REASONS FOR JUDGMENT
BUCHANAN J:
24 The Industrial Relations Commission of New South Wales ('the IRC') is established by s 145 of the Industrial Relations Act 1996 (NSW) ('the IR Act'). The IRC discharges its statutory obligations in a context set by the statutory objects of the IR Act. Section 3 of the IR Act provides as follows:
'The objects of this Act are as follows:
(a) to provide a framework for the conduct of industrial relations that is fair and just,
(b) to promote efficiency and productivity in the economy of the State,
(c) to promote participation in industrial relations by employees and employers at an enterprise or workplace level,
(d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies,
(e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments,
(f) to prevent and eliminate discrimination in the workplace and in particular to ensure equal remuneration for men and women doing work of equal or comparable value,
(g) to provide for the resolution of industrial disputes by conciliation and, if necessary, by arbitration in a prompt and fair manner and with a minimum of legal technicality,
(h) to encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations.'
25 The general functions of the IRC are stated by s 146 of the IR Act. Section 146 provides:
'(1) The Commission has the following functions:
(a) setting remuneration and other conditions of employment,
(b) resolving industrial disputes,
(c) hearing and determining other industrial matters,
(d) inquiring into, and reporting on, any industrial or other matter referred to it by the Minister,
(e) functions conferred on it by this or any other Act or law.
(2) The Commission must take into account the public interest in the exercise of its functions and, for that purpose, must have regard to:
(a) the objects of this Act, and
(b) the state of the economy of New South Wales and the likely effect of its decisions on that economy.
This subsection does not apply to proceedings before the Commission in Court Session that are criminal proceedings or that it determines are not appropriate.'
(emphasis added)
26 In the discharge of its functions the IRC may determine its own procedure (s 162(1)), is not bound to act in a formal manner (s 163(1)(a)) and is not bound by the rules of evidence (s 163(1)(b)). It has available to it extensive powers to compel attendance of witnesses, the giving of answers by witnesses and production of documents (s 164).
27 On 9 February 2007 the New South Wales Minister for Industrial Relations ('the Minister') referred a matter to the IRC, pursuant to s 146(1)(d) of the IR Act, in the following terms:
'Pursuant to s 146(1)(d) of the Industrial Relations Act 1996 the Minister for Industrial Relations hereby refers to the Industrial Relations Commission of New South Wales for inquiry and report to the Minister on:
(1) The facts and circumstances, including the historical and background facts and circumstances relating to the availability of work or the continuing availability of work at the operation of Tristar Steering and Suspension Australia Ltd at Carrington Road, Marrickville with regard to, but not limiting the generality of the foregoing, the current dispute between the employees and unions at that site, and the employer or employers operating the site, concerning redundancy or termination pay.
(2) The availability and adequacy of remedies under Commonwealth and NSW laws, including but not limited to determination of entitlements and dispute resolution, where there is an issue relating to the availability of work or the continuing availability of work, or redundancy or termination pay, at the workplace.
(3) Recommendations as to utilisation of or changes to Commonwealth and NSW laws, including removing any obstacles, jurisdictional or otherwise, where there is an issue relating to the availability of work or the continuing availability of work, or redundancy or termination pay, at the workplace.'
28 The applicants in the present matter, Tristar Steering and Suspension Australia Limited ('Tristar') and its Managing Director have commenced proceedings by application in this Court challenging the jurisdiction of the IRC to conduct an inquiry into the matters referred to it by the Minister ('the Inquiry'). They contend that the provisions of the Workplace Relations Act 1996 (Cth) ('the WR Act') engage the operation of s 109 of the Constitution in a way that renders invalid any operation of s 146(1)(d) of the IR Act which would otherwise grant jurisdiction and power to the IRC to conduct the inquiry or proceed upon the terms of reference.
29 Tristar claims to be a constitutional corporation within the meaning of s 51(xx) of the Constitution. The terms of reference set out earlier proceed upon the basis that it has an 'operation' at Carrington Road, Marrickville. There is evidence before us that Tristar trades. Its Memorandum and Articles of Association show that it was established as a trading corporation. At the hearing before this Court it was conceded that Tristar is a trading corporation within the meaning of s 51(xx) of the Constitution. It is accepted that Tristar is an employer.
30 Accordingly Tristar is an 'employer' as defined by s 6(1)(a) of the WR Act, which provides:
'employer means:
(a) a constitutional corporation, so far as it employs, or usually employs, an individual.'
