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Article Excerpt
[The decision of the High Court in the Work Choices Case presents a paradox. It is possible on one hand to read it as a revolutionary decision which has up-ended our conventional understanding of the scope and nature of the Commonwealth's power over industrial relations, with significant long-term implications for the balance of power between Commonwealth and state governments. On the other hand, it is possible to read the outcome as entirely predictable in terms of established principles and methods of constitutional interpretation, themselves the culmination of a long line of cases dealing with federal legislative power generally and the corporations power in particular.
In this article, it is contended that the paradoxical nature of the Work Choices Case is best understood by reference to a series of interpretive choices that have been made by the High Court over the course of its history and which are recapitulated in the joint judgment. Reading the case in this way, it is argued, enables us to understand both the significance of the outcome and the predictability of the reasoning. It also helps us to understand the conundrum faced by the dissenting justices, who wished to resist a decision that would radically overhaul the balance of power between the Commonwealth and the states. Such resistance required the repudiation of a series of established conventions of constitutional interpretation, as well as entailing a return to the idea that in determining the scope of Commonwealth powers it is both legitimate and desirable to take into consideration the scope of power retained by the states. This latter aspect, however, presents us with the question: what exactly is wrong with the reserved powers doctrine? It is argued that, when the doctrine is understood and applied in its most sophisticated, interpretive form, the answer is: not much at all.]
CONTENTS I Introduction II Work Choices III Constitutional Heresy IV Constitutional Orthodoxy V Constitutional Choices A The Majority B Interpretive Choices of the Majority C Callinan J D Kirby J VI Conclusions
GLEESON CJ: Yes, Mr Solicitor for New South Wales.
MR SEXTON: If the Court pleases. This is a case about the division of legislative power under the Constitution between the Commonwealth Parliament and the Parliament of the States. It raises the question ...
KIRBY J: Is that quite right? Is it not about the extent of the power of the Federal Parliament?
MR SEXTON: Combined with section 109, your Honour, it is a question about division, we would say.
KIRBY J: It sounds to have the ghosts of the reserve powers clanking ...
MR SEXTON: No, there is no suggestion of that, your Honour. (1)
KIRBY J: You are not trying under the guise of this history to revive the reserve powers notion, are you?
MR SOFRONOFF: Absolutely not, your Honour. Absolutely not.
HAYNE J: Wash your mouth out with soap.
KIRBY J: I am just looking a bit suspiciously at you. (2)
I INTRODUCTION
In New South Wales v Commonwealth (3)--the well-known 'Work Choices Case'--a 5:2 majority of the High Court of Australia upheld the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ('Work Choices Act') (4) as validly enacted under the Commonwealth's corporations power. (5) This Act effected a far-reaching transformation of Australian industrial relations law, displacing the existing federal system of compulsory conciliation and arbitration based on the industrial arbitration power (6) and excluding the operation of a range of state and territory workplace regimes.
The case presents a paradox. On one hand, it is possible to read it as a revolutionary decision which has up-ended our conventional understanding of the extent of the Commonwealth's power over industrial relations and corporations, with far-reaching implications for the balance of power between the Commonwealth and the states. Describing the decision as 'a shipwreck of Titanic proportions', Greg Craven has stated that '[n]ot since the 1920's [sic] has the Court struck such a devastating blow against Australian federalism.' (7) Focusing upon its implications for the regulation of workplace relations, Ron McCallum similarly described the case as the most significant change in the 'constitutional contours' of federal-state relations delivered since 1920. (8) On the other hand, it is also possible to read the decision as the entirely predictable application of long established methods of interpreting federal legislative power. As George Williams has remarked, in spite of the 'extraordinary policy and political consequences' of the outcome, (9) the Work Choices Case was 'a very orthodox decision' which came as no surprise to informed commentators. (10)
Thus, there are two very different assessments of the significance of the case. How is it best understood? Is the decision revolutionary? Is it entirely conventional? Or is it somehow both?
In this article, I argue that the decision is best understood--that its paradoxical character is best explained--by reference to a series of interpretive choices that have been made by the High Court over the course of its history and which are recapitulated in the Work Choices Case. These choices are of utmost significance--they are indeed revolutionary--when critically assessed in light of the text, structure and underlying principles and purposes of the Constitution. And yet, they are welt-established choices that have become the conventional rudiments of the High Court's constitutional jurisprudence. To get to the heart of the Work Choices Case, therefore, it is necessary to recount these choices, to show what they are and why they are significant, and to show how they are fundamental to the Court's reasoning. Moreover, because they are choices, it is also necessary to show how the course of Australian constitutional interpretation might have been different by explaining the forks in the road and indicating the alternative paths that might have been taken.
