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[1996] HCA 56
High Court of Australia
1996-07-01
Brennan CJ, Gummow JJ
Original judgment source is linked above.
The application of that canon of construction to the affirmative grants of paramount legislative powers gives the Constitution a dynamic force which is incompatible with a static constitutional balance. The complexity of modern commercial, economic, social and political activities increases the connections between particular aspects of those activities and the heads of Commonwealth power and carries an expanding range of those activities into the sphere of Commonwealth legislative competence. This phenomenon is nowhere more manifest than in the field of external affairs. 1. R v Coldham; Ex parte Australian Social Welfare Union (1983) 153 CLR 297 at 314; Jumbunna Coal Mine NL v Victorian Coal Miners' Association (1908) 6 CLR 309 at 367-368. 2. (1983) 158 CLR 1 at 221.
There may be some treaties which do not enliven the legislative power conferred by s 51(xxix) even though their subject matter is of international concern. For example, Professor Zines has suggested that a treaty expressed in terms of aspiration (for example, "to promote full employment") cannot support a law which adopts one of a variety of possibly contradictory ways that might be selected to fulfil the aspiration. He writes [60] :
Accepting that the agreement by nations to take common action in pursuit of a common objective amounts to a matter of external affairs, the objective must, nonetheless, be one in relation to which common action can be taken. Admittedly, this raises questions of degree; but a broad objective with little precise content and permitting widely divergent policies by parties does not meet the description. When a treaty is relied on under s 51(xxix) to support a law, it is not sufficient that the law prescribes one of a variety of means that might be thought appropriate and adapted to the achievement of an ideal. The law must prescribe a regime that the treaty has itself defined with sufficient specificity to direct the general course to be taken by the signatory states. But, as Judge Dillard observed in his opinion in the Appeal Relating to the Jurisdiction of the ICAO Council [61] , the point at which ideals merge into legal obligations "constitutes one of the most delicate and difficult problems of law and especially so in the international arena where generally accepted objective criteria for determining the meaning of language in light of aroused expectations are more difficult to ascertain and apply than in domestic jurisdictions". However, Deane J has pointed out in the Tasmanian Dam Case [62] : [A]bsence of precision does not, however, mean any absence of international obligation. In that regard, it would be contrary to both the theory and practice of international law to adopt the approach which was advocated by Tasmania and deny the existence of international obligations unless they be defined with the degree of precision necessary to establish a legally enforceable agreement under the common law. 1. Zines, The High Court and the Constitution, 3rd ed (1992), p 250 (emphasis in original). 2. [1972] ICJ Rep 46 at 107n. Cited by Brennan J in the Tasmanian Dam Case (1983) 158 CLR 1 at 226. 3. (1983) 158 CLR 1 at 261-262.
Where the legislative power is said to be enlivened by a treaty binding on the Commonwealth of Australia, and the law prescribes a regime affecting a domestic subject matter, a question arises as to the connection which must exist between the law and the treaty. To be a law with respect to "external affairs", the law must be reasonably capable of being considered appropriate and adapted to implementing the treaty. Thus, it is for the legislature to choose the means by which it carries into or gives effect to the treaty provided that the means chosen are reasonably capable of being considered appropriate and adapted to that end [63] . But that is not to say that an obligation imposed by treaty provides the outer limits of a law enacted to implement it [64] . The term "purpose" has been used to identify the object for the advancement or attainment of which a law was enacted. Hence, the statement by Brennan J in Cunliffe v The Commonwealth [65] that the external affairs power has "a purposive aspect". As this phrase indicates, care is required in relevant analysis. Where a treaty relating to a domestic subject matter is relied on to enliven the legislative power conferred by s 51(xxix) the validity of the law depends on whether its purpose or object is to implement the treaty. This was explained, in a passage with which we respectfully agree, by Dawson J in Richardson v Forestry Commission [66] :
The power to make laws with respect to external affairs contains no expression of purpose and in that respect it is like most of the other powers contained in s 51 of the Constitution. It is not a power to make laws for the purpose of cementing international relations or achieving international goodwill or even for implementing international treaties. The implementation of treaties falls within the power because it is a subject matter covered by the expression "external affairs". And the purpose of legislation which purports to implement a treaty is considered not to see whether it answers a requirement of purpose to be found in the head of power itself, but to see whether the legislation operates in fulfilment of the treaty and thus upon a subject which is an aspect of external affairs. In this context, purpose is not something found in the head of power. Rather, it is a test for determining whether the law in question is reasonably capable of being considered as giving effect to the treaty and therefore as being a law upon a subject which is an aspect of external affairs. 1. Airlines of NSW Pty Ltd v New South Wales [No 2] (1965) 113 CLR 54 at 136; the Tasmanian Dam Case (1983) 158 CLR 1 at 130-131, 172, 232, 259; Richardson v Forestry Commission (1988) 164 CLR 261 at 288-289, 303, 311-312, 336, 342. 2. See the statements collected by Gaudron J in Richardson v Forestry Commission (1988) 164 CLR 261 at 341-342. 3. (1994) 182 CLR 272 at 322. 4. (1988) 164 CLR 261 at 326.
It has been said that a law will not be capable of being seen as appropriate and adapted in the necessary sense unless it appears that there is "reasonable proportionality" between that purpose or object and the means adapted by the law to pursue it [67] . The notion of "reasonable proportionality" will not always be particularly helpful. The notion of proportion suggests a comparative relation of one thing to another as respects magnitude, quantity or degree; to ask of the legislation whether it may reasonably be seen as bearing a relationship of reasonable proportionality to the provisions of the treaty in question appears to restate the basic question. This is whether the law selects means which are reasonably capable of being considered appropriate and adapted to achieving the purpose or object of giving effect to the treaty, so that the law is one upon a subject which is an aspect of external affairs.
It would be a tenable proposition that legislation purporting to implement a treaty does not operate upon the subject which is an aspect of external affairs unless the legislation complies with all the obligations assumed under the treaty. That appears to have been the view taken by Evatt and McTiernan JJ in R v Burgess; Ex parte Henry [68] . But the Tasmanian Dam Case and later authorities confirm that this is not an essential requirement of validity [69] .
In the Tasmanian Dam Case, the Wilderness Regulations that were under attack implemented only in part the supporting Convention. They were nevertheless upheld. A criterion of validity expressed in R v Burgess; Ex parte Henry namely, whether the Regulations could fairly be regarded as "sufficiently stamped with the purpose of carrying out the terms of the convention" [70] , was applied by Brennan J [71] . Deane J dealt as follows with "partial" legislative implementation [72] :
It is competent for the Parliament, in a law under s 51(xxix), partly to carry a treaty into effect or partly to discharge treaty obligations leaving it to the States or to other Commonwealth legislative or executive action to carry into effect or discharge the outstanding provisions or obligations or leaving the outstanding provisions or obligations unimplemented or unperformed. On the other hand, if the relevant law "partially" implements the treaty in the sense that it contains provisions which are consistent with the terms of the treaty and also contains significant provisions which are inconsistent with those terms, it would be extremely unlikely that the law could properly be characterised as a law with respect to external affairs on the basis that it was capable of being reasonably considered to be appropriate and adapted to giving effect to the treaty. 1. Ex parte Henry (1936) 55 CLR 608 at 688. 2. Tasmanian Dam Case (1983) 158 CLR 1 at 234. 3. Tasmanian Dam Case (1983) 158 CLR 1 at 268.
Deficiency in implementation of a supporting Convention is not necessarily fatal to the validity of a law; but a law will be held invalid if the deficiency is so substantial as to deny the law the character of a measure implementing the Convention or it is a deficiency which, when coupled with other provisions of the law, make it substantially inconsistent with the Convention. The Conventions with which we are concerned in this case are mostly Conventions of the General Conference of the ILO.
Article 387 in Pt XIII of the Treaty of Versailles established a "permanent organisation", now the ILO, to promote objects which were stated as including the following [73] :
And whereas conditions of labour exist involving such injustice, hardship and privation to large numbers of people as to produce unrest so great that the peace and harmony of the world are imperilled; and an improvement of those conditions is urgently required: as, for example, by the regulation of the hours of work, including the establishment of a maximum working day and week, the regulation of the labour supply, the prevention of unemployment, the provision of an adequate living wage, the protection of the worker against sickness, disease and injury arising out of his employment, the protection of children, young persons and women, provision for old age and injury, protection of the interests of workers when employed in countries other than their own, recognition of the principle of freedom of association, the organisation of vocational and technical education and other measures. 1. The Consolidated Treaty Series, vol 225, p 373.
Australia was a foundation member. The Constitution of the ILO was amended by the General Conference of the ILO in 1922, 1945 and 1946. As so amended, the Constitution was approved for Australia by statute in 1947 [74] . Further amendments made to the Constitution of the ILO pursuant to Art 36 thereof were approved by the International Labour Organisation Act 1973 Cth. The Constitution of the ILO is reproduced as a schedule to that Act and to the Act of 1947.
The organs of the ILO are the General Conference, the Governing Body and the International Labour Office (Art 2). The General Conference comprises four delegates from each of the members of the ILO, two representing the government and two representing respectively employers and "workpeople" (Art 3(1)). The General Conference acts by voting on the adoption of International Conventions or Recommendations. A majority of two-thirds of the votes cast by the delegates present must be in favour of the Convention or Recommendation for it to be adopted (Art 19(2)). Neither Conventions nor Recommendations are binding merely as a result of their being adopted by the General Conference. Both Conventions and Recommendations are communicated to members; in the case of Conventions for ratification, in the case of Recommendations for "consideration with a view to effect being given to [them] by national legislation or otherwise" (Art 19(5)(a), (6)(a)). Once a member communicates its ratification of a Convention to the Director-General, it must then "take such action as may be necessary to make effective the provisions" of that Convention (Art 19(5)(d)). In contrast, in the case of Recommendations, the only obligation upon members is to bring Recommendations before the authorities which are competent to legislate or take other action to implement them (Art 19(6)(b), (6)(d)).
Any member of the ILO has the right to file a complaint with the International Labour Office if "it is not satisfied that any other Member is securing the effective observance of any Convention which both have ratified" (Art 26(1)). These complaints are investigated by a Commission of Inquiry established by the Governing Body which prepares a report containing findings of fact and recommendations as to the steps to be taken to meet the complaint (Art 28). A party which does not accept the recommendations of the Commission of Inquiry may refer the matter to the International Court of Justice for a final decision (Arts 29, 31). The Court may affirm, vary or reverse a finding of fact or recommendation of a Commission of Inquiry (Art 32). If a member fails to implement a recommendation of a Commission of Inquiry or the International Court of Justice, the Governing Body may recommend to the General Conference "such action as it may deem wise and expedient to secure compliance" with the recommendation (Art 33).
The establishment of the ILO continued a development, well in hand at the time of the establishment of the Commonwealth of Australia, whereby contracting parties established specific international legal institutions to deal with matters affecting economic and commercial rights and obligations, including human rights, and agreed upon the taking of steps which would necessitate change to the domestic or municipal legal orders operating in their territories. The changes agreed upon called for the creation of new public and private rights and obligations and the modification of existing public and private rights and obligations.
Part 2 of the Amending Act comprises ss 3 and 4 and is headed " Objects ". Section 4 thereof repeals s 3 of the Act and substitutes a new s 3. This states as the principal object of the legislation the provision of a framework for the prevention and settlement of industrial disputes which promotes the economic prosperity and welfare of the people of Australia. The new s 3 goes on in pars (a)-(g) to identify the means by which the framework is provided. Of particular importance for immediate purposes is par (b)(ii) which identifies the provision of the means for "ensuring that labour standards meet Australia's international obligations" and par (g) which states, as one of the Act's objects, the aim of:
helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
Part 4 of the Amending Act comprises ss 18-24 and is headed " Minimum Entitlements of Employees ". The Commonwealth contends that these provisions meet or implement Australia's international obligations in such a manner as to obtain legislative support in the external affairs power. Section 19 of the Amending Act inserts in s 4(1) of the Act definitions of, respectively, the "Anti-Discrimination Conventions", the "Equal Remuneration Convention", the "Family Responsibilities Convention", the "Minimum Wages Convention", and the "Termination of Employment Convention". Section 24 of the Amending Act amends the Act by adding to the four Schedules already found therein, Schs 5-16. These new Schedules are vital for the operation of s 21 which inserts in the Act a new Pt VIA, headed " Minimum Entitlements of Employees " and comprising, in the Act, ss 170AA-170KAA. Certain provisions of the new Pt VIA themselves were amended by the Second Amending Act. Reference will be made to these further amendments as appropriate.
The new Pt VIA is divided into Divs 1-6. Division 1 (ss 170AA-170AH) is headed "Minimum wages", Div 2 (ss 170BA-170BI), "Equal remuneration for work of equal value", Div 3 (ss 170CA-170HB), "Termination of employment", Div 4 (ss 170JA-170JH), "Orders and proceedings", Div 5 (ss 170KA-170KC), "Parental leave", and Div 6 (s 170KAA), "Leave to care for immediate family". Division 3 is further divided into Subdivs A-F to which further reference will be made. No specific challenge is directed to the validity of Divs 4 and 6.
Part 5 of the Amending Act comprises ss 25-35 and is headed " Promoting Bargaining and Facilitating Agreements ". Section 31 inserted into the Act a new Pt VIB, comprising six Divisions. Division 4 thereof (ss 170PA-170PP) is headed "Immunity from civil liability" and its validity is challenged.
Section 80 of the Amending Act inserted into the Act a new section, s 334A, dealing with dismissal of employees for engaging in industrial action. This is said to be beyond power.
Finally, specific challenge is made to particular provisions introduced by the Amending Act in apparent implementation of the object specified in the new s 3(g). We have set out the text of par (g). The plaintiff States challenge the validity of s 150A(2)(b) of the Act, inserted by s 17 of the Amending Act and dealing with review of awards by the Australian Industrial Relations Commission (the Commission), together with provisions in the new Pts VIA and VIB, being respectively s 170DF(1)(f), and ss 170MD(5) and 170ND(10). Section 170MD is in Div 2 of Pt VIB, headed "Certified agreements" and s 170ND is in Div 3 thereof, headed "Enterprise flexibility agreements".
The object of Div 1 of Pt VIA, as set out in s 170AA, is to give effect, or further effect, to the ILO Minimum Wage Fixing Convention 1970, a copy of the English text of which is set out in Sch 5 to the Act. Expressions used in Div 1 which are also used in the Minimum Wages Convention have the same meanings as they do in that Convention (s 170AB).
The primary operation of Div 1 is as set out in s 170AC. That section confers power on the Commission to make orders setting:
(a) the same minimum wage for all employees in a group specified in the order; or
(b) different minimum wages for different categories of employees in a group specified in the order.
Various other provisions regulate the exercise of the power conferred by s 170AC. They will be referred to in the context of the argument that that power cannot validly be conferred on the Commission in exercise of the power of the Parliament to legislate with respect to external affairs.
Secondary or additional operation is given to Div 1 by s 170AH of the Act, in the sense that the Division is also to operate "[as] if section 170AA were repealed" [75] . It will later be necessary to refer to the provisions of Div 1 defining the scope of that operation.
The questions in the case stated which directly relate to Div 1 of Pt VIA may be paraphrased as follows:
• Are the provisions of Div 1 of Pt VIA of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid? In this regard the plaintiff States challenge the primary operation of the provisions on the basis that they are not laws with respect to external affairs. There is a further question whether, in their secondary operation, they are laws for the conciliation and arbitration of industrial disputes.
• Are the provisions of Div 1 of Pt VIA of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid in so far as they purport to apply to the States?
• Are the provisions of Div 1 of Pt VIA of the Act, or any of them, beyond the legislative powers of the Commonwealth and invalid in their application to the States of Victoria and Western Australia; and to the States of South Australia and Western Australia in relation to persons employed to enable them to continue to exist and function as such?
(iii) The primary operation of the minimum wage provisions and the external affairs power
In its primary operation, Div 1 empowers the Commission to make orders setting minimum wages upon receipt of an application in that behalf either from an employee included in the group to be covered by the order, or from a trade union whose rules entitle it to represent the industrial interests of such employees (s 170AD). Section 170AC empowers the Commission to make an order, in respect of a group of employees specified in the order, setting the same minimum wage for all those employees or different minimum wages for different categories of such employees. This power is conditioned by s 170AE. The Commission must make an order if, and must not make an order unless, it is satisfied that the terms of employment of the group of employees to be covered by the order are such that coverage by a system of minimum wages is appropriate (s 170AE(1)(a)). Before deciding what group an order should cover, and whether the Commission is satisfied as to the conditions provided in s 170AE(1)(a) being met, the Commission must give to each trade union whose rules entitle it to represent the industrial interests of any of the employees concerned, and to each organisation or association representing employers of any of those employees, an opportunity to express their respective views and must take into account the views expressed (s 170AE(4)).
Further, before making an order, the Commission must give an opportunity to be heard to the person who applied for it and each employer of employees to be covered by it (s 170AE(5)).
Section 170AE(2) requires an order to specify, and exclude from its operation, such of the employees in the group covered by the order as are "ineligible", a term expounded in sub-s (3). This specifies that an employee is ineligible if, and only if, any one of four circumstances applies. One is that minimum wages for the relevant employee are set by an award within the meaning of the Act, and another is that there are proceedings under Pt VI of the Act that relate to the setting, or adjusting from time to time, of minimum wages for that employee (sub-s (3)(b), (c)). An employee is also ineligible if minimum wages can be set and adjusted from time to time by a State industrial authority which has the power to set minimum wages by compulsory arbitration (par (a)). Finally, an employee is ineligible if minimum wages are set by an agreement entered into under a State law (i) which sets minimum wages that, if the agreement had not been entered into, could have been set by a State arbitrator by compulsory arbitration, (ii) which prevails over any inconsistent order, award, decision or determination of a State industrial authority, and (iii) which, during a particular period, but only during that period, prevents those minimum wages from being set or adjusted by a State arbitrator by compulsory arbitration (sub-ss (3)(d) and (6)).
The Division is not intended to limit any right that a person or trade union otherwise may have to establish minimum wages (s 170AG).
Section 170AF specifies matters to which the Commission must have regard in setting the level of minimum wages under Div 1. The section states:
In setting the level of minimum wages under this Division, the Commission must have regard to the principles it would apply in setting the level of those minimum wages in performing its functions under Part VI, but must also have regard, so far as possible and appropriate in relation to Australian practice and conditions, to:
(a) the needs of workers and their families, taking into account the general level of wages in Australia, the cost of living, social security benefits and the relative living standards of other social groups; and
(b) economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment.
It is appropriate now to turn to the relevant provisions of the Minimum Wages Convention. The purpose of the Convention is indicated in the recitals to the Convention, two of which provide:
Considering that these [previous] Convention[s] have played a valuable part in protecting disadvantaged groups of wage earners,
Considering that the time has come to adopt a further instrument complementing these Conventions and providing protection for wage earners against unduly low wages, which, while of general application, pays special regard to the needs of developing countries.
Article 3 is reflected in the terms of s 170AF. The Article states that the elements to be taken into consideration in determining the level of minimum wages shall, as far as possible and appropriate in relation to national practice and conditions, include the matters set out in pars (a) and (b) thereof, the terms of which are adopted in pars (a) and (b) of s 170AF.
Article 2 specifies that the minimum wages shall have the force of law and shall not be subject to abatement. Paragraph 1 of Art 4 obliges members of the ILO which ratify the Convention to create or maintain machinery adapted to national conditions and requirements whereby minimum wages for groups of wage earners can be fixed and adjusted from time to time. Paragraph 2 requires in connection with the establishment, operation and modification of such machinery provision for full consultation with representative organisations of employers and workers concerned or, where no such organisations exist, representatives of employers and workers concerned. Finally, par 3 of Art 4 states:
Wherever it is appropriate to the nature of the minimum wage fixing machinery, provision shall also be made for the direct participation in its operation of -
(a) representatives of organisations of employers and workers concerned or, where no such organisations exist, representatives of employers and workers concerned, on a basis of equality;
(b) persons having recognised competence for representing the general interests of the country and appointed after full consultation with representative organisations of employers and workers concerned, where such organisations exist and such consultation is in accordance with national law or practice.
Both the terms of the Convention and the terms of the legislation are general. However, as has been indicated, and as the plaintiff States conceded, the terms of the legislation closely follow the requirements of the Convention. For example, the Convention requires consultation with worker and employer groups concerning the scope of the group of workers that the minimum wages should cover, and the direct participation of those groups in the wage fixing process where "it is appropriate to the nature of the minimum wage fixing machinery". These requirements are mirrored in provisions of the Act which require the Commission to give trade unions and employer organisations an opportunity to "express their respective views to the Commission" on the group to be covered (s 170AE(4)) and an opportunity for the applicant and employers of employees to be covered to be heard in determining the wages to be fixed (s 170AE(5)).
