New South Wales v Commonwealth (2006)

the WorkChoices caseJudgement of the High Court of Australia

New South Wales v Commonwealth (also called the WorkChoices case) is a landmark decision of the High Court of Australia, which held that the federal government's WorkChoices legislation was a valid exercise of federal legislative power under the Constitution of Australia. In essence, the majority (Gleeson CJ, Gummow, Hayne, Heydon & Crennan JJ) found the Constitution's corporations power capable of sustaining the legislative framework, while the conciliation and arbitration and territories powers were also seen as supporting parts of the law. Furthermore, the majority also held that the legislation permissibly limited State powers and did not interfere with State constitutions or functioning. A minority (Kirby and Callinan JJ) dissented. The case attracted considerable attention before, during and after the High Court decision was delivered on 14 November 2006. As a legal precedent, it may signify a shift in the distribution of power from the States to the Federal Parliament. Thus, the decision could well be regarded by historians of Australian federalism as an important legal landmark.

From at least 1904 through to the last decade of the 20th century, the constitutional basis of most Australian federal industrial relations legislation was the conciliation and arbitration power. In general, the Federal Parliament would exercise this power to establish an independent tribunal to set minimum terms and conditions of employment by the compulsory conciliation and arbitration of interstate industrial disputes. Another important historical fact of note is that for much of the 20th century, the States and Territories had their own workplace relations legislation setting terms and conditions for employees not affected by the arbitration of interstate industrial disputes.

In December 2005, the WorkChoices reforms were passed by Federal Parliament. There were many elements in the reforms, including some which elicited political and social controversy and consternation. In a legal sense, perhaps the two most fundamental changes were (1) the purported elimination of State and Territory workplace relations legislation from the federal industrial landscape and (2) the attempt to rely almost completely on the corporations power directly to prescribe minimum terms and conditions of employment regardless of the existence of an intrastate industrial dispute. This unprecedented (but not novel) use of the corporations power to enact federal industrial legislation was accompanied by claims that 85% of the Australian workforce would be covered by WorkChoices. A legal challenge to the constitutional basis of WorkChoices followed in short order. The plaintiffs were States of New South Wales, Western Australia, South Australia, Queensland, Victoria, and the Australian Workers' Union and Unions New South Wales. The defendant was the Commonwealth of Australia. Attorneys General for the State of Tasmania, the Northern Territory and the Australian Capital Territory intervened in support of the plaintiffs. The Full Court of the High Court hearing the case comprised Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ. Hearings of substantial matters began on 4 May 2006, and concluded on 11 May. The outcome of the challenge was the High Court decision of New South Wales & Ors v Commonwealth, delivered on 14 November 2006.

The Court ruled 5:2 in favour of the Commonwealth (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; Kirby and Callinan JJ dissenting).

Media coverage and commentary on the case has been significant. The case has been "hailed as the most important constitutional case in 80 years" (a probable reference to Engineers, heard 86 years prior). It has also been described as potentially one of the most important cases in the history of the Court. The case is also significant because of the politics surrounding it. Underpinning the challenge is a major political rift in Australian politics between the two major political forces: the Australian Labor Party (ALP) and the Liberal/National Coalition. In 2006 not only did the Coalition hold the Federal Government of Australia but they also held a majority in the Senate allowing them to completely dominate the Federal Parliament. Federal Labor's poor result at the 2004 federal election provided the Coalition with control of the Senate for the first time since 1980. This gave the Coalition complete Federal legislative freedom. Conversely, Labor governments have been elected in all six states and two territories. The Workplace Relations WorkChoices Act is itself politically contentious and perceived by some as an attack on both the Union and Labor movements, and the minimum wage setting system as a whole. The Coalition (inspired by conservative think tank the H. R. Nicholls Society) believe the step to have "bravely taken advantage of new found legislative freedom and have created a substantially different and national industrial relations system". The ALP have been aggressive critics of the new laws. On the day the Bill was introduced into the Australian House of Representatives 11 members of the ALP were ejected during heated debate over the Bill. In this context the creation of "one national system" is seen by some as a sensible step to modernise Australia's industrial relations regime. Others see it as a coup d'état of the Labor Party's power to create union friendly legislative regimes through their respective State Parliaments. The political (and party political) dimension has led commentators to draw comparisons between this case and two others: the Bank Nationalisation Case and the Communist Party Case, because in those cases the High Court was the final arbiter of divisive political issues. The Case is also significant in that it had the most lawyers to ever appear in the High Court at one time (39), outstripping Wik Peoples v Queensland for the title. A picture of the proceedings has been placed on the High Court of Australia's website for this reason. Queensland Premier Peter Beattie has said that if the Commonwealth were successful in the case, it would pave the way for the Commonwealth to use the corporations head of power to move into other areas of law traditionally within the purview of the States, such as transport, education and health. He has stated that this "would leave the federation in confusion" and has suggested that a Constitutional Convention would be necessary if that situation arose.