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High Court of Australia Transcripts |
Last Updated: 11 May 2006
IN THE HIGH COURT OF AUSTRALIA
Office of the
Registry
Sydney No S592 of 2005
B e t w e e n -
STATE OF NEW SOUTH WALES
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Perth No P66 of 2005
B e t w e e n -
STATE OF WESTERN AUSTRALIA
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Adelaide No A3 of 2006
B e t w e e n -
STATE OF SOUTH AUSTRALIA
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Brisbane No B5 of 2006
B e t w e e n -
STATE OF QUEENSLAND
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Brisbane No B6 of 2006
B e t w e e n -
AUSTRALIAN WORKERS UNION
First Plaintiff
AUSTRALIAN WORKERS UNION OF EMPLOYEES QUEENSLAND
Second Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Sydney No S50 of 2006
B e t w e e n -
UNIONS NSW AND QUEENSLAND COUNCIL OF UNIONS
First Plaintiffs
PUBLIC SERVICE ASSOCIATION AND PROFESSIONAL OFFICERS’ ASSOCIATION AMALGAMATED UNION OF NEW SOUTH WALES AND NEW SOUTH WALES LOCAL GOVERNMENT, CLERICAL, ADMINISTRATIVE, ENERGY, AIRLINES & UTILITIES UNION AND ELECTRICAL TRADES UNION OF AUSTRALIA, NEW SOUTH WALES BRANCH AND NATIONAL UNION OF WORKERS, NEW SOUTH WALES BRANCH AND NEW SOUTH WALES TEACHERS FEDERATION AND QUEENSLAND TEACHERS UNION OF EMPLOYEES AND COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION – QUEENSLAND BRANCH (CEPU ELECTRICAL DIVISION)
Second Plaintiffs
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Melbourne No M21 of 2006
B e t w e e n -
STATE OF VICTORIA
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
GLEESON CJ
GUMMOW J
KIRBY J
HAYNE
J
CALLINAN J
HEYDON J
CRENNAN
J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON THURSDAY, 11 MAY 2006, AT 10.19 AM
(Continued from 10/5/06)
Copyright in the High Court of Australia
__________________
GLEESON CJ: Yes, Mr Tracey.
MR TRACEY: If the Court pleases. I understand my learned friend from South Australia has an application he desires to make.
MR KOURAKIS: If the Court pleases. South Australia seeks leave to amend its statement of claim in accordance with the document entitled “PROPOSED SECOND FURTHER AMENDED STATEMENT OF CLAIM” that has been provided to the Court. The purpose can be seen conveniently from paragraphs (i) and (j) of the relief that is sought. It particularises all the provisions of the schedule that were challenged in the course of my submissions. The earlier statement of claim had not dealt with those particular provisions. I understand it is by consent.
GLEESON CJ: This is not opposed?
MR KOURAKIS: Not opposed.
GLEESON CJ: Are you happy with that? Yes, you have that leave.
MR KOURAKIS: If it please the Court.
GLEESON CJ: One other small matter, Mr Tracey. We are going to get a matrix at some stage during the day, is that right?
MR TRACEY: Not from us, your Honour.
MR SOFRONOFF: Your Honour, I will be handing that up.
GLEESON CJ: When it is handed up, Mr Sofronoff, we may need to adjourn for 10 or 15 minutes to study its contents to be sure that we do not have any questions to ask about it.
MR SOFRONOFF: Yes.
GLEESON CJ: Very well. Yes, Mr Tracey.
MR TRACEY: Your Honour, the Chief Justice yesterday asked me about whether the former Schedule 1B had any provisions in it seeking to link it to constitutional heads of power and I said I would look at that overnight. Your Honour, the answer is yes. The former Schedule 1B in section 18 provided for the registration of various forms of associations, associations of employers, associations of employees, and enterprise associations and it was a condition to that eligibility for registration, in each case, that the employer/employees concerned were capable of being engaged in an industrial dispute and that term was defined in section 8 in terms that picked up section 51(xxxv) so that the industrial dispute had to be one extending across State limits and had to be about matters pertaining to the employer/employee relationship, so it was done in that way.
GLEESON CJ: Thank you.
MR TRACEY: Your Honours, I foreshadowed last night that I wished to take the Court to some of the provisions of Part 8 of the Act which commences in volume 1 at page 224. This Part, as the Court knows, is central to the new arrangements under which constitutional corporations will be able to enter into a variety of collective and individual agreements regulating their industrial relationships with their employees. Various forms of agreement are contemplated.
They are identified in sections 326 to 331 and your Honours will note that each of those provisions requires that one of the parties to such agreement be a section 6 employer. The Court might also notice the provisions of section 322 to 324 which elaborate on and expand the notion of a relevant employer, for example, in 324, to pick up prospective employers at the time that an agreement is made.
We would also invite the Court to look briefly at a number of other provisions starting at sections 334 to 335 which provide for bargaining agents to act on behalf of negotiating parties in the striking of these agreements and the Court will see that employers – that is constitutional employers and employees – may appoint bargaining agents to act on their behalf for the purpose of striking an agreement.
Section 337 imposes on employers involved in negotiations certain obligations and in particular to make certain information available to the employees who it is thought may become a party to an agreement. Section 342 imposes an obligation on employers to lodge agreements once they have been made, that is, lodgement with the appropriate authorities. Section 357 is a provision which says that a section 6 employer contravenes the subsection if, when that agreement is lodged, it contains certain material, that is, prohibited content.
Section 358, as I mentioned to the Court last night, renders void prohibited content in workplace agreements. Section 363 enables the employment advocate to remove prohibited content from agreements. So that it is clear, in our submission, that what section 356 is dealing with when it provides that regulations may specify those matters which constitute prohibited content is doing so in a statutory context which links the regulation-making power to agreements that are to be made between section 6 employers, section 5 employees.
It is the Commonwealth’s submission that there is nothing untoward about such a provision. Normally, it would bear the character of a law with respect to the subject matter dealt with in the legislation. That will be so even in the absence of criteria guiding the content of the regulations. We would submit that, relevantly, the case law can be stated as a series of short propositions. Firstly, that the Commonwealth Parliament may provide for the making of subordinate legislation in wide and general terms without stipulating criteria to guide the exercise of the power, and that has been established since Dignan’s Case. Secondly, that the terms in which the power is conferred may leave the repository of the power free to exercise its own discretionary judgment in determining the contents of the regulations, and the principal authority in support of that proposition is Capital Duplicators. There are others that are collected at footnote 507 of our submissions.
The third proposition is that the power to make regulations to further or give effect to a statutory purpose will have the same character, that is, of a law with respect to the subject matter dealt with in the statute. Again, Dignan is the principal authority in support of that proposition. The final proposition is that if regulations once made are within legislative power, they will fall within the statutory power to make the regulations. The Court has so held on a number of occasions and I would simply refer the Court to R v Halton; Ex parte AUS [1978] HCA 26; 138 CLR 201 at 207.
HAYNE J: Does it follow that you contend that any term of or pertaining to employment may be prescribed as prohibited content?
MR TRACEY: Not anything, your Honour, because there are limitations imposed by this legislation.
HAYNE J: Yes. What are the limitations?
MR TRACEY: Well, if your Honour would go back, for example, to section 353, your Honour will find there a requirement that agreements must include dispute settling procedures. A regulation made under section 356 could not include such a matter as prohibited content. Section 354(2) ensures that protected award conditions are incorporated in agreements. A regulation made under 356 could not prescribe such material as prohibited content.
HAYNE J: Thus the proposition I put to you, you say has to be modified: any term of, or pertaining to, employment except those matters which are positively required by particular provisions of the Act.
MR TRACEY: It is wider than that. The qualification is wider than that, your Honour, because the regulation-making power in section 846 which your Honour has seen requires consistency with the Act generally so that, for example, there could not be prescription in section 356 that reached so wide as to effectively undermine the State for making a workable agreement. There are other matters that would need to be borne in mind.
Your Honour will note a number of constraints on the power. The first one is the one to which we have already adverted, that the statutory context limits prohibited content to the content of agreements between constitutional corporations and their employees. We note, for example, in 356 itself, the requirement that any regulations be for the purposes of the Act and that has to be coupled with the provisions of section 846 to which I have already referred.
There is the constraint arising from a provision such as 353 and 354. There is the provision in section 173 about the standards, the fair pay standards that have to be observed. There could not be anything in an agreement by way of prohibited content that would undermine those standards and, of course, there are other matters as well. There is the general law doctrine that the regulation-making power must be exercised bona fide for the purpose of carrying the purposes of the Act into effect. Any regulations made would, of course, be subject to disallowance and, ultimately, any regulation that was made that was beyond constitutional power would fall, but none of that strikes at the validity of section 356.
In our submission, this is not an unconfined power.
It is a power of a kind that one finds in many Acts of Parliament. It is
subject
to those sorts of limitations. We submit that there is nothing in
S157 211 CLR 476 at
512-513 that calls any of these
propositions into question. The passage relied on by our friends appears in
paragraph 102. I do
not need to take the Court to it, but we do ask the
Court to note that that passage did not relate to regulation-making power,
rather,
it was concerned, as appears in paragraph 101, with some
hypothetical examples of other forms of delegation that were raised by counsel
in argument for the purpose of testing some propositions. Not surprisingly, the
Court responded in paragraph 102 tentatively and
did not say that such
provisions were definitely invalid.
So it is our submission, if the Court pleases, that section 356 and the other provisions that are challenged in conjunction with it are valid and that accordingly the submissions to the contrary on behalf of the AWU should be rejected.
I should say one further thing, your Honours. The AWU submits that if the Court were to determine that section 356 was invalid, that Division 7B of Part 8 – that is sections 356 to 366 – would all fall with it. In our submission, that does not follow. If section 356 were declared to be invalid, then the regulations that have been presently made under it would fall, but the position would be precisely as it would have been had no regulations been made under it, namely that the other provisions would not be operative, but that is not a reason why they should fall.
The Parliament could rectify the situation by, for example, including in section 356 a prescription of the matters that presently appear in the regulations, and the provision could then operate. So that just because the provision would be for a short period rendered inoperative would not justify, in our submission, declaring that the whole of the subdivision fell. If the Court pleases, they are the submissions on the regulation-making matter and my friend, Mr Burmester, will follow for the Commonwealth.
GLEESON CJ: Thank you, Mr Tracey. Yes, Mr Burmester.
KIRBY J: Mr Burmester, might I ask a question as to whether or not you can help with the identification of any provisions of the legislation that are designed to meet the issue of the core employees of the State of the kind who are beyond the reach of the federal legislative power. I should perhaps have asked this of the Solicitor, but if you can assist on that and draw attention to that, I would be grateful. It may well have been done before, but if you can draw attention to those provisions, I would be appreciative.
MR BURMESTER: Your Honour, there are no express provisions which, for instance, specifically exclude State employees who would be outside Commonwealth power based on the AEU principle, officers at a high level and so on. There is no express provision to that effect, just as there was no express provision in the Industrial Relations Act 1996. We would expect that the Act clearly would not apply to those officers who are immune from Commonwealth law. The States have withdrawn the limited challenge they did make to coverage of certain State employees from the present case, but there are no express provisions, if I understand your Honour’s question correctly, dealing with those high level State officers that would be immune from Commonwealth law. We would say the Act should be read down in order to recognise that constitutional limitation as it was in the 1996 Industrial Relations Case.
GLEESON CJ: If I recollect the progress of this litigation, there was originally an issue about that raised in the statement of claim and I then raised some questions at a directions hearing about the facts that were relevant to it and that issue was withdrawn or that challenge was withdrawn
MR BURMESTER: Yes, your Honour
KIRBY J: So on the face of the federal legislation it applies universally and, first of all, you have to identify the class and then do some surgery so that the legislation does not apply to such persons.
MR BURMESTER: No, your Honour, maybe I need to clarify that. It applies to those who fall within the definition of “employee” or “employer” in sections 5 and 6 so there may be some State Government employees employed by State corporations who would fall within it, but there is certainly no general application to all State public servants, for instance, if that was your Honour’s question. Section 5 does not purport to apply to all State public servants, it applies to employees of State corporations that happen to be constitutional corporations, but unless one falls within section 5 or 6 the Act will not apply to you. So there is no need to carve out either an exception for high level officers of the State or, say, public servants generally. The attack that was made, and it was withdrawn, focused on State employees in State corporations.
KIRBY J: At the moment they are covered even though they might, within the Constitution, be high State public servants?
MR BURMESTER: There is that issue which the States had raised and then withdrew because this was not a suitable vehicle, as to whether there may in fact be high level State Government employees employed by State corporations.
KIRBY J: But is it fair to say that it is yet a further indication of the universality and, on one view, the overreach of the federal legislation that it makes no distinction?
MR BURMESTER: No, your Honour, I reject that. Sections 5 and 6 rely quite directly on specific Commonwealth heads of power. The corporations power, in our submission, can extend to cover certain State corporations that are trading or financial corporations and, to that extent, certain State employees will be protected. But if a State, for instance, employs all its teachers or nurses as members of the public service and not as State corporation employees then this Act will not apply to them.
KIRBY J: In the modern age, of course, so many activities which once were performed by States and by governments are now performed by corporations so that the borderline would have to be worked out in the particular case.
MR BURMESTER: Yes, your Honour, as our submissions have indicated, working out what is a trading corporation may involve questions of degree and fact. Some of the States, in fact, have, in the light of this legislation, revised the arrangements whereby State employees are engaged, to move some of them back into the core public service and outside State corporations. I think New South Wales has taken measures to that effect and that is an option that is clearly open to the States and if they are not employed by corporations then there is no endeavour by the Commonwealth to control them.
KIRBY J: So that the State industrial tribunals would, at the least, have continuing functions to perform in respect of those employees and attempts to enjoin them to prevent them performing their functions, at least in respect of those employees, would be constitutionally invalid.
MR BURMESTER: Your Honour, I am about to come to section 117, the possible power to enjoin State tribunals. That is why we have Schedule 6, the transitional, because some of those State employees, particularly for instance teachers or nurses, may well have been within the federal system and under the new system, because they are not employed by constitutional corporations, they will have to move into the State system. So what has happened is that there is a realignment of those within the federal system and those outside it. It is not the same as before and it is not simply an addition to those that were in. There will be some who were in the old section 51(xxxv) system who will need to find a place in the State systems because they are not employed by an employer within the definition of section 6.
Your Honour, if I could perhaps go to section 117 which deals with State authorities being restrained from dealing with matters that are before the Commission. This is dealt with in our written submissions at paragraph 661 to 696 and South Australia in its submissions, 94 to 112. As South Australia indicated when they dealt with this issue, the section is based very closely on provisions that have been in the relevant industrial relations legislation since 1904. It is now confined, if one goes to section 117, simply to matters that are “the subject of a proceeding before the Commission under this Act”. It does not have the other components that might have been there before dealing with awards and so on.
South Australia has attacked the provision on
essentially two grounds. The first might broadly be described as
section 106 of the Constitution/Melbourne Corporation principle and
then, as I understood the oral argument, secondly, that there is no head of
power that supports its validity. They
have abandoned their challenge to it on
the basis that it involved the exercise of judicial power. In order to
understand its validity,
your Honours, I need to indicate how it operates.