Excluded from the jurisdiction of the Commission are groups for whom the Commission is not satisfied that the terms of employment of employees make the coverage by a system of minimum wages appropriate, or groups where all of the employees are covered by other means for setting minimum wages such as State arbitrators, or an employment agreement setting minimum wages under State law, or a federal award (s 170AE(3) and (6)). These provisions can reasonably be considered as appropriate and adapted to the implementation of obligations under the Convention. The exclusions from the jurisdiction of the Commission mean that, where other satisfactory provisions for the setting of minimum wages exist, those provisions will not be displaced by the scheme implementing the Convention. That is consistent with the Convention. It removes the potential for an argument that the legislation is not reasonably capable of being considered appropriate and adapted to fulfilling Australia's obligation under the Convention to provide a system of minimum wage fixing because it displaces satisfactory schemes for minimum wage fixing already in existence under State law. That the obligations of the Convention are expressed in broad general terms does not deny them the character of obligations, enforceable by way of complaint pursuant to Art 26 of the Constitution of the ILO and susceptible to implementation by a law of the Commonwealth. The validity of such a law falls for determination not by the ILO but by this Court, the criterion being whether the law can reasonably be considered to be appropriate and adapted to the implementation of the Convention. Subject to consideration of the question whether it discriminates against the States, Div 1 of Pt VIA is valid in its primary operation.
(iv) The secondary operation of the minimum wage provisions and the conciliation and arbitration power
In its secondary operation, Div 1 of Pt VIA authorises the Commission to determine applications for the setting of minimum wages by arbitration if, but only if:
(a) it considers that the order is necessary to prevent an industrial dispute about minimum wages for employees; and
(b) it has given to each organisation or other person who, in its opinion, would be likely to be a party to the dispute an opportunity to be heard in relation to the making of the order (s 170AH(3)).
The Commission's order under s 170AH is binding only on such organisations as have been given an opportunity to be heard and such persons who are members of those organisations as the Commission specifies (s 170AH(4)).
In their statements of claim, the plaintiff States challenge the secondary or additional operation given to Div 1, Pt VIA of the Act and this is reflected in the questions asked in the case stated. However, it was not argued that the provisions which give secondary or additional operation to Div 1 are invalid on any basis other than that they discriminate against the States. Rather, it was conceded in the written submissions for South Australia, which were expressly adopted in the written submissions for Victoria and for Western Australia, that, subject only to the question of discrimination, the provisions are not beyond legislative power. That concession was correct. We shall indicate briefly why that is so.
The secondary or additional effect given to Div 1 by s 170AH is clearly intended to be an exercise of the power conferred on the Parliament by s 51(xxxv) of the Constitution to legislate with respect to conciliation and arbitration for the prevention and settlement of interstate industrial disputes. So much emerges from the fact that it is a power to be exercised by arbitration to prevent an "industrial dispute" which is defined in s 4 of the Act in terms which echo the constitutional grant of power [76] .
The power conferred by s 51(xxxv) of the Constitution is a power to legislate with respect to conciliation and arbitration for the prevention, as well as for the settlement of interstate industrial disputes. Thus, as is well settled, it extends to a situation that is likely to give rise to an interstate industrial dispute [77] .
The question whether a situation is likely to give rise to an interstate industrial dispute is one that can be answered only by making a judgment or forming an opinion in that regard. Once it is accepted, as it must be, that the power conferred by s 51(xxxv) of the Constitution extends to a situation likely to give rise to an interstate industrial dispute, it follows that it extends to a situation in which a body entrusted with the power of conciliation and arbitration, as the Commission is, forms the opinion that there is a situation of that kind. Certainly, it extends to a law authorising the Commission to arbitrate claims for minimum wages if it considers that that is necessary to prevent an industrial dispute, which is the effect of s 170AH of the Act.
(v) Minimum wage provisions and discrimination against the States
The plaintiff States submit that the provisions of Div 1 of Pt VIA of the Act offend against the implied constitutional prohibition first identified in Melbourne Corporation v The Commonwealth [78] and since expounded in a number of cases [79] . The prohibition was most recently considered in Re Australian Education Union; Ex parte Victoria [80] . The majority in that case identified the scope and content of the prohibition as follows [81] :
The limitation consists of two elements: (1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities ("the limitation against discrimination") and (2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments. There are three matters to be noted with respect to the second element of the prohibition identified in Re Australian Education Union. First, it precludes the "exercise of Commonwealth legislative or executive powers "to control the States" " [82] for that would constitute "an exercise of power inconsistent with the continued existence of the States as independent entities and their capacity to function as such" [83] . The second matter is that, as was held in that case, it precludes laws which prevent a State from exercising its "right to determine the number and identity of the persons whom it wishes to employ, the term of appointment of such persons and, as well, the number and identity of the persons whom it wishes to dismiss on redundancy grounds" [84] . Finally, in the case of those employed at the higher levels of government, it precludes laws which prevent the State from determining "the terms and conditions on which those persons shall be engaged" [85] . 1. (1947) 74 CLR 31. 2. See, eg, Bank of NSW v The Commonwealth (1948) 76 CLR 1; Victoria v The Commonwealth (the Payroll Tax Case) (1971) 122 CLR 353; Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25; Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192; Re Lee; Ex parte Harper (1986) 160 CLR 430; Re State Public Services Federation; Ex parte Attorney-General (WA) (1993) 178 CLR 249. 3. (1995) 184 CLR 188. 4. Re Australian Education Union (1995) 184 CLR 188 at 231. 5. Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 247, per Deane J. 6. Re Australian Education Union (1995) 184 CLR 188 at 232. 7. Re Australian Education Union (1995) 184 CLR 188 at 232. 8. Re Australian Education Union (1995) 184 CLR 188 at 233.
The arguments for the plaintiff States with respect to the minimum wage provisions in Div 1 of Pt VIA were put in two different ways, reflecting the two elements of the prohibition as stated in Re Australian Education Union. First, they argued that, in their primary operation, the provisions discriminate against those States which do not have or, perhaps, elect not to maintain a system of compulsory arbitration for the resolution of industrial disputes. Secondly, they contended that the provisions of Div 1 of Pt VIA infringe the second element of the prohibition in that they purport to apply to persons employed by the States at the higher levels of government. In this last regard, the argument was made by reference to the primary operation of Div 1, but applies mutatis mutandis to its secondary operation.
As already indicated, the first argument was made by reference to s 170AE, which sets out the limits of the primary operation of the Division. As previously described, by s 170AE(1), the Commission is required to make an order setting minimum wages if, and is required not to make an order unless, satisfied:
(a) that the terms of employment of the group of employees to be covered by the order are such that coverage by a system of minimum wages is appropriate; and
(b) at least some of the employees in the group are not ineligible under subsection (3).
By sub-s (2) the order must specify and exclude ineligible employees. Sub-section (3) identifies ineligible employees as those for whom minimum wages are set "by an award within the meaning of [the] Act" [86] , or in respect of whom minimum wage proceedings are pending under Pt VI of the Act, and by pars (a) and (d) respectively, those for whom "minimum wages can be set and adjusted from time to time by a State arbitrator" and those for whom "a State employment agreement sets minimum wages". 1. Note that by s 4(1) "award" is defined as: "(a) an award or order that has been reduced to writing under subsection 143(1); or (b) a certified agreement; or (c) an enterprise flexibility agreement."
In general terms, the effect of the definitions of "State arbitrator" [87] and "State employment agreement" [88] in s 170AE(6) is that a minimum wages order cannot be made for employees for whom a minimum wage can be set by compulsory arbitration by a State industrial tribunal or in respect of whom minimum wages which could have been arbitrated but have, instead, been agreed under a State law which allows that agreement to prevail over awards. It is common ground that, when Div 1 of Pt VIA came into operation, some States had legislated for a system of compulsory arbitration and some had not. Western Australia still has not. It is put that the provisions of Div 1 single out and, thus, discriminate against Western Australia and any other State which elects not to maintain a system of compulsory arbitration.
The provisions of Div 1 of Pt VIA are of general application and do not distinguish between employees of a State and other employees. And there is no suggestion that, in their practical operation, they operate upon States and their employees differently from other employers and employees. Rather, the argument that the provisions are discriminatory was put on the basis that "if a particular State does not maintain a compulsory arbitration system for its employees, the State and its employees are subjected to the power of the Commission to impose a common rule which fixes minimum wages for those employees" while other States are not. That argument mistakes the nature and effect of the provisions in question.
The provisions of Div 1 of Pt VIA are directed to ensuring that persons whose wages are not protected by an award (whether State or federal) or by an agreement which prevails over awards may obtain the benefit of a minimum wages order under s 170AE. The class of persons in respect of whom an order may be made is selected, not by reference to employment by or in a State, but by reference to practical criteria which take account of the general pattern of industrial regulation and of the way in which the rights of wage earners are generally protected in Australia.
Moreover, the criteria which determine those for whom an order may be made under Div 1 of Pt VIA do not necessarily entail the consequence that proportionately more employees who work in Western Australia will be covered by orders under Div 1 of Pt VIA than those who work in other States. Nor do they necessarily entail the consequence that proportionately more employees of the State of Western Australia will be covered than employees of other States. Coverage will depend on a range of factors, including, significantly, the pattern of federal award coverage.
The question whether a provision is discriminatory is to be determined from the purpose of the enactment ascertained "by reference to the substance and actual operation of the law in the circumstances to which it applies" [89] . Given that, first, the criteria selected to determine those for whom an order may be made under s 170AE bear a real and rational relationship with the general system of wage fixation as it has developed in this country and, secondly, that it cannot be said that the provisions of Div 1 of Pt VIA necessarily operate with different impact on or in Western Australia, there is no basis for holding that the provisions in question discriminate against that State or, indeed, any other State which elects not to maintain an industrial system involving compulsory arbitration [90] .
The second argument with respect to the provisions of Div 1 of Pt VIA of the Act is based on the holding in Re Australian Education Union that the Commonwealth may not legislate to prevent a State from determining the rights and conditions of those employed at the higher levels of government. According to the argument, the power conferred on the Commission by ss 170AE and 170AH is conferred in terms wide enough to include such employees and, thus, the provisions of Div 1 of Pt VIA are, to that extent, invalid.
As already indicated, s 6 specifies that the Act binds the Crown in various capacities, including "in right of each of the States" [91] . That provision governs the application of the substantive provisions of the Act. In so far as the substantive provisions are expressed in general terms or in terms wide enough to apply to or permit of orders regulating the terms and conditions of those employed at the higher levels of government, the question is not whether, on that account, those provisions are invalid in their application to the States, but whether s 6 is invalid in its specification that the Act and, thus, those provisions bind the States.
Section 6 of the Act is not, in terms, subject to any limitation or prohibition. More particularly, it is not, in terms, made subject to those matters pertaining to State employees which were identified in Re Australian Education Union [92] as falling within the scope and content of the implied limitation recognised in the Melbourne Corporation Case [93] . The question thus arises whether, pursuant to s [94] of the Act or s 15A of the Acts Interpretation Act 1901 Cth (the Interpretation Act), s 6 can be read as not binding the States with respect to those matters, particularly as not binding them with respect to the terms and conditions of those employed at the higher levels of government.
It is convenient first to consider s 15A of the Interpretation Act which provides:
Every Act shall be read and construed subject to the Constitution and so as not to exceed the legislative power of the Commonwealth, to the intent that where any enactment thereof would but for this section have been construed as in excess of that power, it shall nevertheless be a valid enactment to the extent to which it is not in excess of that power.
Section 15A of the Interpretation Act may fall for application in two distinct situations. It may fall for application in relation to "particular clauses, provisos and qualifications, separately expressed, which are beyond legislative power" [95] . It may also fall for application in relation to general words or expressions [96] . It is well settled that s 15A cannot be applied to effect a partial validation of a provision which extends beyond power unless "the operation of the remaining parts of the law remains unchanged" [97] . Nor can it be applied to a law expressed in general terms if it appears that "the law was intended to operate fully and completely according to its terms, or not at all" [98] .
Where a law is expressed in general terms, it may be more difficult to determine whether Parliament intended that it should, nonetheless, have a partial operation. And there is an additional difficulty if it "can be reduced to validity by adopting any one or more of a number of several possible limitations" [99] . It has been said that if, in a case of that kind, "no reason based upon the law itself can be stated for selecting one limitation rather than another, the law should be held to be invalid" [100] .
The limitation by reference to which a law is to be read down may appear from the terms of the law or from its subject matter [101] . Thus, a law which is "clearly made with the intention of exercising the power to make laws with respect to trade and commerce" can be read down "so as to limit its application to inter-State and foreign trade and commerce" [102] . Similarly, where a law is intended to operate in an area where Parliament's legislative power is subject to a clear limitation, it can be read as subject to that limitation.
In the present case, s 6 purports to subject the States to a regime which specifies certain terms and conditions with respect to employment generally and which, in relation to other matters, permits the Commission to regulate the terms and conditions on which persons are employed. That is an area in which the legislative power of the Parliament is limited in the manner explained in Re Australian Education Union. The nature and subject matter of the Act suggest the limitation by which s 6 may be read down within constitutional power if its provisions would otherwise infringe that limitation. In other words, s 6 can be read as binding the States to the extent that the provisions of the Act do not prevent them from determining the number of persons they wish to employ, the term of their appointment, the number and identity of those they wish to dismiss on redundancy grounds and the terms and conditions of those employed at the higher levels of government.
If s 6 is read down as indicated, the operation of the substantive provisions of the Act is correspondingly limited but their operation is otherwise unaffected. Thus, if any provision of the Act would otherwise operate to prevent the States from determining for themselves any of those matters which were held in Re Australian Education Union to be beyond the legislative power of the Commonwealth, the reading down of s 6 precludes invalidity for infringing the limitation on Commonwealth legislative power. That being so, it is unnecessary to consider the effect of s 7A of the Act.
It is necessary now to consider s 170AE which confers power on the Commission to make orders setting minimum wages for those for whom it "is satisfied that coverage by a system of minimum wages is appropriate". The terms of s 170AE are wide enough to authorise orders with respect to those employed at the higher levels of government. That being so, s 6 is to be read down as earlier indicated. And when so read down, s 170AE does not authorise orders of that kind. The same is true of s 170AH(3)(a) which, in terms, allows that "[t]he Commission may make an order only if it considers that the order is necessary to prevent an industrial dispute". Thus, neither s 170AE nor s 170AH infringes the implied constitutional limitation identified in Melbourne Corporation and more fully explained in Re Australian Education Union.
(vi) Conclusion with respect to the minimum wage provisions
The provisions of Div 1 of Pt VIA are valid in their entirety. However, by reason of the reading down of s 6, ss 170AE and 170AH do not bind the States with respect to persons employed at the higher levels of government.
Equal Remuneration for Work of Equal Value - Pt VIA, Div 2, ss 170BA-170BI
Division 2 of Pt VIA is in similar form to Div 1. The object of the Division is to give effect, or further effect, to no less than six international instruments (s 170BA). The first four are defined in s 4(1) as the "Anti-Discrimination Conventions". They are (a) the Equal Remuneration Convention 1951, the English text of which is set out in Sch 6 to the Act, (b) the Convention on the Elimination of all Forms of Discrimination against Women, the English text of which is set out in the Schedule to the Sex Discrimination Act 1984 Cth, (c) the Convention concerning Discrimination in respect of Employment and Occupation, the English text of which is set out in Sch 1 to the Human Rights and Equal Opportunity Commission Act 1986 Cth (the Human Rights Act), and (d) Arts 3 and 7 of the International Covenant on Economic, Social and Cultural Rights, the English text of which is set out in Sch 8 to the Act.
The fifth and sixth of these international instruments are identified in pars (b) and (c) of s 170BA by reference to the English text set out respectively in Sch 7 and Sch 9 of the Act. Each is a Recommendation adopted by the General Conference of the ILO. The former is the Equal Remuneration Recommendation 1951, also known as Recommendation No 90. The latter is the Discrimination (Employment and Occupation) Recommendation 1958, also known as Recommendation No 111.
By s 170BB(1), a reference in Div 2 to "equal remuneration for work of equal value" is a reference to "equal remuneration for men and women workers for work of equal value". This expression is given by s 170BB(2) the same meaning as it has in the Equal Remuneration Convention adopted by the General Conference of the ILO on 29 June 1951. The relevant term is, by Art 1, said to refer to "rates of remuneration established without discrimination based on sex".
Division 2 of Pt VIA also has a primary and a secondary operation. Its primary operation is effected by s 170BC(1) which provides, subject to the Division, that "the Commission may make such orders as it considers appropriate to ensure that, for employees covered by the orders, there will be equal remuneration for work of equal value". The secondary or additional operation of the Division is effected by s 170BI(3)(a) which authorises the Commission to make an order only if it considers "the order is necessary to prevent an industrial dispute about equal remuneration for work of equal value". The power to make an order under s 170BI(3)(a) is subject to the same limitations and requirements referable to the conciliation and arbitration power as those which attend the power to make an order under s 170AH with respect to minimum wages.
The questions in the case stated which bear directly on the provisions with respect to equal remuneration may be paraphrased as follows:
• Are the provisions of Div 2 of Pt VIA of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid? The plaintiff States challenge the Division on the basis that its primary operation is not supported by the external affairs power. There is a further question whether, in its secondary operation, it is supported by the conciliation and arbitration power.
• Are the provisions of Div 2 of Pt VIA of the Act, or any part of such provisions, invalid in their application to the States of South Australia and Western Australia in relation to persons employed to enable those States to continue to exist and function as such?
(iii) The primary operation of the equal remuneration provisions and the external affairs power
It should be noted that, in its primary operation, in reliance upon the external affairs power, Div 2 does not limit the Commission to making an order thereunder only if it considers that this is necessary to prevent an industrial dispute about equal remuneration for work of equal value. Nor is Div 2 intended to limit any rights that a person or trade union otherwise may have to secure equal remuneration for work of equal value (s 170BH).
Under s 170BD, the Commission must only make an order under the Division if it has received an application therefor from an employee to be covered by the order or a trade union whose rules entitle it to represent the industrial interests of such employees, or from the Sex Discrimination Commissioner, holding office under the Sex Discrimination Act. Furthermore, the Commission must refrain from considering the application or from determining it if it is satisfied that there is available to the applicant, or to the employees represented by the applicant, an adequate alternative remedy under a law of the Commonwealth (other than Div 2), or under a law of a State or Territory which will ensure, for the employees concerned, equal remuneration for work of equal value (s 170BE).
The crucial provisions are in ss 170BC, 170BF and 170BG. The first and third of these refer in terms to one or more of the international instruments listed in s 170BA to which it is the object of the Division to give effect or further effect.
Section 170BC empowers the Commission to make orders requiring equal remuneration. It states:
(1) Subject to this Division, the Commission may make such orders as it considers appropriate to ensure that, for employees covered by the orders, there will be equal remuneration for work of equal value.
(2) Without limiting subsection (1), an order under this Division may provide for such increases in rates (including minimum rates) of remuneration (within the meaning of the Equal Remuneration Convention) as the Commission considers appropriate to ensure that, for employees covered by the order, there will be equal remuneration for work of equal value.
(3) However, the Commission may make an order under this Division only if:
(a) the Commission is satisfied that, for the employees to be covered by the order, there is not equal remuneration for work of equal value; and
(b) the order can reasonably be regarded as appropriate and adapted to giving effect to:
(i) one or more of the Anti-Discrimination Conventions; or
(ii) the provisions of [Recommendation No 90 or Recommendation No 111] (emphasis added).
Section 170BF deals with immediate and progressive introduction of equal remuneration. It states:
The order may implement equal remuneration for work of equal value when the order takes effect. However, if it is not deemed feasible to implement it immediately, the order may implement it in stages (as provided in the order).
Finally, s 170BG deals with reduction of remuneration by stating:
(1) An employer must not reduce an employee's remuneration (within the meaning of the Equal Remuneration Convention) for the reason, or for reasons including the reason, that an application or order has been made under this Division.
(2) If subsection (1) is contravened, the purported reduction is of no effect.
Both s 170BC(2) and s 170BG(1) turn upon the meaning given to the term "remuneration" by the Equal Remuneration Convention. Paragraph (a) of Art 1 thereof states that, for the purposes of that Convention:
the term "remuneration" includes the ordinary, basic or minimum wage or salary and any additional emoluments whatsoever payable directly or indirectly, whether in cash or in kind, by the employer to the worker and arising out of the worker's employment.