31 Correspondingly its employees are each an 'employee' as defined by s 5(1) of the WR Act which provides:
'employee means an individual so far as he or she is employed, or usually employed, as described in the definition of employer in subsection 6(1), by an employer, except on a vocational placement.'
32 The WR Act by its statement of objects is directed, inter alia, (s 3(b)) to:
'(b) establishing and maintaining a simplified national system of workplace relations.'
33 To that end, amongst others, Federal Parliament has declared that its provisions will prevail over certain specified and described State and Territory laws. Section 16(1)(a) and (b) of the WR Act provide:
'(1) This Act is intended to apply to the exclusion of all the following laws of a State or Territory so far as they would otherwise apply in relation to an employee or employer:
(a) a State or Territory industrial law;
(b) a law that applies to employment generally and deals with leave other than long service leave.'
(emphasis added)
34 Section 16(2), (3) and (4) except from the operation of s 16(1) a number of identified subject matters and other laws if prescribed for that purpose by regulation. No suggestion was advanced to us that any of the exceptions apply in the present matter.
35 The term 'State or Territory industrial law' is defined by s 4 of the WR Act to include ((a)(i)) 'the Industrial Relations Act 1996 of New South Wales' and also:
'(b) an Act of a State or Territory that applies to employment generally and has one or more of the following as its main purpose or one or more of its main purposes:
(i) regulating workplace relations (including industrial matters, industrial disputes and industrial action, within the ordinary meaning of those expressions);
(ii) providing for the determination of terms and conditions of employment;
(iii) providing for the making and enforcement of agreements determining terms and conditions of employment;
(iv) providing for rights and remedies connected with the termination of employment;
(v) prohibiting conduct that relates to the fact that a person either is, or is not, a member of an industrial association (as defined in section 779).'
36 The IR Act, by both specification and description, is therefore one of the State and Territory laws which is excluded so far as it 'would otherwise apply in relation to an employee or employer'. The words 'apply in relation to' are broader than the term 'apply to'. In my view they are not confined to legal affectation but are a description of the field of operation of the State or Territory law. It is not intended that State or Territory laws (as defined) operate in the same field as the WR Act unless permitted by s 16(2), (3) or (4). It is intended that they should not.
37 Section 109 of the Constitution provides:
'When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.'
38 The operation of s 109 has been considered in very many cases. One distillation is contained in P v P (1994) 181 CLR 583 in these terms (at 602-3):
'If, in such a case, the terms and operation of the Commonwealth law disclose a legislative intent to cover the relevant field, s. 109 of the Constitution will apply to render invalid the State or Territory law to the extent that it intrudes within the area validly occupied by the Commonwealth law. If the terms and operation of the Commonwealth law disclose no such legislative intent, the existence and extent of inconsistency between the Commonwealth and the State or Territory laws will depend upon the terms and operation of each. Commonly, when that is so, the State or Territory law will be inconsistent with the Commonwealth law and invalid pursuant to s. 109 of the Constitution to, but only to, the extent that it would "alter, impair or detract from" the Commonwealth law's conferral of jurisdiction by directly or indirectly precluding, overriding or rendering ineffective an actual exercise of that jurisdiction. The practical effect of that pro tanto invalidity of the State or Territory law is that orders made in the exercise of the Commonwealth jurisdiction will prevail over the provisions of the State or Territory law or orders made or acts done in the exercise of power or authority which the State or Territory law purportedly confers.'
(emphasis added and footnotes omitted)
39 It is the first of the circumstances referred to in this passage with which the present matter is concerned. The declaration of intent in s 16 of the WR Act is unmistakeable. It is to that intent primarily that regard must be paid in the present case. The first enquiry which must therefore be made is what field is occupied by the WR Act. Any attempt to enter the field under a State law is invalid.
40 In argument before us counsel for the Minister contended that it was only regulation of rights and obligations arising out of employment relationships which was excluded by s 16. They relied on one sentence in a passage in the majority judgment of the High Court in New South Wales v Commonwealth (2006) 81 ALJR 34 where submissions made by the Commonwealth (later approved) were summarised. The summary included at [369] the following:
'The Commonwealth submitted that it was open to the Parliament to identify the rights and obligations arising out of those relationships of employees and employers as a field, and to indicate an intention to cover that field (or, as here, part of it, because of the limitations to s 16(1) and the operation of s 16(2) and (3)).'