As one sees from its terms:
If it appears to a Full Bench –
that is, a Full
Bench of the Commission –
that a State industrial authority is dealing or is about to deal with a matter that is the subject of a proceeding before the Commission . . . the Full Bench may make an order –
I need to take your Honours to
section 4 of the Act where there was a definition of “state
industrial authority”. That is on page 13 of the print. One sees
that it is a limited definition. It is:
(a) a board or court of conciliation or arbitration, or tribunal, body or persons, having authority under a State Act to exercise any power of conciliation or arbitration in relation to industrial disputes within the limits of the State; or
(b) a special board constituted under a State Act relating to factories; or
(c) any other State board, court, tribunal, body or official prescribed for the purposes of this definition.
My understanding is
no additional prescriptions have been made. Your Honours can see that it
is limited to boards or courts of conciliation
or arbitration, or tribunal, body
or persons, having authority to exercise powers of conciliation and arbitration.
So it is not a
section that, for instance, gives the Commission power to
restrain a State Supreme Court from exercising its normal civil or criminal
jurisdiction.
KIRBY J: The Industrial Court of New South Wales has, of course, under the Constitution of New South Wales the same status as the Supreme Court.
MR BURMESTER: Yes, your Honour, it may have that status and it may well fall within - - -
KIRBY J: It is a constitutional status of - - -
GUMMOW J: That is not quite right, is it? They have the same status for the limited purpose of preserving - - -
MR BURMESTER: When exercising in Court Session. I think that is - - -
KIRBY J: No, that is gone. It is now the Industrial Court of New South Wales. It has been renamed from the Court Session.
MR BURMESTER: Your Honour, it may well be equated for certain purposes with the Supreme Court. My point is that section 117 is not capable in its terms of directing or having orders made directed at what one might call the core the judicial system of a State, particularly the Supreme Court or - - -
KIRBY J: The Supreme Courts are mentioned in the Constitution. The Industrial Court Commission is not.
MR BURMESTER: That is correct, your Honour. So my point is simply that the scope of section 117 is limited to other bodies that can exercise conciliation or arbitration powers. It is not directed at courts exercising the ordinary civil or criminal jurisdiction they may have.
If I can take your Honours back to section 117, it is also
clear that it is limited to a situation where:
a State industrial authority is dealing or is about to deal with a matter that is the subject of a proceeding before the Commission –
At the Commonwealth end it clearly
has to be a non-judicial matter that is before the Commission, even if it
happens to be a State
court or tribunal that might also be dealing with the same
matter, but what has been made clear from the cases on the predecessors
of this
section is that the power only operates in relation to a situation where the
same matter is being dealt with before both
the federal body and State body. So
it is not a power for the Commonwealth body to restrain State bodies because
there might be
some remote connection with a matter before the Commonwealth
body. The Commonwealth body, according to the judicial authorities,
has to
identify the matter with some particularity and it is only the matter that is
before the federal body that can be the subject
of an order under this
section.
It may be that section 117 will have less work to do than it may previously have had to do if section 16 is valid and the State industrial authorities generally do not have concurrent jurisdiction over employers and employees within the federal system, but there may still be scope for the section to be used, for instance, if one party has brought a claim in a State body and the other party has brought a claim in the federal body alleging that they fall within federal jurisdiction under the definitions in section 5 and 6. It will also be used during the transitional period for five years where reliance is placed on the conciliation and arbitration power.
So the section, in our submission, does have some work to do, even if it is more limited than before. It has been used. I think Justice Kirby asked about its use in the past. There are cases set out at footnote 552 and paragraph 695 of our submissions which indicate some of the instances where reliance has been placed on that section in its previous forms. Your Honours, in our submission, it is not properly described as an injunction power. It is a statutory command to cease dealing with the same matter that is before the federal body and section 117(3) does impose a consequence if - - -
KIRBY J: Why is it not an injunction power? It is a command to stop.
MR BURMESTER: It is
a command to stop, your Honour, but it is not the normal injunction power,
namely, issued by a court and enforceable by the
body issuing the injunction.
What happens here is that there is a direction that:
The State industrial authority must, in accordance with the order, cease dealing or not deal, as the case may be, with the matter.
That is subsection (2). There is a consequence in subsection (3) that if there is to be any action taken against a State industrial authority that was, for instance, to ignore an order, action would have to be taken judicially to enforce it. So, again, in our submission, it is not properly seen as an interference, for instance, by a federal body with the exercise of power under the ordinary judicial system of a State by a non-judicial body by the federal Commission.
KIRBY J: Given the sanctions, it must feel like an injunction if you receive it.
MR BURMESTER: It may, your Honour, but it is not, as has been clear from the South Australian note on the history of the section, something unexceptional or that has not been there for a long period and, in our submission, nothing that has occurred through the change in the basis of the Commonwealth Act, moving from the conciliation and arbitration power to the corporations power, makes any difference in that regard.
It has been held to be valid and certainly the most recent case that considered its validity in relation to the conciliation and arbitration power – that was R v Moore; Ex parte New South Wales Public Service Professional Officers’ Association (1984) 154 CLR 1 – I need not take your Honours to it – and at page 7 Chief Justice Gibbs said there was no reason to doubt its validity and Justice Deane at page 15 said he was “not persuaded that there exists any proper ground for questioning the correctness of the decisions” that say it is within power and Justice Dawson did say its validity may not be beyond question.
Apart from that, your Honour, there is, in our submission, well established authority that it was valid under section 51(xxxv). The question then is: is there any reason why it is not equally valid under the current system? In our submission, for the same reason it was valid before, namely, it enables a federal system to work efficaciously without unwarranted interference from a State body dealing with exactly the same matter, there is no reason why it is not equally valid based on the corporations power. If the system of industrial relations governing corporations established by the Act is valid, then it seems entirely incidental to the proper operation of that system that to the extent the Industrial Relations Commission has particular jurisdiction that it be free to exercise that jurisdiction without interference or having someone else at the same time dealing with the same matter.
Your Honours, in our submission, it is not unheard of for a federal body being able to exercise its powers to restrain a State body. In footnote 543 on page 163 of our submissions we give examples of Commonwealth legislation where restraint is imposed may result if a particular federal body – sometimes a court, sometimes not a court – takes action. One example might well be, for instance, under section 60 of the Bankruptcy Act if existing legal proceedings by a bankrupt can be restrained and the validity of that sort of provision has been upheld. Storey v Lane [1981] HCA 47; (1981) 147 CLR 549 and, more recently, your Honours, in the Full Federal Court, Campbell v Metway Leasing [2002] FCAFC 394; (2002) 126 FCR 14.
So, in our submission, this is not an unusual or exceptional provision. Nevertheless, the learned Solicitor for South Australia contends that in some way it infringes section 106 of the Constitution or the Melbourne Corporation principle. As I have indicated, the section does not operate to deprive the ordinary State courts of their general civil or criminal jurisdiction and, in our submission, it cannot - - -
KIRBY J: What is so special about their “ordinary” criminal or civil jurisdiction? It is still the work of the tribunals and courts of the State.
MR BURMESTER: Yes, your Honour, but in terms of section 106 of the Constitution it follows, in our submission, that the section does not operate on the fundamental framework or scheme of a State system of government, to use a phrase that has been used to describe the work of section 106 – the fundamental framework and scheme of a State system of government as opposed to a law that directly, for instance, sought to control a State Supreme Court which we would accept was part of a State’s Constitution for the purposes of section 106. This operates on industrial tribunals and bodies exercising conciliation and arbitration. So, in our submission, it does not fall with any of the conceptions, even given a broad meaning of State Constitution for the purposes of section 106.
CALLINAN J: Mr Burmester, some of the cases use the expression “essential functions of a State”. Do you know what I am referring to?
MR BURMESTER: Your Honour, I think that may come more out of the Melbourne Corporation Case.
CALLINAN J: Yes, but it is referred to in Murphyores too, I think. They are not defined by the Constitution, of course, but I would be interested to know how you would define them.
MR BURMESTER: Your Honour, what the Commonwealth has said in previous cases is that a State’s Constitution for section 106 purposes is not artificially constrained by whether something is in the State Constitution Act, for instance, but it does have to relate to the fundamental framework and structure of government and, as I said, a Supreme Court may well fall within that. But, in our submission, State industrial tribunals or courts with conciliation and arbitration functions that a State might establish do not fall into that category. So even giving “State Constitution” a broad meaning, it is not a fundamental framework in terms of essential - - -
CALLINAN J: Well, take section 51(i). It recognises that there must be State economies. There is not only a national economy. There is also a State economy, because if you talk about commerce among the States, you are obviously accepting that there is State commerce. Why is not State commerce an essential function of the State – the regulation and control of State commerce?
MR BURMESTER: Well, your Honour, my submission does not involve the proposition that it is not.
CALLINAN J: Well, if you say employment by all corporations, indeed employment is doing business; it is part of commerce. Assume you say that – and I think some of the Solicitor’s submissions go so far as to say that – then why should you not say that there is such a thing as State commerce and that the control of it is an essential function of the State, and commerce includes employment, paying people to work for you?
MR BURMESTER: Yes. Your Honour, even if that was correct and the Commonwealth law could not therefore intrude into that area, in our submission, to the extent the Commonwealth law was dealing with, say, interstate disputes, an area within Commonwealth jurisdiction, then there is no reason why in order to make that jurisdiction effective, it could not restrain the exercise of State jurisdiction for the limited purpose and only when it is dealing with a particular matter. So it is not as if section 117 is a general power to exclude State industrial tribunals from ever exercising their jurisdiction.
CALLINAN J: But I am talking more generally than that. I am really talking now about essential State functions.
MR BURMESTER: Well, your Honour, if one sought to apply the Melbourne Corporation principle or, as more recently expounded in Austin, in our submission, section 117 and does not impermissibly burden, restrict or otherwise control State activity, in particular the right of a State to function as a government or to exercise constitutional functions, in our submission, one cannot define or should not define the principle by reference to essential functions, which is a rather uncertain concept; rather one should ask, is the burden such that it restricts or controls State activity in a way which stops the State Government functioning as a government or exercising its constitutional powers.
CALLINAN J: If you can curtail its capacity to regulate internal – and you know what I mean by internal – employment, and you regard that as part of commerce, why are you not curtailing – which is part of the language of Austin and I think Melbourne Corporation - an essential State function?
MR BURMESTER: Your Honour, in our submission, the Melbourne Corporation and Austin principles have never been seen as extending to an activity in which a State happens to engage and immunising that from Commonwealth control simply because it might be seen as significant or important - - -
CALLINAN J: It is more than that. It is more than an activity in which a State engages. The whole existence of a State depends upon its economic welfare, upon its commerce.
MR BURMESTER: Yes, your Honour. In, for instance, the Australian Education Union Case, the only restraint under the conciliation and arbitration power on State government employees was those at a very high level of office. There was no suggestion that there was a complete immunity from Commonwealth control of State employees generally or employees engaged in local commerce. In our submission, that would be to read restrictions and limitations into the power that have not in the past been recognised and which we say would be inappropriate.
CALLINAN J: That was not a case like this. This is an entirely different case and there are different arguments being presented here. In any event, I have exposed a concern of mine, Mr Burmester.
MR BURMESTER: Yes, your Honour, and, as I indicated to Justice Kirby earlier, there is not an attempt here to control State employees per se. It is only if they are employed by corporations that they fall within the federal system. I am reminded that we do accept that Parts 15 and 16, that is the right of entry and freedom of association, may have some application to the States even where there are not constitutional corporations involved, but it is a limited reach of Commonwealth authority. Your Honours, the point I was trying to make was that section 117, by any measure, cannot be seen as the sort of interference with a State government and State government institutions which would - - -
KIRBY J: Does that concession about freedom of association arise out of international obligations under ILO conventions?
MR BURMESTER: No, your Honour, there is no reliance on external affairs power or international obligations for the current rights of entry provisions.
KIRBY J: There was under the 1996 Act, I think, or 1993 Act.
MR BURMESTER: You may be right, your Honour.
KIRBY J: That has all been withdrawn, has it?
MR BURMESTER: Certainly any reliance on international obligations for right of entry, that is right.
KIRBY J: Is that because some of these provisions are not in conformity with our obligations under the international obligations?
MR BURMESTER: Your Honour, I do not know that one can draw that conclusion. I think that Parliament has simply chosen not to rely on international obligations to sustain those parts of the Act. It has chosen in other parts, like parental leave, to continue to rely on external obligations.
KIRBY J: But presumably those obligations remain in force. They have not been denounced.
MR BURMESTER: Yes, your Honour, and there are, I understand, one or two ILO conventions that do deal with rights of entry, but my point is simply there is no reliance placed upon them for purposes of the relevant provisions.
KIRBY J: Presumably they remain in force and relied on for the transitional arrangements. Insofar as section 51(xxxv) is still applicable in that area, presumably also the external affairs power is still invoked.
MR BURMESTER: Your Honour, I cannot say whether that is right or wrong. I could provide a short note, if that would assist, but I do not think I can answer that question.
KIRBY J: If you would that and anything else that is relevant to the ILO conventions to which Australia is a party.
MR BURMESTER: We are happy to provide such a note. The purpose of my submissions in relation to 117 are simply that the nature of that provision is not such that it could be seen as offending section 106 of the Constitution or the Melbourne Corporation principle. To the extent the States suggest that Re Tracey [1989] HCA 12; (1989) 166 CLR 518 would lead to that conclusion, we say that that is not necessary to determine that because Re Tracey, properly construed, can be seen as dealing with an entirely different situation. That dealt with the exclusion of ordinary State criminal law and, in our submission, there is no reason, for the purpose of deciding the validity of 117, to revisit Re Tracey. In our submission, it can be distinguished. In any event, in our written submissions, at paragraphs 672 to 680 we have indicated why we consider Tracey was wrong and, if necessary, should be overruled but, your Honour, our principal submission is that there is no reason to address that issue in this case. One can decide the validity of section 117 without doing so.
Your Honours, if I can move then to the next issue I need to address which is section 16. Section 16 is on page 23 of the Act. This is dealt with in our submissions paragraphs 590 to 620. Your Honours, the first issue is one of construction: what does section 16 purport to exclude? In our submission, it is clear from the chapeau of 16(1) that what is purported to be excluded is State law that would otherwise apply only in relation to an employee or employer as understood in sections 5 and 6. So it is not an attempt to exclude all State law dealing with any employees or employers; it is only employees and employers as understood in section 5 and 6.
The reason this is clear becomes apparent from Schedule 2 of the Act which has identified particular paragraphs in section 16 as excluded from those definitions in section 5 and 6 where the terms “employee” and “employer” and “employment generally” have been given their ordinary meaning. That is clear in schedule 2 in item 2.1 which singles out section 16(3)(g) and (m) which use the word “employee” in (g) about public holidays, so it has its ordinary meaning there and then in (m), “association of employees” has its ordinary meaning. In item 4.2(b), 16(1)(d) is given the ordinary meaning. But apart from those particular paragraphs, there is no reason, in our submission, why particularly in the chapeau of section 16 the words “in relation to an employee or employer” should not continue to be given their section 5 and section 6 meanings. As I understood Western Australia, they seemed to - - -
GUMMOW J: I am sorry, Mr Burmester. So you are saying, looking at 16.1, the opening words, “employee” and “employer” there, is a constitutional - - -
MR BURMESTER: Is a constitutional one. So the scope of section 16 is clearly limited to situations where the Commonwealth has constitutional power, in our submission. So when we exclude particular State laws, we only exclude them, as 16(1) makes clear, so far as they would otherwise apply in relation to a federal constitutional employee or employer.
