 of the Federal Awards (Uniform System) Act 2003 commences and ending on the day fixed under sub-section (2) as the day on which the reference of that matter under this Act terminates but no longer.

     (2)The Governor in Council, by proclamation published in the Government Gazette, may fix a day as the day on which the reference under sub-section (1) terminates.

     (3)The matter referred to the Parliament of the Commonwealth by sub-section (1) is so referred subject to the Commonwealth of Australia Constitution Act and pursuant to section 51(xxxvii) of that Act."

899. The matters expressly excluded from the reference are these:

     "5.       Matters excluded from a reference

     (1)A matter referred by a sub-section of section 4 or 4A does not include –

     (a)matters pertaining to the number, identity, appointment (other than terms and conditions of appointment) or discipline (other than matters pertaining to the termination of employment) of employees, other than law enforcement officers, in the public sector;

     (b)matters pertaining to the number, identity, appointment (other than matters pertaining to terms and conditions of appointment not referred to in this paragraph), probation, promotion, transfer from place to place or position to position, physical or mental fitness, uniform, equipment, discipline or termination of employment of law enforcement officers;

     (c)matters pertaining to the number or identity of employees in the public sector dismissed or to be dismissed on grounds of redundancy;

     (d)matters pertaining to the following subject matters –

     (i)workers' compensation;

     (ii)superannuation;

     (iii)occupational health and safety;

     (iv)apprenticeship;

     (v)long service leave;

     (vi)days to be observed as public holidays;

     (vii)equal opportunity –

     but not so as to prevent the inclusion in awards or agreements made under the Commonwealth Act of provisions in relation to those matters to the extent to which the Commonwealth Act, as enacted as at 30 November 1996 (whether or not in force), allows such awards or agreements to include such provisions;

     * * * * *

     (f)matters pertaining to Ministers, members of the Parliament, judicial officers or members of administrative tribunals;

     (g)matters pertaining to persons holding office in the public sector to which the right to appoint is vested in the Governor in Council or a Minister;

     (h)matters pertaining to persons holding senior executive offices in the service of a Department within the meaning of the Public Sector Management Act 1992;

     (i)matters pertaining to persons employed at the higher managerial levels in the public sector;

     (j)matters pertaining to persons employed as ministerial assistants or ministerial advisers in the service of Ministers;

     (k)matters pertaining to persons holding office as Parliamentary officers;

     (l)matters pertaining to the transfer or redundancy of employees of a body as a result of a restructure by an Act;

     (m)matters pertaining to the duties of employees if a situation of emergency is declared by or under an Act or an industry or project is, by or under an Act, declared to be a vital industry or vital project and whose work is directly affected by that declaration.

     (2)Insofar as a matter specified in sub-section (1) of this section does not fall within the terms of a sub-section of section 4 or 4A, sub-section (1) of this section must be taken to have been enacted for the avoidance of doubt."

900. Section 898 of the Act provides that the Act is intended to apply to the exclusion of all Victorian laws which relate (i) to employment generally and (ii) to one or more of the matters referred to the Commonwealth by Victoria. The Commonwealth would seem to be seeking to engage s 109 of the Constitution by s 898 of the Act, which is as follows:

     "Additional effect of Act – exclusion of Victorian laws

     (1)This Act is intended to apply to the exclusion of all the following laws of Victoria so far as they would otherwise apply in relation to an employee or employer:

     (a)a law of Victoria that applies to employment generally and relates to one or more of the following matters:

     (i)agreements about matters pertaining to the relationship between an employer or employers in Victoria and an employee or employees in Victoria;

     (ii)minimum terms and conditions of employment (other than minimum wages) for employees in Victoria;

     (iii)setting and adjusting of minimum wages for employees in Victoria within a work classification;

     (iv)termination, or proposed termination, of the employment of an employee in Victoria;

     (v)freedom of association;

     (b)a law of Victoria that is prescribed by regulations made for the purposes of this paragraph.

     Victorian laws that are not excluded

     (2)However, subsection (1) does not apply to a law of Victoria so far as:

     (a)the law deals with the prevention of discrimination and is neither a State or Territory industrial law nor contained in such a law; or

     (b)the law is prescribed by the regulations as a law to which subsection (1) does not apply.

     Definitions

     (3)      In this section:

     freedom of association has the same meaning as in subsection 4(6) of the Commonwealth Powers (Industrial Relations) Act 1996 of Victoria.

     minimum terms and conditions of employment has the same meaning as in subsection 4(4) of the Commonwealth Powers (Industrial Relations) Act 1996 of Victoria.

     minimum wage has the same meaning as in subsection 4(7) of the Commonwealth Powers (Industrial Relations) Act 1996 of Victoria.

     work classification has the same meaning as in section 865.

     Note:See also clause 87 of Schedule 6 (common rules in Victoria), which has effect despite any other provision of this Act."

