The High Court’s judgment this week on the challenge by conservative states to aspects of Labor’s industrial-relations legislation has given a very large blank sheet to the Federal Parliament in an field previously dogged by jurisdictional limitations. The effect of the judgment is that by and large the ambit of federal industrial-relations law is now a political matter, not a legal one.
In 1901 the Constitution gave the Federal Parliament power to makes laws with respect to “”conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one state”.
The words do not describe a power over working conditions generally, though for 95 years federal governments have been trying to make it so. On their face, the words limit the power to cases where there is an interstate element and a dispute. Initially the way around the narrowness of the clause was to legislate for working conditions through allowing federal unions (which extend beyond the limits of any one state) to register with a commission and for the commission to set awards that would in theory settle industrial disputes. The Constitution forced Australian mangers and workers to predicate their relations upon a dispute, however artificially created, and to deal with federal unions, which were often remote from the needs and aspirations of workers at enterprise level.
And jurisdictional disputes still abounded, especially arguments over which union covered which workers and the ambit of various federal awards to state-government employees and non-union workers.
But more recently governments, particularly Labor, relied on the corporations and foreign-affairs power in the Constitution to legislate about working conditions. Thus Australia signed an international convention on various working conditions and the Parliament passed laws applying these to everyone, whether in a federal union or not. Similarly, laws were passed to ensure corporations apply certain working conditions, whether the employees were in a federal union or not.
Broadly, this week’s judgment upheld these laws, though there may be some argument about the extent to which the corporations power can support laws that dealing with working conditions of all employees who work in corporations. A further minor restriction was that the court ruled that the federal laws could not reach to the upper levels of state government employment.
It now seems, though, that the federal Parliament, if it is so minded, can redraw the industrial-relations map without too much legal difficulty. It is, of course, a two-edged sword, and there is some irony in that. The High Court was hearing objections by conservative states to federal Labor legislation. The court threw out the substance of their objection, but in doing so, it so broadened the ambit of the federal industrial-relations law-making ability that the new conservative federal government will not face any significant constitutional difficulties in putting its industrial-relations ideology into law. It may, of course, run into political difficulty in the Senate, but that is a separate matter.
The High Court’s decision is to be welcomed. The clumsy phrasing of the 1901 clause has for too long been responsible for a legalistic mish-mash in industrial relations which has been to Australia’s economic detriment. There is now no need to have industrial relations based upon large federal unions and artificially created disputes to satisfy the limits of one clause of the Constitution. Other heads of power have come to the rescue which will enable a more sensible and flexible regime.