Re Australian Education Union; Ex parte Victoria [1995] HCA 71

Re Australian Education Union; Ex parte Victoria [1995] HCA 71 - HCA 1995 case summary — Zoe

[21]

[W]e should point out that the statement made in Re Lee; Ex parte Harper [20] , that the implied limitations must be read subject to the express provisions of the Constitution, should not be understood as excluding consideration of implications derived from the Constitution until the scope of s 51(xxxv) is ascertained by reference to its terms alone. Rather, the scope of that provision must be ascertained by reference not only to its text but also to its subject matter and the entire context of the Constitution, including any implications to be derived from its general structure. Brennan J said [21] : The passage [in Re Lee; Ex parte Harper ] should not be read as suggesting that the scope of a State immunity implied by the general provisions of the Constitution can be ascertained by considering the overriding effect of a valid Commonwealth law on an inconsistent exercise of State power. The tentative view was expressed in that case that the implied limitations "do not protect the States from the consequences of the exercise by the Commonwealth of the powers granted to it by the Constitution which contemplate their application to the States" [22] . So much must be accepted. But the critical question is the scope of the relevant Commonwealth power. The true construction of s 51(xxxv) would have to be ascertained before the effect of that provision on any countervailing implication could be determined. His Honour continued [23] : It is clear that implications derived from the general structure of the Constitution may qualify express provisions conferring legislative power [24] . Thus in Queensland Electricity Commission v The Commonwealth , it was held that a law enacted under the power conferred by s 51(xxxv) was invalid for conflict with an implied limitation. The proposition that "implied limitations must be read subject to the express provisions of the Constitution" does not in terms acknowledge that the construction of a head of legislative power is itself ascertained by reference to the entire context of the Constitution and that its scope may be limited by implication The construction of s 51(xxxv) or, for that matter, the construction of any other legislative power in s 51, calls for a consideration of the text of the power, its subject matter and the general constitutional context. None of these factors can be considered in isolation, nor is there a sequence to be followed in considering one factor before another. 1. SPSF Case (1993) 178 CLR 249 at 271-272. 2. (1986) 160 CLR 430 at 453, per Mason, Brennan and Deane JJ. 3. SPSF Case (1993) 178 CLR 249 at 274-275. 4. Re Lee (1986) 160 CLR 430 at 453 5. SPSF Case (1993) 178 CLR 249 at 275. 6. Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 44-45 Australian Capital Television Pty Ltd v The Commonwealth [No 2] (1992) 177 CLR 106 at 134, 168, 184, 215, 242.

[115]

The power of the Commonwealth under s 51(xxxv) to affect the States or their instrumentalities was originally thought to be circumscribed by the doctrine of intergovernmental immunities. With the abandonment of that doctrine in the Engineers' Case [71] , it was established that the power of the Commonwealth Parliament under s 51(xxxv) extends to the making of laws binding on the States and their instrumentalities with respect to conciliation and arbitration for the prevention and settlement of interstate industrial disputes. Nevertheless, the question remained whether a dispute between a State and its employees might be described as industrial so as to fall within the reach of s 51(xxxv). Clearly enough, in the face of the Engineers' Case it could not be said that the governmental nature of the employment necessarily denied to it any industrial character; that would have been to reintroduce in another guise the doctrine of intergovernmental immunities. Rather, the conception was that the nature of the employment of some government employees meant that any dispute between them and their employer concerning their employment could not be described as industrial because it stood outside the whole world of productive industry and organised business carried on for the purpose of profit [72] . Thus in the Schoolteachers' Case [73] it was held that the educational activities of the States did not constitute an industry so that a dispute between the States and their teachers did not constitute an industrial dispute within the meaning of s 51(xxxv). The perceived inapplicability of s 51(xxxv) to disputes between those involved in the non-industrial services of the States and their employers meant that little attention was given to other aspects of the problem which arises from an exercise of the power under s 51(xxxv) affecting the States and their agencies. The occasion did not arise to consider whether the nature of the relationship between the Crown in right of a State and its employees was of an inherently intrastate character such that any dispute between them could not ordinarily form part of a dispute extending beyond the limits of the State. Nor did the occasion arise to consider the extent to which the power under s 51(xxxv) is confined by limits which the federal structure by implication imposes upon Commonwealth legislative power to affect the States.