(emphasis added)
41 However, that sentence must be seen in the context arising from the competing submissions under consideration and the surrounding observations. As counsel for the applicants pointed out to us, the matter being addressed in that part of the judgment concerned the constitutional validity of s 16. The Commonwealth's arguments summarised at [369] concerned the contention by Western Australia that s 16 was a bare attempt to limit or exclude State legislative power. The whole passage reads:
'[369] The Commonwealth's arguments. The Commonwealth specifically declined to contend that if a Commonwealth law simply sought to exclude State law in a field and made no provision whatever on the same subject matter it was within power. The Commonwealth contended rather that it was open to the Commonwealth Parliament to indicate the relevant field it intended to cover to the exclusion of State law, that s 109 would then operate even though the Commonwealth had not made its own detailed provisions about every matter within that field which State law dealt with, and that it sufficed for the Commonwealth to have some provisions dealing with aspects of the field, leaving others unregulated. The Commonwealth submitted that the relevant field was to be identified, not by reference to the areas regulated by State law, but by reference to the terms of the Commonwealth law. It was concluded above that the Commonwealth has power to regulate the relationships between employees and employers as defined in ss 5(1) and 6(1) by reliance on the heads of power referred to in pars (a), (e) and (f) of the definition of "employer" in s 6(1). The Commonwealth submitted that it was open to the Parliament to identify the rights and obligations arising out of those relationships of employees and employers as a field, and to indicate an intention to cover that field (or, as here, part of it, because of the limitations to s 16(1) and the operation of s 16(2) and (3)). On the construction of s 16(1) accepted above, the Commonwealth chose to exclude State law only in respect of the relations of employees and employers as defined in ss 5(1) and 6(1).'
42 On this issue, the Court held (at [370]) that 'The Commonwealth's submissions are to be preferred'. Earlier in their judgment the majority judges rejected the argument by Western Australia that s 16 was not supported by any head of constitutional power. The Court said (at [359]):
'Hence s 16(1) on its true construction is limited to the exclusion of State and Territory laws so far as they would otherwise apply to an employee or employer, defined by reference to the heads of constitutional power referred to in paras (a)-(f) of the definition of "employer" in s 6(1).'
43 Accordingly s 16 was held valid (see [355]). At [361] the Court said:
'… s 16(1) (subject to the matters listed in s 16(2) and (3)) applies the new Act to the exclusion of certain kinds of State and Territory laws so far as they would otherwise apply to employees and employers as defined in ss 5(1) and 6(1).'
44 The Court accepted that s 16(1) operated within the limits established by the definitions of 'employee' and 'employer' in ss 5(1) and 6(1) but I do not read the majority judgment as suggesting that s 16 is further limited for the purpose of s 109 of the Constitution. The sentence relied upon by the Minister was directed to a different issue. It is important not to take it out of context or substitute it for the text in the legislation in a case involving different considerations (see Caltex Oil (Australia) Pty Ltd v Feenan (1981) 1 NSWLR 169 at 173).
45 By its terms s 16 of the WR Act declares an intent that the WR Act occupy, to the exclusion of the IR Act, (subject only to the exceptions in s 16(2), (3) and (4) - which are not here relevant), the whole field of legislative activity 'in relation to an employee or employer' (my emphasis) where the employer is an entity identified by s 6(1) of the WR Act, including a constitutional corporation. The words 'in relation to' are broad. They are not confined to exclude only actual regulation of specific rights and obligations but anything done by or under a State or Territory industrial law. Furthermore, although in many, perhaps most, cases it is the relationship of employer and employee, or the relations of an employer with its employee or employees, which will provide the practical foundation from which s 16 commences that should not be understood to import a limitation upon, or add a further gloss to, the words 'in relation to an employee or employer'. Matters which concern them individually, or separately, are also within the field covered.
46 Although neither the IR Act or s 146(1)(d) are rendered wholly invalid by the operation of s 109 of the Constitution, invalidity arises inter alia when, and to the extent that, the IR Act otherwise operates as a grant of jurisdiction or power in relation to a matter within the field covered by the WR Act.
47 It is convenient and relevant, for the moment, to concentrate on constitutional corporations and put aside other employers to whom s 6(1) of the WR Act refers. The IR Act is rendered invalid to the extent that it 'would otherwise apply in relation to' constitutional corporations who are employers or any of their employees. Section 146 of the IR Act (whether under s 146(1)(d) or otherwise) does not, any longer, permit or authorise the IRC to perform any function 'in relation to' such employers or employees.