GUMMOW J: That then does not help you with 16(4).
MR BURMESTER: No, your Honour. I will come to that separately. In our submission, there is no reason why, for instance, 16(1)(e), a representative of a trade union having a right to enter premises – I understood Western Australia to suggest that in some way that could not be read in a way that was confined to employees or employers as understood in section 5 or 6. In our submission, that is not correct. Read with the rest of the chapeau, it clearly means a law relating to entry to premises in relation to employees or employers covered by the Act, that is, to situations involving section 5 or 6 employers and employees. We are not excluding State law dealing with trade union rights to enter for all purposes in relation to employees who might have no connection with the federal system.
GLEESON CJ: What about 16(1)(d)?
MR BURMESTER: Yes, your Honour, that is the unfair contracts. Again, what we are excluding is the application of State laws dealing with unfair contracts only to the extent that they would apply or are sought to be applied to constitutional employees or employers.
GLEESON CJ: Especially bearing in mind the prohibited content aspect of this legislation, you may have in a State a law that, on the face of it, gives a wide power to vary contracts of employment between ordinary employers and ordinary employees, that is, constitutional employers and constitutional employees. The Commonwealth does not purport, or may not purport, to regulate what I might call the general matter of the fairness of the employment contract. The argument against you, as I understand it, is that this is an example of the Commonwealth saying, “We don’t intend to legislate about general matters of fairness in relation to these contracts and you may not”. That is to say, to use the phrase with which we are accustomed, a bare exclusion of State law.
MR BURMESTER: Yes, your Honour, and I understood that to be, in a sense, one of Western Australia’s principal criticisms of it. In response to that we say the following, that the covering the field test has always recognised that the Commonwealth has a capacity to indicate the field that it wishes to occupy to the exclusion of State law without having to make its own detailed provisions on exactly the same matters. That is not to say that it can simply legislate at large to exclude State law making from anything to do with trade and commerce or lighthouses or something that might potentially be within a Commonwealth power.
My proposition is not as broad as to say that a law that simply sought to exclude State law and made no provision whatsoever in that same subject matter was within power, but in this case we have legislated a detailed set of rules and minimum requirements and content for particular agreements and so while we have not dealt specifically with the subject of unfair contracts, except in relation to independent contractors, in our submission, that does not preclude the Commonwealth from indicating its intention to occupy the field of employment contracts for constitutional employees to the exclusion of any other State law that might impact or take away rights.
GLEESON CJ: It may depend on how you define the field. As you are probably aware, there are some State decisions that give a pretty ample definition to this field of employment contracts.
MR BURMESTER: Your Honour, the field we have defined is the field defined by the relations between constitutional employees or employers and what we have said in 16(1) is that to the extent a State law would seek to interfere with that employment contract on the basis of unfairness then there is no scope for that State law to operate.
GLEESON CJ: Let me give a practical example. Suppose you had – and some of these employment contracts that I am about to mention operate at a fairly high level of management – a contract between a constitutional employer and a constitutional employee that provided for the employee, as part of his or her remuneration, to receive share options and suppose a dispute arose between the employer and the employee as to the fairness of the terms relating to those share options, perhaps a dispute arising out of some change in market conditions which is alleged to have made the agreement as originally struck unfair and suppose you had a State law that conferred jurisdiction on a tribunal to review that contract and even to rewrite the terms of the share option. Is that a matter that is part of a field that the Commonwealth purports to occupy under its legislation?
MR BURMESTER: Yes, your Honour, if it is a contract between a constitutional employee and employer and there is an employment contract governing that relationship, then section 16(1), subject to any modification by either subsection (3) or regulations to allow State laws to operate, would say that this Act applies to the exclusion of that State Act. So that even though it might deal with high level employer or employees, if it is governed by this Act, relates to an employee or employer within section 5, then the Commonwealth Parliament has indicated it wishes to occupy that field to the exclusion of State law.
That is not, in our submission, necessarily surprising. The Act sets out a detailed set of minimum conditions and then provides mechanism for workplace agreements, either collectively or individually, and if that set of arrangements was able to be varied or set aside or in some way impugned by going off to a State tribunal, then, in our submission, one clearly would have interfered with the integrity of the Commonwealth system.
HAYNE J: Does that proposition assume that Part 8 is an exhaustive description of the way in which employment agreements may be struck?
MR BURMESTER: Your Honour, I think there may still be scope for agreements outside Part 8.
HAYNE J: My impression was that Part 8 was to the general effect an “employer”, as defined, may make agreements with its “employees”, again as defined, in any of a number of ways with consequences thus prescribed, but that Part 8 did not say, “These are the only ways in which employers as defined may make employment agreements with employees”.
MR BURMESTER: I think your Honour is right; I do not disagree with that proposition.
HAYNE J: If that is so, does not the proposition you last advanced depend upon or implicitly assert that the Commonwealth has wholly covered the field of employment contracts, and yet Part 8 does not?
MR BURMESTER: We have covered it, your Honour, only in relation to unfairness. If one reads 16(1)(d), it is only a law providing for variation on the basis of unfairness. So if there is a common law contract, for instance, outside Part 8, then the Commonwealth does not purport to prevent any remedy being obtained under that common law contract under State law, except in relation to unfairness, and yes, we have purported to exclude State laws dealing with unfairness in a broader situation, as I read section 16, than possibly situations covered by workplace agreements. Your Honour, we say that does not mean there is a constitutional difficulty because - - -
GLEESON CJ: Part of the problem arises because the way some of these State laws about unfair contracts of employment operate – indeed, one of the complaints that is sometimes made about the way these State laws operate is that that they go well beyond what might be commonly regarded as the industrial context and into the commercial context.
MR BURMESTER: Yes, your Honour, that is so.
KIRBY J: You say that this is not surprising, but one point of view is that in a federation it is surprising that you are preventing the experimentation in the State sphere which is said to be one of the strengths of Federation and you are striking at so-called work choices which, on the face of things, are designed to promote diversity in employment relationships, but which your legislation is designed to prevent and to stamp a uniform federal approach without the experimentation that Federation provides for.
MR
BURMESTER: Your Honour, in our submission, if that is a consequence,
then it is a consequence the Commonwealth Parliament is entitled to make.
Can I
just put some flesh on the bones of some of what I have been saying.
Regulation 8.5 dealing with prohibited content, in subsection
(5) says
that:
A term of a workplace agreement is prohibited content to the extent that it confers a right or remedy in relation to the termination of employment of an employee bound by the agreement for a reason that is harsh, unjust or unreasonable.
So to the extent there is a workplace agreement
under Part 8, one cannot have any additional term in relation to
unfairness.
HAYNE J: Is not the regulation to which you just took us tied back into the definition of “workplace agreement” contained in section 4, page 15 of the print?
MR BURMESTER: Yes.
HAYNE J: Those being agreements of a kind given effect by section 351 at page 241 of the print, given effect in the sense that a workplace agreement that is in operation binds those who are there identified?
MR BURMESTER: Yes, your Honour. So we have dealt with workplace agreements in that detailed way. I acknowledge that section 16(1) is not talking about workplace agreements. It talks about contracts of employment and not workplace agreements and so the effect of section 16(1)(d) is, as the Chief Justice raised, to exclude State law dealing with employment between constitutional employees or employers even if under a common law contract of employment and yes, the rest of the Act makes no particular provision in relation to that but, in my submission, that does not lead to an excess of power or invalidity. It is a clear statement by the Commonwealth of its intention to occupy that field or to exclude State law from that field and, in our submission, that is - - -
HAYNE J: Can I just be sure about one thing that I understood you as just saying? Is it clear that what you have called a common law contract of employment is dealt with in the Act only in 16(1)(d). That may be a question that you cannot answer on the run, Mr Burmester, but - - -
MR BURMESTER: I am reluctant to give a general answer immediately, your Honour - - -
HAYNE J: - - - it is a point about which I would be glad to have a considered answer when you are in a position to do so.
MR BURMESTER: Yes, your Honour. We will endeavour to provide that, if possible, today. Certainly there is a distinction between contracts of employment in 16(1)(d) and workplace agreements in Part 8 and yes, 16(1)(d) is talking more generally about contracts of employment. Now, your Honours, to make good the submission I am attempting to make can I take your Honours to Wenn v Attorney-General (Victoria) [1948] HCA 13; (1948) 77 CLR 84 at 107 - - -
GUMMOW J: Perhaps it helps to understand the particular legislation in Wenn.
MR BURMESTER:
Yes, your Honour. I was going to do that on page 107. In
particular you will see on page 107 section 24 of the Commonwealth Act
and there are two subsections. It is really the second subsection at about
point 4 that is the scope of the Commonwealth law that
is set out. It
says:
The provisions of this Division shall apply to the exclusion of any provisions, providing for preference in any matter relating to the employment of discharged members of the forces, of any law of a State . . . and whether the law, award, order, determination or agreement was enacted, made or filed before or after the commencement of this section.”
So the Commonwealth states there its intention to apply its law to the exclusion of any provisions providing for preference in any matters relating to employment. Now, the Commonwealth had made no specific provision in relation to preference for promotion but the State law did specifically deal with promotion and the issue was whether section 24(2) was effective to displace the State law dealing specifically with promotion, a matter about which the Commonwealth had made no specific provision. The Court said that that was valid and the Commonwealth had successfully displaced the Commonwealth law although it had made no specific provision on it.
If I can go over to
page 108 at about point 5 your Honours will see in
Chief Justice Latham’s judgment he says:
This section does in terms exclude any law of a State providing for “preference . . . Promotion is employment of an employee in a higher position than that previously occupied by him . . . preference in a matter relating to the employment . . . This sub-section is relied upon as an express provision showing the intention of the Commonwealth Parliament . . .
If the Commonwealth Parliament, in a law with respect to a subject within its legislative powers –
and I might need to come back to those words –
enacts provisions which show that the Parliament intended to make an adjustment with respect to certain matters upon a particular basis to the exclusion of any other adjustment, then the result is to exclude the application of any State legislation or other provision which would “disturb or vary the Federal adjustment” –
And 109 at about point 2 quoting from Ex parte McLean
Chief Justice Latham says:
if the intention of the paramount legislature is “to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed . . . it is inconsistent with it for the law of a State to govern the same conduct or matter”. . . the legislature has made its intention clear by saying in s.24(2) that the subject matter as to which it is intended that the legislation shall be exclusive and exhaustive is “preference in any matter relating to the employment of discharged members of the forces.”
Now, your Honour, we say section 16(1) does exactly
the same thing and we have made clear our intention exhaustively to exclude
State
laws dealing, for instance, in 16(1)(d) with variation of:
contract of employment . . . that a court or tribunal finds is unfair –
and we say we have done no more than what Wenn’s Case would allow.
GLEESON CJ: I realise that this question may raise matters that are going to be the subject of the note that you are providing an answer to Justice Hayne’s question, but a lot of energy was spent on working out the meaning of the expression “industrial disputes” under paragraph (xxxv). Now that the Commonwealth has moved from reliance on paragraph (xxxv) to reliance on paragraph (xx) it is necessary, I think, to understand how the legislation works in relation to contracts of employment that would in the past have been regarded as outside the industrial context. How does this legislation operate in relation to a contract of employment between, say, an insurance company and its chief executive which might be a very elaborate contract of employment and would certainly contain a lot of what might otherwise be prohibited content?
MR BURMESTER: Your Honour, we will cover some of this in a note, but can I indicate the following? That sort of employment contract you mentioned would not be a workplace agreement and so a lot of the detail about prohibited content and so on would not apply to it. However, there is - - -
GLEESON CJ: Why would it not be a workplace agreement?
MR BURMESTER: Well, your Honour, it could be a workplace agreement, but it may have been made simply as a common law contract of employment.
HAYNE J: Because the central scheme of the Act in this regard has two relevant parts, does it not? Part 7, a constitutional corporation must meet certain minima.
MR BURMESTER: Yes, your Honour.
HAYNE J: Part 8 is, a constitutional corporation may but need not, may make its agreements with employees in any of a number of ways with the following specified consequences if it does.
MR BURMESTER: That is correct, your Honour. Under Part 8, for instance, a workplace agreement needs to be lodged, cannot have certain content and so on. In the example the Chief Justice gave, a contract with a chief executive, I think it is most likely that Part 8 would not be engaged, it would not be a workplace agreement, the employer would not have chosen to bring it under this Act.
In terms of Part 7, section 173 which deals with the Australian fair pay and condition standard, makes it clear that even in a common law contract, not only in a workplace agreement, one cannot exclude the Australian fair pay and condition standard. So that to that limited extent at least, at least in terms of minimum standards, the Act does operate on any employment contract between a section 5, section 6 employee/employer.
There is some intersection between common law contracts and this Act – it is a limited intersection, in my submission – principally directed, for instance, at minimum standards but in section 16(1)(d), we also intersect with common law contracts by seeking to exclude particular State laws dealing with such contracts, namely, laws for their variation on the basis of unfairness. Your Honour, we might elaborate in the note that Justice Hayne has requested.
GLEESON CJ: Thank you.
MR BURMESTER: So, your Honour, there being some intersection, the Commonwealth having chosen not to deal comprehensively with, for instance, contracts of employment outside the specific ones dealt with in the Act, nevertheless, we say, it is open to the Commonwealth Parliament to indicate an intention to exclude certain State laws that might otherwise govern that employment relationship which is otherwise within Commonwealth constitutional power. We submit that Wenn’s Case enables the Commonwealth to do that without making its own provision on the point.
Your Honours, could I take you to Justice Dixon’s judgment in Wenn as well on pages 119 and 120 and, in response to the argument that the federal Act leaves the question of promotion clear of statutory regulation and therefore State law can operate, in the middle of the page Justice Dixon responds to that argument, and over onto page 120 - - -
GUMMOW J: It is the last sentence on 119 really that perhaps encapsulates it.
MR BURMESTER:
In this Court it is far too late to contend that s. 109 does not invalidate State law which in such a state of affairs carries the regulation of the same matter further than the Federal legislation has decided to go.
GLEESON CJ: That expression, “the same matter” - - -
MR BURMESTER: That does leave room for argument, your Honour. We say “the same matter” here is the matter we have identified in section 16 which does extend beyond those covered by, perhaps, Parts 8 and so on, dealing with individual agreements.
GLEESON CJ: A way of putting the question might be whether, in the example that I gave about the insurance company’s chief executive, that really is a matter that the federal legislation is regulating.
MR BURMESTER: To the extent, for instance, where we do make some provision about it, namely, that the minimum conditions, the AFPC standard, for instance, cannot be excluded.
HAYNE J: A matter of high moment.
GLEESON CJ: The risk of that being fairly remote.
MR BURMESTER: On page 120,
Justice Dixon says, at about point 2:
To legislate upon a subject exhaustively to the intent that the areas of liberty designedly left should not be closed up is, I think, an exercise of legislative authority different in kind from a bare attempt to exclude State concurrent power from a subject the Federal legislature has not effectively dealt with by regulation, control or otherwise.
HAYNE J: What do you say in that sentence, applied to these facts, is the subject of which his Honour first spoke?
MR BURMESTER: The subject is the subject reflected in the chapeau of section 16(1), the relation between an employee or employer as defined in sections 5 and 6. So, yes, it is a broad area but, we say, when one then looks at the laws that are proscribed or excluded in section 16(1), one can see that they all relate back to that employment relationship.