Article 2 of the Equal Remuneration Convention states as follows:
(b) legally established or recognised machinery for wage determination;
(c) collective agreements between employers and workers; or
Recommendation No 90 recites that it is desirable to indicate certain procedures for the progressive application of the principles laid down in the Equal Remuneration Convention, and goes on to "recommend" that each member of the ILO should, subject to the provisions of Art 2 of that Convention, apply the provisions which follow and report to the International Labour Office as requested by the Governing Body of the ILO on measures taken to give effect to them.
(1) Where appropriate in the light of the methods in operation for the determination of rates of remuneration, provision should be made by legal enactment for the general application of the principle of equal remuneration for men and women for work of equal value.
(2) The competent public authority should take all necessary and appropriate measures to ensure that employers and workers are fully informed as to such legal requirements and, where appropriate, advised on their application.
Paragraph 4 provides for the progressive application of the principle of equal remuneration for men and women for work of equal value where it has not been feasible to implement that principle immediately. It states that appropriate provision should be made or caused to be made, as soon as possible, for progressive application of this principle by such measures as decreasing the differential between rates of remuneration for men and women for work of equal value and that, where a system of increments is in force, by providing equal increments for men and women performing work of equal value. Paragraph 4 may be compared with s 170BF.
The Discrimination (Employment and Occupation) Convention 1958 is more general in its terms. Article 1 defines "discrimination" for the purposes of the Convention as including:
(a) any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation;
(b) such other distinction, exclusion or preference which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation as may be determined by the Member concerned after consultation with representative employer's and worker's organisations, where such exist, and with other appropriate bodies.
Each Member for which this Convention is in force undertakes to declare and pursue a national policy designed to promote, by methods appropriate to national conditions and practice, equality of opportunity and treatment in respect of employment and occupation, with a view to eliminating any discrimination in respect thereof.
Each Member for which this Convention is in force undertakes, by methods appropriate to national conditions and practice -
(b) to enact such legislation and to promote such educational programmes as may be calculated to secure the acceptance and observance of the policy.
The provisions of the International Covenant on Economic, Social and Cultural Rights relied upon are as follows:
The States Parties to the present Covenant undertake to ensure the equal right of men and women to the enjoyment of all economic, social and cultural rights set forth in the present Covenant.
The States Parties to the present Covenant recognise the right of everyone to the enjoyment of just and favourable conditions of work which ensure, in particular:
(a) Remuneration which provides all workers, as a minimum, with:
(i) Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work.
The plaintiff States do not dispute that the legislation follows the terms of the various Conventions. The issues that arise are in relation to s 170BC(3). They are (a) whether the power of the Commission may be limited in the manner attempted by the section and (b) the effect of the reliance on the ILO Recommendations.
The power of the Commission in s 170BC(3) to make an order is conditional upon the requirement that the order "can reasonably be regarded as appropriate and adapted to giving effect to" one of the Conventions or Recommendations referred to. That wording plainly reflects the criterion for validity of a law enacted in reliance on s 51(xxix) to implement a treaty. It was supported by a number of members of this Court in the Tasmanian Dam Case [103] . If the broad provisions of the Division had the effect that they allowed the Commission to make orders that were not so limited, arguably the section would be beyond power. The limitation has the effect that the general nature of the provision is confined in effect by the constitutional limit on the power of the Parliament to enact such legislation. It is not the case that the Commission is given the power to determine the constitutionality of its own order as might be the case if the words of par (b) were preceded by the words that appear in par (a), "the Commission is satisfied that". Rather, the test is an objective one, and is subject to judicial review by this Court or the Industrial Relations Court of Australia (the Industrial Relations Court).
The section refers separately to a measure being reasonably regarded as appropriate and adapted for giving effect to Recommendation No 90 or Recommendation No 111. That provision can be supported under s 51(xxix) if, but only if, the terms of these Recommendations themselves can reasonably be regarded as appropriate and adapted to giving effect to the terms of the Conventions to which they relate. In our view, they can be so regarded. Hence measures that fall within the terms of s 170BC(1) and implement the terms of the Recommendations will fall within the terms of s 170BC(3)(b)(i). On this line of reasoning, the words "can reasonably be regarded as appropriate and adapted to" in s 170BC(3)(b) may be superfluous in relation to the Recommendations but are obviously designed to cover the situation where the Recommendations are relied upon of themselves to support an exercise of the external affairs power. This is a point which, at this stage, it is not necessary to decide.
Subject to a consideration of the question whether it discriminates against the States, the Division is valid in its primary operation.
(iv) The secondary operation of the equal remuneration provisions and the conciliation and arbitration power
As with the minimum wage provisions, the secondary operation of the equal pay provisions is challenged in the statements of claim but, subject only to the question whether the provisions discriminate against the States, is conceded to be valid in the written submissions for South Australia which were adopted by counsel for the other plaintiff States. For the reasons given with respect to the secondary operation of the minimum wage provisions, the provisions which give Div 2 of Pt VIA its secondary operation are, subject only to the question of discrimination against the States, valid laws with respect to conciliation and arbitration for the prevention of interstate industrial disputes.
(v) Equal remuneration provisions and discrimination against the States
As with the provisions of Div 1, the provisions of Div 2 of Pt VIA are challenged on the basis that they permit orders with respect to persons employed by the States at the higher levels of government. In its primary operation, Div 2 allows, in s 170BC(1), that, subject to the Division "the Commission may make such orders as it considers appropriate to ensure that, for employees covered by the orders, there will be equal remuneration for work of equal value". In its secondary operation, it allows, in s 170BI(3)(a), that "the Commission may make an order if it considers that the order is necessary to prevent an industrial dispute about equal remuneration for work of equal value". Given that s 6 of the Act is to be read down in the manner earlier indicated, neither s 170BC(1) nor s 170BI(3) authorises orders with respect to persons employed by the States at the higher levels of government.
(vi) Conclusion with respect to the equal remuneration provisions
The provisions of Div 2 of Pt VIA are valid in their entirety. However, by reason of the reading down of s 6, ss 170BC(1) and 170BI(3) do not bind the States with respect to persons employed at the higher levels of government.
Termination of Employment - Pt VIA, Div ss 170CA-170HB
These provisions, inserted by the Amending Act, have, in various respects, been amended first by the Second Amending Act, and now by the 1995 Act. For the reasons earlier given, the latter amendments will not be taken into account here.
Division 3 is subdivided into seven Subdivisions. Subdivision A (ss 170CA-170CD) is headed "Object and interpretation". Subdivision B (ss 170DA-170DG) contains the central provisions of the Division and is headed "Requirements for lawful termination of employment".
The significance of the obligations imposed upon employers in respect of termination of employment by Div 3 can be gauged by the remedies given by Subdiv C (ss 170EA-170EH) in respect of unlawful termination. In particular, application may be made to the Industrial Relations Court by an employee (s 170EA(1)) for a remedy in respect of a termination of that person's employment and in certain cases now provided for by s 170EE (inserted by s 8 of the Second Amending Act), the Industrial Relations Court may order reinstatement and payment of compensation. These remedies are available in cases of termination in contravention of s 170DC (denial of opportunity to respond to allegations), s 170DE (harsh, unjust or unreasonable termination) and breach of s 170DF (termination on impermissible grounds). It will be necessary to refer more particularly to s 170EDA, dealing with onus of proof in certain of these applications to the Industrial Relations Court.
Subdivision CA (s 170EI) was inserted by s 9 of the Second Amending Act. It empowers the prescription by regulations of a formula for annual indexation of certain amounts for which provision is made in ss 170CD and 170EE. Subdivision D (ss 170FA-170FE) empowers the Commission to make orders for the purpose of giving effect to certain requirements of Arts 12 and 13 of the Termination of Employment Convention 1982. The English text of that Convention is set out in Sch 10 of the Act and it recites its adoption on 22 June 1982 by the General Conference of the ILO. Subdivision E (ss 170GA-170GD) authorises the Commission to make remedial orders where an employer has failed to consult the relevant trade unions in relation to the termination of employment of fifteen or more employees for reasons of an economic, technological, structural or similar nature. Finally, Subdiv F (ss 170HA-170HB) deals with miscellaneous matters, in particular by providing in s 170HA that, after the Termination of Employment Convention takes effect (on 26 February 1994), any award or order of the Commission which is inconsistent with the requirements of that Convention is not to have effect to the extent of that inconsistency.
Leaving aside questions relating to s 170DF(1)(f) and (g), the questions in the case stated relating to the provisions dealing with termination of employment may be summarised as follows:
• Are the provisions of Div 3 of Pt VIA of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth? In this regard the plaintiff States deny and the Commonwealth asserts that the provisions are authorised by the power to legislate with respect to external affairs.
• Are the provisions of Div 3 of Pt VIA of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid in so far as they purport to apply to the States?
• Are the provisions of Div 3 of Pt VIA of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid in their application to the States of South Australia or Western Australia in relation to persons employed to enable those States to continue to exist and function as such?
(iii) Termination of employment provisions and the external affairs power
To determine whether Div 3 of Pt VIA is authorised by the power to legislate with respect to external affairs, it is necessary to refer in more detail to the provisions of Subdiv A and Subdiv B.
Section 170CA(1) states that the object of Div 3 is to give effect or to give further effect to the Termination of Employment Convention and to the Termination of Employment Recommendation 1982, also known as Recommendation No 166 adopted by the General Conference of the ILO on 22 June 1982. A copy of the English text of that Recommendation is set out in Sch 11 to the Act. An expression in Div 3 has the same meaning as in the Termination of Employment Convention (s 170CB). In particular, Art 3(4) of the Convention states that, for its purposes, the terms "termination" and "termination of employment" mean "termination of employment at the initiative of the employer".
Article 11 of the Termination of Employment Convention states:
A worker whose employment is to be terminated shall be entitled to a reasonable period of notice or compensation in lieu thereof, unless he is guilty of serious misconduct, that is, misconduct of such a nature that it would be unreasonable to require the employer to continue his employment during the notice period. This may be compared with s 170DB(1). That section provides that an employer must not terminate the employment of an employee unless the employee has been given either the period of notice required by s 170DB(2) or compensation instead of notice, or "the employee is guilty of serious misconduct, that is, misconduct of a kind such that it would be unreasonable to require the employer to continue the employment during the notice period". The table set out in s 170DB(2) specifies required periods of notice ranging from one week in respect of a continuous period of service of not more than one year up to four weeks in respect of a continuous period of service of more than five years, with an increase of the period by one week if the employee is aged more than forty-five years and has completed at least two years continuous service.
Article 7 of the Termination of Employment Convention states:
The employment of a worker shall not be terminated for reasons related to the worker's conduct or performance before he is provided an opportunity to defend himself against the allegations made, unless the employer cannot reasonably be expected to provide this opportunity. This may be compared with s 170DC which provides: An employer must not terminate an employee's employment for reasons related to the employee's conduct or performance unless:
(a) the employee has been given the opportunity to defend himself or herself against the allegations made; or
(b) the employer could not reasonably be expected to give the employee that opportunity.
Section 170DD is designed to implement Art 14 of the Termination of Employment Convention. That section states:
(1) This section applies if, on or after 26 February 1994, an employer decides to terminate the employment of 15 or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including such reasons.
(2) As soon as practicable after so deciding, the employer must give to the Commonwealth Employment Service [104] a written notice of the intended terminations that sets out:
(b) the number and categories of employees likely to be affected; and
(c) the time when, or the period over which, the employer intends to carry out the terminations.
(3) The employer must not terminate an employee's employment pursuant to the decision unless the employer has complied with subsection (2).
Articles 4-6 of the Termination of Employment Convention comprise Div A (headed " Justification for Termination ") in Pt II (headed " Standards of General Application ") of the Convention. They should be taken together, as should ss 170DE and 170DF, along with one provision from Subdiv C, s 170EDA, which was added by the Second Amending Act. The validity of the whole of the Division is challenged. However, the plaintiff States' submissions focused only on s 170DE(2) (which provides that a reason for termination will not be a valid one if the termination is harsh, unjust or unreasonable), on its associated provision, s 170EDA(1)(b) (relating to onus of proof as leading to invalidity), and on s 170DF(1)(f) and (g) [105] .
The text of s 170DE is as follows; the italicised expression in sub-s (2) was added by the 1995 Act and is to be disregarded for the purposes of this litigation:
(1) An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons, connected with the employee's capacity or conduct or based on the operational requirements of the undertaking, establishment or service.
(2) A reason is not valid if, having regard to all the circumstances of the case, including the employee's capacity and conduct and those operational requirements, the termination is harsh, unjust or unreasonable. This subsection does not limit the cases where a reason may be taken not to be valid.
Section 170DE(1) must be read with s 170EDA(1) which provided, before amendment by the 1995 Act, as follows: (1) If an application under section 170EA alleges that a termination of employment of an employee contravened subsection 170DE(1):
(a) the termination is taken to have contravened subsection 170DE(1) unless the employer proves that, apart from subsection 170DE(2), there was a valid reason, or valid reasons, of a kind referred to in subsection 170DE(1); and
(b) if the employer so proves, the termination is nevertheless taken to have contravened subsection 170DE(1) if the applicant proves that, because of subsection 170DE(2), the reason or reasons proved by the employer were not valid.
The phrase "termination of employment" as used in s 170EDA is defined in s 170EDA(3) so as to exclude cases in which the Industrial Relations Court had given a final judgment before 30 June 1994 (the commencement date of the Second Amending Act) upon an application under s 170EA.
An employer must not terminate an employee's employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons:
(a) temporary absence from work because of illness or injury;
(b) union membership or participation in union activities outside working hours or, with the employer's consent, during working hours;
(c) non-membership of a union or of an association that has applied to be registered as a union under the provisions of this Act;
(d) seeking office as, or acting or having acted in the capacity of, a representative of employees;
(e) the filing of a complaint, or the participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities;
(f) race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
(g) absence from work during maternity leave or other parental leave.
Section 170DF(1) is to be read with s 170EDA(2). Before amendment by the 1995 Act, this stated: If an application under section 170EA alleges that a termination of employment of an employee contravened subsection 170DF(1) on the ground that the termination:
(a) was for a particular reason or reasons referred to in that subsection that were stated in the application; or
(b) was for reasons stated in the application that included a particular reason or reasons referred to in that subsection;
the termination is taken to have contravened subsection 170DF(1) unless the employer proves that:
(c) the employment was not terminated for the particular reason or reasons or for reasons that included the particular reason or reasons; or
(d) the particular reason was a reason, or the particular reasons were reasons, to which subsection 170DF(2) or (3) applied.
Articles 4, 5, 6 and 8 and pars 1 and 2 of Art 9 of the Termination of Employment Convention bear an evident relationship to s 170DE(1) and s 170DF(1)(a)-(e). These Articles state:
The employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service.
The following, inter alia, shall not constitute valid reasons for termination:
(a) union membership or participation in union activities outside working hours or, with the consent of the employer, within working hours;
(b) seeking office as, or acting or having acted in the capacity of, a workers' representative;
(c) the filing of a complaint or the participation in proceedings against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities;
(d) race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
(a) the burden of proving the existence of a valid reason for the termination as defined in Article 4 of this Convention shall rest on the employer;
(b) the bodies referred to in Article 8 of this Convention shall be empowered to reach a conclusion on the reason for the termination having regard to the evidence provided by the parties and according to procedures provided for by national law and practice.
Article 1 states that the provisions of the Convention shall be given effect by laws or regulations in so far as they are not otherwise made effective by means of collective agreements, arbitration awards or court decisions or in such other manner as may be consistent with national practice.
Section 170DE(2) goes beyond the terms of the Convention because Art 4 of the Convention only requires the employer to comply with the equivalent of s 170DE(1). The question, therefore, is whether the selection of the criteria of harsh, unjust or unreasonable termination is an expression of the manner of the implementation of the Convention which, as we have indicated [106] , is a matter for the Parliament, or whether s 170DE(2) is not reasonably capable of being considered appropriate and adapted to implementing the Convention obligations.
Article 4 of the Convention requires that employment not be terminated without a valid reason. Article 5 provides that a number of grounds "inter alia, shall not constitute valid reasons for termination". Those grounds, even if they would otherwise have constituted valid reasons for termination, are deemed not to be valid reasons. The use of the words "inter alia" recognises that the list in Art 5 is not an exhaustive one. There obviously will be other reasons for termination which, having regard to the capacity and conduct of the employee and the operational requirements of the employer, are not valid. However, the Convention does not specify in detail what those reasons are. It leaves the general word "valid" as the cornerstone of Art 4.
Section 170EDA(1) provides for a shifting onus of proof. Where an application alleges that a termination was not for a valid reason, the onus lies on the employer to prove that there was a valid reason (par (a) of s 170EDA(1)) but, even if the employer does so, the employee may still prove that the termination was harsh, unjust or unreasonable (par (b) of s 170EDA(1)). Paragraph (a) is clearly supported by Art 9(2) of the Convention which provides that the methods of implementation of the Convention in relation to "the burden of proving the existence of a valid reason for the termination as defined in Article 4 of this Convention shall rest on the employer" or an alternative method detailed in the Article. There is no indication in the Convention that the onus might be a shifting one, requiring the employer to prove valid reasons for termination in some cases and the employee to prove that the reasons were not valid in other cases.
It is this shifting onus in s 170EDA(1) which indicates that the inclusion of the "harsh, unjust or unreasonable" test is an additional ground of unlawful termination that goes beyond the requirement for the reason for termination to be valid. The terms "harsh, unjust or unreasonable" are not merely a synonym for "valid". Had the Parliament recognised the terms as being synonyms, or even the harsh, unjust or unreasonable test as being a subset of grounds that were not "valid", then there would be no reason for changing the onus from employer to employee between pars (a) and (b) of s 170EDA(1).
The changing onus in s 170EDA(1) indicates that the harsh, unjust or unreasonable criterion is broader than what otherwise would be the test for validity. This is reinforced by the nature of s 170DE(2) which, in contrast to s 170DE(1) and Art 4 of the Convention, goes not to the reason for termination but to the overall effects of the termination. It recognises that, whilst a reason for termination might be a valid one, the overall effect of the termination in the circumstances might be harsh, unjust or unreasonable. This supports the conclusion that the inclusion of the "harsh, unjust or unreasonable" criterion does not implement the terms of the Convention but goes beyond its requirements and adds an alternative ground for making terminations unlawful. For these reasons, ss 170DE(2) and 170EDA(1) are, at least in part, invalid.
The provisions in ss 170DE and 170EDA creating the "harsh, unjust or unreasonable" criterion go beyond the terms of the Convention to a constitutionally impermissible degree. However, they are structurally severable from the remainder of the Division. The operation of the remainder of the provisions of the Division will not be affected by their severance. Section 170DE(1), which accords with the Convention, can operate unaffected by the invalidity of s 170DE(2), which does not. Similarly, s 170EDA(1)(a), read down to exclude references to s 170DE(2), will implement the terms of Art 9 of the Convention despite the invalidity of par (b) in that sub-section. Hence the stated purpose of the Parliament in enacting the Division will not be affected.
Leaving aside s 170DF(1)(f) and (g) (which will be considered separately) and subject to a consideration of their application to employees of the States, the provisions of Div 3 other than ss 170DE(2) and 170EDA(1)(b) are valid.
(iv) Termination of employment provisions and their application to the States
The challenge to the termination of employment provisions, as they affect the States, is made compendiously by reference to the holding in Re Australian Education Union that the Commonwealth cannot legislate to prevent a State from exercising its "right to determine the number and identity of the persons whom it wishes to employ, the term of appointment of such persons and the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds" [107] . The plaintiff States claim that that is what the termination of employment provisions do. In the alternative, they argue that the provisions apply to persons employed by the States at the higher levels of government and are, to that extent, invalid. It is convenient to consider the arguments of the plaintiff States first in relation to the general prohibitions on termination and, then, in relation to the provisions specifically dealing with redundancy.
The non-redundancy provisions called into question by the primary argument of the plaintiff States are ss 170DB, 170DC, 170DE(1) and 170DF. Section 170DE(2) can be disregarded as, in our view, it is not authorised by the external affairs power and is invalid on that account. And, as already indicated, s 170DF(1)(f) and (g) will be considered later in these reasons. Thus, the prohibitions presently in issue are the restrictions on termination without notice, or, payment in lieu (which prohibition does not apply in the case of serious misconduct) (s 170DB(1)); the prohibition on termination for reasons related to conduct or performance unless the employee has first been given a chance "to defend himself or herself against the allegations made" (which prohibition does not apply if the employer could not reasonably be expected to provide that opportunity) (s 170DC); the prohibition on termination other than for a valid reason, or valid reasons, connected with the employee's capacity or conduct or the employer's operational requirements (s 170DE(1)); and the prohibition on termination for the reasons set out in s 170DF(1)(a)-(e) inclusive. In general terms, those reasons consist of temporary absence because of illness or injury, union membership, participation in union activities, non-membership of a union, standing for election to or holding a union position, and complaining or participating in proceedings against the employer for alleged breach of its legal obligations.