901. I have set out some of the provisions of the Victorian Act to show just how much needed to be referred for the consensual enlargement of Commonwealth industrial power. That the Commonwealth appears to have accepted that Victorian legislation and s 51(xxxvii) of the Constitution were necessary to achieve this end, and that the Commonwealth did not seek to achieve it by exercising power under s 51(xx) are not matters of which very much may be made. They do, however, again provide some indication of informed legislators' and their legal advisors' thinking, both State and federal, on the topics of State and Commonwealth powers as recently as 1996.

902. Victoria submits that if s 898 is not supported by the Commonwealth's power to make laws with respect to "matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States"[1211], the section is invalid, there being no other source of power to support it.

     [1211]Constitution, s 51(xxxvii).

903. Victoria acknowledges that when a State refers power to the Commonwealth, the Commonwealth and the State have concurrent power in relation to the matter[1212], and, to the extent that the Commonwealth intends to "cover the field", s 109 of the Constitution will apply to render the State law or laws inoperative[1213].  Victoria makes the submission, however, that because its referral excluded a number of matters, the Commonwealth does not have the power to legislate comprehensively even over the matters specifically referred, because there may be some overlap.  The submission is this:

     "In the present case, the Referral Act^[[1214]^] excludes a number of matters from the scope of the matters referred to the Parliament of the Commonwealth; the Referral Act does not refer a power to legislate comprehensively or exhaustively on the matters identified in ss 4 and 4A. It follows that it is not open to the Commonwealth Parliament to legislate comprehensively or exhaustively on those matters, or to express an intention to exclude State laws on such matters, and the expression of this intention is invalid."

     This submission may be correct.  It is not however necessary for me to reach a concluded view about it.

     [1212]Graham v Paterson (1950) 81 CLR 1 at 19 per Latham CJ, 22 per McTiernan J, 24-25 per Williams J, 25 per Webb J, 26 per Fullagar J. Windeyer J made a similar observation in Airlines of NSW Pty Ltd v New South Wales (1964) 113 CLR 1 at 52.

     [1213]Wenn v Attorney-General (Vict) (1948) 77 CLR 84 at 108-110 per Latham CJ, 114 per Rich J, 120 per Dixon J, 122 per McTiernan J.

     [1214]ie the Commonwealth Powers (Industrial Relations) Act 1996 (Vic).

904. Victoria makes a further or alternative submission, that s 898 impermissibly curtails, or interferes with, the capacity of the State of Victoria to function as a government[1215]. Victoria submits that s 898 of the Act:

     "purports to exclude laws of Victoria relating to the employment of persons at the higher levels of government, including Ministers, ministerial assistants and advisers, head of departments and high level statutory office holders, parliamentary officers and judges[1216]".

     [1215]Austin v The Commonwealth (2003) 215 CLR 185 at 219 [28] per Gleeson CJ, 249 [124] per Gaudron, Gummow and Hayne JJ, 281-282 [223]-[225] per McHugh J, 300-301 [280]-[281] per Kirby J.

     [1216]cf Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 233.

905. Victoria also contends that s 898(1) would, if valid, exclude various provisions of the Juries Act 2000 (Vic), which, for example, require employers to pay make-up pay[1217], and create offences for terminating or threatening to terminate employment because of jury service[1218].

     [1217]Section 52.

     [1218]Sections 76 and 83.

906. The Commonwealth submits that s 898 has application only to the extent of the powers referred to it by Victoria. In particular, the Commonwealth points to s 859 of the Act, which provides:

     "Part only has effect if supported by reference

     A provision of this Part (other than paragraph 862(b) or Division 11 or 12) has effect only for so long, and in so far, as the Commonwealth Powers (Industrial Relations) Act 1996 of Victoria refers to the Parliament of the Commonwealth a matter or matters that result in the Parliament of the Commonwealth having sufficient legislative power for the provision so to have effect."

907. The Commonwealth submits that s 859 ensures that s 898 does not purport to operate in relation to matters beyond the scope of powers referred to the Commonwealth. The Commonwealth's submission is this:

     "In this case, the Commonwealth accepts that the referral does not refer a power to legislate exhaustively in respect to the matters identified in ss 4 and 4A of the Referral Act because of the exclusions in s 5 of that Act. The Commonwealth cannot make laws with respect to the excluded matters in s 5 of the Referral Act and does not purport to do so. It can, however, legislate exhaustively with respect to the referred subject matter (the ss 4 and 4A matters read down by reference to the s 5 matters) and exclude Victorian law in that field. This is what s 898 does."

908. The Commonwealth submits, further, that the Act does not interfere impermissibly with the essential functions of Victoria's government, principally because the express exceptions found in Victoria's reference of power protect the essential functions of Victoria's government. To the extent that the Victorian Juries Act may be affected, the Commonwealth says:

     "Just because a law may pertain to the essential functions of government does not mean that it impermissibly interferes with a State government within the meaning of the Melbourne Corporation principle. ...

     The laws in question go only to entitlements to payment and prohibition on termination.  They do not undermine the jury system or the ability of Victoria to empanel juries as necessary.  Furthermore, the laws are excluded only in their application to employees in Victoria who are not covered by s 5 of the [Referral] Act."

909. In my opinion the Act, despite the reference of power by Victoria, is invalid to the extent at least of Victoria's challenge to it. This is so for the same reasons as lead me to conclude against validity generally.