GUMMOW J: This law comes out of Clyde v Cowburn and McLean. Ironically, in a way, it comes out of the award system. Are there any examples of a comparable field being treated as pegged out by an award system which then was exhaustive of intrusion by the State law?
MR BURMESTER: Your Honour, there have always been provisions similar to section 17 of this Act which says whatever is in an award it operates to the exclusion and prevails over State law.
GUMMOW J: Yes.
MR BURMESTER: That has been accepted over a long period as possible. We say that if that is permissible in the area of an award certainly the award defines the area so it is not so much a question of the Commonwealth making provision in a void but in substance we say there is not a great deal of difference in terms of how section 109 operates. The intention of the Commonwealth is made clear as to which area it wishes to leave covered by its own award, its own workplace agreement or to the exclusion of a State law on a particular subject on a matter that otherwise falls within Commonwealth power.
HAYNE J: Does not the very specificity of paragraphs (a) to (e) reveal the absence of exhaustive regulation elsewhere in the Commonwealth legislation?
MR BURMESTER: Yes, your Honour. I do not pretend that we have regulated exhaustively these subjects otherwise. What we have done is to say that we have not made detailed regulation on all of these things and in fact an issue I probably need to mention that Western Australia put some emphasis on was the relationship between section 16 and other provisions in the Act. The other provisions that Western Australia referred to – and this is at transcript lines 8246 to 8265 – we submit do not deal with employees or employers as defined n section 5 so it is not as if there are other provisions elsewhere in the Act making contradictory provision for matters dealt with in section 16.
If one examines the provisions referred to by Western Australia it is clear that they only deal with non-section 5 to 6 employees. This is clear from section 690 dealing with parental leave – one of the sections Western Australia mentioned – and section 689 makes it clear it is only dealing with non-section 5 and 6 employees. Clause 87 of Schedule 6 which was mentioned is only dealing with employees in Division 1 of Part 21 and section 858 makes it clear it is only dealing with non-section 5 employees.
We have not found any provision elsewhere in the Act which deals expressly with State laws in relation to section 5 and 6 persons. The provision dealing with non-section 5, 6 persons is – I am sorry. There are provisions elsewhere in the Act dealing with non-section 5, 6 employees. Section 16 is the section that deals with section 5 and 6 employees and employers and indicates the way in which State law interacts with them.
GLEESON CJ: In one respect, section 16(1)(d) looks
remarkably limited. Would it apply to:
a law providing for the variation or setting aside of rights and obligations arising under a contract of employment . . . that a court or tribunal finds is –
harsh and unconscionable?
MR BURMESTER: Your Honour, not in its terms, in our submission. It does only single out unfairness. There may be a question whether harsh and unconscionable add anything or can be dealt with in isolation from the notion of unfairness but - - -
GLEESON CJ: I would have thought the notion of harshness and unconscionability is different from the notion of fairness.
MR BURMESTER: It has traditionally been seen as different, I agree, your Honour. I think it was clearly and, as you say, it was - - -
GLEESON CJ: Take State legislation that dealt specifically with a Blomley v Ryan contractual issue.
MR BURMESTER: Your Honour, if it was on some other ground, then section 16(1)(d) does not exclude it. It is a narrow exclusion in that sense, a carefully chosen exclusion. Maybe given the history in New South Wales with unfair contracts – but, your Honour, we say that is no reason why the Commonwealth cannot chose to occupy or to make clear its intention to exclude State law from that field which otherwise falls within its constitutional power.
GUMMOW J: What is the head of power that supports section 16?
MR BURMESTER: Your Honour, it is all the heads of power that support the application of this Act to employees or employers in section 5 and 6. That is the head of power. We accept there has to be a head of power. It clearly links back to the heads of power that support the definitions of “employee” and “employer” in section 5 and 6. We say that the principle in Wenn has not been contradicted in later cases but in cases like the Native Title Act Case, Western Australia v Commonwealth [1995] HCA 47; (1995) 183 CLR 373 particularly at 464 to 468, and in the Botany Municipal Council v Federal Airports Corporation [1992] HCA 52; (1992) 175 CLR 453 at 464 to 465, one finds statements that, in our submission, are consistent with those in Wenn and which indicate that there is an ability to exclude State laws even though the Commonwealth may not have made its own detailed provisions on the subject.
The issue is one of power – is it a law with respect to a head of power – rather than whether there is a prohibition on excluding State law. In our submission, one cannot characterise section 16, given the way in which it is drafted, the laws to which it applies which confine it to section 5 employees and section 6 employers, as a bare attempt to prevent State law making.
Your Honours, that leaves section 16(4). The question is really: is it in a different category in terms of its validity? The States say that there are no criteria indicated for the laws that can be made. For instance, presumably you could make a regulation excluding the State Dog Act from applying. Your Honours, subsection (4) applies to the exclusion of a law of a State or Territory for the purposes - - -
GUMMOW J: Can we just go back to the Native Title Act Case for a minute?
MR BURMESTER: Yes, your Honour.
GUMMOW J: Do you rely on the passage at 467 in 183 CLR?
MR BURMESTER: The passage from O’Reilly that has been quoted, your Honour?
GUMMOW J: The first paragraph, “The critical question”.
MR
BURMESTER:
The critical question is the scope of Commonwealth legislative power. Provided the power supports a Commonwealth law making its regime exclusive and exhaustive, the law may validly exclude in terms the application of State law to the subject matter.
Yes, your Honour. Then there is a
reference to the Botany Municipal Council that I also referred
to.
GUMMOW J: Botany is a useful illustration of that, is it not?
MR BURMESTER: Yes, your Honour. We exclude the State environmental law and particular planning approvals and so on and put our own limited regime in place.
GUMMOW J: I am sorry, I took you off section 16(4).
MR BURMESTER: Yes, section 16(4). The complaint is that there are no criteria or indications as to the way in which the subsection can be used.
GLEESON CJ: Are there any regulations?
MR BURMESTER: Your Honour, there is one regulation. It is regulation 1.4, which excludes the Contracts Review Act (NSW), and as one looks at that regulation, it is confined to its exclusion to section 5, section 6 employees, employers. So on the face of the regulation, it does not purport to exclude the Contracts Review Act beyond its application to employees and employers within the scope of the Act.
GUMMOW J: How do you get out of 16(4) a power to exclude pro tanto?
MR BURMESTER: Well, your Honour, if there was a regulation that simply said the Contracts Review Act (NSW) is excluded full stop - - -
GUMMOW J: That would be void.
MR BURMESTER: - - - it may be beyond power, because it would not bear any relationship to the purpose for which the power is given. Subsection (4) appears in section 16(1). One could equally read it as a little (f), a paragraph (f) to 16(1). We say, given its context, it is effectively constrained in the same sort of way. In order for a regulation under that subsection to be valid it could not trespass generally into State areas, could not prescribe a State Act that had no relationship to employers and employees covered by this Act.
So we say obviously in construing the regulation-making power, just as Mr Tracey outlined in relation to the sections he was concerned with, one has to have regard to the object and purpose of the Act and, in particular, the section in which it appears. We have given in paragraph 604 of our submissions and footnote 487 one reference to a case that we say supports that. We referred there to R v Toohey; Ex parte Northern Land Council [1981] HCA 74; (1981) 151 CLR 170. That dealt with whether regulations in relation to the scope of the City of Darwin were within power. Clearly if one makes a regulation for an improper purpose or with a lack of bona fides, and in particular if one makes a regulation that is not consistent with the object and purpose for which the power was given, we would say it would be invalid.
So on that basis we say section 16(4) is not, properly understood, an unlimited power – it does take its context and limitations from where it appears – and we say that a regulation such as the one that has been made, regulation 1.4, is within its scope and is a valid regulation.
Your Honours, I am reminded that yesterday when the Solicitor-General was addressing trading corporations he indicated that a governmental nature of a trading corporation might well be relevant to whether it is in fact a trading corporation – that is page 389 of yesterday’s transcript – and your Honour Justice Kirby in terms of concern about intrusion into State areas, that may well provide another limitation on the scope of the corporations power. Your Honours, that completes my submissions on section 16.
There are a couple of other matters I need to deal with, some little ones first. Just to correct the transcript yesterday at line 18057, there are references to paragraphs in our written submissions that are incorrect. Instead of 151 to 164, it should be 51 to 64. Your Honours, when the learned Solicitor made submissions yesterday on severance, he indicated that the Commonwealth accepted that if section 6(1)(a) was wholly invalid, then the consequence was that the Work Choices Act fails, but I need to emphasise that that consequence – and in this regard we agree with the Northern Territory and the Australian Capital Territory submissions – is that the old Act would revive, so it is not as if there would be a complete void if, and only if, section 6(1)(a) is totally invalid.
Your Honours, there are some matters where the Commonwealth felt it would be useful to just recap a little and make a few summations. In particular, can I return to Schedule 1 which was dealt with yesterday. Can I make clear that in the Commonwealth’s submissions there are for bases for the validity of Schedule 1, and I will indicate the four briefly and then say a little bit more about the first two.
The first is that the registration and control of organisations that have a range of rights and duties under the Act is incidental to the powers supporting the Act, and what I want to do is show the connections that do in fact exist. The second basis is that, independently of the Act, in reliance on constitutional powers, not all of which might be related to the Act, which are set out in sections 18A(2) and 18B(2), the Act independently can support the schedule based on those powers.
The third head is the corporations power to the extent an organisation may be a constitutional corporation, and we accept there may be very few of those, if any, but the section does allow for that. Then the fourth head is for the three-year transitional period for existing organisations based on the conciliation and arbitration power, the issue that Mr Tracey mentioned yesterday.
Even if the first three bases for validity were found to be inadequate, either for drafting or other reasons, then, in our submission, the consequence is not that the whole of the schedule is invalid, but the consequence would only be that clauses 8(a), (b), (c) and (d) would be invalid and they could be severed. They are the ones for the registration of new organisations and the criteria for the new organisations to get registered, but there is no reason why the schedule could not continue to operate under the transitional periods for three years in relation to existing organisations.
So, in our submission, contrary to I think the AWU’s submissions, if the criteria for new registration are invalid, the consequence is not the whole of Schedule 1 fails, but the new criteria for registration may be invalid and the transitional provisions could sustain the schedule under the old conciliation and arbitration power, the former conciliation and arbitration power.
GUMMOW J: What do you say about Mr Hutley’s argument in this respect?
MR BURMESTER: Your Honour, that is really when I come to the second head of power, if I can reserve it until then. If I can go back to the first basis on which we say the schedule of that is valid, and that is that it is incidental to the scheme established by the Act, and in paragraph 532 of our written submissions we have set out in some detail the particular functions that impose links between an organisation and its ability to take particular action under the Act.
In our submission, it is not a situation where, having been registered, an organisation gets some freestanding right to participate generally or intrude into any workplace of federal employees. Its rights for purposes of the Act and the substantive provisions of the Act indicate when and where it can participate and take action and, in our submission, there is a clear link between when it can do that under the Act and its existence as an organisation. So it is not, well, it is established as an organisation and it does have personality separate from its members, nevertheless the rights and obligations that it gets are set out in specific parts of the Act and it is not by reason of its incorporation, as it were, given a right to intrude generally into any workplace to engage in any industrial disputation it may wish.
Your Honours, if I can illustrate that by taking you to sections 328 and 329 of the Act. These deal with union collective agreements and union greenfields agreements.
KIRBY J: Is this section of the argument addressed to the submission that, whereas with conciliation and arbitration you have to have organisations to do the conciliating and arbitrating, that is not inherent in the use of the section 51(xx) power?
MR BURMESTER: Your Honour, it is partly that and it is partly it is in response to Justice Hayne’s question that one needs to show the links between the establishment of the organisation and the substantive provisions of the Act which give it rights and obligations.
KIRBY J: The one is a constitutional point and the other is a statutory point.
MR BURMESTER: No, I think the second one may well have constitutional significance.
KIRBY J: Of course.
MR BURMESTER: It shows the incidental nature of the establishment of the organisation by reference to the substantive rights and obligations it acquires. If I can take your Honours to section 328, you will see that the only organisation that can make an agreement is if the organisation making the agreement has at least one member whose employment in a single business of the employer will be subject to the agreement and they have a right to represent the industrial interests of the member.
Section 329, the union greenfields agreement, similarly, requires that the organisation be entitled to represent the industrial interests of one or more of the persons whose employment will be subject to the agreement. So it is only those organisations that get rights, for instance, to conclude collective agreements and that is clear, I think, from the express terms of those provisions. There has to be at least some connection between the employee and the organisation in the particular business before the organisation will be conferred with certain rights.
Similarly, your Honour, it is only unions who are bound by an award, for instance, in section 553, who can seek to vary the award and that is not unexpected. Just as has always been the case under the old system, it is people who are bound by the awards in a particular organisation that may apply for an order varying it.
Similarly, to initiate a bargaining period and to then get
protection from any industrial action during that bargaining period,
section
423 allows an organisation who wants to make a collective agreement
– this is section 423(2):
an organisation of employees . . .
wants to try to make a collective agreement –
and it is clear from section 423(1) that it is only those unions who we have seen in 327 who can initiate a bargaining period. In other words, a union that has no connection with a particular negotiation is not authorised to initiate a bargaining period and, hence, they will not get any protection under section 435(2) during a bargaining period because an organisation of employees that is a negotiating party is the relevant organisation that gets protection. It is clear from section 423 that it is only an organisation that wants to try and make a collective agreement and, as we have seen in the earlier sections, that requires them to have particular members.
So, your Honours, we say when one looks at the substantive provisions of the Act and if one took all the sections that are outlined in paragraph 532 of the Commonwealth’s submissions, one could see that there is a link between particular unions, particular organisations and their ability to do particular things.
Alongside those requirements when one then goes back to Schedule 1 one sees, for instance, in section 19(1)(i) that an organisation is only eligible for registration if they will further the object of clause 5 of the schedule and section 3 of the Act, so their right to be registered does depend on some ability to take a role and have a role under the Act. Then, in the particular substantive provisions of the Act, as I have sought to show by a few illustrations, the unions only get particular rights and privileges if there is some connection between them and their members and the particular right or privilege in question.
We say, on that basis, the schedule is incidental to the system established by the Act and the fact that there may not be a precise overlap in sections 18A and 18B of the schedule with those employees and employers covered by sections 5 and 6 does not matter. The degree of overlap is likely to be substantial. As Mr Hutley has noted, there is a possibility that the definition of “federal system employee” in the schedule may be broader in its range than that in section 5 of the principal Act but, in our submission, it is apparent that the vast majority of federal system employees under the schedule will in fact be likely to be employees under section 5.
For instance, employees of constitutional corporations will fall within the scheduled definition in section 5, Territory employees, similarly. The number of employees likely to be covered by the insurance or banking powers, for instance, which are picked up in the schedule but not in section 5 is likely to be very small and, similarly, with telephonic industries, the fact that most banks and insurance corporations suggest that in fact there are unlikely to be many persons picked up by the schedule that would not otherwise be caught by the system established by the Act. So the disconformity, to the extent it exists, we submit, in our view, does not detract from the system that has been established being incidental to the sections 5 and 6 system established in the body of the Act.
The second basis for validity, we say, exists alongside the first basis which I have outlined and that is that the organisations based on the criteria in sections 18A and 18B can be created and exist independently of the Act because, in our submission, the heads of power in section 18A(2) and 18B(2) can support registration of relevant organisation employees, regardless of any federal system.