The prohibitions in ss 170DB, 170DC, 170DE(1) and 170DF apply only to employees already in employment. They thus do not prevent the States from determining "the number and identity of the persons whom [they wish] to employ" [108] . And apart from the prohibition in s 170DB on termination without notice and that aspect of s 170DE(1) concerned with dismissal for reasons connected with operational requirements, none is concerned with termination on redundancy grounds. To the extent that s 170DB is concerned with redundancy, it prescribes the steps to be taken before or in association with termination, namely notice or payment in lieu. It is not concerned with "the number and identity of the persons whom [the States wish] to dismiss on redundancy grounds" [109] . However, if s 170DE(1) is read according to its terms, that aspect of it which requires that there be a valid reason for termination connected with operational requirements would operate to prevent a State from determining the number and identity of those to be made redundant. This operation is, nonetheless, avoided by reason that s 6 of the Act is to be read down in the manner earlier indicated.
It is also necessary to consider whether, in terms, the prohibitions in ss 170DB, 170DC, 170DE(1) and 170DF impair the right of the States to determine "the term of appointment [of those whom they wish to employ]" [110] . The relevant words of each prohibition are that "[a]n employer must not terminate an employee's employment". In the case of s 170DC, the prohibition is elaborated by reference to a specific reason and, in the case of ss 170DE(1) and 170DF, by reference to specific reasons. As a matter of ordinary language, an employer does not terminate an employee's employment when his or her term of employment expires. Rather, employment comes to an end by agreement, or, where the term is fixed by award or statute, by operation of law.
There is nothing in the Act to suggest that the words "[a]n employer must not terminate an employee's employment" are to be construed other than in accordance with their ordinary meaning. So construed, they do not apply to the situation where employment comes to an end because its term has expired. To put the matter another way, the prohibitions are concerned with termination for reasons unconnected with the term of employment. And that is manifestly clear when regard is had to ss 170DC, 170DE(1) and 170DF. The prohibitions effected by those sections are directed, respectively, to termination for a specified reason and termination for one or more specified reasons, none of which includes the expiry of the employee's term of appointment.
If read according to their terms, the prohibitions in ss 170DB, 170DC, 170DE(1) and 170DF leave the States free to determine the number and identity of those whom they wish to employ, the term of their employment and, save for s 170DE(1), the number and identity of those whom they wish to dismiss on redundancy grounds. However, in this last regard, the effect of reading down s 6 is that the States are not bound by s 170DE(1) to the extent that it would otherwise operate to prevent them determining the identity and number of those they wish to make redundant.
So far as concerns the argument of the plaintiff States with respect to those employed at the higher levels of government, it is to be noted that, as a matter of ordinary language, the prohibitions in ss 170DB, 170DC, 170DE(1) and 170DF are directed to employers generally and operate with respect to employees generally. And there is nothing to suggest that they should be construed otherwise. And so construed they would apply to those employed at the higher levels of government, but for a reading down of s 6 in the manner indicated.
The prohibitions in Div 3 of Pt VIA specifically concerned with redundancy are in ss 170DD and 170DG. It is convenient to deal first with s 170DD which, as already indicated, requires an employer who decides to terminate fifteen or more employees "for reasons of an economic, technological, structural or similar nature" to give written notice of that fact to the Commonwealth Employment Service (the CES), specifying the reasons for the terminations, the numbers and categories of employees likely to be affected and the period over which the terminations are to be carried out. As with s 170DB, which requires notice or payment in lieu, s 170DD merely prescribes a step to be taken if more than fifteen employees are to be made redundant. It does not in any way impair the right of the States to determine "the number and identity of the persons whom [they wish] to dismiss with or without notice on redundancy grounds" [111] .
Nor does s 170DD affect the terms and conditions of employment of those employed at the higher levels of government. It merely requires that, if they are to be made redundant, relevant particulars be included in the notice to be given to the CES. Thus, s 170DD does not infringe the implied constitutional prohibition on any of the bases identified in Re Australian Education Union and relied upon by the plaintiff States.
The other prohibition which operates specifically with respect to terminations for redundancy is in s 170DG. That section provides that "[a]n employer must not terminate an employee's employment in contravention of an order in force under section 170FA." The latter section provides that, subject to Pt VIA, "the Commission may make an order for the purpose of giving effect to Article 12 (in so far as it relates to a severance allowance or other separation benefits) or 13 of the Termination of Employment Convention". As already indicated, Art 12 is concerned with severance pay and Art 13 with union consultation.
An order for the payment of severance pay and orders requiring union consultation clearly impair a State's right to "determine the number and identity of [those] whom it wishes to dismiss on redundancy grounds". However, the effect of the reading down of s 6 is that s 170FA does not apply to the States. It follows that the prohibition in s 170DG has no operation with respect to the States.
(v) Conclusions with respect to the termination of employment provisions
Sections 170DE(2) and 170EDA(1)(b) are invalid. Leaving aside pars (f) and (g) of s 170DF(1) (which will be considered later), the other provisions of Div 3 of Pt VIA are valid. However, the reading down of s 6 has the result that ss 170DB, 170DC, 170DE(1) and 170DF(1)(a), (b), (c), (d) and (e) are limited in their application and s 170FA does not apply to the States.
Part VIA, Div 5 relates to parental leave. The stated intention of the Division is to give effect to the Workers with Family Responsibilities Convention 1981 (Sch 12 to the Act) (the Family Responsibilities Convention) and the Workers with Family Responsibilities Recommendation 1981 (Sch 13) (the Family Responsibilities Recommendation) (s 170KA(1)(a)-(b)). The principal operative provision in the body of the Act is s 170KA(3) which provides that a mother is entitled to maternity leave and her spouse is entitled to paternity leave totalling up to fifty-two weeks following the birth of a child, a maximum of one week of their leave being taken concurrently at the time of the birth of the child. Section 170KB declares that Sch 14 has effect as if it were contained within the Division. Schedule 14 provides for a detailed code outlining the entitlement to and procedural requirements for obtaining maternity or paternity leave. Sections 170KA(5) and 170KC provide for the making of regulations in relation to an analogous system of unpaid adoption leave.
The questions in the case stated which relate to the parental leave provisions may be summarised as follows:
• Are the provisions of Div 5 of Pt VIA of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth? In this regard the Commonwealth claims and the plaintiff States deny that the Division was validly enacted pursuant to the legislative power with respect to external affairs.
• Are the provisions of Div 5 of Pt VIA of the Act, or any part of such provisions, beyond the legislative power of the Commonwealth and invalid in their application to the States of South Australia or Western Australia in relation to persons employed to enable those States to continue to exist and function as such?
(iii) Parental leave provisions and the external affairs power
The Family Responsibilities Convention itself does not refer to maternity, paternity or parental leave. It rises no higher than Arts 1, 3 and 4 which relevantly provide:
With a view to creating effective equality of opportunity and treatment for men and women workers, all measures compatible with national conditions and possibilities shall be taken -
(a) to enable workers with family responsibilities to exercise their right to free choice of employment; and
(b) to take account of their needs in terms and conditions of employment and in social security.
All measures compatible with national conditions and possibilities, including measures in the field of vocational guidance and training, shall be taken to enable workers with family responsibilities to become and remain integrated in the labour force, as well as to re-enter the labour force after an absence due to those responsibilities.
Also relevant are the terms of the Family Responsibilities Recommendation referred to in s 170KA(1)(b). Paragraph 22 of that Recommendation provides:
(1) Either parent should have the possibility, within a period immediately following maternity leave, of obtaining leave of absence (parental leave), without relinquishing employment and with rights resulting from employment being safeguarded.
(2) The length of the period following maternity leave and the duration and conditions of the leave of absence referred to in subparagraph (1) of this Paragraph should be determined in each country by one of the means referred to in Paragraph 3 of this Recommendation.
(3) The leave of absence referred to in subparagraph (1) of this Paragraph may be introduced gradually.
Paragraph 3 of the Recommendation refers to applying the provisions of the Recommendation by "laws or regulations, collective agreements, work rules, arbitration awards, court decisions or a combination of these methods, or in any other manner consistent with national practice".
The quoted Articles of the Family Responsibilities Convention impose obligations on Australia and, whilst they are expressed in more than terms of aspiration, they are set forth in general terms. There is no specific provision relating to parental leave. Nevertheless, in the conditions of society and industrial organisation in this country, an obvious means of discharging the obligations imposed by Arts 3, 4 and 7 is to provide for parental leave.
Thus, the challenged provisions are reasonably capable of being considered appropriate and adapted to fulfilling one element of Australia's obligations under the Family Responsibilities Convention. That is because the law falls within the terms of the obligation imposed by Arts 4(b) and 7. These specify that "all measures shall be taken to take account of their needs in terms and conditions of employment" (Art 4(b)) and to enable them to "become and remain integrated in the labour force" (Art 7). Division 5 can reasonably be seen as an attempt to do this. That is reinforced by the reference to parental leave in the Family Responsibilities Recommendation. This confirms the appropriateness of a law relating to parental leave to fulfilling Australia's obligations under the Family Responsibilities Convention. As we have explained earlier in these reasons, the circumstance that only part of the broad obligations imposed on Australia by the Family Responsibilities Convention is implemented in the Division of itself is no objection to its validity [112] .
Subject to a consideration of the question whether it discriminates against the States, the Division is valid.
(iv) Parental leave provisions and discrimination against the States
The provisions of Div 5 of Pt VIA are questioned with respect to "persons employed to enable [the States] to continue to exist and function as such". However, as with other provisions the argument was put by reference to those employed at the higher levels of government. As with ss 170DB, 170DC, 170DE(1) and 170DF, ss 170KA, 170KB and 170KC are of general application and, as a matter of ordinary language, apply to persons employed at the higher levels of government. As with ss 170DB, 170DC, 170DE(1) and 170DF, there is nothing to indicate that they should be construed as bearing other than their ordinary meaning. However, as with ss 170DB, 170DC, 170DE(1) and 170DF, the effect of reading down s 6 is that they do not bind the States to the extent that they would otherwise apply to persons employed at the higher levels of government.
(v) Conclusion with respect to parental leave provisions
The provisions of Div 5 of Pt VIA operate validly according to their terms except for ss 170KA, 170KB and 170KC which, by reason of the reading down of s 6, do not bind the States with respect to persons employed at the higher levels of government.
By s 170DF(1)(g), an employer must not terminate an employee's employment on the ground or grounds including "absence from work during maternity leave or other parental leave". The Termination of Employment Convention, the relevant terms of which were reproduced earlier, provides in Art 5(e) that "absence from work during maternity leave" shall not constitute a valid reason for termination. The validity of the section is brought into question by the questions raised with respect to the termination of employment provisions in Div 3 of Pt VIA of the Act.
Section 170DF(1)(g) implements Art 5(e) of the Termination of Employment Convention. Further, as with the parental leave provisions in Div 5 of Pt VIA, the prohibition effected by s 170DF(1)(g) is reasonably capable of being considered appropriate and adapted to the obligation in Art 4(b) of the Family Responsibilities Convention to take measures "[w]ith a view to creating effective equality of opportunity and treatment for men and women workers to take account of their needs in terms and conditions of employment".
It remains only to be noted that in its application to the States and their employees, s 170DF(1)(g) is in no different position from the other termination of employment provisions in Div 3 of Pt VIA of the Act. The effect of the reading down of s 6 of the Act is that it does not bind the States with respect to persons employed at the higher levels of government.
Discrimination in Employment - ss 3(g), 150A, 170DF(1)(f), 170MD(5) and 170ND(10)
The Act contains a number of provisions which are directed to preventing "discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin" (hereafter called "the proscribed grounds"). The first such provision is in s 3 of the Act, which identifies the principal object of the Act as the provision of a framework for the prevention and settlement of industrial disputes by a number of means, including, in par (g), by helping to prevent and eliminate discrimination on the proscribed grounds.
The second provision is in s 150A. By that section, the Commission is required to conduct a regular review of its awards [113] (other than certified agreements or enterprise flexibility agreements [114] ) to ascertain if they are deficient in respect of any of the matters specified in s 150A(2), including that specified in par (b), namely, that they contain a provision which discriminates against an employee on any of the proscribed grounds.
In addition to s 3(g) and s 150A(2)(b), ss 170MD(5) and 170ND(10) require the Commission to refuse to certify and approve, respectively, agreements and enterprise flexibility agreements containing terms which it considers discriminate on any of the proscribed grounds. And subject to sub-ss (2) and (3), s 170DF(1)(f) forbids the termination of employment on any of those grounds [115] .
• Questions 9(h) and (i) in the case stated ask whether ss 3(g) and 150A are invalid. However, the argument with respect to s 150A was conducted by reference only to the power of the Commission to vary awards for the purposes of s 150A(2)(b), it being argued that it is neither authorised by the conciliation and arbitration power nor the external affairs power.
• The validity of ss 170DF(1)(f), 170MD(5) and 170ND(10) is brought into question by the plaintiff States' challenge to Div 3 of Pt VIA, Div 2 of Pt VIB, and Div 3 of Pt VIB respectively. The provisions are challenged as not being authorised by the external affairs power. In this regard, the plaintiff States point to the inclusion of sexual preference, age and physical or mental disability, none of which is referred to in the various international Conventions and Recommendations upon which they are ostensibly based. Sections 170MD(5) and 170ND(10) are further challenged as being beyond the conciliation and arbitration and the corporations powers respectively.
(iii) Section 150A and the conciliation and arbitration power
It is necessary to refer to sub-ss (2) and (3) of s 150A. By s 150A(2), the Commission is required to remedy any deficiency identified in the review process by taking "the steps (if any) prescribed by the regulations". Section 150A(3) authorises the making of regulations prescribing steps which "may include varying the award after giving any party to the award who has a genuine interest in the matter an opportunity to be heard". Regulations have in fact been made with the consequence that, if the Commission considers that an award is deficient in respect of the matters set out in s 150A(2)(b), it must allow the parties, the Human Rights and Equal Opportunity Commission and interveners, if any, to be heard and, thereafter, must remedy the deficiency by varying the award or taking such other action as it considers appropriate [116] .
It was argued for the State of Western Australia that the combined effect of s 150A(2)(b) and (3) is that regulations may be made requiring the Commission to vary an award so that it extends beyond the ambit of the original dispute or includes terms that are not "relevant", "reasonably incidental" or "appropriate" [117] to the settlement of that dispute and that, to that extent, s 150A(2)(b) and (3) is invalid. Counsel for Western Australia also argued that s 150A(2)(b) is not appropriate or adapted to achieving the object of any relevant international obligation and therefore cannot be supported by s 51(xxix) of the Constitution. On the other hand, the Commonwealth submitted that s 150A(2)(b) and (3), so far as sub-s (3) relates to par (b) of sub-s (2), is a valid exercise of the power to legislate with respect to external affairs and, also, of the power to legislate with respect to conciliation and arbitration.
In our view, the context in which s 150A(2)(b) appears makes the question whether it can be supported as a law with respect to external affairs entirely irrelevant. As already indicated, s 150A applies only to awards, not certified and enterprise flexibility agreements. It thus applies, and applies only, to awards made in prevention or settlement of an interstate industrial dispute.
It is well settled that the terms of an award must be " "relevant" or "reasonably incidental" or "appropriate" to the settlement of the differences constituting the interstate dispute [attracting the Commission's power to arbitrate] or [have] a "natural or rational tendency to dispose of the question at issue" " [118] . The "ambit" doctrine [119] , which confines the variation of awards within the limits of the dispute upon which the award was based, is an aspect, albeit an important aspect, of that more general rule.
It is conceivable (although hardly likely in practice) that the variation of an award, either by removing or amending a discriminatory term of the kind to which s 150A(2)(b) is directed, could result in the award no longer having the required connection with the dispute on which it was founded. Ordinarily, the question asked with respect to the variation of the award is whether the variation is valid [120] . That is a convenient course if, as is almost always the case, the variation can be severed from the award. But the fundamental question is that of the relationship between the award, as varied, and the dispute. And because that is the question, it is always necessary to relate the Commission's power to vary awards to the conciliation and arbitration power.
So far as the validity of s 150A(2)(b) and (3) is concerned, the first step is to determine whether, as contended for by the State of Western Australia, the Commission may be required to vary an award in such a way that it no longer has a relevant connection with an interstate industrial dispute. As already indicated, that would result in invalidity. In itself, that is a powerful reason for thinking that s 150A does not operate in that way.
Moreover, s 150A must be read in the same light as other provisions of the Act which confer power on the Commission to vary awards, particularly s 113(2) which relevantly allows that "[t]he Commission may vary an award". The latter provision, or, more accurately, its predecessor in the Conciliation and Arbitration Act 1904 Cth has always been construed, or more accurately, read down by reference to the limits of the power conferred by s 51(xxxv) of the Constitution so as to authorise only those variations which have a relevant connection with the dispute giving rise to the award in question or which are made for the purpose of preventing an interstate industrial dispute [121] . In the context of the conferral of power to conciliate and arbitrate for the prevention and settlement of interstate industrial disputes, it is difficult to see that it could have been approached in any other way.
Given that s 150A(2) is concerned entirely with awards made in settlement or prevention of interstate industrial disputes, s 150A(3) must be read down so as to authorise the variation of awards only to the extent that the variation has a relevant connection with the dispute which attracted the Commission's award-making power. If the removal or variation of an award provision containing the proscribed grounds would deny the connection required between the award and the dispute in settlement of which the award was made, the award could not be considered to be "deficient" by reason of the provision that contains the proscribed grounds. Indeed, the need to find a deficiency in the award confers on the Commission the function of considering the significance of any of the proscribed grounds to the matters in dispute between the parties to the dispute. The fact that an award contains a provision which discriminates on any of the grounds specified in s 150A(2)(b) does not by itself establish a deficiency in the award. If it were otherwise, no provision which justifiably discriminates on any of those grounds could be maintained. There are some areas of employment in which one or other ground of discrimination is justifiable: see, eg, ss 150A(4), 170DF(3), 170MD(5A) and (6), 170ND(10A) and (11). Construing s 150A(2) and (3) in this way, the foundation for the argument advanced on behalf of Western Australia disappears.
It was not argued that it was beyond the power conferred by s 51(xxxv) of the Constitution for the Parliament to legislate to require regular revision and variation of awards to reflect current industrial standards, so long as the award as varied retains the required connection with an interstate industrial dispute. Nor, in our view, is such an argument open. A law requiring regular review and variation, within the limits indicated, is clearly a law with respect to conciliation and arbitration. And it makes no difference whether the direction to vary is expressed in terms of industrial standards generally or, as here, is directed to some specific matter which may pertain to the relations of employers and employees.
It follows that, when s 150A(3) is read down in the manner indicated, s 150A(2)(b) is valid.
(iv) Sections 170DF(1)(f), 170MD(5) and 170ND(10) - the external affairs power
It is convenient first to consider whether s 170DF(1)(f) is supported by the external affairs power.
As previously mentioned, the Discrimination (Employment and Occupation) Convention 1958 which forms Sch 1 to the Human Rights Act defines "discrimination", in Art 1, as including:
(a) any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation;
(b) such other distinction, exclusion or preference which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation as may be determined by the Member concerned after consultation with representative employer's and worker's organisations, where such exist, and with other appropriate bodies.
The definition in s 3 of the Human Rights Act mirrors this definition and provides:
(a) any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin that has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation; and
(b) any other distinction, exclusion or preference that:
(i) has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation; and
(ii) has been declared by the regulations to constitute discrimination for the purposes of this Act.
By regulations made under s 50 of the Human Rights Act [122] there was added to the definition of "discrimination" in that Act any distinction, exclusion or preference based on, inter alia, age, impairment, mental, intellectual or psychiatric disability, physical disability or sexual preference.
The relevant Articles of the Discrimination (Employment and Occupation) Convention provide:
Each Member for which this Convention is in force undertakes to declare and pursue a national policy designed to promote, by methods appropriate to national conditions and practice, equality of opportunity and treatment in respect of employment and occupation, with a view to eliminating any discrimination in respect thereof.
Each Member for which this Convention is in force undertakes, by methods appropriate to national conditions and practice -
(b) to enact such legislation and to promote such educational programmes as may be calculated to secure the acceptance and observance of the policy.