48 Accordingly its functions do not, under s 146, validly extend in relation to constitutional corporations or their employees to:
(a) setting remuneration or other conditions of employment;
(b) resolving industrial disputes concerning them;
(c) hearing and determining other industrial matters concerning them;
(d) inquiring into or reporting on any matter concerning them, whether industrial or otherwise, referred by the Minister, or;
(e) performing any other function conferred by the IR Act so far as it concerns them.
49 Subject to presently inapplicable exceptions, the IR Act has no valid operation 'in relation to' Tristar or any of its employees, or any other constitutional corporations or any of their employees.
50 Section 146(1)(d), in particular, confers no power on the IRC to inquire into or report on any matters concerning constitutional corporations or their employees. It follows that the Minister's reference was ineffective to engage any jurisdiction or power of the IRC in relation to Tristar or its employees regardless of the description of particular subject matters.
51 Counsel for the Minister made some attempt to save particular aspects of the terms of reference. They submitted that matters in the first term of reference 'relating to the availability of work or continuing availability of work' were not necessarily connected with employment relationships. However, I do not think this construction of the first term of reference can assist. Such issues, in the first term of reference at least, are clearly connected with Tristar. In any event the construction is too strained for my liking. I prefer to regard the first term as referring in substance to an existing controversy than to subject it to a close textual dissection with a view to preserving a remnant possibility.
52 The position is admittedly less clear with respect to the second and third terms of reference but in my view clear enough. Obviously, there is a tangible connection between the matters thereby referred to the IRC and the examination directed by the first term of reference. Clearly its report is intended to address, and be informed by, the Tristar 'dispute'. In any event, even if it were appropriate to read the second and third terms of reference devoid of their context, and artificially, they could not authorise an examination, under s 146(1)(d) of the IR Act, of matters concerning employers as defined by s 6(1) of the WR Act or their employees whether or not Tristar is involved. There was no serious suggestion made that the terms of reference had any meaningful operation in relation to employees or employers not within the definitions in ss 5(1) and 6(1) of the WR Act. The fact that the terms of reference purport to raise for consideration the relative merits of 'remedies under Commonwealth and NSW laws' (clearly a reference to the WR Act and the IR Act) emphasises that the IRC is intended by the terms of reference to concern itself with matters which now fall outside its jurisdiction and power.
53 In all the circumstances there is no basis upon which to conclude that the terms of reference have any valid application.
54 I need deal only briefly with one further aspect. Had the Inquiry been immune from restraint because, in the words of the IRC:
'Neither s 146(1)(d) nor the Commission (in the exercise of the powers to conduct the Inquiry pursuant to that section) imposes or confers any obligation or right upon employers or employees.'
the use of s 164 of the IR Act to compel attendance of witnesses or production of documents would have required attention.
55 As at present advised, and notwithstanding the arguments put to us by counsel for the Minister, I am unable to see how the use of coercive power of this kind against a constitutional corporation or its officers or employees arising from concern about events at its operation or workplace could fall outside the declaration of intent in s 16. However, as relief should be granted on other grounds it is not necessary to pursue that matter further.
56 The present proceedings are brought in the original jurisdiction of the Court and involve a federal matter. The appropriate form of final relief, in view of the conclusion that the IRC lacks jurisdiction to conduct the proceedings before it, but intends to continue to do so, is to make a declaration that it has no relevant jurisdiction or power and restrain any further proceedings or action on the terms of reference by granting a permanent injunction.
57 The applicants sought their costs. There is no reason why costs should not follow the result.
58 I would make the following declaration and orders:
4. The Industrial Relations Commission of New South Wales does not have jurisdiction or power under the Industrial Relations Act 1996(NSW) to inquire into and report on matters referred to it by the NSW Minister for Industrial Relations on 9 February 2007.
5. The Industrial Relations Commission of New South Wales is restrained from proceeding further to inquire into or report on matters referred to it by the NSW Minister for Industrial Relations on 9 February 2007, or from any exercise of jurisdiction under the Industrial Relations Act 1996 (NSW) in connection with such matter.
6. The second respondent is to pay the applicants'costs as agreed or taxed.
I certify that the preceding thirty five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.