If I can give an example like this, assuming the Commonwealth had made no provision in its own federal workplace system for postal workers or lighthouse workers, in our submission, it would be incidental to those particular powers of the Commonwealth to establish a mechanism for organisations of relevant employees, of lighthouse workers, and so on, and postal workers, to register an organisation to represent them in dealing with their employers, whomever those employers might be and under whatever industrial system they may be subject to.
It may not be a federal system. It may be a State system. We would say there would be power under those particular heads of power, the heads of power, in particular, banking, insurance, the ones set out in 18A(b)(ii) and so on to set up separately and independently of any particular operation of a workplace relation system, a mechanism for the registration of organisation of employees to represent them as part of an industrial relations system, whatever that industrial relation system might be.
GUMMOW J: Or that notion – I am not disputing it, but that notion you have just explained is important for the primary thrust of this case as well really, that is to say, it is with respect to the relevant head of power to do this.
MR BURMESTER: Yes, your Honour,
but we say the way the Act has been drafted they can both be relied upon and
they both support Schedule 1, the
incidental to the system in the Act and
independently on this heads of power. If I can take your Honours to
section 5 of Schedule
1 which states Parliament’s intention and
one can, in a sense, see this in the difference between paragraph (1) and
paragraph
(2) of that statement. Paragraph 5(1) refers specifically
to:
federal system employers and federal system employees -
and then clause (2) talks more generally about:
associations of employers and employees are required to meet the standards set out in this Schedule in order to gain the rights and privileges accorded to associations under this Schedule and the Workplace Relations Act.
So we say that there is a recognition by Parliament of two potential bases on which to support the schedule, the one that particular rights, privileges and immunities conferred in the Act on organisations and the large overlap and coverage between those eligible for registration under the schedule and then separately, independently on the basis of these heads of power. It is incidental for employees in the activities within Commonwealth heads of power to have organisations established by Commonwealth law to protect their Commonwealth interests. Your Honours, I need not say probably anything about the third and fourth bases which I indicated supported our arguments in relation to the schedule.
GUMMOW J: Does that deal with Mr Hutley’s argument?
MR BURMESTER: Yes, your Honour, I sought to say that the degree of disconformity, if you like, was not significant. There was, in fact, likely and, in fact, one would expect there to be substantial overlap between those eligible under sections 18A and 18B to seek registration and those covered by the Workplace Relations Act itself. In fact, it might be a broader category, but the hypothetical union that only had workers, employees who had no connection with the federal system and yet were eligible for registration under the federal system (a) is remote and then, secondly, in particular, the specific requirement in section 19(1)(i), I think it is, that the organisation is committed to and capable of taking part in the – that “the registration of the association would further Parliament’s intention in enacting” the schedule under the Workplace Relations Act we say would mean that there would be unlikely to be an organisation that had predominantly or solely non-section 5 or section 5 employees. Even if not valid under that, then we say it is valid under the other heads of power we mentioned.
Your Honour, finally, if I could return to our submissions on the corporations power and take your Honours to section 379 of our written submissions. This is really a brief summation of what we put yesterday which - - -
KIRBY J: Is this the Commonwealth’s peroration, is it?
MR BURMESTER: Yes, your Honour.
KIRBY J: It has fallen to you.
MR BURMESTER: It has fallen to me to briefly summarise what has been put in considerable detail yesterday by the learned Solicitor. Paragraph 379 seeks to set out a summary of what we say are the connection criteria which will support the Act.
GUMMOW J: Just a minute.
MR BURMESTER: Sorry, your Honour, it is on page 93 of the submissions.
GUMMOW J: Yes.
MR BURMESTER: Now, 379.1 which is there called a direct connection is what is being referred to as the object of command. We say that that test supports those provisions of the Act which are set out in paragraph 381, which is at the bottom of page 94, going over the page. It is Part 7, 8, 10 and so on.
GLEESON CJ: Does it support the Fontana Films provisions?
MR BURMESTER: No, your Honour, and it would not be supported by this criteria. Paragraph 394 refers to another part, Part 9, to the extent it deals with employers, which we say is supported by the direct connection test. Now, 379.2 is the sufficient connection test and it sets out a number of variations of that. It is not the same as the object of command test. We say that 379.2 will support the whole of the Act, including the parts that we have sought to also support under the direct connection or object of command test.
GUMMOW J: Can I just put this to you, Mr Burmester. I do not think it cuts across what you are saying but it will help me. The critical provision is 6(1)(a), is it not?
MR BURMESTER: Yes, your Honour.
GUMMOW J: That postulates and takes as a given, if you like, a constitutional corporation.
MR BURMESTER: Yes.
GUMMOW J: There are not any at the Bar table as it happens, but as time goes on I imagine it would possible that a corporation will put its hand up at some stage and say, “I am not a constitutional corporation. This Act has nothing to do with me and I want prohibition”.
MR BURMESTER: Quite likely.
GUMMOW J: But that is not today’s argument because this is a demurrer. So we posit a constitutional corporation, whatever that phrase means, but we posit there is such a creature and then we ask: is it employing or usually employing individuals?
MR BURMESTER: Yes.
GUMMOW J: Then we take the next step and we look at various legislative norms that are then imposed on that relationship in way one or another and then we ask: are those particular norms which bear upon this employment relationship, are they laws with respect to the constitutional corporation?
MR BURMESTER: That is correct, your Honour.
GUMMOW J: Is that not it?
MR BURMESTER: That is the task. What we have sought to do in 379.2 is to assist your Honours reach the conclusion that - - -
GUMMOW J: Each of those is trying to explain or is explaining the content, in this particular context, of the cases that tell you when something is with respect – a head of power.
MR BURMESTER: With respect to a corporation, that is correct.
HAYNE J: That task is illuminated by two further observations. Firstly, the corporations with which 51(xx) deals are juristic persons, if you like, legal constructs. Those legal constructs can act only through natural persons. The legislation with which we are concerned is directed to one particular kind of legal persons and the relationship – a natural person’s relationship with corporations, employees, and is a law with respect to the relationship between the artificial juristic person and natural persons falling within the class of employees, a law with respect to that class of artificial juristic persons. The debate, though put in terms of, amongst other things, internal/external, relationship between 51(xx) 51(xxxv), really has to shift to a debate about “with respect to” rather than the metes and bounds of 51(xx).
MR BURMESTER: Your Honour, that is what we have sought to do in the submissions that follow 379, where having set out the alternative ways in which we say particular parts or the whole of the Act can be supported, we have indicated specifically which connection applies in a particular part that is challenged and why we say for that reason is a valid law with respect to corporations.
GUMMOW J: Now, that will leave for another day the question of whether the Red Cross is a 51(xx) corporation.
MR BURMESTER: Yes, your Honour.
GLEESON CJ: Now, Mr Burmester, on page 93 at line – and I am not sure whether it is 8 or 9, but at the point of connection between 397.1 and 379.2 there is the word “or”. Do you see that?
MR BURMESTER: Yes.
GLEESON CJ: Why should it not be “and”?
MR BURMESTER: Well, your Honour, not “and” in the sense that you have to have both. We say they are alternatives.
GLEESON CJ: The question of characterisation never disappears, does it?
MR BURMESTER: No, your Honour, it does not disappear. So they are “or” in the sense that they are alternatives. The first is one alternative, the second has a number of alternatives within it, and what we say is that only some of the Act would be supported by the first connection, the direct connection – and we have indicated, as I said, in 381 and 394 those parts. We say the whole of the Act, including the parts for which we have contended the direct connection would suffice, would also be valid under the related persons connection and the business activities or relationships connection, those ones in particular, but one or two provisions also under possibly some of the others there in 379.2. But, yes, they are all different ways in which one could reach the conclusion that a particular provision was a law with respect to corporations.
GLEESON CJ: But, as was pointed out by Justice Gummow earlier, the hypothesis is that what you are dealing with is a trading corporation, et cetera.
MR BURMESTER: Yes.
GLEESON CJ: Let us confine it to trading corporations. If it is not a trading corporation, end of story.
MR BURMESTER: Yes.
GLEESON CJ: If it is a trading corporation, its relations with all its employees, regardless of what particular activity they perform, are a matter of business, are they not?
MR BURMESTER: Yes, quite likely, your Honour, in this context.
GLEESON CJ: A contract of employment between a municipal council and a health inspector is a business relationship, is it not?
MR BURMESTER: Yes, your Honour, and we would say - - -
GLEESON CJ: Just as much as is a contract of employment between a council and the man who sells refrigerators.
MR BURMESTER: Yes, your Honour, and it may be that all your Honours need to decide for the purpose of upholding the provisions in this case is that particular provisions operate on a business activity or relationship with a constitutional corporation – that is 379.2 – and on that basis the law is valid.
GUMMOW J: So it may be encapsulated by the last sentence of paragraph 83 of Justice Gaudron’s reasons in Pacific Coal 203 CLR 346 at 375. What she is doing I think in that paragraph is giving content to, as you are attempting to do here, I think, at least in paragraph 379, what will be with respect to this given of a trading corporation, and that “laws prescribing the industrial rights and obligations of corporations and their employees and the means by which they are to conduct their industrial relations” will be laws with respect to the corporation.
MR BURMESTER: Yes, your Honour. I think the learned Solicitor read that passage yesterday and we say that can apply here. Your Honour the Chief Justice, just so there is no confusion, in separating 379.1 and 379.2, we are not saying that 379.1 is not also an exercise of characterisation. It is really a specific example of where we say there is a sufficient connection with a constitutional corporation, so it is not in that sense intended to be a different nature of the test. It is just another one of the connections which we say establishes that a law is a law with respect to corporations. But there is no need to decide, for instance, that the object of command test necessarily will support any law addressed to a corporation.
GLEESON CJ: Exactly. What we are concerned here is the validity of the law which makes corporations an object of command in relation to their employment relationships.
MR BURMESTER: Yes, your Honour.
GUMMOW J: And that is what 6(1)(a) is talking about.
MR BURMESTER: Yes, your Honour.
GLEESON CJ: That is to say an object of command in relation to a matter of business.
MR BURMESTER: That is right, and that is why we have independently suggested 379.2.2, the business activities connection, by itself – and it may not necessarily always for business activities have to be addressed to a corporation, but certainly if you had an object of command and a business activity, then, in our submission, there can be no doubt it is a law with respect to corporations.
KIRBY J: Can I just go one step behind the question Justice Hayne asked that the corporation is not only a juristic person but it is a juristic person that an individual can elect in the proper way to become and, thereby, one party to the employment relationship can elect to, on your theory of the Constitution, bring itself into the federal power. Is there any other illustration of that in section 51 whereby a person can, by their own act, alter the industrial employment relationship by the simple option of turning itself into a corporation? Are there analogous – has the Court ever said, “Well, that doesn’t matter; you are entitled to take that step”?
MR BURMESTER: I cannot immediately think of another example, your Honour, but, in our submission, in terms of constitutional power it should not have constitutional significance. I mean, one can move, for instance, from Sydney to Canberra and one then is subject to the territories power. One can be an immigrant or cease to be an immigrant - - -
HAYNE J: But much depends on who you mean by “one” in the sentences you have just uttered and the whole foundation of the corporations power is that the corporation is separate from and distinct from the corporators. If not, it is not a corporation.
KIRBY J: Yes, but it is a legal fiction - - -
MR BURMESTER: And in terms of an
individual establishing the corporation, it has to be a trading corporation
within the meaning of the
Constitution and once it is established, it then
does take on a life of its own, it does come
within - - -
KIRBY J: You will understand I have my eyes still fixed on the interrelationship of (xx) and (xxxv) and if one is, therefore, looking at how (xxxv) is intended to operate, the notion that one can, by becoming this artificial person, a trading corporation, as it were, take yourself out of (xxxv) is a notion that allows you really just to walk straight out of - - -
MR BURMESTER: Your Honour, whether one can become a corporation, of course since the Incorporation Case, depends on the States.
KIRBY J: That is true but the requirements are formal.
MR BURMESTER: But once one is a corporation, if one is a constitutional corporation, then, in our submission, that we say is sufficient and then one has this issue of characterisation of a particular law.
GLEESON CJ: Deciding whether or not to become a corporation could be very important to the way in which the Trade Practices Act applies to your operations. I am sure that has nothing to do with why barristers do not form corporations the way doctors do.
MR BURMESTER: The tax laws and all sorts of other laws, your Honour, yes. There is nothing else I need to address. There are a number of notes we have either agreed to do or where we will need to respond to notes by the States. We would ask that we be given 14 days in order to respond to those notes.
GLEESON CJ: Yes.
MR BURMESTER: They are the Commonwealth’s submissions, your Honours.
GLEESON CJ: Thank you, Mr Burmester. In
what order are these replies?
MR WALKER: The proposal,
your Honours, subject to the matter between my friend, the
Solicitor-General for Queensland, and the Solicitor-General
for South Australia,
is that I start, Queensland follow and Mr Jackson conclude, but I think
there may be - - -
GLEESON CJ: Are we going to get the matrix before lunch?
MR WALKER: The answer is concrete, your Honour.
MR SOFRONOFF: I can hand up the matrix, your Honours. I have ample copies here. It was proposed that as far as my submissions are concerned I will reply but, if the Court pleases, then my learned friend, the Solicitor-General for South Australia, will follow me on a couple of brief points. The time will not differ.
GLEESON CJ: It is just handy for us to have an opportunity to run our eyes over this over the adjournment. Would it make any difference to counsels’ arrangements if we adjourned now and resumed at 2? That will give us the opportunity to look at this before any of the replies commence.
MR WALKER: Not so far as we are concerned, no, your Honour.
MR SOFRONOFF: Not at all, your Honour.
GLEESON CJ: All right, let us do that. We will adjourn now and resume at 2.00 pm.
AT 12.25 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.01 PM:
GLEESON CJ: Yes, Mr Walker.
MR WALKER: May it please the Court. Our opponents have adopted a
number of formulations suggested by your Honours for their consideration.
We do not suggest that among those suggestions there is any fatal inconsistency.
In particular, for the purposes of reply, may I
single out the sense in which it
has been said that a corporation might be considered as being in business or
engaged in its business
when it is in the course of coming to employ and is
employing workers for its activities, whatever they be. It is related, and we
accept that it is related, to the point most recently made by
Justice Hayne, as adopted by my learned friend, Mr Burmester, about
the critical, we would assert central, role in relation to the testing of the
availability of a head of power in this case of the
all important connective
phrase “with respect to”.
Also, most latterly, we accept that it is related to a possible answer to the whole of what I will call the overall arguments advanced on the plaintiff’s side as put by way of suggestion from Justice Gummow to my learned friend, Mr Burmester. At the heart of all of those arguments which are now against us, we accept that the clearly not immaterial, clearly not tenuous, clearly not insubstantial connection between what a corporation does and the fact that it does so by its workers, its employees is at the heart of the matter.
However, in our submission and by way of reply in particular to the adoption by the Commonwealth of the gist of some of those suggestions to which I have just referred, we submit that there are historical, linguistic and contextual reasons to construe this power, which has been described as a difficult one, in such a way as would lead, when going to the next step of characterising the impugned law, to the result for which the plaintiffs contend.
At the outset we would respectfully submit in answer to an adopted suggestion that to focus as one must on the connection which the phrase “with respect to” requires to be at the heart of the exercise is not, when looking at the first part of the exercise, namely, the interpretation of the constitutional head of power, is not different in kind but, rather, is part of the exercise of defining the metes and bounds of the power.