The international obligation cast upon Australia by Art 2 of the Discrimination (Employment and Occupation) Convention to pursue a national policy to promote equality of opportunity and treatment in respect of employment and occupation with a view to eliminating discrimination in respect thereof, includes the proscription of the grounds of discrimination, exclusion or preference specified in Art 1(a) of the Convention and those determined in accordance with Art 1(b). Article 1(b) requires Australia (i) to consult with representative employers' and workers' organisations and with other appropriate bodies in order to identify other grounds of unjustified discrimination which have the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation and which ought to be proscribed and, pursuant to Art 2, (ii) to proscribe those grounds. The power conferred by s 51(xxix) will support legislation which is enacted in discharge of these obligations. It will not support the proscription of grounds which are neither specified in the Convention nor the subject of the consultation required. There is no obligation on Australia to proscribe a ground which is not specified in the Convention and which has not been the subject of the required consultation. Hence, any law which proscribes such a ground would derive no support from s 51(xxix).
In s 170DF(1)(f), as in the Regulations made under the Human Rights Act, the grounds "sexual preference, age, physical or mental disability" were added to those specified in the Convention. A challenge is made to their inclusion, based on a suggested absence in the consultative process in which the Commonwealth was required to engage pursuant to Art 1(b), before adding grounds to those specified in Art 1(a) of the Convention.
The Commonwealth relies on the process of consultation which occurred prior to the making of the Regulations under the Human Rights Act. It appears [123] that the Regulations were made in response to a recommendation of a National Committee on Discrimination in Employment and Occupation. That Committee has since been disbanded. The National Committee, like the corresponding Committees for the States and the Northern Territory, was constituted by representatives of government, employer and employee organisations. They were established upon ratification of the Convention in 1973 to eliminate discrimination and to promote equality of opportunity in employment and, in particular, to "ensure that there is consultation between the tripartite partners prior to the Government introducing special measures to overcome past discrimination" [124] . Pursuant to Art 1(b) of the Convention these Committees recognised grounds of discrimination including those of "age", "physical disability" and "sexual preference" [125] . There is no reference to recognition of, or consultation with respect to, mental disability [126] . The additional grounds of discrimination recognised by the Committees were then determined to be additional grounds for the purposes of the Convention by their inclusion in the Human Rights and Equal Opportunity Commission Regulations. Those Regulations were made after the establishment of the Human Rights and Equal Opportunity Commission in 1986 to which the function of the Committees was transferred [127] .
Thus, it appears that there was the consultation required by Art 1(b) of the Convention prior to the determination by Australia to discharge its Convention obligations by adding the grounds of "age", "physical disability" and "sexual preference". The inclusion of the same grounds in s 3(g), as well as in s 170DF(1)(f), is supported by the external affairs power. But, so far as the material available to the Court reveals, there was no consultation with respect to the ground of mental disability [128] . It follows that the inclusion of "mental disability" in the relevant sections is unsupported by s 51(xxix). As at present advised, those words as they appear in s 170DF(1)(f) are invalid. However, as the material relating to consultation was not fully canvassed at the hearing, the better course is to give no answer in respect of that ground when disposing of the questions in the case stated. Subject to that qualification and subject to a consideration of the argument with respect to discrimination against the States, s 170DF(1)(f), in so far as it refers to age, sexual preference and physical disability, is valid.
As will become apparent, it is unnecessary to consider whether ss 170MD(5) and 170ND(10) are supported by the external affairs power.
(v) Section 170DF(1)(f) and discrimination against the States
In its application to the States and their employees, s 170DF(1)(f) is in no different position from the other termination of employment provisions in Div 3 of Pt VIA of the Act. Thus the effect of the reading down of s 6 of the Act is that it does not bind the States with respect to persons employed at the higher levels of government.
Given that s 150A(2)(b) is valid and given also that s 170DF(1)(f) operates validly according to its terms, save with respect to persons employed by the States at the higher levels of government, there can be no objection to the terms of s 3(g). And that is so whether or not ss 170MD(5) and 170ND(10), which will be considered later, are also valid. However, the phrase "mental disability", as it appears in s 170DF(1)(f), stands in the special position indicated above. Section 3(g) also is linked with ss 150A(2)(b), 170MD(5) and 170ND(10). As has been indicated with respect to s 150A and as will be indicated with respect to the other two provisions, they are supported by other heads of power. Accordingly, in these respects, there is no limitation or query as to the full operation of s 3(g).
(vii) Conclusions with respect to provisions relating to discrimination in employment
Sections 3(g), 150A and 170DF are all valid. This is subject to the qualification that we provide no answer with respect to the phrase "mental disability" in s 170DF(1)(f). In addition, s 150A(3) is to be read down so as to authorise the variation of awards only to the extent that the variation has a relevant connection with the dispute which attracted the Commission's award-making power. Further, by reason of the reading down of s 6, s 170DF(1)(f) does not bind the States with respect to persons employed at higher levels of government.
Sections 170MD(5) and 170ND(10) will be considered later.
Collective Bargaining - Certified and Enterprise Flexibility Agreements
The Act allows that, in certain circumstances and subject to certain conditions, the Commission may certify industrial agreements (certified agreements) between employers and employees who are parties to an industrial dispute or who are parties to an industrial situation (ss 170MA(4) and 170MC). It also allows that, subject to certain conditions, the Commission may approve industrial agreements (enterprise flexibility agreements) made with an employer that is a "constitutional corporation", which is defined in s 4(1) of the Act to mean:
(a) a foreign corporation within the meaning of paragraph 51(xx) of the Constitution; or
(b) a body corporate that is, for the purposes of paragraph 51(xx) of the Constitution, a financial corporation formed within the limits of the Commonwealth; or
(c) a body corporate that is, for the purposes of paragraph 51 (xx) of the Constitution, a trading corporation formed within the limits of the Commonwealth; or
(d) a body corporate that is incorporated in a Territory; or
When registered or approved, the agreements take effect as awards of the Commission [130] , and by s 152, prevail to the extent of any inconsistency over "State law, or an order, award, decision or determination of a State industrial authority". 1. Section 4(1) of the Act defines "Commonwealth authority" to mean: "(a) a body corporate established for a public purpose by or under a law of the Commonwealth or the Australian Capital Territory; or (b) a body corporate: (i) incorporated under a law of the Commonwealth or a State or Territory; and (ii) in which the Commonwealth has a controlling interest; other than a prescribed body." 2. See the definition of award in s 4(1) of the Act which includes, in pars (b) and (c), a certified agreement and an enterprise flexibility agreement.
The provisions governing certified agreements are in Div 2 of Pt VIB of the Act which confers power on the Commission, subject to conditions, to certify agreements as specified in s 170MA(1) and (2). The agreements specified in s 170MA(1) are agreements between the parties to an industrial dispute, or any of them, the terms of which are for "the settlement of all or any of the matters in dispute; or [for] the prevention of further industrial disputes between them". The agreements specified in s 170MA(2) are agreements between the parties to an industrial situation [131] , or any of them, the terms of which are "for preventing the situation from giving rise to an industrial dispute between them".
The Commission's power to certify agreements is qualified by ss 170MC and 170MD. By s 170MC, "[t]he Commission must certify an agreement if, and must not certify an agreement unless, it is satisfied" of certain matters, including, under sub-s (c), that the agreement contains procedures for the resolution of disputes arising under the agreement. Section 170MC is, however, subject to s 170MD which provides that, "[d]espite section 170MC", the Commission may in certain circumstances and must in certain other circumstances refuse certification of an agreement. It is necessary to refer specifically to s 170MD(5). As already mentioned, that sub-section requires the Commission, subject to limited qualifications [132] , to "refuse to certify an agreement if it thinks that a provision of the agreement discriminates against an employee because of, or for reasons including, race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin".
The provisions governing the approval of enterprise flexibility agreements are found in Div 3 of Pt VIB of the Act. Subject to a number of conditions, the Commission is empowered to approve an agreement that applies to an enterprise of a constitutional corporation (the definition of which is set out above) and is about matters pertaining to the relationship between employers and employees (ss 170NA and 170ND). Mention should again be made of s 170ND(10), which requires the Commission to refuse approval if it thinks that a provision discriminates on any of the grounds earlier referred to in relation to certified agreements.
The questions in the case stated bearing on certified and enterprise flexibility agreements may be summarised as follows:
• Are the provisions of Div 2 of Pt VIB of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth? Pursuant to this question, the plaintiff States claim that the provisions of Div 2 are not laws with respect to conciliation and arbitration of interstate industrial disputes. There is a separate challenge to s 170MD(5) on the ground that it is also beyond the external affairs power.
• Are the provisions of Div 3 of Pt VIB of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth? As a result of a concession in argument, the only question that is raised is that of the validity of s 170ND(10).
• Is s 152 of the Act in its application to enterprise flexibility agreements beyond the legislative powers of the Commonwealth? The plaintiff States claim that s 152 is not authorised by the legislative powers which support the provisions with respect to enterprise flexibility agreements in Div 3 of Pt VIB of the Act.
• Are the provisions of Div 2 of Pt VIB of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid in so far as they purport to apply to the States?
• Are the provisions of Divs 2 and 3 of Pt VIB of the Act, or any part of such provisions, beyond the legislative power of the Commonwealth and invalid in their application to the State of Western Australia in relation to persons employed to enable the State to continue to exist and function as such?
(iii) Certified agreements and the conciliation and arbitration power
The central issue raised with respect to Div 2 of Pt VIB is whether the Parliament may provide that certified agreements have the same effect as awards of the Commission. It is not in issue that that question is to be answered by reference to the legislative power with respect to conciliation and arbitration.
The plaintiff States base their primary argument with respect to Div 2 of Pt VIB on the ground that it permits certification and, thus, allows for agreements to have the same effect as awards, notwithstanding that the agreements are arrived at without the intervention of a third party. They claim this involves neither conciliation nor arbitration, arguing that "conciliation", as used in s 51(xxxv) of the Constitution, requires the interposition of a third party using its good offices to effect a resolution of the matters in dispute. According to the argument, if there is no conciliation or arbitration the Parliament cannot legislate to give the parties' agreement the same effect as an award.
The question whether Parliament may legislate to give binding effect to industrial agreements was considered by Griffith CJ in J C Williamson Ltd v Musicians' Union of Australia [133] . His Honour expressed the minority view that the Parliament might, "as ancillary to the prevention and settlement of industrial disputes by conciliation and arbitration, make provisions authorising the parties to come together out of Court and agree to terms of settlement, and declaring that an agreement so made shall be binding upon them" [134] . His Honour added that "[t]he coming together for such a purpose followed by such an agreement" was not in his view "inaptly described as "conciliation" " and concluded that the agreement in question in that case was an industrial agreement within the meaning of the Conciliation and Arbitration Act 1904 Cth [135] . Higgins J later stated, in Federated Engine-Drivers and Firemen's Association of Australasia v Broken Hill Proprietary Co Ltd [No 3] [136] , that he was unable to concur in that opinion. However, it is not clear whether Higgins J disagreed with all that was said on the subject by the Chief Justice, or simply disagreed with his conclusion that the agreement in question in J C Williamson was an industrial agreement.
There are difficulties with the notion that the coming together of disputing employers and employees for the purpose of reaching agreement, whether or not with the intention that their agreement should have the same effect as an award, is properly described as "conciliation". But even if it is not properly so described, that does not determine the validity of Div 2 of Pt VIB. It may be that its provisions are properly to be regarded as ancillary or incidental to the exercise of the powers of conciliation or arbitration and, thus, validly enacted pursuant to s 51(xxxv) of the Constitution [137] .
It is to be remembered that, by s 170MA, the Commission's power to certify is confined to agreements made by persons or organisations who are parties to an industrial dispute or an industrial situation. And by that section, it is further confined to agreements the terms of which have been agreed by parties to an industrial dispute for "the settlement of all or any of the matters in dispute" or for "the prevention of further industrial disputes between them" and, in the case of parties to an industrial situation, "for preventing the situation from giving rise to an industrial dispute between them".
As already indicated in relation to s 150A(2)(b), the Commission's award-making power is dependent on there being a relevant relationship between an award and an interstate industrial dispute. And ordinarily, that is determined by having regard to the term or provision in question and considering its relationship with the claim to which it is directed. When s 170MA is construed with that in mind, it is clear that one consequence of that section is that the Commission cannot certify an agreement if any of its terms lacks a relevant connection with the dispute or industrial situation which would otherwise attract its award-making powers. Or to put the matter another way, the Commission can certify an agreement if and only if it could have made an award in the same terms. And that is so notwithstanding that its powers of certification are otherwise circumscribed so that, for example, they must be exercised if certain other conditions are fulfilled and must not be exercised if certain other conditions are not.
The power conferred by s 51(xxxv) of the Constitution clearly extends to authorise the establishment and maintenance of a system of conciliation and arbitration resulting in legally enforceable rights and obligations with respect to matters which are the subject of an interstate industrial dispute. That being so, it follows that it also authorises laws defining the features of a system of that kind. For example, it might validly be provided that, in relation to certain matters, the parties to an industrial dispute should not be granted enforceable rights or should only be granted enforceable rights of a limited kind [138] . Equally, it might validly be provided that, if there is an interstate industrial dispute, the legally enforceable rights and obligations of the parties with respect to the matters in dispute should, and should only, be as agreed in conciliation or determined by arbitration by a specified person.
When read in the context of the other provisions of the Act concerned with the conciliation and arbitration of industrial disputes, the effect of Div 2 of Pt VIB is to provide that, except in cases where the Commission refuses to exercise its powers of conciliation and arbitration [139] , the future industrial rights and obligations of parties to an interstate industrial dispute or a situation likely to give rise to an interstate industrial dispute shall either be those which result from the processes of conciliation and arbitration or those which might have so resulted but which, instead, have been agreed by the parties or, at least, some of those who have entered into the agreement in question.
It follows that Div 2 of Pt VIB does no more than allow that, instead of submitting their differences to conciliation and arbitration, the parties to an industrial dispute or an industrial situation may, subject to the matters specified in that Division, agree on a settlement of the matters in issue, conditional upon the terms of their agreement having the same legal effect as an award of the Commission [140] . In so doing, it marks out a feature of the system of conciliation and arbitration adopted by the Parliament for the prevention and settlement of industrial disputes. And it marks out what well may be thought to be a necessary or indispensable feature of any system that might properly have been adopted pursuant to s 51(xxxv). Whether or not that is so, the provisions of Div 2 of Pt VIB are so closely connected with conciliation and arbitration for the prevention and settlement of interstate industrial disputes as to be properly regarded as ancillary or incidental thereto. They are, thus, validly enacted pursuant to s 51(xxxv) of the Constitution.
One other matter should be noted. Certification of agreements under Div 2 of Pt VIB is conditional upon satisfaction of a number of requirements other than the central requirements that there be an industrial dispute or an industrial situation, that the agreements be made for the settlement or prevention of industrial disputes and, as a matter of construction, that the terms of the agreements be terms that could have been included in an award. Once it is accepted, as it must be, that the Parliament can legislate to provide that, if those conditions are satisfied, the agreements are to have the same effect as an award, it follows that the Parliament may attach such other conditions limiting the circumstances in which agreements will have that effect as it sees fit. If the conditions are not satisfied, the consequence is simply that, if disputes are to result in legally enforceable rights and obligations, they must be referred to conciliation and, if that fails, arbitration. It follows that the condition imposed by s 170MD(5) with respect to provisions which discriminate on the grounds specified in that sub-section is authorised by s 51(xxxv) of the Constitution. Thus, it is unnecessary to consider whether it is also supported by the external affairs power. Moreover, there is no issue under s 51(xxxv) with respect to the inclusion in s 170MD(5) of the phrase "mental disability".
(iv) Enterprise flexibility agreements and the corporations power
Subject to one possible exception, it was conceded in argument by Western Australia (the only State to challenge the validity of Div 3 of Pt VIB in its statement of claim) that the Parliament has power to legislate as to the industrial rights and obligations of constitutional corporations (as defined in s 4(1) of the Act) and their employees. That definition embraces corporations of the kind specified in s 51(xx) of the Constitution, bodies incorporated in a Territory and Commonwealth authorities [141] . The possible exception is s 170ND(10) which, as already mentioned, requires the Commission to refuse certification of an agreement if it thinks its provisions discriminate on the grounds referred to in ss 3(g), 150A(2)(b) and 170MD(5) of the Act, which grounds include grounds not specified in the Anti-Discrimination Conventions.
If, as is conceded, the Parliament can legislate pursuant to ss 51(xx) and 122 of the Constitution as to the industrial rights and obligations of employees and employer corporations of the kind specified in s 51(xx), and employee and employer bodies incorporated in a Territory, it can also legislate pursuant to the same constitutional grants of power as to the conditions to attach to those rights and obligations. And the same is true of its powers which authorise laws regulating Commonwealth authorities. Thus, s 170ND(10) is valid whether or not it also is authorised by the external affairs power. Again, no question arises under s 51(xx) and s 122 of the validity of the inclusion in s 170ND(10) of the phrase "mental disability".
(v) Section 152 in relation to enterprise flexibility agreements
The plaintiff States challenge the validity of s 152 in its application to enterprise flexibility agreements. Section 152 is as follows:
Where a State law, or an order, award, decision or determination of a State industrial authority, is inconsistent with, or deals with a matter dealt with in, an award, the latter prevails and the former, to the extent of the inconsistency or in relation to the matter dealt with, is invalid. As already mentioned, "award" is defined in s 4(1) of the Act to include an enterprise flexibility agreement.
It is not in issue that the Parliament may validly legislate as to the industrial rights and obligations of persons employed by constitutional corporations as defined in s 4(1) of the Act. Clearly, the constitutional powers which authorise laws in that regard also authorise laws defining those rights and obligations by reference to a specified happening or event. And they authorise laws specifying that they are exclusive of other rights and liabilities, whether that specification is express [142] or implied [143] . Section 152 is, thus, valid in its specification that the rights and obligations which flow from approval of an enterprise flexibility agreement are exclusive of those which might otherwise arise under a State law, or an order, award, decision or determination of a State industrial authority.
The effect of Div 3 of Pt VIB is to provide that, if the Commission so approves, the industrial rights and obligations of a constitutional corporation, as defined in s 4(1) of the Act, and its employees, are those upon which it and its employees have agreed. The combined effect of the definition of award in s 4(1) of the Act and s 152, in its application to enterprise agreements, is to give those rights and obligations the same statutory protection as those provided for by an award of the Commission, and to provide expressly that they are exclusive of rights and obligations which might otherwise be imposed by State law or by an order, award, decision or determination of a State industrial authority. Section 152 is, therefore, valid in its application to agreements approved under Div 3 of Pt VIB of the Act.
(vi) Certified and enterprise flexibility agreements and discrimination against the States
Although, in its statement of claim, the State of Western Australia challenged both certified and enterprise flexibility agreements on the grounds of discrimination, the submissions of all the plaintiff States at the hearing were confined to certified agreements. In this regard, it was argued that the combined effect of the definition of single business in s 170LB and of s 170MC(1)(a) and (g) of the Act is to make it more difficult for the States to enter into certified agreements with their employees than for other employers.
(a) a business that is carried on by a single employer; or
(b) a business that is carried on by 2 or more employers as a joint venture or common enterprise; or
(ii) a body, association, office or other entity established for a public purpose by or under a law of the Commonwealth, a State or a Territory; or
(iii) any other body in which the Commonwealth, a State or a Territory has a controlling interest.
By s 170MC(1), an agreement must be certified if, and must not be certified unless, the Commission is satisfied of various matters, including that:
(a) wages and conditions of employment of the employees covered by the agreement are regulated by one or more awards (as defined in subsection (6)) that bind their employer, or their respective employers; and
(g) if the agreement applies only to a single business, part of a single business or a single place of work:
(i) subject to subsections (4) and (5), the parties to the agreement include each organisation of employees that is a party to the award, or to one or more of the awards, referred to in paragraph (1)(a); and
(ii) the agreement has been negotiated, on the one hand, by each employer concerned or a representative of the employer, and, on the other hand, by a single person or group of persons representing all the other parties to the agreement.
Sub-sections (4) and (5) are not presently relevant and can be put to one side. "Award" is defined in s 170MC(6) to include a State award, but not a certified agreement or enterprise flexibility agreement.
The conditions in s 170MC(1)(a) and (g) are of general application and do not distinguish between the States, as employers, and other employers. Nor do they distinguish between employees of the States and other employees. If s 170MC(1) operates to make it more difficult for the States to enter into agreements with their employees, it can only be because of either that part of the definition of "single business" that applies to government undertakings, the circumstances in which that sub-section operates with respect to the States, or a combination of both.