At a pivotal point in its history, the High Court deliberately chose between two fundamentally different approaches to the interpretation of the legislative powers of the Commonwealth and the states. The first approach was one commonly known as the 'reserved powers doctrine' and associated with the judgments of the Court under its first Chief Justice, Sir Samuel Griffith. The other is generally associated with the Court's famous decision in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ('Engineers' Case'), delivered under the intellectual leadership of Sir Isaac Isaacs. (11) In the fateful Engineers' Case, the Court anathematised the conceptual foundations of the reserved powers doctrine and substituted an alternative approach that has become the Court's conventional stance ever since.
In this article, I argue that the reserved powers and Engineers' doctrines cannot properly be understood or evaluated without first unscrambling the two doctrines into their constituent elements and then identifying the different versions in which each doctrine has been presented. As to this second task, I contend that three versions of both doctrines are to be distinguished. These I label respectively, and for reasons that will become apparent, the abridged, absolute and interpretive versions of the reserved powers doctrine and the abridged, testamentary and methodological versions of the Engineers' doctrine. Moreover, because the reserved powers doctrine has long been regarded as heresy, its influence in constitutional interpretation has been camouflaged: only particular elements of the doctrine have been (at times) utilised in various configurations, including the idea of 'federal balance', a concept which has also been advanced in abridged, absolute and interpretive forms.
When the various elements and different versions of the reserved powers, federal balance and Engineers" doctrines are clearly distinguished, it becomes possible to identify their respective roles in the many cases in which the High Court has interpreted the scope of the Commonwealth's legislative powers. Analysing the Work Choices Case in these terms enables us not only to understand the paradoxical character of the decision, but also to expose the underlying constitutional jurisprudence to critical analysis. When the Work Choices Case is understood as presenting a series of interpretive choices, the apparent inevitability of the outcome, as presented by the majority of the Court, begins to dissolve before our eyes. Furthermore, when we understand the issues presented by the case as involving elements of reserved powers reasoning, it becomes easier to comprehend the conundrum in which the plaintiffs and the two dissenting justices, Kirby and Callinan JJ, found themselves. This dilemma was one of wishing to resist an outcome that would radically overhaul the balance of power between the Commonwealth and the states, but where the only truly effective path of resistance involved repudiating a whole line of established conventions of constitutional interpretation. The crucial strategic question was whether to challenge those conventions head-on through an openly acknowledged resuscitation of the reserved powers doctrine, or whether to try and show that the Work Choices Act could not be supported by the corporations power when that power was read according to orthodox methods of interpretation. Such was the technical cleverness of the legislation, however, that a conventional attack was unlikely to succeed, and so a radical path beckoned. And yet, constitutional law remains a highly traditional and conservative discipline--in what other body of Australian law are labels such as 'orthodoxy' and 'heresy' so commonly and forcefully used? (12) Thus, the path proposed by the dissenters had to be couched in conventional terms.
In the majority's joint judgment in the Work Choices Case, the plaintiffs' arguments were rejected on the basis of a caricature of the reserved powers and federal balance doctrines which presented them almost entirely in their absolute forms, without ever seriously addressing the much more sophisticated and persuasive interpretive versions of both doctrines. While there are indeed problems with the absolute versions of these doctrines, I argue that the more subtle interpretive versions avoid these problems and, indeed, chart an approach to the interpretation of federal legislative powers much more in line with the text, structure, underlying principles and overarching purposes of the Constitution. (13)
The article proceeds as follows. Part II summarises the legislation, issues and arguments in the Work Choices Case. Part III deals with the reserved powers doctrine. It explains the way in which the doctrine was formulated by the Griffith Court and it identifies three different versions in which the doctrine has at times been presented. In so doing, Part III also touches upon the subversive path that the reserved powers doctrine had to take after the Engineers' Case, noting in particular the part played by the notion of federal balance. Part IV discusses the Engineers' doctrine--particularly spelling out its abridged, testamentary and methodological dimensions--and explaining its influence upon the interpretation of federal legislative power in the decided cases. Part V then seeks to show how Engineers' orthodoxy was fundamental to the majority's joint judgment in the Work Choices Case, as well as how various aspects and elements of reserved powers and federal balance reasoning were utilised in the case's dissenting judgments. Finally, Part VI concludes by asking: what exactly is wrong with the reserved powers doctrine? Not quite as much as is often thought, it is concluded.