     PART X.  THE DIFFERENT POSITION OF THE TERRITORIES

910. I need not delay for long on the question of the validity of the Act under the territories power. It may be, as Kirby J says[1219], that the power of the Commonwealth to make laws for the government of any territory, including in relation to industrial affairs, stands apart, is relevantly plenary and is not subject to any implication or limitation imposed by s 51(xxxv). Like Kirby J, however, I agree that it would be preferable to dispose of the precise scope of the territories power in relation to s 51(xxxv) in proceedings in which that question is essential for the disposition of an actual case. I would say this however. Whatever the ambit of federal power in relation to industrial affairs may be, on no view should the Act or any like Act be allowed to be used as a Trojan horse for the invasion of State industrial powers by the device of a territorial connexion by reason merely of, for example, incorporation in a Territory, or some other slight connexion of a Territory with the corporation: the reality and substance of any employment in question, both as to locality of it, and matters closely related thereto, should be determinative of the sufficiency or otherwise of territorial connexion[1220].

     [1219]Reasons of Kirby J at [460(2)].

     [1220]See Lamshed v Lake (1958) 99 CLR 132 at 141-146 per Dixon CJ.

911. In his Honour's reasons for judgment, Kirby J poses the question whether it is feasible or necessary to dissect provisions of the Act and to judge their validity on various of the constitutional underpinnings now suggested by the Commonwealth. To do that would be to require the Court, among other things, to identify any "accidental bullseyes" that the Commonwealth may have hit, and to say whether unintended results have been achieved, that is, to hold that although the Commonwealth may have sought but failed to engage the corporations power, a section or sections of the Act could have been validly enacted under another power or powers. But as Kirby J points out, the measures were put to the Parliament and enacted as ones to be integrated with some of the preceding legislation, designed overall to change substantially the foundation and approach to federal workplace relations law[1221].  I agree with his Honour that it accordingly is appropriate to take "the resulting legislative 'package' at face value, and to treat it as an integrated endeavour, intended to stand or fall in its entirety"[1222].  The joint reasons are to that effect in invalidating no provision of it[1223]. 

     [1221]Reasons of Kirby J at [460(2)], [584]-[586].

     [1222]Reasons of Kirby J at [590].

     [1223]At [422].

912. As Kirby J holds[1224], it is not the function of this Court to save bits and pieces of the new law. I agree generally with his Honour's reasons for rejecting the submissions of the Commonwealth that the Court may and should dissect those sections which might be valid, standing alone, or in a different context, on the basis of the injunction in s 14 of the Act itself, or s 15A of the Acts Interpretation Act 1901 (Cth), for validity under s 51(xx) of the Constitution or otherwise. There is also this, as Windeyer J said in Rocla Pipes[1225]:

     "The question whether an enactment truly answers to the description of a law with respect to a given subject matter must be decided as it arises in any particular case in reference to the facts of that case."

     This Court has no relevant facts before it.

     [1224]At [604].

     [1225](1971) 124 CLR 468 at 512.

     PART XI.  SUMMARY OF CONCLUSIONS

913. The Amending Act is invalid. The reasons in summary why this is so are these.

     (i)The Constitution should be construed as a whole and according to the principles of construction that I have stated in these reasons[1226].

     (ii)The Amending Act was presented and enacted as a comprehensive integrated measure containing generally interdependent provisions.

     (iii)The substance, nature and true character of the Amending Act is of an Act with respect to industrial affairs.

     (iv)The power of the Commonwealth with respect to industrial affairs is a power in relation to "conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State" and not otherwise (except for Commonwealth employment and other presently not relevant purposes).  As the jurisprudence of this Court shows, that power is a very large one.  Much can properly be characterized as preventative of a relevant industrial dispute.

     (v)The corporations power has nothing to say about industrial relations or their regulation by the Commonwealth. To the extent, if any, that s 51(xx) might otherwise appear to confer such power, it must be subject to the implied negative restriction imposed by s 51(xxxv).

     (vi)The corporations power is concerned with the foreign, trading and financial activities and aspects of corporations, the precise limits of which it is unnecessary to decide in this case.  In Australia, history, the founders, until 1993 the legislators who have followed them, and this Court over 100 years, as Kirby J has pointed out[1227], have treated industrial affairs as a separate and complete topic, and s 51(xxxv) as defining the Commonwealth's total measure of power over them, except in wartime.

     (vii)To give the Act the valid operation claimed by the Commonwealth would be to authorize it to trespass upon essential functions of the States. This may not be the decisive factor in the case but it at least serves to reinforce the construction of the Constitution which I prefer, that industrial affairs within the States, whether of corporations or of natural persons, are for the States, and are essential for their constitutional existence.

     (viii)The validation of the legislation would constitute an unacceptable distortion of the federal balance intended by the founders, accepted on many occasions as a relevant and vital reality by Justices of this Court, and manifested by those provisions of the Constitution to which I have referred, and its structure.

     [1226]See Pt VI of these reasons.

     [1227]Reasons of Kirby J at [428], [431]-[442].

914. I would make the same orders as Kirby J.