The arguments for the plaintiff States did not rely on any particular circumstance pertaining to their activities as giving discriminatory operation to the provisions of Div 2 of Pt VIB. Rather, the argument was put by reference to the terms of the provisions in question. It was said that the definition of the activities of a State as a single business made it more difficult for a State to enter into agreements with their employees because of the need for all employees to be covered by awards and the need for an agreement to be negotiated by "a single person or group of persons representing all the other parties to the agreement". However, that fails to take proper account of s 170MC(1)(g) which allows that an agreement may apply to "a single business, part of a single business or a single place of work". It also fails to acknowledge that, by par (d)(ii) of the definition of single business in s 170LB, the activities of "a body, association, office or other entity" are a single enterprise. Moreover, it pays no regard to the possibility of State activities falling within other parts of the definition, including par (c) of the definition which refers to "a single project or undertaking".
When regard is had to the terms of s 170MC(1)(g), it appears that, in defining single business to include activities carried on by the Commonwealth and the States and Territories, the Act simply ensures that government employers, as well as non-government employers, may take advantage of the provisions of Div 2 of Pt VIB. There is nothing in the definition or in the terms of s 170MC(1)(g) which enables it to be concluded that the provisions of Div 2 of Pt VIB make it more difficult for the States to enter into certified agreements than for other employers or, in any other way, impose special burdens or disabilities upon the States.
(vii) Conclusion with respect to certified and enterprise flexibility agreements
The provisions of Divs 2 and 3 of Pt VIB of the Act are valid in their entirety, as is s 152 in its application to enterprise flexibility agreements.
The Act contains a number of provisions concerned with what may conveniently, though perhaps not accurately, be referred to as the right to strike and to engage in industrial action. It is convenient to deal separately with the provisions of Div 4 of Pt VIB and s 334A, which involve a consideration of the external affairs power, and ss 164, 166 and 166A, which do not.
(i) Immunity from civil liability - Pt Vib, Div 4, ss 170PA-170PP; Non-dismissal - s 334A
Division 4 of Pt VIB is entitled "Immunity from civil liability". Part VIB also provides for "Certified agreements" (Div 2) and "Enterprise flexibility agreements" (Div 3). The purpose of Div 4, stated in s 170PA(1), is to give effect in particular situations to "Australia's international obligation to provide for a right to strike". This obligation is stated by that section to arise from a number of sources: (a) Art 8 of the International Covenant on Economic, Social and Cultural Rights (Sch 8); (b) the Freedom of Association and Protection of the Right to Organise Convention 1948 (Sch 15); (c) the Right to Organise and Collective Bargaining Convention 1949 (Sch 16); (d) the Constitution of the ILO [144] ; (e) "customary international law relating to freedom of association and the right to strike".
The Division provides for a limited right to strike and a limited right to lock out workers during negotiation of a certified agreement under Div 2. The strike or lock-out is "protected action" (s 170PG) if it occurs during a "bargaining period" (s 170PF) and complies with the procedural requirements set out in the Division [145] . If these requirements are met then the action is protected from civil liability under any law, written or unwritten, of a State or Territory so long as it does not involve personal injury, wilful or reckless destruction of or damage to property, or the unlawful taking, keeping or use of property (s 170PM(3)). The immunity does not apply to an action for defamation (s 170PM(4)). The Commission has power to suspend or terminate the bargaining period in certain circumstances, for example, where a party to the dispute is not genuinely trying to reach agreement with the other parties to settle the dispute (s 170PO).
It is necessary to refer also to s 334A. By s 334A(2), it is an offence for an employer to "dismiss an employee, injure an employee in his or her employment, or alter the position of an employee to the employee's prejudice, merely because the employee has engaged, or is proposing to engage, in industrial action in relation to an industrial dispute that has been notified to the Commission or that the Commission has found to exist" [146] . The employer may be fined for the commission of such an offence. Further, by s 334A(7)(b), the Industrial Relations Court may order an employer who is convicted of an offence under sub-s (2) "to pay, to the person dismissed, injured or prejudiced, compensation for loss suffered as a result of the dismissal, injury or prejudice". Alternatively, if the offence constituted dismissing an employee, the Industrial Relations Court may order reinstatement (s 334A(7)(a)).
The questions in the case stated which bear on Div 4 of Pt VIB and s 334A may be stated as follows:
• Are the provisions of Div 4 of Pt VIB of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid? In this regard, the plaintiff States argue that the provisions in question are supported neither by the power to legislate with respect to external affairs nor that with respect to conciliation and arbitration. They also argue that the provisions effect an acquisition of property other than on just terms. (Qs 1(f), 5(e), 9(g))
• Are the provisions of Div 4 of Pt VIB of the Act, or any part of such provisions, beyond the legislative power of the Commonwealth and invalid in so far as they purport to apply to the States or in their application to the State of Western Australia in relation to persons employed to enable that State to continue to exist and function as such? (Qs 2(d), 12(g))
• Is s 334A beyond the legislative power of the Commonwealth and invalid? Again the plaintiff States argue that s 334A is neither a law with respect to external affairs nor with respect to conciliation and arbitration. They further contend that s 334A(7)(b) effects an acquisition of property other than on just terms. (Qs 1(g), 5(f), 9(n))
• Is s 334A beyond the legislative powers of the Commonwealth and invalid in so far as it purports to apply to the States or in its application to the State of Western Australia in relation to persons employed to enable that State to continue to exist and function as such? (Qs 2(e), 12(h))
(iii) Part VIB, Div 4 and the external affairs power
Article 8 of the International Covenant on Economic, Social and Cultural Rights (the Covenant) is the only international instrument relied upon that employs the term "right to strike". It provides:
(a) The right of everyone to form trade unions and join the trade union of his choice ;
(b) The right of trade unions to establish national federations or confederations ;
(d) The right to strike, provided that it is exercised in conformity with the laws of the particular country.
The Freedom of Association and the Protection of the Right to Organise Convention 1948 provides generally for the right of workers and employers to freely establish or join representative organisations. Further, it requires (in Art 11) that Members for whom the Convention is in force take "all necessary and appropriate measures to ensure that workers and employers may exercise freely the right to organise".
The closest that the Right to Organise and Collective Bargaining Convention 1949 comes to providing for a "right to strike" is in Art 4 which provides:
Measures appropriate to national conditions shall be taken, where necessary, to encourage and promote the full development and utilisation of machinery for voluntary negotiation between employers or employers' organisations and workers' organisations, with a view to the regulation of terms and conditions of employment by means of collective agreements.
The Constitution of the ILO makes no reference to a right to strike. The only support for the Division that might come from that Constitution are the words in the Preamble:
And whereas conditions of labour exist involving such injustice, hardship and privation to large numbers of people as to produce unrest so great that the peace and harmony of the world are imperilled; and an improvement of those conditions is urgently required: as, for example, by recognition of the principle of freedom of association.
There are also references to freedom of association and the right of collective bargaining in Arts 1 and 3 of the Declaration Concerning the aims and purposes of the International Labour Organisation which forms an Annex to the Constitution of the ILO.
The final source of support for the Division is said to be customary international law. It is difficult to see how this could be so. Customary international law requires both uniformity or consistency of state practice [147] as well as acceptance by those states that they are bound to so act. It is not enough that states act in a uniform manner if in so doing they see themselves as not acting out of a sense of legal obligation but from motives of fairness, courtesy and morality [148] . There is no evidence before this Court that this is the case. It is only if one accepts a different process for the formation of customary international law that it would be possible to come to the conclusion that there is a rule of customary international law that requires states to afford a right to strike. There is no basis, on the material before this Court, which would allow us to uphold the provisions on the basis that they implement a rule of customary international law.
As we have stated, the only explicit obligation to provide a "right to strike" is that in the Covenant. It is unnecessary to determine, for present purposes, whether, construed in accordance with Art 31 of the Vienna Convention on the Law of Treaties 1969, the provisions of other Conventions referred to are such as to give rise to an obligation to provide a right to strike. Article 31 requires a treaty to be interpreted in accordance with the ordinary meaning to be given to its terms "in their context and in the light of its object and purpose" [149] . Further, it is unnecessary to determine whether the activities of the agencies of the ILO such as the Committee on Freedom of Association are of such a nature or extent as to give rise to the ability to legislate under s 51(xxix). The question is best approached directly, on the basis of Art 8 of the Covenant. That Article gives rise to an obligation to provide a right to strike that may be exercised according to laws regulating that right.
The content of the obligation is open to debate. It might be argued that, even without enacting Div 4 of Pt VIB, Australia has fulfilled its obligation to provide a right to strike in that there are not generally applicable criminal sanctions for undertaking strike action. However, the absence of criminal penalties does not equate with the provision of a right to strike. In our view, it was reasonably open to the Parliament to conclude that even the existence of common law remedies against strikers and strike organisers is inconsistent with the provision of the right to strike. Put positively, it was open to the Parliament to conclude that qualifying common law rights of action against strikers will fulfil, at least in part, Australia's obligation to provide a right to strike within the terms of the Covenant.
The provisions of the Division can only represent a partial implementation of the right referred to in the Covenant. That is because of the limited circumstances in which they are applicable, namely, where employees are covered by an award and an agreement is being negotiated under Div 2 (which relates to certified agreements). It has no effect in relation to (i) workers covered only by State awards; (ii) workers not covered by awards; or (iii) workers covered by Commonwealth awards not involved in negotiating an agreement under Div 2. However, as we have said, partial implementation of a Convention is no objection to the validity of a law under s 51(xxix).
The main effect of Div 4 is to preclude common law action against members and officials of employee organisations where those persons are involved in "protected action" (s 170PG(2)). However, the Division goes further than protecting and regulating the right to strike. It also provides protection for employers who, in breach of their contracts with their employees, lock out their employees from their place of employment (s 170PG(3)). This provision is not part of the protection of the right to strike. Nor is it a qualification on the right to strike, since it may be exercised at the initiative of the employer when there is no intention on the part of the employees to take strike action [150] . In our view, although the provisions protecting strike action in the Division are reasonably capable of being seen as appropriate and adapted to partially implementing the obligation under Art 8 of the Covenant, those provisions protecting lock-outs are not. If they are valid, only the conciliation and arbitration power, s 51(xxxv), can support them.
In contrast, s 334A, a provision which operates generally in relation to industrial disputes, does not go beyond what might reasonably be regarded as appropriate and adapted for giving effect to Art 8 of the Covenant. The section is stated, in sub-s (1), to be for the purpose of implementing in part Australia's obligation to provide for a right to strike. Its main provision (sub-s (2)) states that an employer "must not dismiss an employee, injure an employee in his or her employment, or alter the position of an employee to the employee's prejudice, merely because the employee has engaged, or is proposing to engage, in industrial action in relation to an industrial dispute". Excluded by s 334A(3) is industrial action causing personal injury or damage to, or destruction or misappropriation of, property.
Just as the provisions protecting persons taking industrial action would be supportable, so too is s 334A. Just as the existence of the right to strike, subject to the possibility of common law remedies, might reasonably be seen as no right at all, so too might the existence of the right be doubted where its exercise might lead to the loss of employment or punitive action by the employer against the employee. In contrast to Div 4, the terms of s 334A do not go beyond what might reasonably be regarded as implementing the terms of the Covenant.
Subject to a consideration of the argument that it effects an acquisition of property other than on just terms, s 334A is valid.
(v) Immunity from civil liability - Pt VIB, Div 4 and the conciliation and arbitration power
It is necessary to consider whether the provisions of Div 4 of Pt VIB are validly enacted pursuant to s 51(xxxv) of the Constitution. In this regard it may be noted that s 170PA(3) provides that Div 4 has the additional effect it would have "under the powers conferred on the Parliament by paragraph 51(xxxv) of the Constitution ".
In considering whether the provisions of Div 4 are validly enacted under s 51(xxxv), it is necessary to emphasise that Div 4 is not of general application. It applies only if a party to an interstate industrial dispute wishes to negotiate an agreement to be certified under Div 2 of Pt VIB of the Act (s 170PD). The Commission must have found the dispute to exist (s 170PC(a)) and certain other conditions must be satisfied (ss 170PC and 170PD). Those other conditions, which are not presently relevant, further confine the circumstances in which the Act confers immunity from civil suit. If the various conditions are satisfied, the party wishing to negotiate an agreement may give written notice to that effect (ss 170PD and 170PE) with the result that a "bargaining period" begins seven days later (s 170PF). As previously described [151] , limited immunity, qualified in the manner discussed above, is conferred on the employer, with respect to lock-outs (s 170PG(3)-(6)), and on the organisation of employees, its officers, members and employees, with respect to industrial action (s 170PG(2)), during the bargaining period [152] , provided that certain procedural requirements are satisfied (ss 170PH-170PL). In general terms, immunity does not extend to action involving or likely to involve personal injury, wilful or reckless damage or misappropriation of property. Nor does it extend to an action for defamation.
The immunity conferred by s 170PM is qualified by the Commission's power under s 170PO to suspend or terminate the bargaining period, thus terminating the immunity (s 170PO(4)) [153] , if it is satisfied that the party involved in the industrial action is not genuinely trying to reach agreement, or has not complied with the Commission's directions to negotiate in good faith, or if it is satisfied that the action in question is threatening to endanger the life, safety or health of the public or a section of the public, or to cause significant damage to the economy or an important part of it. And by s 170PP, if the bargaining period is terminated for either of the two last-mentioned reasons, "[t]he Commission must immediately begin to exercise its powers under [the] Act to prevent or settle the industrial dispute".
It is well settled that s 51(xxxv) "carries with it authority to make such provisions as are incidental to the effectuation of the purpose described by the express words of the power" [154] . However, there is no precise test to determine whether a provision is "incidental" in that sense. Various questions have been propounded in the decided cases to facilitate examination of the issue whether there is a sufficient connection between the provision in question and the subject matter of the power, the questions asked often varying according to the nature of the provision or the power in question. However, it is clear that the grant of power extends beyond what is merely necessary [155] and, at the very least, includes whatever is appropriate to effectuate the exercise of the power [156] . It is also clear that what is appropriate is to be determined by the Court [157] with due weight being given to the view of Parliament [158] .
A provision conferring general immunity with respect to industrial action or lock-outs in support of or in resistance to claims involved in an industrial dispute might well be viewed as likely to frustrate the Commission in the exercise of its powers of conciliation and arbitration and, thus, as not appropriate to effectuate those powers. But different considerations arise if immunity is limited to action which does not involve the likelihood of personal injury or wilful or reckless interference with property rights (limited immunity) and is qualified in a way that leads or can lead to the loss of immunity and also ensures that the Commission is in a position to exercise a measure of control over the parties and their dispute.
In the absence of limited immunity for industrial action taken in support of or in response to claims in an industrial dispute, the parties may well take the view that civil litigation should be pursued rather than the processes of conciliation and arbitration. And if differences are entrenched by reason of the prospect of civil litigation that, too, reduces the likelihood of successful conciliation. By arming the Commission with the authority to withdraw that immunity in the event of a failure by a party to negotiate towards a settlement, s 170PM enables the Commission to play a constructive role in negotiations aimed at settling the dispute.
It was open to the Parliament to form the view that disputes might more readily be resolved by conciliation and arbitration if the parties to a dispute who so wish are first provided with an opportunity to negotiate the matters in the dispute freed from the prospect of civil litigation in the event of direct industrial action. The view is also open that limited immunity of the kind conferred by s 170PM has the capacity to assist in the resolution of the dispute by conciliation and arbitration if negotiations fail and it becomes necessary for the Commission to exercise its powers in that regard. Thus s 170PM has a substantial connection with conciliation and arbitration for the prevention and settlement of interstate industrial disputes. It follows that, subject to the questions raised by the plaintiff States with respect to the acquisition of property and discrimination against the States, the provisions of Div 4 of Pt VIB are validly enacted pursuant to s 51(xxxv) of the Constitution.
(vi) Section 334A and the conciliation and arbitration power
Although it is not strictly necessary to consider whether s 334A is a valid law with respect to conciliation and arbitration, it is convenient to note that it operates to prevent an employer dismissing or taking other action against an employee because he or she has engaged or is proposing to engage in industrial action "in relation to an industrial dispute that has been notified to the Commission or that the Commission has found to exist". As with the limited immunity conferred by s 170PM, the employee is not protected in his or her employment if the industrial action involves or is likely to involve personal injury, wilful or reckless destruction of or damage to property, or the unlawful taking, keeping or use of property (s 334A(3)).
And as with the limited immunity conferred by s 170PM, the view is well open that interstate industrial disputes will more readily be resolved by conciliation and arbitration if the employer is prevented from dismissing or taking other action against employees in the circumstances to which s 334A is directed. Particularly is that so where, as s 334A requires, the dispute has been notified to the Commission or a dispute finding has already been made. Section 334A has a substantial connection with the conciliation and arbitration of interstate industrial disputes. Subject to a consideration of the arguments of the plaintiff States with respect to the acquisition of property and discrimination against the States, it is also a valid law on the subject of conciliation and arbitration.
(vii) Immunity from civil liability - ss 164, 166 and 166A
Two other provisions of the Act confer immunity from action on organisations of employees, their officers, members and employees. The first is s 166 which confers immunity from action under a law of a State or Territory with respect to conduct that is a breach of a bans clause in a federal award or in an agreement having the force of a federal award. The second is s 166A which confers immunity from action in tort under the law of a State or Territory "in relation to conduct in contemplation or furtherance of claims that are the subject of an industrial dispute", subject to the qualification that immunity attaches neither to conduct resulting in personal injury, wilful or reckless damage or misappropriation of property, nor to conduct arising from a demarcation dispute or disputes relating to payment claims in respect of a period in which the employees were engaging in industrial action (s 166A(2)).
By s 164 of the Act, immunity is also conferred on a trade union, which is defined to include an organisation of employees registered under the Act and an organisation which is registered or recognised under State law [159] , its officers, members and employees. The immunity is immunity from action under a law of a State or Territory for conduct leading to or resulting in secondary boycotts of a constitutional corporation as defined in s 156 of the Act. As with s 170PM, the immunity conferred by s 164 of the Act does not attach to conduct resulting in personal injury, damage or misappropriation of property nor to defamation (s 164(2) and (3)).
(viii) Questions in the case stated with respect to ss 164, 166 and 166A
The questions in the case stated with respect to these provisions may be condensed into the single question:
• Are any of ss 164, 166 and 166A of the Act beyond the legislative power of the Commonwealth and invalid? In this regard the plaintiff States argue that ss 166 and 166A are not supported by the conciliation and arbitration power and that s 164 is not supported by the powers which authorise the provisions of the Act proscribing secondary boycotts. They also argue that s 166A effects an acquisition of property other than on just terms. (Qs 1(i), (j), and (k); 5(h), (i) and (j); 9(k), (l) and (m))
(ix) Section 166A and the conciliation and arbitration power
It is convenient to deal first with s 166A which confers limited immunity on organisations of employees, their officers, members and employees in relation to industrial action taken in contemplation or furtherance of claims that are the subject of an industrial dispute. It is limited in the manner earlier described. Moreover, it is conferred subject to the qualification that it is lost in the circumstances set out in sub-ss (3), (4), (5) and (6). In general terms, those sub-sections allow a person who wishes to bring an action in tort to notify the Commission, whereupon the Commission must take immediate steps to stop the conduct involved and, if the conduct has not ceased within seventy-two hours, or if the Commission is of the opinion it cannot stop the conduct promptly or that there would be substantial injustice if the notifying party were prevented from bringing action, it must certify to that effect and immunity is thereby lost.
As earlier indicated with respect to the provisions of Div 4 of Pt VIB, the view is well open that industrial disputes will more readily be resolved by conciliation and arbitration than by the conferral of a limited immunity of the kind presently in question. And particularly is that so if the body charged with conciliation and arbitration has power to take action which results in the loss of that immunity. That being so, there is a clear and substantial connection between s 166A and conciliation and arbitration for the prevention and settlement of industrial disputes. Subject to the question whether s 166A offends the constitutional prohibition against acquisition other than on just terms, it is validly enacted pursuant to s 51(xxxv) of the Constitution.
(x) Section 166 and the conciliation and arbitration power, the corporations power, etc
As already indicated, s 166 provides that "[a]n action under a law of a State or Territory does not lie against an organisation, or an officer, member or employee of an organisation, in relation to conduct of the organisation, or of the officer, member or employee acting in that capacity, that is in breach of a bans clause [160] of an award" [161] . The immunity which s 166 confers is to be considered in the context of s 178 of the Act. Pursuant to s 178, the Industrial Relations Court may impose a penalty on an organisation or party bound by an award of the Commission for breach of a term of that award, including breach of a bans clause [162] .
There can be no doubt as to the Parliament's power to legislate as to the legal consequences to attach to the breach of a term of an award. And the same is true of the terms of an agreement if, as here, Parliament has validly enacted that it is to have effect as an award. And if Parliament legislates as to the legal consequences of a breach of a bans clause, it may specify, either expressly or by implication, that they are to be exclusive of those that might otherwise attach under a law of a State or Territory.