II WORK CHOICES
The Work Choices Act effected a far-reaching transformation of Australian workplace relations law. (14) Among other things, it encouraged an expanded role for Australian Workplace Agreements in substitution for Industrial Relations Commission awards, it reduced the number of mandatory employee entitlements, and it established the Australian Fair Pay Commission, which was made responsible for setting and adjusting statutory minimum wage levels. The Work Choices Act also provided that it is to apply to the exclusion of a range of state and territory workplace laws. (15) Previously, the Workplace Relations Act 1996 (Cth) ('Workplace Relations Act') had principally rested upon the industrial arbitration power and only marginally upon the corporations and external affairs powers. (16) However, the primary constitutional foundation for the amendments introduced by the Work Choices Act was, and remains, the corporations power. (17)
This connection to the corporations power is achieved through the definitions sections of the Workplace Relations Act, as substantially amended by the Work Choices Act. As a result of the amendments, s 5(1) of the Workplace Relations Act now defines an 'employee' as an individual insofar as they are employed, or usually employed, by an employer as defined in s 6(1). Section 6(1) in turn defines an 'employer' as, inter alia, 'a constitutional corporation, so far as it employs, or usually employs, an individual'. Section 4 defines 'constitutional corporation' as a corporation to which s 51(xx) of the Constitution applies. The substantive provisions of the Workplace Relations Act then confer and impose a range of powers, rights and duties upon the employees and employers thus defined. In this way, the basic objective of the amendments to the Workplace Relations Act was to introduce a national workplace relations system which applies to the majority of employees throughout Australia.
Several actions were commenced by five Australian states (18) and a number of trade union organisations challenging the validity of the Work Choices Act, principally on the ground that the corporations power did not support an entire industrial relations regime of this kind. A number of interrelated lines of argument were available. (19)
First, it was generally acknowledged that the case raised questions about the scope of the corporations power that had not specifically arisen in previous decisions, (20) and so submissions were made concerning the meaning and reach of the decided cases. Argument in this respect particularly concerned the problem of identifying the proper scope of the corporations power. Specifically, it was submitted by the plaintiffs that the power under s 51(xx) of the Constitution extends only to the 'external' relationships of constitutional corporations and not to 'internal' matters, such as the relationship between a corporation and its employees. The plaintiffs pointed out that the corporations power assumes that the corporations to which it applies already exist and engage in certain kinds of activities, (21) with the relationship between a corporation and its officers and employees being a matter essentially incidental to the formation of corporations, and thus outside the scope of s 51 (xx). It was alternatively submitted that, if a general test was required, the nature of the corporation must be a significant element in the nature or character of the law, and that the corporations power is therefore directed to the regulation of characteristics which distinguish corporations from other legal persons, or the regulation of their interaction with the public in relation to those characteristics (an approach which came to be called the 'distinctive character' test). (22) This entailed a rejection of the view that the corporations power extends to any law in which constitutional corporations are an object of command (the 'object of command' test). (23) While the argument was based primarily on the language of s 51(xx) and secondarily on the case law, it was also submitted that the framers of the Constitution and early text writers saw the objective of the power as enabling provision to be made in relation to the status and recognition of corporations. This later developed, it was submitted, into a concern to enable regulation of the particular characteristics of corporations qua corporations, and their interaction with the public, such as by defining conditions under which companies may carry on business throughout the Commonwealth. (24)
Secondly, wider arguments were made concerning the Constitution's underlying federal structures, principles and purposes. The object of command test would, it was said, enable the Commonwealth to legislate on a whole range of subjects, such as employment, defamation, negligence, contracts, succession, trusts and crime, provided that one of the persons involved was a constitutional corporation. However, it was submitted that the corporations power needs to be interpreted in the context of the Constitution as a whole, which includes the conferral of specifically defined heads of legislative power upon the Commonwealth and, in particular, a power to legislate with respect to the prevention and settlement of interstate industrial disputes by conciliation and arbitration in s 51(xxxv). It was argued that the question of whether the corporations power can support the enactment of a national industrial relations regime under s 51(xx) has to be considered in light of the specific and limited power conferred by s 51(xxxv). Here, the plaintiffs relied upon structural-based arguments about the overall configuration of federal and state powers for which the Constitution as a whole provides, upon inter-provisional arguments about the relationship between ss 51(xx) and (xxxv), and upon cases in which ss 51(xx) and (xxxv) had been interpreted. (25) The plaintiffs claimed that judges, lawyers and politicians had uniformly assumed since federation that s 51(xxxv) places certain limits on the Commonwealth's power over industrial relations, and that attempts to overcome those limitations through formal amendment of the Constitution have consistently been rejected in referenda. In the absence of formal amendment, it was said, these limits should not be circumvented via an expansive interpretation of the corporations power.