We accept, of course, that the metes and bounds of what a corporation of those constitutional characteristics might be is a different question from the metes and bounds of the power to legislate with respect to them, but we are concerned only with interpreting section 51(xx) in such a way that, properly characterised, this law would not fall within the power granted by it.
The learned Solicitor-General for the Commonwealth treated, in our submission, as if it was not capable of lending real assistance the history to which the various plaintiffs’ cases have drawn attention and, in particular, which has been added to by the considerations raised by the Bench, both of the plaintiffs and with the Commonwealth. In our submission, that is a history which shows that before the Constitution was made and in the pro-Federation and perhaps also anti-Federation commercial milieu of the time and governmental concern of the time showed that the characteristic concern in the area was with the effects by and on corporations which were in business with others. By others, we mean outsiders in the sense that Mr Justice Isaacs used that very term in the passage to which your Honours have been taken repeatedly at 8 CLR 395.
Now, of course, the history is not controlling. It might be thought that ultimately nothing is controlling except the meaning that your Honours give to 51(xx) as a result of these arguments. Though it is not controlling, it is part of the contributory circumstances which combine with linguistic and contextual matters to require stepping back from the width of the power which, of course, one must concede as a matter of pure literal understanding, could extend as far as the Commonwealth would have it.
That is an unremarkable and not necessarily favourable attribute of any of the constitutional powers that, interpreted literally, they many encompass certain things. It is a necessary but by no means sufficient foundation for the Commonwealth argument. That history, we submit, suggests that there is a difference to be observed from the relations with others with whom one is in trading or financial business relations and the “internal”, a word that cannot be avoided because it is both historically, as well as in the authorities, also used, the internal relations with one’s own labour force and obviously historically and contextually there was 51(xxxv), with which in particular my learned friend, the Solicitor for Queensland, will be dealing in reply.
In relation to the use of history, we should have drawn to your Honours’ attention in-chief the reference – it does not add to any of the detail but it certainly, with respect, supports the approach that one may find in the comments by Chief Justice Gibbs and Justice Wilson in the State Superannuation Board v Trade Practices Commission decision[1982] HCA 72; , (1982) 150 CLR 282 at 297 point 7 – I will not take your Honours to it. That history includes, as already noted by Justice Gummow and we think adopted by the learned Solicitor-General for the Commonwealth, “foreign” included, of course, in the usage, companies created under the laws of other Australian colonies pre-Federation, and there were, not only immanent, but explicit concerns involving questions of international law, private as well as public international law, which dominated the discourse at the time.
There were choices in particular between places of incorporation and places of contracting as the sources of legal rules, especially for imposing liability on the corporators, the members, either for the whole or proportion of a corporation’s or company’s unmet liabilities. In that, as has been observed by Justice Hayne, and we think adopted by some of the remarks from our learned friends, the notion of the company as an artificial person, but the – what has called in the literature at the time, the reality, the realistic theory, of the corporation being a group of natural persons, individuals, the idea of the company being the corporators, is very evident of course in the articles by Hohfeld which have been drawn to our attention, those in volumes 9 and 10 of the Columbia Law Review.
In particular, there are references there that show the historical milieu, in our submission, evocatively for this case, in relation to the representative role and function, a very important word when one considers its later use in the specific context of Hollis v Vabu – the representative role and function of officers and agents, an expression which when used by Hohfeld at 9 Columbia Law Review 310, one may suppose from the context very much to include servants, that is, employees.
At this point we need to note in relation to this history in relation to corporation as corporators and the human agency which is necessary for their operations, that we have slipped in our written submissions, paragraph 104. There is a parenthesis in that that suggests that corporations need corporators. That of course is not necessarily correct. See in relation to the initial incorporation of the Commonwealth Bank in this country as noted by Chief Justice Latham in the Banking Case [1948] HCA 7; 76 CLR 1 at 190.
Nonetheless, leaving aside the power of Parliament to make corporations without corporators, it is clear from the historical material to which we have drawn attention and with which the Commonwealth, with respect, does not substantively engage, that the concern pre-Federation was a concern for the regulation of corporations whose presence in Australia, be they foreign or local in birth, may be manifest only by human agency, including at the level of employees. Thus, for example, the case that triggered the concern of Hohfeld as author, and it turns out also Hohfeld as, as it were, vicarious counsel – he put in a note for unsuccessful counsel to argue in the Court of Appeal and makes reference to that with some asperity later to the fact that the judges did not take any account of it.
In Risdon Iron and Locomotive Works v Furness [1905] 1 KB 304, in the Court of Appeal [1906] 1 KB 49, but perhaps more significantly, pre-Federation a decision of the Privy Council from Western Australia noticed as being an important decision by Hohfeld, Bateman v Service (1881) 6 App Cas 386 – copies have been made available. That is discussed by Hohfeld at, in the four-part article, 10 Columbia Law Review 324 to 325. Now, in Bateman 6 App Cas 386 at 390 there are references to carrying on business which, in our submission, entirely supports the business focus that we put in-chief and which of course is now in accordance with the formulation proposed by the Chief Justice for the Commonwealth’s consideration, and we think adopted by the Commonwealth, capable of being well turned against us.
At the next page 391, there was a reference to the “comity of nations” aspect of international law with the corporation as an artificial actor through human agency – at 391 – comity of nations is governing. Of course, that case, which is a short case, and cases like that must have been of great moment to those making the Federal Constitution because it involved the Privy Council reading down a Western Australian statute for the regulation of corporations and the way in which they were to conduct themselves when doing business in Western Australia so as not to apply to the foreign corporations which were treated – to use a provocative expression but one, in our submission, approved by usage – which were treated as a given, not only a formed but also an operating corporation coming from time to time to do business in Western Australia. That was the Victorian corporation for the exploitation of jarrah wood, which notwithstanding the provenance of jarrah, was a Victorian corporation, foreign in Western Australia, and designed to trade internationally as well as inter-colonially.
I was asked by Justice Gummow concerning the footprint of E. Hilton Young. Hohfeld adds to what is already apparent from Professor Harrison Moore’s citation of him. You will find that at 10 Columbia Law Review 322, footnote 74, where it evokes the tribute of being an interesting article. The man who at one stage became Sir Edward Hilton Young and eventually became Lord Kennet of Dene was called to the Bar in 1904. Yes, he wrote the book that the learned Solicitor-General for the Commonwealth noted. He was also the representative at The Hague on International Finance of the United Kingdom, conducted financial missions to India, Poland and Iraq, ascended to become the Secretary for Overseas Trade, eventually the Minister for Health, having, of course, been a Member of Parliament, became a Privy Councillor, was once Financial Secretary to the Treasury in the early 1920s.
KIRBY J: Why do we need to know all this of this distinguished imperial official?
MR WALKER: I was asked concerning the author. He has other aspects to his history. Apart from marrying the widow of Scott of the Antarctic, he was clearly a very considerable war hero who having got DSC and bar, lost his right arm and then fought the Bolsheviks for which he got the DSO.
The Solicitor-General for the Commonwealth on 9 May, page 344 in the print of the transcript, line 14725 put what we would respectfully submit was a gentle but nonetheless thoroughgoing travesty of a key part of our argument. It is not the case that our argument carries with it that the Commonwealth “cannot legislate on anything to do with employees.” Already in-chief we had made our position clear in relation to section 75B of the Trade Practices Act and our position clear in relation to section 45D of the Trade Practices Act and either within 45D or with provisions that could not be constitutionally different from it we of course accept, indeed would assert, that such provisions could within power be enacted which would regulate conduct that interferes with performance of work under or work required by employment contracts. One would have thought that is the aim of a successful secondary boycott, after all.
We also accept that there may be laws made in relation to the qualifications, such as a licensing provision, for certain employees doing certain things but the point, in our submission, is that there is the connection with the head of power as we have put it because those are requirements for the qualities of certain employees or a restriction on who may be employed to do certain things because of the dealings, vis-à-vis what I will call the public, again because that expression has been used in the authorities, but may also be called the other participants who are involved in the transactions, which viewed as a whole, attract the description “trading” as being a proper character and the constitutionally required character of a corporation involved in those dealings. Trading is about dealings, financial corporations are involved in dealings.
Why we do that, of course, is that we accept, indeed assert, that laws which attach and which will intimately affect employment contracts who may be employed in particular roles, for example, are there because the employees are being treated as the person who represents the corporation by that time-honoured phrase still used, not only in private instruments but in public statutes, “by their servants and agents”. But it remains that there is “a preliminary question” – that expression comes from Justice Isaacs, 8 CLR 393, point 5 - whether the corporation has the constitutional character.
May I flag at this point in relation to the list of things that we say are permitted under the Constitution to impact upon employees that there is an example with which I must deal, particularly in light of the Chief Justice’s suggestion concerning section 53(b) of the Trade Practices Act. I will come back to that though. Now, the activities test, if I may call it that, that one sees summarised in SSB or referred to in Fencott v Muller and which was the evolution or revolution from St George has not been challenged in this case but this case, after all, does not present a matter in which that is capable of being done properly.
It may well be, with respect, that in the future this Court may see reason to revisit, for example, the words and the approach taken by Chief Justice Gibbs and Justice Wilson in SSB 150 CLR 295 in the passage immediately before they said, “But we are bound by authority”. But it has to be clear, and we accept as a characterisation of New South Wales’ argument, that is the argument that we addressed – we have put more arguments than that, your Honours have seen that in writing – we accept that it is a part of it to take the activities test as what is now the constitutional requirement in this country and to apply it in the context of an Act that characterises employers by their employing or usually employing people to say that these are not Fencott v Muller corporations, these are corporations who are to be known by what they have done and are doing.
GLEESON CJ: Is it a consequence of your argument that ASIC is invalidly constituted?
MR WALKER: No, it is not. Our position in relation to ASIC is quite simply that quite apart from – there are several grounds that have been called in aid. Quite apart from the territories power for such bodies in relation to co-operative schemes there is also 51(xxxix) in terms of its creation and not to forget, and we cannot hide from, the significance of 51(xxxvii) and I think that is a yes and no answer to the Chief Justice. It is a consequence that but for 51(xxxvii) the full panoply of power would not be available to ASIC that it now has. That, in our submission, is not a mark of weakness in our argument but merely recognises that one does not start by assuming references under 51(xxxvii) are Acts of supererogation.
GUMMOW J: You mentioned St George County Council.
MR WALKER: Yes, your Honour.
GUMMOW J: In fact, that was a prohibition application. The question was, as Mr Masterman was complaining for the prosecutor, his client, the County Council, was not a trading corporation – that is what it was all about – notwithstanding that it carries on trading activities.
MR WALKER: That is right.
GUMMOW J: That has nothing immediately to do with this case, today.
MR WALKER: Your Honour, it is only by such extension and analogy as can be seen between those statutory expressions and the expression in the Constitution that it has anything to do, we accept that. On the other hand, it is clear from the explicit link by the definitions sections in the Trade Practices Act that constitutional interpretation is at the heart of an understanding of those statutory expressions. The constitutional expressions are not just 51(i). They are 51(xx), when it comes to the corporations.
GLEESON CJ: Mr Walker, just a couple of matters of detail. Your argument, I presume, is that Quickenden v O’Connor was wrongly decided by the Federal Court.
MR WALKER: Yes, it is.
GLEESON CJ: Was there any application for special leave to appeal in that case?
GUMMOW J: Yes, I think Justice Hayne and I refused it on grounds to do with the changes that had been supervening in Western Australian law, I think.
MR WALKER: I am sorry, your Honour, I did not know that.
GLEESON CJ: And, secondly, in relation to that case, I was
looking at the judgment at first instance of Justice Lee which is reported
in 91FCR
597 at 602. You in your argument in-chief, and a number
of other counsel, referred to Justice Brennan in Dingjan.
Justice Lee interpreted him in a particular way, and I would just be glad
to have your comment on this. I will read out two sentences.
He said,
Justice Brennan, in Dingjan, stated that:
to be a law with respect to a constitutional corporation, a relationship governed by the law must affect the constitutional corporation in a discriminatory manner. That is, a provision indistinguishable in its impact or operation on constitutional corporations, or their businesses, and on other persons or entities, is not a provision which has the character of a law with respect to trading or financial corporations.
Is that a fair rendition, as it were, of Justice Brennan’s view?
MR WALKER: It is a rendition which gives content to the, with great respect, difficult word, “discriminatory”, that lies at the heart of Justice Brennan’s approach. It does not supply answers to questions concerning the difference between a law of linguistically general application which would therefore incorporate, so it would therefore apply to corporations as well as to other persons, on the one hand and on the other hand, laws which, while addressed to or about constitutional corporations, do so concerning matters which are not of themselves, or as they affect the corporation, any different from exactly the same matters which do exist for other people and do affect the other people in precisely the same way.
We would submit that the gloss, if I may call it that, by Justice Lee of what Justice Brennan had been writing, is one which is open. It is one which, in our submission, conduces in our favour rather than against, because the employment relationship, which is clearly the subject matter of the impugned Act in this case, is one which is indifferent as to the qualities affected by this statute in its regulation, as between employment by an individual or employment by a constitutional corporation or employment by a corporation that is not a constitutional corporation or, indeed, in some cases, employment by a governmental body, but otherwise the answer is yes. As to the holding in the Full Court we are bound to say that is wrong, it follows from our main argument.
KIRBY J: Can I just go back to your answer to the Chief Justice’s questions about ASIC. If all that is there is the territories power in section 51(xxxix) and 51(xxxvii), it really would not sustain everything that ASIC does as at the moment.
MR WALKER: Placitum (xxxvii) would, your Honour, yes - as a reference.
KIRBY J: Does it rely on the reference power, ASIC?
MR WALKER: It is not a question of whether ASIC does rely. It is a question of whether Parliament has power to do what it has done.
KIRBY J: So your answer is, ASIC may not be valid as presently constituted, but there would be power by reference to do it.
MR WALKER: I have already said, leaving aside territories which, of course - - -
KIRBY J: Well - - -
MR WALKER: That is why I leave it aside.
GUMMOW J: Wait a minute. ASIC was incorporated before the reference.
MR WALKER: Of course it was. That does not mean its powers cannot be extended or contracted according to the expansion of available legislation.
GUMMOW J: That is a question.
MR WALKER: That is the question, we accept - - -
GUMMOW J: That is a question.
MR WALKER: I am sorry, that is a question.
GUMMOW J: The question is whether the law was valid when it was passed, not whether it has had a transfusion.
MR WALKER: But if your Honour is asking me about validity, there can be no question, in our respectful submission, about validity – the question is about what did it authorise?
KIRBY J: We have enough on our hands, I suppose, to look at the validity of this legislation but it looks as though what you have left it is a rump and that dependent upon co-operation which may or may not be forthcoming.
MR WALKER: We say, to return to an argument which was characterised by my learned friend, the Solicitor-General for the Commonwealth, as depending upon another participle this time not found in 51(xx), again, we say that the notion of there being a given, a logically anterior preliminary question, to use Justice Isaacs approach, is not one which is novel or necessarily strange. It might be right or wrong but it is not one which has been introduced just for this case. The way we put it, using more words than simply the notion of a given - which is, after all, ordinary English in this area - is that it is a logical prerequisite of a corporation engaging in activities that it has human agents and that the engagement of it, as such, precedes the corporations coming within the scope of the federal power under 51(x) and even more clearly so in the case of the impugned Act with its reference to “employs, or usually employs”.