[119]

It is also unnecessary to consider whether or not disputes between a State or a State authority and employees engaged in the administrative services of the State are capable of falling within the constitutional conception. It has been generally accepted, notwithstanding the Engineers' Case, that the power conferred by s 51(xxxv) is inapplicable to the administrative services of the States If the reasons hitherto given for reaching that conclusion are no longer fully acceptable, it may be that the conclusion itself finds support in the prefatory words of s 51 where the power is made "subject to this Constitution" The implications which are necessarily drawn from the federal structure of the Constitution itself impose certain limitations on the legislative power of the Commonwealth to enact laws which affect the States (and vice versa). The nature of those limitations was discussed in Melbourne Corporation v The Commonwealth [77] , Victoria v The Commonwealth (the Pay-roll Tax Case) [78] , and the other cases there cited. If at least some of the views expressed in those cases are accepted, a Commonwealth law which permitted an instrumentality of the Commonwealth to control the pay, hours of work and conditions of employment of all State public servants could not be sustained as valid, but as Walsh J pointed out in the Pay-roll Tax Case [79] , the limitations have not been completely and precisely formulated and for present purposes the question need not be further examined. And in Re Lee; Ex parte Harper [80] Gibbs CJ said: From the earliest times this Court has experienced a difficulty in reconciling the effect which the exercise of the power given by s 51(xxxv), construed without limitation, might have on the States with the position intended to be secured to the States by the Constitution. There have been a number of shifts of opinion, and the matter has never been fully explored. In particular, the questions whether it is possible to have a genuine interstate dispute involving the officials of one State who are doing no more than carrying out the administrative services of that State, and whether the artificial doctrine concerning paper disputes needs modification in the light of the illumination thrown on s 51(xxxv) by R v Coldham; Ex parte Australian Social Welfare Union , remain open for definitive discussion. 1. (1983) 153 CLR 297 at 313. 2. (1947) 74 CLR 31 esp at 55-60, 66, 70-75, 82-83. 3. (1971) 122 CLR 353 esp at 386-393, 402-403, 406-411, 417-424. 4. (1971) 122 CLR 353 at 410. 5. (1986) 160 CLR 430 at 443-444.

[133]

Difficulty is inevitably encountered in attempting to identify the point at which a law, particularly a law of general application, may prevent a State from functioning effectually as an independent unit. The difficulty may be less in the case of a discriminatory law [91] . In the light of the Engineers' Case, it is necessary to start with the proposition that a law under s 51(xxxv) may bind a State and its instrumentalities, but having regard to the nature and scope of State employment, there is no readily discernible line between those aspects of the relationship between a State and its employees which may be externally regulated without interference with the capacity of the State to function independently and those which may not. If the determination of the number and identity of persons to be employed is critical to the functioning of a State, then so too will be the wages and conditions of employment, for the former cannot be determined in isolation from the latter, if only because of the budgetary considerations which constrain any government. It is obvious that if, for example, a State is required to pay a substantial increase in wages to its teachers (who are employed in significantly large numbers), it may have as much impact on the State's budget and the implementation of its policies as an award prohibiting redundancies in that workforce. It is similarly artificial to draw a line between those employed at the higher levels of government and those employed at the lower levels. To do so is merely to revive the distinction between industrial and non-industrial functions which is of little relevance in the context of industrial disputes as they are now viewed. A State can function only through those whom it employs, whatever the level of employment, and the external regulation of the terms and conditions of employment of those employed at the lower levels may, if for no other reason than their numbers, be as destructive of the capacity of a State to function as an independent unit as the regulation of the terms and conditions of those employed at the higher levels.

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