The principal problem for the plaintiffs was that this last line of reasoning smacked of the discredited reserved powers doctrine, widely said to have been 'exploded' by the Engineers' Case. (26) The reason for this is that one of the hallmarks of the doctrine is the idea that the limited terms in which a particular head of power is conferred upon the Commonwealth imply limitations on the scope of other heads of power. In other words, what is not granted under one head of power is treated as significant when determining the scope of what is granted under another. The proposition that what is not conferred under s 51(xxxv) suggests a limit on the scope of s 51(xx) is an argument of this type. However, since the plaintiffs disclaimed any reliance upon the opprobrious reserved powers doctrine, their problem was to identify some other ground upon which the scope of the corporations power might be defined and interpreted, referable both to the language of the corporations power itself and to previous cases. The plaintiffs' strategy, in effect, was to break the argument down into a number of discrete elements and to argue those elements without acknowledging their relationship to reserved powers reasoning.
The two dissenting justices, Kirby and Callinan JJ, found the arguments of the plaintiffs sufficiently compelling, with each judge in his own way formulating limits upon the scope of the corporations power by reference to the language of the power, the existence of the industrial arbitration power and the federal nature of the Constitution. However, a majority of the Court rejected these arguments in a joint judgment which focused almost entirely upon the language of s 51(xx) alone, discounted the force of the arguments based in federalism and the limited terms of the industrial arbitration power, and relied instead upon the line of previous decisions in which the scope of the corporations power had progressively expanded. In a critical passage early in the joint judgment, the majority of the Court pointed out that the Engineers' Case had overturned the reserved powers doctrine, that previously restrictive interpretations of the corporations power founded upon reserved powers reasoning had been overruled, and that subsequent well-established principles of constitutional interpretation made it improper to seek to 'read down' the scope of one head of power by reference to limits written into another. (27) The majority thus upheld the entirety of the Work Choices Act, principally on the basis of the Commonwealth's submissions that the corporations power extends to any law which alters the rights, powers or duties of a constitutional corporation, as well as to laws which have a less direct but nonetheless sufficiently substantial connection to constitutional corporations. (28)
III CONSTITUTIONAL HERESY
The reserved powers doctrine is often misunderstood. The abridged version of the doctrine presents itself simply as the idea that there is some rather vaguely defined body of legislative powers that have been reserved to the states and into which federal legislative power cannot extend. (29) If the content of this mysterious sphere of power reserved to the states is given any definition at all, it is described as relating to the domestic or internal affairs of the states, (30) to their traditional areas of law-making power (31) or--without explaining why--it is sometimes referred to as particularly relating to state regulation of domestic trade. (32) If there is any foundation for the doctrine in the text of the Constitution, reference is at best made to s 107, (33) which under the reserved powers doctrine was somehow thought to reserve to the states control over their domestic affairs without federal interference. (34)
When presented in this way, the reserved powers doctrine is easily subjected to at least three powerful lines of criticism. The first is that the doctrine seems to lack any real foundation in the text of the Constitution. Section 107 says that state powers shall 'continue' but it provides no positive guidance as to what those powers might be. Rather, it directs attention to powers conferred upon the Commonwealth or explicitly withdrawn from the states, and suggests that only once these have been ascertained is it possible to identify those state powers which are to continue. Thus, secondly, the reserved powers doctrine seems to reverse the proper order of inquiry required by s 107, for it suggests that the first question is one of identifying the powers reserved to the states and only after that is there a question of identifying the powers conferred upon the Commonwealth (with the proviso that this must be done in a way that prevents federal power from entering fields reserved to the states). However, s 107 appears to provide that the continuing powers of the states lying beyond the reach of the Commonwealth are only those that are found to be left over after the positive powers conferred upon the Commonwealth have first been ascertained. Thirdly, and relatedly, the reserved powers doctrine appears to be a recipe for uncertainty and subjectivity. The absence of any clear guidance in the Constitution regarding the specific content of the powers reserved to the states suggests that judges will have to rely on any one of a number of ideas about the content of the properly 'domestic' affairs of the states, ideas that have no basis in the text of the Constitution. Recourse to unavoidably extra-constitutional notions such as these appears to be a recipe for arbitrary and unpredictable judicial decision-making. (35)
However, this is to conjure with a mere caricature of the doctrine. In its strongest form, as enunciated by the Griffith Court, the reserved powers doctrine rested upon much firmer foundations than this account would suggest. These foundations included: (1) a clear and defensible account of the political origins, underlying ideas, structural features and intended purposes of the Constitution; (2) a careful articulation of the grounds upon which the specific content of the powers reserved to the states can be identified--one that requires very close attention to be given to the precise terms in which federal heads of power are defined, such that what is not granted to the Commonwealth may be as significant as what is granted; and (3) a sophisticated recognition that constitutional interpretation inevitably requires choices to be made and that these choices can be guided by a general orientation either to expand federal power as far as possible...
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