Colin Wicking beat me to the punch with a comment on this morning’s High Court decision in the WorkChoices Case. My only excuse is that my sort of commentary forces me to read the actual judgments rather than just the headline outcome.
Nevertheless, although the judgments are long, their essence can be summarised in short detail. The majority (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ) essentially adopted the reasoning of Justice Gaudron in Re Pacific Coal as to the ambit of the corporations power* :
I have no doubt that the power conferred by s 51(xx) of the Constitution extends to the regulation of the activities, functions, relationships and the business of a corporation described in that sub-section, the creation of rights, and privileges belonging to such a corporation, the imposition of obligations on it and, in respect of those matters, to the regulation of the conduct of those through whom it acts, its employees and shareholders and, also, the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business.
Hence the Work Choices legislation is constitutionally valid in directly regulating the employment terms and conditions of employees of foreign, trading and financial corporations. That doesn’t come as any surprise to most constitutional lawyers. Like many others, it’s exactly what I predicted here at Troppo.
* Nevertheless there is a certain irony in the current High Court adopting Justice Gaudron’s approach to the corporations power. Justice Gaudron dissented in Re Pacific Coal, along with Justices McHugh and Kirby, holding that the Workplace Relations Act provisions then in question could not be supported either by the conciliation and arbitration power or the corporations power (despite Justice Gaudron’s broad conception of the scope of the corporations power).
Nor is it especially noteworthy that Justice Kirby dissented. What is remarkable is that Justice Callinan also dissented (although some predicted it from Callinan’s longstanding federalist inclinations), accepting almost holus bolus the NSW government’s position. Callinan J’s dissent is based predominantly on resuscitating the pre-Engineers’ Case doctrine of Federal Balance espoused by the Griffith High Court. Kirby J’s reasoning is essentially the same as that of Callinan J, although avoiding overt resuscitation of the pre-Engineers Federal Balance doctrine. Callinan J is rather more honest in expressing his intent. He simultaneously expresses his scepticism about much of the reasoning in Engineers while professing to accept its authority, but then proceeds to re-erect a doctrine of Federal Balance which includes a principle whereby some Commonwealth heads of legislative power should be read down by reference to posited federal restrictions in other heads of power. Of course, this is precisely what Engineers overthrew in its rejection of the “reserved state powers” doctrine.
Callinan J attempts to distinguish between Commonwealth heads of power. There are some, Callinan argues, which manifest an intention (“implied negative restriction”) to reserve certain areas of activity to the States. Constitution section 51 placita (xiii) and (xiv) (the banking and insurance powers respectively) and placitum (xxxv) (the interstate industrial disputes/conciliation and arbitration power), Callinan argues, manifest such an implied negative restriction, such that other heads of power which might seem to justify a broader interpretation when read in isolation must be read down by reference to those restrictions. Hence the corporations power must be read down so as not to authorise a Commonwealth law on industrial relations which does not observe the implied negative restrictions in 51(xxxv), namely the requirement for an industrial dispute of an interstate character and the requirement that the law must be one providing for settlement of such disputes by conciliation and arbitration (and not one directly legislating employment terms and conditions as WorkChoices does).
There are 2 fairly fundamental problems with Callinan J’s reasoning (and equally that of Kirby J). They both ignore (or rather “distinguish” unconvincingly) the predominant reasoning in recent decisions on the corporations power, especially Re Dingjan and Re Pacific Coal. Both Callinan and Kirby JJ are also forced by their reasoning to draw a very strained distinction between some heads of power which the Court has held are not to be read down by reference to the claimed “implied negative restrictions” in 51(xxxv) and others (especially 51(xx)) which are to be read down by reference to those restrictions. In Pidoto v Victoria (1943) the Court effectively held that a law enacted under the defence power was not constrained by restrictions in 51(xxxv), while in the Industrial Relations Act Case (1996) (dealing with legislation where the Keating government had directly imposed employment terms) the Court held that the external affairs power also wasn’t constrained by 51(xxxv). Callinan and Kirby JJ both tie themselves in rhetorical knots trying to construct a persuasive argument as to why the corporations power should be regarded as impliedly restricted by the conditions expressly constraining the conciliation and arbitration power, whereas the external affairs and defence powers should not be seen as so restricted.
Despite the best efforts of Justice Kirby and his unlikely ally Justice Callinan, the result of the WorkChoices Case was pre-ordained though not dictated per se by the Engineers’ Case and its subsequent elaboration in High Court case law. None of the parties advocated that Engineers should be overruled and replaced by a doctrine more respectful of the notion of Federal Balance on which Australia’s Constitution was unquestionably based. But Engineers is so “case hardened” that not even idisoyncratic federalists like Justice Callinan countenance overtly overruling it (as opposed to re-erecting by stealth the substantive doctrines it overruled). I agree with Justice Callinan that much of the reasoning in Engineers “is less than satisfactory”, and also with this even more trenchant criticism (at ):
Neither the reasoning nor the result in the Engineers’ Case assists the Commonwealth here. Furthermore, it is a case which does not deserve the reverence which has been accorded to it. Despite the subsequent emergence of other candidates for the dubious honour, the joint judgment remains, as Professor Sawer said, “one of the worst written and organized in Australian judicial history”.
As a federalist, I even agree with Justice Callinan’s more general observation that:
There is nothing in the text or the structure of the Constitution to suggest that the Commonwealth’s powers should be enlarged, by successive decisions of this Court, so that the Parliament of each State is progressively reduced until it becomes no more than an impotent debating society. This Court too is a creature of the Constitution. Its powers are defined in Ch III, and legislation made under it. The Court goes beyond power if it reshape the federation. By doing that it also subverts the sacred and exclusive role of the people to do so under s 128.
In the ultimate analysis, however, the reasoning of both Justices Kirby and Callinan demonstrate that it isn’t possible, except by some spectacular and therefore unsatisfying leaps of legal logic, to reconstruct a Federal Balance doctrine without overruling either Engineers or any of the more recent cases on either the corporations or conciliation and arbitration powers which strongly suggest a contrary result.
Finally, for all those Labor-leaning pundits who are no doubt busily crafting articles claiming that the Howard government is the most centralist in Australia’s history, it just isn’t true. The Keating, Hawke and Whtilam governments were equally centralist, although they tended mostly to prefer using the external affairs power and international treaties to whittle down state power, and the ends to which their centralism was directed were very different.
Nor does the WorkChoices decision spell the death knell of federalism (although it isn’t terribly healthy). However, that’s an argument for a separate post.