In context, s 166 merely makes it plain that s 178 provides exhaustively as to the consequences which attach to the breach of a bans clause. It is a valid exercise of the power with respect to conciliation and arbitration and, so far as concerns enterprise flexibility agreements, a valid exercise of the powers which authorise the provisions of the Act in that regard.
The plaintiff States contend that s 164 is invalid, being a law for the protection of trade unions and not a law which may validly be enacted pursuant to those powers which authorise the provisions of the Act proscribing secondary boycotts. The Commonwealth contends that it is validly enacted pursuant to those powers and, also, pursuant to the power conferred by s 51(xxxv) of the Constitution. However, it will later emerge that consideration of s 51(xxxv) is unnecessary.
To understand the operation of s 164, it is necessary to turn to the provisions of Div 7 of Pt VI, particularly the prohibitions effected by ss 162 and 163 by reference to a "constitutional corporation". A "constitutional corporation" is specially defined in s 156 for the purposes of Div 7. In general terms, the effect of that definition is that constitutional corporations are foreign corporations, trading and financial corporations formed within the Commonwealth (which together will be referred to as "s 51(xx) corporations") and corporations formed in a Territory.
Subject to exceptions and qualifications which are not presently relevant, s 162 prohibits a person from acting in concert with another for the purpose of advancing the interests of some person or trade union (which by definition includes a State union registered or recognised under State law [163] ) in relation to industrial matters [164] , if their conduct hinders or prevents a third person from trading with a fourth person and the purpose and likely effect of the conduct is to cause substantial loss or damage to the business of that fourth person, provided the third or the fourth person is a constitutional corporation as defined in s 156 of the Act.
Again subject to exceptions and qualifications which are not presently relevant, s 163 prohibits a person (referred to in s 163(1) and hereafter as the "first person") from entering into an agreement with a trade union or a member, officer or employee of a trade union in order to prevent or settle an industrial dispute between the first person and a third person if "the substantial immediate purpose of the agreement" is to prevent or hinder the first person from continuing to trade with the third person [165] or to subject continued trading to a condition preventing or hindering the third person from supplying goods or services to another person, and the agreement is likely to cause substantial loss or damage to the business of the third person, provided that either of the first or the third person is a constitutional corporation as defined in s 156 of the Act.
Division 7 is given additional operation by ss 159, 160 and 161. Section 159 provides:
(b) a body corporate established for a purpose of the Commonwealth by or under a law of the Commonwealth or a law of a Territory; or
(c) an incorporated company in which the Commonwealth, or a body corporate of a kind referred to in paragraph (b), has a controlling interest;
this Division applies to the Commonwealth, the body corporate or the incorporated company, as the case may be, as if it were a constitutional corporation. Section 160 provides: In addition to its effect apart from this section, section 162 has the effect that it would have if:
(a) any reference to conduct were a reference to conduct in the course of, or in relation to, constitutional trade or commerce; and
(b) the reference in paragraph 162(2)(a) to trading were a reference to trading by way of constitutional trade or commerce; and
(c) in subsection 162(3) the words "if either the third person or the fourth person is a constitutional corporation" were omitted.
And by s 161, s 163 has the additional effect it would have if references "to trade, or to trading were reference[s] to trade, or trading by way of constitutional trade or commerce" and there were no reference to constitutional corporations. By s 156 "constitutional trade or commerce" is defined to mean:
(a) trade or commerce between Australia and places outside Australia; or
(c) trade or commerce within a Territory, between a State and a Territory or between 2 Territories; or
(d) the supply of goods or services to or by the Commonwealth or an authority or instrumentality of the Commonwealth.
Provision is made in s 163A for the notification of boycott disputes [166] to the Commission, whereupon, by s 163B, the Commission is to take immediate steps to settle the dispute by conciliation. If the Commission thinks it is not likely to be able to settle the dispute or to stop the boycott promptly, it must certify to that effect (s 163D). Thereupon, proceedings may be instituted in the Industrial Relations Court (s 163P). If the requirements of s 163D(3) are satisfied, the Commission must certify to that effect. Proceedings can be commenced in the Industrial Relations Court if the Commission decides that it would cause substantial injustice if a party who wishes to bring action were prevented from beginning that action, or if seventy-two hours have elapsed since the boycott contravention (s 163D(3)). If proceedings are commenced, the Industrial Relations Court may grant restraining and mandatory injunctions (s 163G). And by s 163H, "[a] person who suffers loss or damage by boycott conduct may recover the amount of the loss or damage by action in [that] Court", provided the action is brought within three years after the cause of action arose [167] .
It is in this statutory setting that s 164 confers immunity from action under a law of a State or Territory on trade unions, their officers, members and employees with respect to "boycott conduct" as defined by s 156 or, what would be boycott conduct if ss 162(7) and 163(4) and s 162A had not been enacted [168] . "[B]oycott conduct" is defined in s 156 to mean:
(b) attempting to commit a boycott contravention; or
(c) aiding, abetting, counselling or procuring a person to commit a boycott contravention; or
(d) inducing, or attempting to induce, a person (whether by threats, promises or otherwise) to commit a boycott contravention; or
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the commission of a boycott contravention; or
(f) conspiring with others to commit a boycott contravention.
"[B]oycott contravention" is defined by the same section to mean "a contravention of section 162 or 163". 1. Note that the immunity is subject to the exceptions set out in s 164(2) and (3), being the same exceptions set out in s 170PM(3) and (4).
Although the plaintiff States argue that s 164 is not supported by any of the legislative powers authorising provisions proscribing secondary boycotts, it is convenient to consider the validity of s 164 by reference to s 51(xx) of the Constitution. In this regard, it is sufficient to note that it is not in dispute that the powers of the Parliament to legislate as to secondary boycotts by and affecting "a body corporate that is incorporated in a Territory" [169] , a business of the kind specified in s 159, and boycotts in the course of or affecting constitutional trade and commerce, as defined in s 156, are no less extensive than the power conferred by s 51(xx) to legislate with respect to "[f]oreign corporations, and trading or financial corporations formed within the limits of the Commonwealth".
The prohibitions effected by ss 162 and 163 each have a double aspect. So far as a s 51(xx) corporation is concerned, s 162 operates to protect it from conduct of a specified kind, the purpose and likely result of which is substantial loss or damage to the business of the corporation. It is convenient to refer to this as its primary operation. It also operates, so far as a s 51(xx) corporation is concerned, to protect it from specified conduct which prevents or hinders it from trading with another. It is convenient to refer to this as its secondary operation.
The prohibition in s 163 also operates to protect a s 51(xx) corporation from conduct of a specified kind, the purpose and likely result of which is substantial loss or damage to the business of the corporation. Again it is convenient to refer to that operation as its primary operation. It also operates to prevent a s 51(xx) corporation from entering into an agreement of a specified kind with a trade union, its officers, members or employees if the substantial and immediate purpose of the agreement is to prevent or hinder the corporation from trading with another [170] . It is convenient to refer to this as the secondary operation of s 163.
It was held in Actors and Announcers Equity Association v Fontana Films Pty Ltd, a case concerned with a provision operating to much the same effect as s 162 in its primary operation [171] , that s 51(xx) of the Constitution authorises a law forbidding conduct engaged in for the purpose of causing loss or damage to a corporation to which that constitutional provision relates [172] . If the Parliament chooses to forbid conduct of that kind, it may validly proscribe some or all conduct of that kind or, as with ss 162 and 163 (to the extent that they operate to that effect), conduct by particular bodies or persons. It may also validly legislate as to the consequences to attach to that conduct and, in so doing, it may provide, either expressly or by implication, that those consequences shall be exclusive of the consequences which might otherwise attach under a law of a State or Territory.
Sections 162 and 163, in their application to conduct the purpose and likely effect of which is to cause damage to the business of a s 51(xx) corporation, validly proscribe conduct by a trade union, its officers, members and employees. Sections 163G and 163H validly enact the consequences which attach to that conduct. And s 164 validly provides that those consequences are exclusive of the consequences which might otherwise attach under a law of a State or of a Territory.
In its secondary operation, s 162 proscribes conduct of a specified kind that "hinders or prevents [a s 51(xx) corporation] from trading with [another person]", if the purpose and likely effect of the conduct is to cause substantial loss or damage to the business of that other person. Although in its secondary operation s 162 is not concerned to protect the business of a s 51(xx) corporation from loss or damage, it nonetheless operates to "protect [a s 51(xx) corporation] by prohibiting interference with [its] trading activities", an operation which Mason J, in Fontana Films [173] , considered gave the provision there in question the character of a law with respect to a s 51(xx) corporation.
There is no distinction, for the purposes of s 51(xx) of the Constitution, between a law which operates to protect the business of a corporation from loss or damage and one that operates to protect the corporation from interference with its trading activities. Each "protects the subject of a power by operating directly on it" [174] . Thus, so far as concerns a s 51(xx) corporation, s 162 is valid in its secondary operation. It follows that, to that extent, ss 163G and 163H validly enact the consequences to attach to conduct proscribed by s 162 in its secondary operation and s 164 is valid in its application to that conduct.
It remains to be considered whether s 164 is valid in its application to conduct proscribed by s 163 in its secondary operation. That conduct is the entry into an agreement by a s 51(xx) corporation with a trade union, or a member, officer or employee of a trade union, which prevents or hinders the corporation from continuing to trade with another person. In its statutory setting, the prohibition is clearly a prohibition directed both to a s 51(xx) corporation and a trade union, its members, officers and employees. So far as the prohibition is directed to a corporation of that kind, it operates directly on a subject of the power conferred by s 51(xx). Moreover, it operates with respect to its trading activities, which activities have been described as constituting "the very heart of the purpose for which the corporation was formed" [175] . The prohibition is, to that extent, clearly authorised by s 51(xx) of the Constitution.
It follows from Re Dingjan; Ex parte Wagner [176] that not every direction to a third party which relates to the business of a s 51(xx) corporation is a law with respect to a corporation of that kind. However, a law which prevents third parties from entering into agreements with a s 51(xx) corporation for the purpose of preventing or hindering the corporation in its trading activities is one so closely connected with the regulation of the corporation in the conduct of its trading activities as to be a law with respect to a s 51(xx) corporation. That being so, it follows that, so far as concerns a s 51(xx) corporation which has entered into an agreement with a trade union, ss 163G and 163H are valid in their application to conduct proscribed by s 163 in its secondary operation and that s 164 validly enacts that the consequences specified in ss 163G and 163H are exclusive of the consequences which might otherwise attach under a law of a State or of a Territory.
As already indicated, it is not in issue that if Parliament may validly legislate with respect to s 51(xx) corporations in terms of ss 162, 163, 163G, 163H and 164, it may validly legislate in the same terms for bodies corporate formed in a Territory, a business of the kind specified in s 159 and constitutional trade and commerce, as defined in s 156. It follows that s 164 is a valid exercise of the corporations power and those other powers which support ss 162 and 163 in their operation beyond s 51(xx) corporations. Thus, as already indicated, it is unnecessary to consider whether, as contended for the Commonwealth, s 164 is also a valid law with respect to conciliation and arbitration for the prevention and settlement of interstate industrial disputes.
(xii) Conclusions with respect to ss 164, 166 and 166A
It remains to consider whether s 166A provides for the acquisition of property other than on just terms. Subject to that consideration, the provisions in Div 8 of Pt VI are wholly valid.
(xiii) Division 4 of Pt VIB and ss 166A and 334A(7)(b) - acquisition of property other than on just terms
As already indicated, ss 166A and 170PM(3) confer limited immunity from suit with respect to industrial action and, also, in the case of s 170PM(3), with respect to lock-outs. It is unnecessary to repeat the limitations and qualifications that attach to the immunity thus conferred. It is, however, necessary to note, as was conceded in argument, that ordinary principles of interpretation require that ss 166A and 170PM(3) be construed as operating prospectively, and not as affecting accrued rights [177] . This notwithstanding, the plaintiff States contend that ss 166A and 170PM(3) effect an acquisition of property other than on just terms, contrary to s 51(xxxi) of the Constitution.
It is well established that the guarantee effected by s 51(xxxi) of the Constitution extends to protect against the acquisition, other than on just terms, of "every species of valuable right and interest including choses in action" [178] . It has been held to prohibit the extinguishment of vested causes of action [179] . At least that is so if the extinguishment results "in a direct benefit or financial gain and the cause of action is one that arises under the general law" [180] . However, it follows from the fact that ss 166A and 170PM(3) operate only prospectively that they do not operate to extinguish vested causes of action.
Properly construed, ss 166A and 170PM(3) are concerned solely to provide as to the future rights and liabilities of those involved in or adversely affected by lock-outs and industrial action. As such, they are concerned with rights and interests in the abstract, not with valuable rights and interests as protected by s 51(xxxi) of the Constitution. There is no acquisition of property involved in the modification or extinguishment of a right or interest that has not yet accrued. To put the contrary is to propose an acquisition of something that does not exist. Thus, ss 166A and 170PM(3) do not infringe the guarantee in s 51(xxxi).
The plaintiff States also argue that s 334A(7)(b) offends against s 51(xxxi) of the Constitution. As earlier indicated, an employer who has, under s 334A(2), been convicted of dismissing an employee or otherwise injuring or prejudicing the employee in his or her employment "merely because [he or she] has engaged, or is proposing to engage, in industrial action" may, pursuant to s 334A(7)(b), be ordered to pay the employee compensation for loss suffered in consequence.
The argument for the plaintiff States is that s 334A prevents an employer from refusing to pay an employee for any period during which he or she refuses to perform duties for this involves injury to the employee in his or her employment. According to the argument, to award compensation for that injury amounts to an acquisition of property because it would require the employer to part with money without having received consideration in the form of services rendered. The argument proceeds without regard to the contractual or award rights of an employee.
If, as is theoretically possible, an employee is entitled by contract or by award to payment for a period during which he or she is involved in industrial action, the refusal of an employer to make payment clearly constitutes "injury" within the ordinary meaning of that word. And if compensation were ordered in such circumstances, it would be compensation for deprivation of the employee's contractual or award rights and would not, in any sense, involve the acquisition of property.
However, as a matter of ordinary language, a refusal to pay that which there is no obligation to pay does not constitute injury. And there is no reason why "injury" in s 334A should be so construed. Once it is accepted, as it must be, that s 334A does not require a payment that is not otherwise required, there is no basis for the argument that s 334A(7)(b) effects an acquisition of property other than on just terms.
(xiv) The provisions of Div 4 of Pt VIB and s 334A - discrimination against the States
It was argued for the plaintiff States that the combined effect of the definition of protected action in s 170PG and the grant of immunity from civil suit by s 170PM(3) is to discriminate against the States in two distinct ways. First, it is said that they operate to curtail or impair the ability of the States "to control industrial action within the State" in that they cannot "pass or enforce legislation designed to prevent industrial action that is substantially damaging the interests of [a] State and its people". Then it is said that they operate "to curtail or impair the capacity of a State to function as a Government in respects which are critical to the ability of the State to exercise its constitutional powers".
The first argument is one that directs attention to the States as bodies politic, not as employers. If their powers are in any way curtailed, it is by s 109 of the Constitution, not by the provisions of Div 4 of Pt VIB. The first argument must be rejected. The second argument directs attention to the States as employers. In this respect, ss 170PG and 170PM do not, in terms, distinguish between the States as employers and other employers. And the plaintiff States do not point to circumstances which result in the Act operating upon them with different impact from the way in which it operates on other employers. Thus, the provisions of Div 4 of Pt VIB are valid unless they offend the second element of the implied prohibition identified and explained in Re Australian Education Union.
It is unlikely, but theoretically possible, that those employed at the higher levels of government might participate in industrial action in support of claims by other State employees even though their own terms and conditions cannot be the subject of an award and, thus, cannot be the subject of a certified agreement. But, subject to that consideration, the limited immunity from civil suit conferred by s 170PM(3), qualified, as it is, by the Commission's power to take action resulting in the loss of that immunity, in no way infringes any aspect of the second element of the prohibition identified in Re Australian Education Union.
So far as concerns persons employed at the higher levels of government, the reading down of s 6 of the Act has the result that it does not confer immunity for action by and against them. And s 334A of the Act is in no different position from the provisions of Div 3 of Pt VIA which proscribe termination on specified grounds unconnected with the term of employment, namely, by reason of the reading down of s 6, it does not bind the States with respect to those employed at the higher levels of government.
(xv) Conclusions with respect to Div 4 of Pt VIB and s 334A
The provisions of Div 4 of Pt VIB have valid operation according to their terms, except that the reading down of s 6 has the effect that s 170PM(3) does not apply to action which would otherwise be "protected action" for the purpose of s 170PG by and against those employed at the higher levels of government. And, by reason of the reading down of s 6, s 334A is valid but does not bind the States with respect to those employed at the higher levels of government.
The questions in the case stated should be answered as follows:
(1) Are any of the following provisions of the Industrial Relations Act 1988 Cth (the Act), or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid -
(h) s 152 in its application to enterprise flexibility agreements;
Answer: Yes. Sections 170DE(2) and 170EDA(1)(b), which are in Div 3 of Pt VIA, are invalid. See also the answer to Q 4 with respect to ss 170AE and 170AH, which are in Div 1 of Pt VIA; ss 170BC and 170BI, which are in Div 2 of Pt VIA; ss 170DB, 170DC, 170DE(1), 170DF and 170FA, which are in Div 3 of Pt VIA; ss 170KA, 170KB and 170KC, which are in Div 5 of Pt VIA; s 170PM(3), which is in Div 4 of Pt VIB; and s 334A. No answer is given with respect to the term "mental disability" in s 170DF(1)(f).
(2) Are any of the following provisions of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid in so far as they purport to apply to the States -
Answer: Sections 170DE(2) and 170EDA(1)(b), which are in Div 3 of Pt VIA, are invalid. The other provisions are valid. However, see the answer to Q 4 with respect to ss 170AE and 170AH, which are in Div 1 of Pt VIA; ss 170DB, 170DC, 170DE(1), 170DF and 170FA, which are in Div 3 of Pt VIA; s 170PM(3), which is in Div 4 of Pt VIB; and s 334A.
(3) Are the provisions of Division 1 of Pt VIA of the Act, or any of them, beyond the legislative powers of the Commonwealth and invalid in their application to the State of Victoria?
Answer: No. However, see the answer to Q 4 with respect to ss 170AE and 170AH which are in Div 1 of Pt VIA.
(4) If any such provision or provisions of the Act is or are invalid, is it or are they severable and, if so, to what extent?
Answer: Sections 170DE(2) and 170EDA(1)(b) are severable. Section 6 of the Act is to be read down so as to bind the States only to the extent that the provisions of the Act do not prevent them from determining the number of persons they wish to employ, the term of their appointment, the number and identity of those they wish to dismiss on redundancy grounds and the terms and conditions of those employed at the higher levels of government. Consequently, ss 170AE, 170AH, 170BC, 170BI, 170DB, 170DC, 170DE(1), 170DF, 170KA, 170KB, 170KC and 334A do not bind the States with respect to persons employed at the higher levels of government and s 170PM(3) does not apply to action, which would otherwise be protected action for the purposes of s 170PG, by and against those employed at the higher levels of government. When s 6 is read down in the manner indicated, s 170FA does not apply to the States and s 170DE(1) does not operate to prevent the States from determining the number and identity of those they wish to dismiss on redundancy grounds.
(5) Are any of the following provisions of the Industrial Relations Act 1988 Cth (the Act), or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid -
(g) s 152 in its application to enterprise flexibility agreements;
(6) Are the provisions of Div 2 of Pt VIB of the Act, or any part of them, beyond the legislative powers of the Commonwealth and invalid in so far as they purport to apply to the States?
(7) Are any of the following provisions of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid in their application to the State of South Australia in relation to persons employed to enable the State to continue to exist and function as such -
Answer: Sections 170DE(2) and 170EDA(1)(b) in Div 3 of Pt VIA are invalid. The other provisions are valid, however see the answer to Q 4.
(8) If any such provision or provisions of the Act is or are invalid, is it or are they severable and, if so, to what extent?
(9) Are any of the following provisions of the Industrial Relations Act 1988 Cth (the Act), or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid -
(j) s 152 in its application to enterprise flexibility agreements;
Answer: Division 3 of Pt VIB is valid. Section 3(g) is valid in all its operations save that, with respect to its operation with s 170DF(1)(f), no answer is provided as to the phrase "mental disability". As to s 150A, see the answer to Q 13. Otherwise, see the answer to Q 1.
(10) Are the provisions of Div 1 of Pt VIA of the Act, or any part of them, beyond the legislative powers of the Commonwealth and invalid in so far as they purport to apply to the State of Western Australia?