HAYNE J: Sorry, would you put that again. What is the proposition?
MR WALKER: It is the first part of a proposition which I will now put as a whole. It is a logical prerequisite of a corporation engaging activities that it has human agents – that follows from being a corporation.
HAYNE J: It may or may not be employees.
MR WALKER: Quite. The engagement of such agents thus precedes the corporations coming within the scope of the federal power under 51(xx), logically anterior.
GUMMOW J: Say that again, Mr Walker.
MR WALKER: The engagement of human agents logically precedes the corporations coming within the scope of the federal power because that has to happen under the activities test before they may be characterised - - -
HAYNE J: Regardless of that, you cannot form without officers, can you?
MR WALKER: Quite.
HAYNE J: So that is what brings these human agents into the picture, the act of formation.
MR WALKER: It brings the first human agents into the picture, yes, your Honour. But Fencott v Muller, of course, noted that you can have a corporation with officers but without activities that enable it to be characterised by reference to activities. That is why the “employs, or usually employs” is a piece of text in the impugned Act which looks to activities of people, humans, representing the corporation. They will, of course, include, though they are not restricted to, and they may not require there to be employees, but this Act restricts the class to corporations acting through employees – not only employees but they have to have employees, or have had employees, in such a way as to be described as usually employing in order to be caught.
Now, we do not suggest that what has been called internal matters are prohibited – I have already made that point. The internal/external distinction, the outsider’s notion, is simply one way of expressing that aspect of the power which enables the regulation of business – we cannot run from that word we used in-chief, trading and financial or the business activities of foreign corporations, while recognising that it does not extend to matters which are presupposed, the givens, like incorporation before they can become subject of the corporations power.
HAYNE J: Just pursuing that thought a little further but doing so in the context of foreign corporations as distinct from trading or financial corporations, is it within power to say that a foreign corporation shall appoint a natural person normally resident in Australia as its agent for receipt of process or whatever?
MR WALKER: Yes, that is dealings with the world with which it wishes to engage and may be done as a prerequisite of permission to enter, as it were. Now, turning then to the question of context, having gone from history to linguistics to context, in our submission, the method that we have adopted is not one which can be regarded as new in any sense. It does not seem ultimately to be contested by the Commonwealth. An example of it in relation to the approach to be taken between 51(xx) and 51(xiii) is to be seen – and I am only referring to individual approaches now – by Chief Justice Latham in the Bank Nationalisation Case [1948] HCA 7; 76 CLR 1 at 192 and one sees as it is particularly applied in relation to 51(xx), 51(xiii) at pages 201 to 204.
The fact that we use other words apart from those appearing in section 51(xx) to describe how it ought to be interpreted falls out because of the nature of interpretation and it is no objection to the doctrine of this Court which, as Justice Gummow points out, is what the Constitution means, it is not objection that section 90 and section 92 are understood in terms which do not appear in the constitutional text. The same history, sections 90 and 92, for example, rebut the proposition put against us that, as it were, we have only lonely antecedent judicial voices to support our argument. One may note in relation to section 90, for example, the similarity with the frog boiled having started off comfortably cold by degrees.
The mounting franchise licence fees in section 90 eventually, it might be thought, produced the occasion when there had to be reconsideration. In relation to judicial approval of Justice Isaacs’ passage upon which we rely we offer, but gingerly, as a possible reading of Justice Starke’s reasons in the Banking Case [1948] HCA 7; 76 CLR 1 at 304, point 2 that it may be that the way in which his Honour paraphrased Justice Isaacs’ approach is one that might attract the lukewarm label of not with – without disapproval, but I would not wish to push that too far. It happens on the same page. There are evocative uses of the expressions “carrying on operations and business” which accords with the way in which we have been putting the matter.
In our submission, in any event, the mere fact historically that Justice Isaacs proposed using the notion of outsiders before the italicised passage to which we do pin our colours is sufficient reason in a case of this kind to explore the possibilities in this case, which is, after all, acknowledged on all hands to involve a novel and large invocation of power, especially when one bears in mind that section 51(i) and section 51(xxxv) are there as part of the context.
I have to note at this point in relation to what I have said about that contextual approach that in relation to 51(xiii), banking corporations, there is a passage by Chief Justice Latham in the Banking Case [1948] HCA 7; 76 CLR 1 at 194, point 8 to 195, point 6, especially at the end of that passage, that I am bound to say may be against us in relation to the approach most recently suggested by the Chief Justice for the Commonwealth’s consideration.
GUMMOW J: He said a bank had to have managers, had to have staff, had to have officers.
MR WALKER: Yes. That is why I draw it to your attention, your Honour. Now, we simply say that employees are inside that line, and there must be lines drawn eventually,.....by the fact that the concern is with the corporations dealing and being dealt with it. The way in which we rely upon it is as put by me in address-in-chief on 6 May, page 105, lines 4311 to 4321.
Why would you have a line? Otherwise, section 51(xxxv) would be sidelined, as Queensland has argued and will no doubt reply on. Second, because there will be employees whose activities do not contribute to the constitutional characterisation under the activities test, as the Solicitor-General for South Australia has argued and no doubt will reply on. Third, because otherwise one has the power reaching back into the very dealings preliminary to, anterior to the availability of the Commonwealth legislative power upon which we have addressed.
KIRBY J: Why do not employees contribute to the characterisation?
MR WALKER: They do.
KIRBY J: If the characterisation is trading and employees are vital to the production of the goods for trading, why do they not contribute?
MR WALKER: Of course they do. It is because they contribute to the characterisation – and that is the prior question. It is only when by their activities, under this Act, “employs, or usually employs”, that you know them to be a constitutional corporation. Only at the point historically when by those activities they become a constitutional corporation that the power is available. That is, the power of legislation is available. It cannot be power of legislation - - -
KIRBY J: Yes, but the actual anterior steps - the formation is likely to be performed by executives. The actual activity of the trading is likely to be contributed to by the employees.
MR WALKER: They will no doubt all contribute. Like in corporation; because it is anterior to the constitutional characterisation, it is not the subject of the legislative power, and I repeat myself from what I said in-chief.
HAYNE J: But a trading or financial corporation could both trade or engage in financial activities without employees, could it not?
MR WALKER: Yes, and they would not be caught by this Act.
HAYNE J: So a corporation that has only officers?
MR WALKER: I am sorry, if they had no employees at all.
HAYNE J: No employees at all, simply officers?
MR WALKER: They will not be caught by the Act because of 6(1)(a), your Honour, because they will not be a person who - - -
HAYNE J: I understand that.
MR WALKER: That is all I am saying, your Honour. That is not a constitutional point. That is just a statutory point. The last page of the majority reasons in the Incorporation Case 169 CLR 482 at 503 shows what Justice Hayne raised with my learned friend for the Commonwealth, the notion of coming in and out of power according to activities. In our submission, that is powerfully in support of the logically anterior approach, the given approach, being the forbidden area for the Commonwealth power.
The ultra vires doctrine has been raised with the Commonwealth and we think adopted as to the suggestion made by the Chief Justice, particularly by reference to Mr Justice Buckley in David Payne & Co Limited [1904] 2 Ch 608. However, it does not follow that because all conduct must be for the purposes permitted by the charter that all conduct of all employees is for each one of a number of different purposes within the charter of the company. That is the point which, as we understand it, South Australia seeks to put as adopted by us and I will not elaborate it further.
GLEESON CJ: Did you happen to find out when the ultra vires doctrine went?
HAYNE J: It is Act 192 of 1985, which brought in, amongst other provisions, sections 66B, C and 67 of the then Code and that seems to have been deemed to take effect on 1 January 1984. There is a touch of a retrospective deeming, I think.
MR WALKER: Yes. We do not say that there is a constitutional interpretation driven by the eminence of the ultra vires doctrine at the time the Constitution was made, but it is part of the history, of course. We do rely, contrary to the use of it against us by the Solicitor-General for the Commonwealth, on the observations by Justice Dawson in the Dam Case 158 CLR 1 at 317 point 9 to 318 point 2. What his Honour was there saying was that this results in a trivially true proposition which he clearly reasoned, and we would respectfully urge correctly reasoned, is a reason to reject it as a form of constitutional nexus.
We would simply and briefly compare the position with section 51(i). Not everything done by any player in interstate trade and commerce is therefore controllable by the Commonwealth. It has to have a requisite connection. So attributes or conduct outside trade and commerce, even leaving aside any effect that section 92 might have on such a law, would not obviously be within Commonwealth power.
We accept there is a different approach that has to be taken in connections for the purpose of 51(xx), but maybe they are after all very similar in relation to the conditions of permission to escape a prohibition a la Murphyores. For example, in that case controlling the environmental or perhaps social cost of winning material for export perhaps does have a well-arguable connection with section 51(i) control of international trade and commerce.
We say there is still a connection, in answer to a question by Justice Gummow – there is still the requisite connection of course when a trading corporation ceases to trade with the ongoing relationships and consequences for creditors and debtors and for the property of the company. That is clearly with respect to the trading activities by way of what might be called the clean up. Unlike the Dam Case 158 CLR 1, there is no equivalent here of subsection 10(4) of the World Heritage Properties Conservation Act 1983. You will find that referred to at 73 to 74, where one will note, among other things, the reference to corporations acting by servants, that is, on the side of the corporation standing or acting for or being the corporation.
There is no phrase here like the “for purposes of trading” which one finds, or the similar phrase in section 52 of the Trade Practices Act. I note the time, your Honours. I am bound to observe that section 53B of the Trade Practices Act does not have such a connective phrase, and I draw it to attention because it has “employment” in it. On the other hand, quite apart from the definition of “corporation” in section 4 of the Trade Practices Act, there is of course the extended application of the Act in subsection 6(2) of the Trade Practices Act, for which again there is no equivalent in this impugned Act, whereby section 53B cannot be seen as a 51(xx), as it were, precursor that has gone unchallenged.
As to the business possibility, again I should draw to attention there is a dissent by Justice McHugh in Wright v TNT Management (1989) 15 NSWLR 679 at 693 to 694, especially 694C and 694D, none of which looks on the face of it very good for us in relation to employment and corporations. We observe first that it is of course the statutory question, as Justice Gummow earlier pointed out, but of course there is the constitutional link through the definitions section.
That matter and the
Concrete Constructions v Nelson matter, generally, has been the subject
of real differences in the Federal Court. It has not reached the Full Court
very often -
Hearn v O’Rourke 129 FC 64 and
Village Building Company Ltd v Canberra International Airport
[2004] FCAFC 240; 139 FCR 330. May it please your Honours.
GLEESON
CJ: Thank you, Mr Walker. Mr Solicitor for Queensland. Are you
the matrix person?
MR SOFRONOFF: I am not, your Honour, but I am the proxy for the matrix person. I will do my best.
GLEESON CJ: Can I just ask one very trivial question? Do you see item No 1?
MR SOFRONOFF: Yes.
GLEESON CJ: Why is not No 1 qualified by the same note as qualifies Nos 4 and 7b)?
MR SOFRONOFF: I will have to find the answer to that, your Honour. I am sure somebody who knows is here and I will be told shortly. I will find out, your Honour. Your Honours should have a note from Victoria relating to the matter raised by your Honour Justice Kirby as to the consequences for severance if the relevant restriction upon the power related to the matters strictly within paragraph (xxxv). I think that has been distributed. I do not want to say anything about it but your Honours should have it.
The only other housekeeping matter, your Honour, is I need to seek leave formally to amend our statement of claim. There is no objection form the Commonwealth – that is to add a reference to Part 13 and it is the same as the amendment sought by my learned friend, the Solicitor-General for the Commonwealth.
GLEESON CJ: Will you file a document?
MR SOFRONOFF: Yes, we have it ready for filing, your Honour.
GLEESON CJ: Yes, you have that leave.
MR SOFRONOFF: Thank you, your Honour. Your Honour Justice Hayne observed this morning that the debate had to shift to a debate about “with respect to” and your Honour the Chief Justice observed that characterisation never disappears. We have advocated all along that that is central to an understanding of the case, as your Honours will see in due course when you look again at our submissions, paragraphs 42 to 46 and the following ones.
We quote there the
dictum of Chief Justice Barwick in Concrete Pipes
124 CLR 468 at 491, which your Honours need not take - I
only want to read a sentence of it, where his Honour said:
The Constitution itself provides the criterion of validity: the law must be with respect to a topic of granted power.
That is to the same effect but more specifically in relation to
this matter as what Justice Brennan said in Dingjan
[1995] HCA 16; 183 CLR 323 at 339 - again, your Honours need not get that
case – and this is at the heart of our submissions in reply:
The legislative power conferred by s 51(xx) is not a power to make laws with respect to things relating to corporations or things relating to the businesses of corporations.
That echoes the dictum of Chief Justice Latham in the
Bank Nationalisation Case [1948] HCA 7; 76 CLR 1 - which
your Honours need not get:
the Commonwealth Constitution should not be construed upon the basis that any legislation is valid if it can be said to “touch and concern” one of the subject matters assigned to the Commonwealth Parliament.
Our submission, your Honours, is that the
flaw in the case of the Commonwealth is that this is a law that relates to the
terms of
employment of those who work in any capacity for trading, financial or
foreign corporations and, as such, it can fairly be described
as a law with
respect to a matter that relates to corporations. It can fairly be described as
a law with respect to a matter that
may concern the business of a corporation in
the sense that Chief Justice Latham used, in the terms he used. The
law touches and
concerns corporations, but it is not a law directly upon the
subject matter of the power which is - - -
GUMMOW J: “Directly”, where do you get that word from?
MR SOFRONOFF: I withdraw the word “directly”, your Honour.
GUMMOW J: Yes, I should hope so.
MR SOFRONOFF: It is not a law with respect to the subject matter of the power.
KIRBY J: Do not forget that they are entitled to call on all the other heads of powers that they list in the conventional way.
MR SOFRONOFF: Quite, your Honour.
KIRBY J: So it is not exclusively on corporations.
MR SOFRONOFF: No, it is not, your Honour, and, with respect - - -
KIRBY J: It is the combination of the many heads of power that are nominated.
MR SOFRONOFF: Yes, and, with respect to, for example, external affairs we make no submissions, with respect to Territories we make limited submissions, but my submissions in reply are directed to the paragraph (xx) power.
CALLINAN J: Mr Sofronoff, Chief Justice Latham in the Bank Case at page 426 said that the enactment has to fall in substance within the relevant authorised subject, which is really something quite different from touching or concerning.
MR SOFRONOFF: It is and that is similar to the dicta of Justice Kitto that I referred to in my submissions on Monday in relation to the nature of a law that would satisfy a law with respect to a head of power. Your Honours, we submit that subsection (xx) mandates something closer than this law. It must be a law with respect to trading, financial or foreign corporations themselves, not laws that are merely with respect to matters affecting or concerning or relating to such corporations and, your Honours, we would submit the word “business” does not appear in the subsection. There is no paragraph 51 that gives the Commonwealth power to legislate with respect to the business of companies or anyone else and the word “business”, in our respectful submission, is not a synonym for “trading” or “finance”.
That is, in our respectful submission, the flaw in the
Commonwealth’s case as is evident from paragraph 379 of their
submissions
which I would invite your Honours to look at.
