Is the establishment of a national industrial relations regime constitutionally valid?

This head of power clearly does not allow the Commonwealth to enact general legislation on working conditions, thus it would be impossible to create a constitutionally valid national industrial relations system solely under this head of power. There are a number of other heads of power which grant the Commonwealth various legislative abilities in regards to wages and the employment relationship; however these are also limited in the issues which they cover or the individuals which they apply to. As a result the only possible way of creating a national industrial relations system would be to use a combination of other heads of power.

2. Section 51 (xxxix) – The Incidental Power

The restrictions on section 51 (xxxv) have been largely alleviated by the High Court’s broad interpretation of section 51 (xxxix) which allows the Commonwealth to regulate matters which have a ‘sufficiently close connection’ to a particular head of power. Effectively this means that in order to execute a law under one of its heads of power, a federal government may legislate on any issues which can be demonstrated to be associated with, or essential to another head of power.  For example, the High Court has held that the regulation of trade union activities is incidental to the operation of section 51 (xxxv).

        Whilst this power assists with widening the legislative scope of 51 (xxxv) it still doesn’t do enough to allow for the establishment of a federal industrial relations system. The corporations power is one of the main powers which has been used in recent years to expand the Commonwealths powers to establish a national industrial relations scheme and will now be considered.

3. Section 51 (xx) – The Corporations Power

Section 51 (xx) allows the federal government to legislate with respect to “foreign corporations and trading or financial corporations formed within the limits of the Commonwealth”. Commonwealth v Tasmania (the Tasmanian Dam case) and later Re Dingjan; Ex parte Wagner ,  provide that the scope of the corporations power extends to any aspect of the corporation’s business in general, and it is a plenary power. This enables the Commonwealth to legislate and regulate the activities of any foreign, trading or financial corporation and thus on their employment conditions and wages. The Howard Government used the corporations power as the constitutional grounding for their Work Choices legislation, of which it’s validity was upheld by the majority (5:2) in NSW v Commonwealth.

        Despite the outcome of NSW v Commonwealth. , and the enlarged scope of the corporations power which enables the Commonwealth more legislative discretion with regards to industrial relations, it does not provide a sole constitutional basis for the establishment of a complete industrial relations scheme. It by far affords the Commonwealth with more authority than any other head of power to legislate with regards to industrial relations, and takes a substantial step towards granting the federal government with enough constitutional grounding to establish a national regime, however it only allows for an incomplete national scheme. It is constricted by having to apply to foreign, trading or financial corporations which means that any legislation used to regulate such organizations could never cover the entire working population. Unincorporated businesses and sole traders would not be covered by Commonwealth legislation under this power which account for approximately 25% of workers nationally. Likewise non-profit organizations and local councils which engage in commercial activities but are not established for commercial purposes are not covered. A non complete regime would result, with the cooperation of the States under Section 51 (xxxvii) required in order to create a truly national, constitutionally valid, industrial relations scheme. This will be discussed later, however Section 51 (xxix) is another power which could also be used to aid in the establishment of a national industrial relations regime.

4.  Section 51 (xxix) – The External Affairs Power

Section 51 (xxix) allows the Commonwealth to make laws to fulfill Australia’s obligations under international treaties. This enables the federal government to regulate persons, places, things, matters, acts, events and relationships inside or outside of Australia which are the subject matter of international treaties, dealings, rights and obligations. This is considered to be one of the most controversial powers used to legislate over industrial relations. The Keating government used this power to regulate industrial relations directly to give effect to ILO Conventions as allowed by R v Burgess; Ex parte Henry, imposing regulations pertaining to minimum wages, termination, leave entitlements, etc.. Whilst the external affairs power is available for the Commonwealth to expand their legislative scope with relation to industrial relations, it alone is not enough to allow for the establishment of a national regime. It is a rule of interpretation that heads of power can not be construed to be mutually exclusive so that the external affairs power can not override an express provision such as the industrial relations power . Thus whilst being a helpful power, perhaps the only way that a foolproof national system could be established by the federal government would be via utilizing Section 51 (xxxvii).

5. Section 51 (xxxvii) – The Referral by States Power

Section 51 (xxxvii) allows the States to submit any of their powers to the federal government. In 1992 the State Liberal Government in Victoria surrendered their industrial relations powers to the federal government in order to overhaul the industrial relations system.  The only way in which a constitutionally valid national industrial relations system could be established would be to convince each state to surrender their powers, then legislate to establish such a system. This is highly improbable given the protective nature of the states as demonstrated by their High Court challenge of the Workplace Relations Act 1996 legislation in Victoria v Commonwealth (Industrial Relations Act Case), and the combined effort of the State and Territory Governments in NSW v Commonwealth  to challenge the validity of the WorkChoices legislation. There are also several other heads of power which may assist in vesting the Commonwealth with enough legislative power to assist in the establishment of a national industrial relations system however the will only briefly be mentioned given the restrictions of this paper.

6.  Other related heads of power

Section 51 (i) allows the Commonwealth to make laws with respect to trade and commerce with other countries and among the states. This power, combined with section 98 allows the federal government to directly legislate on employment relations matters in the maritime, airline and waterfront industries without having to establish an interstate dispute, and also in industries which engage in interstate or international trade. This power broadens the Commonwealths legislative scope pertaining to industrial relations as does Section 51 (vi) The Defence power and Section 52 (ii) Absolute powers however these can not be discussed due to the limitations of this paper. However a broader limitation on the Commonwealths ability to create a national regime should briefly be considered.

1. FEDERALISM – A RESTRICTION ON FEDERAL  LEGISLATIVE POWERS

An obvious limitation on the constitutional validity of the Commonwealth creating a national industrial relations scheme is the need to ensure the survival of State governments and for them to continue to have effective governing powers as stated by the High Court in Re Australian Education Union. As explained best by Justice Dixon in the Melbourne Corporation case ,

…the foundation of the Constitution is the conception of a central government and a number of State governments separately organized. The Constitution predicates their continued existence as independent entities.

As a result, even if a patchwork of constitutional powers were used to create a national industrial relations regime (which this paper argues can only be done partially), it could be found to be constitutionally invalid “if it exceeds those limitations which are said to be inherent in the federal character of the Constitution”.

2. WOULD A NATIONAL I.R. REGIME BE CONSTITUTIONALLY VALID?

It can be concluded that unless all the States referred their industrial powers to the Commonwealth under Section 51 (xxxvii), a complete national regime of industrial relations would not be constitutionally valid as the Constitution has not vested the federal government with enough legislative power to establish such a system. This conclusion has been validated by a careful consideration of the main Constitutional powers which relate in different ways, and in varying degrees, to industrial relations. The broader restriction of federalism to Commonwealth legislative capacity and the establishment of such a system was also considered. This paper has found that the nearest that the Commonwealth could come to creating a national industrial relations system would be a non complete system, constitutionally validated by the engagement of a mélange of  heads of power which operate to create an industrial relations system which covers a majority of the working population.

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