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 1):
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.
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After reading it, if text had physical form that decision would be a big old leaky boat with all the seemingly contradictory inferences, historical invalidation, doctrines, implications, propositions, constructions etc the water coming in through the hull. No wonder there is a natural entropy of power to Canberra.
You’ll have to remind me of Hawke’s centralist nature. And I hope to see your federalist post soon.
For someone that has only paid attention to politics for the last few years no wonder society is so apathetic, the correct decision is rarely made. There’s always someone that makes life harder. Isn’t it hard enough all ready?
I acknowledge that there is not always a correct decision but it is relatively clear that the High Court only cares about the Commonwealth and centralising everything. Once upon a time we called that Communism. The High Court is not that interested in the effects of the law, just whether its valid or not. That is not justice.
Naive question: Do the judges consider the issues collectively at any point, or are their determinations completely independent of each other?
Chris
I understand that High Court Justices swap their draft judgments between themselves, so that you often see one Justice’s reasons referring to and taking issue with points made in other Justices’ opinion/reasons. Moreover, clearly sometimes Justices caucus and discover sufficient common opinion to put their names to a joint judgment (as here). In that case the joint judgment will often be predominantly the work of one of those Justices, although that is never openly revealed. High Court Justices generally don’t comment publicly on the inner workings of the Court, and it’s also considered poor form (and a serious breach of confidence) for an ex-Associate to do so.
But whether the Howard government is subjectively less or more centralist than previous Labor governments is not really the main issue. What is is whether or not the use of the Corporations power in this case, and its validation by the High Court decision, enables a far greater extension of Commonwealth power vis-a-vis the States than did the External Affairs power in the 1980s. In the early 1990s it was the view of some prominent environmental lawyers, and peak environmental organisations, that the Commonwealth could have, and should have, utilised the Corporations power to assert a far more far-reaching control over environmental policymaking at the expense of the States than the External Affairs power (as interpreted in the Tasmanian Dams and subsequent cases) made possible. Their view was that the Corporations power could enable a near-total Federal takeover of environmental policy.
Ken is right that a) Engineers is a crock, and b) this was the outcome most (well everybody I know) court watchers/constitutional geeks expected.
Vee is also basically right that the Court ‘is not that interested in the effects of the law, just whether its valid or not‘.
For some of us that is basically the definition of the judicial function.
And environmental policy/politics wonks such as myself would also add that the Hawke and Keating governments were far from single-minded in their use of the External Affairs power to whittle down state power on environmental issues.
Hawke used the power to block the Tasmanian Dam, but then resiled from using it to overrule the Bjelke-Petersen government on preserving the far north wet tropics until it became clear that the political auguries were favourable for such a move. There were a (very) few subsequent instances of Federal Labor governments invoking it against rogue States (e.g. to preserve Tasmanian forests in 1988 and to block the Port Hinchinbrook development in Queensland in 1994), but there were also examples where the power could have been invoked but wasn’t (e.g. the Tarkine wilderness dispute in 1995-96). The Federal Labor government’s most significant decision by far in this connection was its Inter-Governmental Agreement on the Environment with the States in 1992, which explicitly renounced the unilateral assertion of Federal authority in relation to a raft of issues on which the Constitutional power of the Feds had been established by earlier court cases.
PN reminds me that I have often thought it ironic that if Howard was a lefty, he would surely be praised for having the courage to enact legislation that was vociferously opposed by the right despite being not universally popular.
If eg workchoices was in fact eg global warming omnibus act and Howard was eg anyone else then I bet the current round of ‘refinements’ would be pushing interest rates off the pages as lefties lined up to praise his ‘vision’ being ‘rewarded’ with increased public support after ‘early effects’ of ‘right-wing scare campaigns’…
But when it suits, the old ‘poll-driven’ tag still rolls out seemingly brand-new.
Thanks Paul. You’ve also answered Vee’s question about the extent of the Hawke government’s centralist tendencies. The fact that the Hawke government didn’t utilise the external affairs power on every single occasion when it could have done so doesn’t negate the suggestion that it was every bit as centralist as Howard is today (although that is itself fairly remarkable given that the Liberal Party has always professed to endorse federalism as an important principle).
We don’t know yet whether Howard will show similar restraint in how far he now pushes the corporations power. The fact that he’s done so in IR is hardly a big surprise given that it’s been one of Howard’s abiding obsessions throughout his political life. It doesn’t mean that he is likely to regard the High Court’s Work Choices decision as a green light for a wholesale overrunning of traditional State powers and functions. It would be very difficult for Howard to use 51(xx), for example, to make substantial incursions into power, water, roads, sewerage, planning and bulding regulation etc. Even in education and health (where some including Callinan and Kirby have suggested that possibility), the Commonwealth could only intrude on some private hospitals and schools (probably not including the great bulk of parish Catholic schools which are not incorporated).
OTO as you observed in your initial comment, it might well be possible for Howard to introduce more far-reaching environmental legislation than occurred under Hawke/Keating using the external affairs power, because most developers and polluting enterprises are corporations. However, it isn’t likely that Howard will choose to do this, and if Labor does so it is more likely to be primarily under the cover of some new Kyoto-type agreement (or the existing one).
The federalist sky isn’t falling; it fell 86 years ago, but hasn’t succeeded in crushing the States for reasons (including constitutional ones) that I’ll explore in another post.
Cam why do you say that there is a “natural entropy of power to Canberra”? As I understand the Second Law, the entropy in a process increases with say time: and events become more chaotic. By putting another nail in the Federalist coffin and restricting further in broad terms the ability of the States to exercise their powers under s51, oxymoronic perhaps, I would have thought intuitively that the entropy, as a measure of the chaos within the system, would have decreased, albeit contrary to a natural process. There is less choice now for the States than before, ergo less chaos. Then again politics and natural laws may not mix.
The long-term impact of the decision will be interesting to watch. Now that it’s beyond argument that the federal government has the power to regulate wages and conditions directly, it may not be long before people expect the federal government to do so. I predicted last year that the Fair Pay Commission would only have a short life; it serves a political purpose in smoothing the transition from conciliation and arbitration to direct regulation.
At some time in the future, however, the government of the day will almost certainly see political advantage in getting rid of the Commission and taking over its functions directly. I suspect some business interests are already urging that outcome after the first minimum wage decision, which must have stunned a lot of small businesses and made them wonder if they’d been tipped from the frying pan into the fire.
There’s nothing radical in governments directly fixing wages and conditions of employment – they’ve always done it in most countries. It does, however, deprive politicians of a convenient scapegoat. From now on they won’t be able to blame the mythical ‘independent umpire’ for decisions they don’t like. If they want to argue that decisions of the FPC are against the national interest, they will now simply be able to change them. The nett effect of this professed ‘deregulation’ of Australian industrial relations may ultimately be re-regulation under a new system.
Wasn’t Engineers a long-shot union challenge in which that radical barrister Menzies argued for the union case? History is full of ironies. On the politics of all this the FPC decision and the committment of conservative state opposisitions to retain collective bargaining for state employees are union victories of note.
FYI; There is a fantastic article by Justice McHugh (a speech to a womens lawyers group) available on the High Court website that gives a great insight as to how the judges make their decisions.
If you’ve ever read Al-Kateb one may get the impression that sometimes they ‘slug it out’ beforehand, but not so.