Answer: No. However, see the answer to Q 4 with respect to ss 170AE and 170AH which are in Div 1 of Pt VIA.
(11) Are the provisions of Div 2 of Part VIB of the Act, or any part of them, beyond the legislative powers of the Commonwealth and invalid in so far as they purport to apply to the States?
(12) Are any of the following provisions of the Act, or any part of such provisions, beyond the legislative powers of the Commonwealth and invalid in their application to the State of Western Australia in relation to persons employed to enable the State to continue to exist and function as such -
Answer: Sections 170DE(2) and 170EDA(1)(b) in Div 3 of Pt VIA are invalid. All other provisions are valid. As to Qs 12(a), (b), (c), (d), (g) and (h), however, see the answer to Q 4.
(13) If any such provision or provisions of the Act is or are invalid, is it or are they severable and, if so, to what extent?
Answer: Section 150A(3) is to be read down so as to authorise the variation of awards only to the extent that the variation has a relevant connection with the dispute which attracted the Commission's award-making power. Otherwise, see the answer to Q 4.
In seeking to support the validity of those provisions of the Industrial Relations Act 1988 Cth which are challenged in these cases, the Commonwealth placed reliance upon its power to legislate under s 51(xxix) of the Constitution with respect to "External affairs". Those provisions, as the name of the Act would suggest, deal with industrial relations but in important respects travel beyond the limits which the Constitution imposes upon the power of the Commonwealth to legislate with respect to that subject matter. Those limits confine Commonwealth power to the making of laws with respect to "Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State" [181] . It is evident that the intention which lay behind the imposition of those limits was that the States should remain responsible for industrial relations within their borders except where, because of the interstate nature of a dispute, its prevention or settlement might be beyond the capacity of any one State. It was then, and only then, that the Commonwealth was to have power to prevent or settle the dispute, and then only by means of conciliation or arbitration.
For a long time the Commonwealth has found these restrictions on its power irksome. Commencing in 1910 it has sought amendments to the Constitution to remove them [182] . None of these amendments have received the majority of votes required by s 128 for the amendment of the Constitution. The Commonwealth made its last unsuccessful attempt at amendment in 1946, this time by the insertion of the following paragraph in s 51 of the Constitution [183] :
(xxxiva) Terms and conditions of employment in industry, but not so as to authorise any form of industrial conscription. It is ironical, to say the least, that the Commonwealth should seek and, upon the view adopted by the majority in these cases, find in the external affairs power a way to disregard the restrictions imposed upon it by s 51(xxxv) and to legislate in a manner denied to it by the continued refusal of the electors to amend the Constitution. 1. See Constitution Alteration (Legislative Powers) 1910; Constitution Alteration (Industrial Matters) 1912; Constitution Alteration (Railway Disputes) 1912; Constitution Alteration (Legislative Powers) 1919; Constitution Alteration (Industry and Commerce) 1926; Constitution Alteration (Industrial Employment) 1946. 2. See Constitution Alteration (Industrial Employment) 1946.
Not only is it ironical, but the result is such as to call into question the construction which produces it. It is one thing to say that the enumerated legislative powers given to the Commonwealth by s 51 may overlap. It is quite another thing to say that the carefully drawn limits upon one power may be disregarded in the construction of another. Where those limits are in the form of an exception to a power otherwise given - for example, the exception of State banking from the banking power [184] - they must surely be given effect whatever paragraph of s 51 is under consideration [185] . And even where the limits are to be found in the definition of the subject matter of the power - as is the case with s 51(xxxv) - they must surely be taken into account in the construction of s 51 as a whole.
This is not to deny the plenary nature of the powers conferred by s 51, but before a power can be given full effect, its proper scope must be determined. For example, the power to legislate with respect to corporations under s 51(xx) is undoubtedly a plenary power, but that did not relieve the Court of the task of construing its terms to ascertain its meaning [186] . And if the injunction that the Court should lean towards a broader rather than a narrower interpretation of the Constitution [187] means that it should abandon the basic principle of construction that an instrument should be construed as a whole, then I respectfully dissent from its application in the present context.
What then is the construction of the external affairs power which supports legislation with respect to industrial matters which are confined to Australia and which are otherwise regarded by the Constitution as being of a domestic nature and does so in a manner which disregards the limits imposed by s 51(xxxv) upon Commonwealth power with respect to such matters? It is a construction which adopts the view that the legislative implementation of an international treaty [188] made in good faith is within the ambit of the external affairs power. I have elsewhere expressed my disagreement with that view [189] .
In Richardson v Forestry Commission [190] , I observed that the mere fact that a treaty is international in character does not mean that the matters with which it deals cease to be of a domestic nature and become part of a country's external affairs. Just as the fact that a contract is made over State borders will not determine whether the subject matter of the contract is interstate or intrastate trade, so the fact that an agreement is made internationally will not determine whether its subject matter is external or domestic in character. The view that legislation implementing a treaty is necessarily legislation with respect to a subject matter falling within the description of external affairs is a view that confuses the implementation of the treaty with the subject matter of the treaty. No doubt the purpose, in the sense of motive, of enacting the legislation is to implement the treaty but that is not to say that the resultant law is a law with respect to the implementation of the treaty [191] .
A law with respect to treaties or the implementation of treaties would operate on treaties as a subject matter. Thus it might deal with the nature of the obligations which could be undertaken by treaty or the manner in which they were to be implemented - for example, whether by regulation or statute. Such a law would be a law with respect to external affairs because it would operate upon a matter which is external to Australia, namely, treaties with other countries. But a law actually implementing a treaty is a law with respect to the subject matter of the treaty and the nature of that subject matter is to be found "by reference to the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes" [192] . It may or may not be with respect to matters external to Australia. And, of course, such a law may deal with matters both internal and external to Australia, and be a law with respect to external affairs. The view of the external affairs power which I favour is not based on the incorrect assumption that "affairs are either internal or external in the sense that the two categories are mutually exclusive" [193] . Indeed, in my opinion, it is the prevailing view which involves a characterisation fallacy. That fallacy is to characterise a law which implements a treaty as a law with respect to treaties even though such a law does not operate upon treaties as a subject matter.
To say that any matter covered by a bona fide international treaty is, by its very inclusion in the treaty, brought within the ambit of the external affairs power is to say that the matters upon which there might be valid Commonwealth legislation are limited only by the capacity of the executive to conclude a treaty upon them. Effectively, it means that it is for the executive and not the Court to determine the scope of the external affairs power, for upon that view no distinction can be drawn in terms of subject matter between what might be described as external affairs and what might not. Yet that is a distinction which s 51(xxix) itself requires to be drawn by the use of the term "External affairs".
To adopt the view that a matter must exhibit some characteristic other than its inclusion in a treaty to fall within the external affairs power is not to adopt a restrictive interpretation of that power, nor is it to rely upon implications drawn from the federal nature of the Constitution. It is simply to recognise and apply the distinction which is necessarily made by s 51(xxix) between those matters which are external affairs and those which are not [194] . True it is that such a distinction is also required because otherwise s 51(xxix) would have the capacity to obliterate the division of power which is a necessary feature of any federal system and of our federal system in particular [195] . But it is a distinction which is expressly made by the language used in s 51(xxix) and is not dependent upon implication.
In Koowarta v Bjelke-Petersen [196] , Mason J said that to adopt any other view than that the implementation of a bona fide treaty falls within the external affairs power would be unacceptable because it would
leave the decision on whether Australia should comply with its international obligations in the hands of the individual States as well as the Commonwealth, for the Commonwealth would then lack sufficient legislative power to fully implement the treaty. He continued: The ramifications of such a fragmentation of the decision-making process as it affects the assumption and implementation by Australia of its international obligations are altogether too disturbing to contemplate. Such a division of responsibility between the Commonwealth and each of the States would [be] a certain recipe for indecision and confusion, seriously weakening Australia's stance and standing in international affairs. But Australia is a federation and a "fragmentation" of the decision-making process is part and parcel of a federal system. Indeed, it is one of the reasons for choosing that system of government and may be seen as a virtue rather than as a vice. In a recent decision of the United States Supreme Court, United States v Lopez [197] , the Court refused to adopt an interpretation of the interstate commerce clause in the United States Constitution which would have obliterated the distinction between interstate and intrastate commerce. "To do so", the opinion of the Court said [198] , "would require us to conclude that the Constitution's enumeration of powers does not presuppose something not enumerated". In a concurring judgment, Kennedy J, with whom O'Connor J agreed, pointed out that it is a feature of federalism that the power "surrendered by the people" is divided between governments so as to secure "the liberties that derive from a diffusion of sovereign power" [199] . Accepting, as we must, that the system of government chosen by the people for this country is a federal system, it is difficult to see why "such a fragmentation of the decision-making process" - which is nothing more than a division of power - should be "altogether too disturbing to contemplate". 1. (1982) 153 CLR 168 at 225. 2. (1995) 131 Law Ed 2d 626. 3. United States v Lopez (1995) 131 Law Ed 2d 626 at 643. 4. United States v Lopez (1995) 131 Law Ed 2d 626 at 648-649, quoting Coleman v Thompson (1991) 501 US 722 at 759.
Nor is it any easier to understand why observance of the fundamental federal principle of division of legislative power should, in the context of external affairs, seriously weaken "Australia's stance and standing in international affairs". To adhere to such a view is to ignore the experience of other federal states. For example, since the decision in Attorney-General (Canada) v Attorney-General (Ontario) [200] , Canada has used federal state clauses in treaties to accommodate its federal requirements and has developed co-operative treaty-making mechanisms between the federal government and the governments of the provinces [201] . No doubt there have been times when Canada has been inconvenienced by the "watertight compartments which are an essential part of her original structure" [202] , but convenience is hardly to be weighed against the basic principle of federalism.
In any event, the Commonwealth Parliament, unlike the Canadian federal legislature, has specific power to make laws with respect to external affairs and matters incidental thereto, in addition to its other enumerated powers which may also be employed to implement treaties. The external affairs power is a broad power but for a law to fall within its terms, it must, in my view, operate upon something which is external to Australia. That is to give the power no narrow construction. A glance at the many treaties entered into by Australia in recent years shows that laws implementing the vast majority of them would deal with matters having an external aspect sufficient to satisfy such a test [203] . But a law which has an entirely domestic operation cannot, in my view, be a law with respect to external affairs merely because it implements a treaty or is upon a subject matter which is of international concern.
The only accepted limits upon the view that the legislative implementation of an international treaty, whatever its subject matter, lies within the external affairs power are the prohibitions, express and implied, imposed by the Constitution and the requirement that the treaty be entered into bona fide and not as a mere device to attract power. The prohibitions are few in number and are confined. The requirement of bona fides, as Gibbs CJ said in Koowarta [204] , is "at best a frail shield, and available in rare cases". It is not surprising, therefore, that in individual judgments which accept the expansive view of the power, efforts have been made to confine it, lest its application should result in a complete distortion of the division of legislative power which s 51 otherwise effects. Those efforts have been, in my view, unsuccessful.
In Koowarta Stephen J endeavoured to impose a requirement of international concern. He spoke of the necessity to scrutinise a treaty which the legislature sought to implement and said [205] :
It will not be enough that the challenged law gives effect to treaty obligations. A treaty with another country, whether or not the result of a collusive arrangement, which is on a topic neither of especial concern to the relationship between Australia and that other country nor of general international concern will not be likely to survive that scrutiny. The difficulty in giving effect to those remarks is that a bona fide treaty will be all but conclusive evidence of either special or general international concern. Moreover, the requirement of international concern as it has developed since Koowarta has not served to confine the ambit of the external affairs power but has expanded it. International concern of itself has become a touchstone, and thus there is no need for a treaty at all [206] . And the matters which are capable of being the subject of international concern, albeit of an entirely domestic character, are even more extensive, if that is possible, than the matters which are likely to be the subject of a treaty. Recognising the breadth of the term "international concern", which he had earlier described as "not difficult to satisfy" [207] , Brennan J in Polyukhovich v The Commonwealth [208] attempted to rein it in by saying: [U]nless standards are broadly adhered to or are likely to be broadly adhered to in international practice and unless those standards are expressed in terms which clearly state the expectation of the community of nations, the subject of those standards cannot be described as a true matter of international concern. It may be that there are few occasions when the external affairs power is enlivened by the existence of a matter of international concern without a corresponding obligation in international law, but whether the enlivening factor be an obligation or a concern it is necessary to define it with some precision in order to ascertain the scope of the power. As I read that passage, it means that the only way in which international concern may ordinarily be established is by reference to standards which are obligatory or tantamount to obligatory in international law. I doubt, with respect, whether that is what other judgments have meant by the term "international concern". But to adopt Brennan J's view is to say that ordinarily a treaty will provide the evidence, not only of international concern, but also of the extent of international concern. It is not, however, to say that international concern with regard to a particular subject matter cannot of itself be sufficient to support legislation upon that subject under the external affairs power. Indeed, Brennan J in the Tasmanian Dam Case [209] wished "to guard against a suggestion that it is necessary to find an obligation before one can find an external affair which enlivens the power under s 51(xxix)". When international concern is treated as a separate test of validity the same problems remain. Those problems can only be overcome by recognising that the fact that a matter is the subject of a treaty cannot be the criterion for deciding whether a law with respect to that subject matter is a law with respect to external affairs; the subject matter itself must exhibit sufficient characteristics of externality for that to be so. The touchstone of the external affairs power should be externality, not international concern. And if a law does exhibit the characteristic of externality, it should not matter whether the law implements a treaty or not. 1. Koowarta (1982) 153 CLR 168 at 216-217. 2. See the Tasmanian Dam Case (1983) 158 CLR 1 at 131-132, per Mason J; at 171-172, per Murphy J. 3. See the Tasmanian Dam Case (1983) 158 CLR 1 at 219. 4. (1991) 172 CLR 501 at 561-562. 5. (1983) 158 CLR 1 at 222.
In the Tasmanian Dam Case [210] Deane J formulated a test for laws which are reliant for validity upon the external affairs power. He said that "the law must be capable of being reasonably considered to be appropriate and adapted to achieving what is said to impress it with the character of a law with respect to external affairs". With respect, I must confess that those somewhat complicated words mean no more to me than that, where a treaty is relied upon, the law must give effect to the treaty. Where the terms of a treaty are little more than exhortation or aspiration, as is not uncommon nowadays, the requirement that a law give effect to the treaty is hardly confining. And, no doubt, as this case shows, the law may give effect to the treaty partially or as a whole. But the real reason why the requirement represents no real limit upon the external affairs power is that the matters which may be the subject of a treaty are virtually unlimited.
However, Deane J regarded the external affairs power as purposive. In the Tasmanian Dam Case [211] he said:
Implicit in the requirement that a law be capable of being reasonably considered to be appropriate and adapted to achieving what is said to provide it with the character of a law with respect to external affairs is a need for there to be a reasonable proportionality between the designated purpose or object and the means which the law embodies for achieving or procuring it. The external affairs power is not purposive. As I pointed out in Richardson [212] it is not a power to make laws for the purpose of cementing international relations or achieving international goodwill or even for implementing treaties. It is a power to make laws with respect to particular matters, namely, external affairs, and the subject matter of a law either answers that description or it does not. A purposive power is different. Taking the defence power, which is truly purposive, it is possible to ask whether a law is for the purpose of defence and to take the view that the disproportion of the law to the achievement of that purpose suggests that it is not a law for that purpose. It is not possible to ask whether a law is for the purpose of external affairs. Either it falls within that description or it does not and whether it does or does not is to be determined by reference to the acts, facts, matters or things upon which it operates. The question to be asked is not, as in the case of a purposive power, what the law is for, but what it operates upon. The concept of proportionality has no useful part to play in answering that question. 1. (1983) 158 CLR 1 at 260. See also Richardson (1988) 164 CLR 261 at 308. 2. (1988) 164 CLR 261 at 325-326.
Notwithstanding that I find nothing in the reasons of the majority in these cases which causes me to doubt the views which I have expressed above and in previous cases, I nevertheless think that I should adhere to the course which I adopted in Richardson. There I said [213] :
Precedent must, however, have a part to play, even in the interpretation of a constitution. Considerations of practicality make it necessary that the law should, as far as possible, take a consistent course. The constant re-examination of concluded questions is incompatible with that aim. That is why this Court has adopted the practice of requiring leave to be granted before it will allow a previous decision to be re-argued: Evda Nominees Pty Ltd v Victoria [214] . The parties in the present case did not seek to question the decision in the Tasmanian Dam Case. In these circumstances, and having made my own view clear, it is, I think, proper to proceed upon the same basis as did the argument in this case and to assume the authority of that decision. The parties in this case, as in Richardson, did not seek to contest the authority of the Tasmanian Dam Case and, proceeding upon the basis of that decision, I agree with the orders proposed by the majority. Other than where the reasoning of the majority is dependent upon the view taken of the external affairs power in the Tasmanian Dam Case, and subject to the following comment, I am able to express my general agreement with their reasons. 1. Richardson (1988) 164 CLR 261 at 322. See also O'Toole v Charles David Pty Ltd (1991) 171 CLR 232 at 267, per Brennan J. 2. (1984) 154 CLR 311.
The comment which I wish to add is that, whilst I agree with the majority that neither s 166A nor s 170PM(3) of the Industrial Relations Act effects an acquisition of property otherwise than on just terms contrary to s 51(xxxi) of the Constitution, I adhere to the view which Toohey J and I expressed in Mutual Pools & Staff Pty Ltd v The Commonwealth [215] that merely to extinguish a proprietary right is not to effect an acquisition of property. I agree with the majority that there is no acquisition of property involved in the modification or extinguishment of a right or interest that has not yet accrued, but I would go further and say that there is no acquisition of property by the Commonwealth in the modification or extinguishment of a right or interest, whether accrued or not, if the property in the right or interest is not thereby transferred to the Commonwealth.
Victoria
Commonwealth
High Court of Australia Brennan CJ Dawson, Toohey, Gaudron, McHugh and Gummow JJ Victoria v Commonwealth [1996] HCA 56
Later, in Chow Hung Ching v The King [37] , Dixon J said that a treaty, "at all events one which does not terminate a state of war", has no legal effect upon the rights and duties of citizens and, "speaking generally no power resides in the Crown to compel them to obey the provisions of a treaty". His Honour cited Walker v Baird [38] . 1. Certain exceptions or qualifications are identified and discussed by J G Starke in "The High Court of Australia and the rule in Walker v Baird [1892] AC 491 ", Australian Law Journal, vol 48 (1974) 368. 2. [1892] AC 491 at 492. 3. vol 6, "Constitutional Law", pp 440-441. 4. (1948) 77 CLR 449 at 478; see also Brown v Lizars (1905) 2 CLR 837 at 851, 860; Bradley v The Commonwealth (1973) 128 CLR 557 at 582; Simsek v Macphee (1982) 148 CLR 636 at 641-642. 5. [1892] AC 491 at 497.
(1983) 158 CLR 1
(1982) 153 CLR 168
(1933) 49 CLR 242
(1937) 58 CLR 528
(1975) 135 CLR 337
(1936) 55 CLR 608
(1974) 131 CLR 477
(1948) 77 CLR 449
(1905) 2 CLR 837
(1973) 128 CLR 557
(1982) 148 CLR 636
(1995) 183 CLR 273
(1949) 79 CLR 121
(1906) 4 CLR 265
(1994) 181 CLR 18
(1991) 172 CLR 501
(1983) 153 CLR 297
(1908) 6 CLR 309
(1965) 113 CLR 54
(1988) 164 CLR 261
(1994) 182 CLR 272
(1992) 176 CLR 1
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(1949) 78 CLR 389
(1989) 166 CLR 311
(1947) 74 CLR 31
(1948) 76 CLR 1
(1971) 122 CLR 353
(1982) 152 CLR 25
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(1993) 178 CLR 249
(1995) 184 CLR 188
(1989) 166 CLR 518
(1939) 61 CLR 634
(1943) 68 CLR 87
(1971) 124 CLR 468
(1986) 161 CLR 376
(1910) 11 CLR 1
(1935) 51 CLR 677
(1995) 183 CLR 323
(1951) 84 CLR 442
(1949) 78 CLR 366
(1953) 89 CLR 461
(1980) 145 CLR 68
(1931) 45 CLR 409
(1976) 134 CLR 56
(1912) 15 CLR 636
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(1948) 77 CLR 84
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(1972) 123 CLR 673
(1944) 68 CLR 261
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(1994) 179 CLR 155
(1994) 179 CLR 297
(1961) 105 CLR 361
(1990) 169 CLR 482
(1951) 83 CLR 1
(1965) 114 CLR 1
(1956) 94 CLR 254
(1991) 171 CLR 232
(1984) 154 CLR 311