Your Honours, if I could ignore 379.1 because your Honours have heard
my submissions
in relation to the many dicta, some of which are in terms that
would deny validity to a law under this placitum merely because it
is directed
to constitutional corporations and others which caution against such a
conclusion. Could I restrict my submissions in
reply to 379.2 and its
subparagraphs and 379.2.1 would have it as a test or an indication or a
connection that a law will be a law
with respect to the subject matter of the
power if it relates:
to the conduct of those who control, work for, or hold shares or office in constitutional corporations –
in that capacity – those words should be included, I think, because of the corrigenda that the Commonwealth has offered – and support for that - - -
GLEESON CJ: That is the difference between their amended version and their original version.
MR SOFRONOFF: I beg your pardon?
GLEESON CJ: That is the difference between their amended version and their original version.
MR SOFRONOFF: Yes, support for that is sought to be
found in the footnote Dingjan [1995] HCA 16; 183 CLR 323 at 369, but what that
reference, if your Honours would look at that, omits to take into account
is that while it is true that Justice
McHugh used the language in
paragraph 2.1, he said a number of things and one of things, at about
point 7, is:
Further, if, by reference to the activities or functions of s 51(xx) corporations, a law regulates the conduct of those who control, work for –
et cetera. So his Honour was not
directing his words merely to the conduct of those who control, work for or hold
shares in the company
in that capacity but to a law which by reference to the
activities or functions of corporations regulates the conduct of those persons.
We would not for a moment challenge that as a description of a law which would
fit within the subject matter of the paragraph, but
the Commonwealth, in our
submission, puts it too widely in subparagraph 1.
CALLINAN J:
Mr Solicitor, reference to all these cases, I know it is helpful, but in the
end in a sense we are free to choose. The Commonwealth
concedes that in
paragraph 97:
There is no case in which the majority of the Court has held that any law that is specifically directed to a constitutional corporation is supported by s 51(xx).
MR SOFRONOFF: That is right. This
the case which - - -
CALLINAN J: There is no binding authority which compels us to go either way.
MR SOFRONOFF:
No, we do acknowledge that in our written submissions. Paragraph 379.2.2
contends that there is a sufficient connection if a law
relates to the business
functions, the business activities or the business relationships –
that is how we read the adjective
“business” – of
constitutional corporations, and cites, again, Justice McHugh, but also at
page 364 in the reasons
of Justice Gaudron. If your Honours
would go to that page, her Honour does indeed use that kind of language
but, in our respectful
submission, one needs to understand that sentence of her
Honour’s in the context in which she was speaking in that paragraph
and
the following because, as her Honour observes and as we would respectfully
embrace, when one speaks of the business activities
of a trading and financial
corporation, she refers to the dicta of Chief Justice Gibbs in
Fontana:
“[i]t is the business of a trading corporation to trade, and its business is its trading”.
Put like that, we would adopt those
dicta because it is easy to see that laws with respect to persons, whether
employees or officers
or other people closely connected with a company, who are
engaged in trade on behalf of the company, for example, would be laws with
respect to the trading activities of the company and on settled authority that
nobody challenges would be laws within the paragraph,
but a law with respect to
merely what is generally called the business of the corporation may not be.
If one takes an example such as that a company buys a refrigerator to put into the tearoom from a company that deals in refrigerators, in our submission, while it would be part of the business of the purchaser company to buy that fridge and it would have bought it for the purpose of the business, it is no part of its trading activities or its financial activities but it would be a part of the trading activities of the vendor company.
Your Honour, the Chief Justice referred to the dicta of Lord Justice Buckley in David Payne & Co Limited [1904] 2 Ch 608 at 612. That, your Honours, is a case which, in our submission, does not bear upon the question that the Court is interested in. That was a question whether a lender to a company was obliged to consider whether the purpose of the borrowing, from the company borrower’s point of view, was lawful or not. Held it did not have to inquire and that it could be taken that all borrowings by the company could only be for the lawful purposes of the company, that is to say its business, and that is as far as the authority went. That is not a law that assists this Court, in our submission, with respect to the task, quite different, of characterising a law which is said to be within subparagraph (xx).
GUMMOW J: You took us to Dingjan?
MR SOFRONOFF: I did, your Honour, and I am going to go back to it because - - -
GUMMOW J: What do you say about what Justice Gaudron says at the bottom of 364 and, in particular, what she says about Chief Justice Gibbs in Fontana?
MR SOFRONOFF: That is the part I took your Honours to. The paragraph at the foot of 364 is the paragraph the Commonwealth relies upon but when one goes to the top of 365 and the dictum of Chief Justice Gibbs, his Honour said, and she cites with evident approval that “the business of a trading corporation [is] to trade” and the word “business” is not, in our respectful submission, a synonym for “trade” wherever it appears. Certainly it is not a synonym in the context in which Lord Justice Buckley used it for the purposes his Lordship used it in Re David Payne.
So if one finds that there is a law with respect to the business of a corporation, broadly defined as Lord Justice Buckley did, to cover every activity, every activity of a corporation must be, in some sense, its business, it does not follow that a law with respect to that activity is a law with respect to a trading corporation.
KIRBY J: I just still have a difficulty in seeing how one draws the line that cuts off employees because without employees virtually every corporation cannot engage in trade. You need the employees to do the work that produces the products or services that constitute the engagement in trade.
MR SOFRONOFF: Your Honour, there are a multitude of things, in our submission, which are essential to permit trading companies and financial companies to engage in trade or finance. Employees may be one of them, money is certainly one of them, the cost of money is one of them, premises are one of them because you need a registered office, the use of infrastructure, but those things are undoubtedly things which are related to the business of a company or even related to the trading activities of a company, but one cannot, in our respectful submission, say that a law with respect to any one of those things is thereby a law within subparagraph (xx).
KIRBY J: I understand that and I realise your “with respect to” argument but when one is testing that argument it is pretty hard not to see the employees as being at the core of the existence and personality of the corporation, hence, of its trading activities. If one is endeavouring to draw a line, it seems difficult to draw a line that cuts the employees off. I could, for example, understand that you would draw a line that would cut off, say, public relations or charitable works or engagement in community involvement and things of that kind, but for the trading, virtually always, you need employees.
MR SOFRONOFF: Your Honour, we would respectfully challenge the proposition that a company takes its existence or personality from its employees. We would submit that it is true that many companies could not function without engaging employees, but a company takes its personality and its existence from other things, the statutory framework that gives it its existence in the first place – I mean company law strictly so-called – and its officers. The employees are a resource just as money is a resource and just as in the Tasmanian Dam Case the wilderness was a resource. The law that was held to be valid in that case was held to be valid because it was a law limiting the use of a resource for trading activities.
GUMMOW J: No, is preparatory to trading activities, to build the dam to generate the electricity to trade in it.
MR SOFRONOFF: Certainly, your Honour, but with respect to trading - - -
GUMMOW J: It is much more remote in distance than this connection.
MR SOFRONOFF: Well, your Honour, it was a law which prohibited the use of - - -
GUMMOW J: No one on your side of the record refers to what Sir Owen Dixon said in the Melbourne Corporation Case about connections that are not good enough because they are insubstantial, tenuous and distant.
MR SOFRONOFF: I am sorry, your Honour, you are saying that - - -
GUMMOW J: No one on your side of the record refers to what Sir Owen Dixon said in the Melbourne Corporation Case as to what it is that breaks the connection.
MR SOFRONOFF: Your Honour, I think many of us have referred to that dictum.
KIRBY J: I thought Mr Walker began with that.
MR SOFRONOFF: But that is as the Commonwealth accepts in 379.2, this question, as the Commonwealth accepts in the paragraph, and we agree with them, is a question of degree, and in the Tasmanian Dam Case a majority of the Court - - -
GUMMOW J: The question is, of what degree.
MR SOFRONOFF: Quite, your Honour.
CALLINAN J: What do you say about a company that employs independent contractors to do all of its business? It does not need employees.
MR SOFRONOFF: That is so, your Honour.
CALLINAN J: Lots of trading companies need not have employees.
MR SOFRONOFF: And that is the trend. Those who do work for the benefit of the company are independent contractors.
HAYNE J: And they fall outside the Act, do they not?
MR SOFRONOFF: They do.
CALLINAN J: But it shows that a trading company does not have to have employees.
MR SOFRONOFF: No.
CALLINAN J: And of course outsourcing is often the cause of major industrial disputes, as it was in Queensland in the mid-1980s in the electrical industry.
MR SOFRONOFF: Your Honours, could I give these two extreme examples to attempt to illustrate the task as we see it of characterisation. Assume a law that was directed to the requirement for qualifications of a stockbroker’s employee engaged in broking shares for a client and requiring that all such employees should have qualifications of a formal kind and should act honestly. That, we would submit, is within power because it relates to, in a substantial way, in a direct way, in every relevant way, to the trading activities of the stockbroker.
Assume one had a law that related, as this law does, to a wage of a person who only in the most indirect way has any connection with the trade of the company. I mean someone like the person who delivers tea or a person who is a car park attendant at the corporate headquarters. Those persons, it can be said, were hired for the company’s business. Their activities are in some respects important to the company’s business but, in our respectful submission, a law with respect to such a person is not a law within subparagraph (xx), because the connection between the subject matter of the law – corporations, trading corporations, corporations trade – is, in Chief Justice Dixon’s words, insubstantial, tenuous; in our words, we would submit it is simply not a law with respect to trading corporations.
They are the two extremes that we advocate and it is no answer, in our submission, to say both persons are employed for the business of the company in the sense that Lord Justice Buckley meant. Lawfully employed for proper purposes is all that his Lordship meant, in our submission.
Similarly, with respect to 379.2.3 of the Commonwealth’s submission, we accept that – that is of course the Fontana Case – and 379.4, in our submission, is merely putting the primary widest proposition in 379.1 in a slightly different form. A law directed to a corporation and having nothing more is a law, of course, that must materially affect the corporation because it will require it to do something or refrain from doing something, or require somebody else in relation to the corporation to do something or refrain from doing something. So, in our respectful submission, 379.2.4 adds nothing to 379.1.
Could I deal as efficiently as I can with the CLM Case, your Honours, which was raised by way of answer to Tasmania’s submissions. In our respectful submission, the CLM Case 136 CLR 235, contains nothing of assistance in this case. Your Honours will recall that that case concerned natural persons who had been charged with an offence involving contravention of the Trade Practices Act. If your Honours would go to page 240, the section of the Act in question appears at the foot of 240. It was a section which created an offence and imposed penalties. At the foot of the page your Honours will see that the submission made on behalf of CLM was that 79 exceeded the legislative power of the Commonwealth Parliament because it attacked persons.
If
your Honours then go to page 242, your Honours will see in the first
paragraph Justice Mason deals with the issue, which is a
minor issue in the
case, concerning the constitutional basis of the provisions which made
corporations liable and observed that:
It has not been suggested that these sections are invalid –
that is four lines down from the top of the page.
His Honour then proceeded on the footing that those sections were valid.
He then
went on to consider section 79. So that case, which we do not
submit is wrongly decided, has nothing to say about the scope of the
corporations power insofar as it might affect employees under an Act like the
present Act. Your Honours will see at 243 at about
point 4, after
saying some things about section 79, his Honour concluded:
So understood the validity of the section is supported by the heads of constitutional power which sustain the various provisions in Pt V, and, as I have said, the prosecutors have not argued that these provisions are invalid.
His Honour then turned his attention to
section 6 of the Act which extended the operation of the Act to areas
permitted by other heads
of power under section 51 and drew some
conclusions about that, but none of it, in our respectful submission, is
directed to or is
useful in answering this case.
Your Honours, in our submission, the Commonwealth’s criticism of Tasmania’s submission ignores the need for characterisation because the Commonwealth’s submission, at its widest, would uphold the validity of a law merely because it is addressed a person described in subparagraph (xx) but under other heads of power we know that a law which - - -
GUMMOW J: We do not have to get into that. We only have to decide 6(1)(a) at the moment.
MR SOFRONOFF: Quite, your Honour.
GUMMOW J: The Commonwealth usually comes along and tries to get an advance ruling on the next case. We only have to decide this one and this one depends on 6(1)(a) which is linked into employment.
MR SOFRONOFF: Quite, your Honour, but the Commonwealth seeks to support 6(1)(a) upon the broadest proposition that a law which is simply addressed to constitutional corporations will for that reason be valid. In our submission, put briefly, that must be wrong because it involves the denial of any requirement for any further characterisation of any law passed under subparagraph (xx). One simply would look for the words “constitutional corporation shall” or “shall not” and that would foreclose the question. In our submission, nothing in any of the cases would justify that kind of conclusion.
KIRBY J: On the matter of the questions which we have to decide and the issues we have to decide in the consultations between the plaintiffs and the intervening States in their interest has it been agreed that the issues that are listed in the joint list of provisions and in the documents that have been placed before us today are the only issues that the Court has to decide and that we do not have to consider any other issue raised by the pleadings, save for those which are listed in the list?
MR SOFRONOFF: Yes, your Honour. I will be quickly corrected if I am wrong but, as I understand it - - -
GLEESON CJ: I bet you will.
MR SOFRONOFF: Yes, but may I put it this way. The matrix, as we have called it – the first source of that was the pleadings, however, what has been done is that the written submissions and the oral submissions have been resorted to with a view to identifying what are the true challenges being made and so in some respects the matrix may be a little narrower than the pleading but your Honours need not be concerned about that. So the answer to your Honour’s question is yes.
KIRBY J: It may be that the answer to some questions will obviate the necessity to the answers to others.
MR SOFRONOFF: Yes. Your Honours, the cases which have raised for consideration the scope of the power – Huddart, Parker, Rocla Concrete Pipes, Fontana, Tasmania Dam – have all had to consider laws which, but for the defect in the Concrete Pipes Case, all of which were plainly within the subject matter. Huddart, Parker concerned malign forms of trade by companies, Rocla concerned malign forms of trade by companies, Fontana concerned malign actions by outsiders against the trade of a company and Tasmanian Dam, as their Honours ultimately decided, related to something that was prohibited for the trading activities of the company.
In our respectful submission, it is necessary to apply a process of judgment in order to determine whether a law that is admittedly addressed to a constitutional corporation is a law with respect to it, hence the use of words like “peculiar”, “especial” or “significant” that your Honours have seen in the authorities. In our submission, the Commonwealth has not addressed how any provision of this Act relates to “corporation” as such or to its trading activities or financial activities beyond the assertion that all employment is important to trading activities, or potentially so, and therefore the law is within power.
HAYNE J: I think the bottom line is that the Commonwealth says this is a law with respect to the relations between an artificial entity and its human actors.
MR SOFRONOFF: Yes. Your Honour Justice Gummow observed that nobody seemed to refer to Justice Dixon’s dicta. We do and I think others do, but we do at paragraph 48 of our - - -
GUMMOW J: I was not talking in the written material. I was talking that words like “significant” and “peculiar” certainly were not used by Sir Owen Dixon.
KIRBY J: On the other hand, “remote” and “distant”, I mean, they are not terribly informative words. They are what Professor Stone would call formulae for decision making which do not really provide much guidance as to how you actually do it in a particular case. They are categories of indeterminate reference.
MR SOFRONOFF: It is often difficult to apply descriptive words which do not have any elasticity in them to something that is a process of judgment.
GLEESON CJ: Yes, we are engaged not in a process of calculation; we are in a process of judgment.
MR SOFRONOFF: Quite, that is right. I have an answer to your Honour’s question about why the qualification does not appear in item 4 of the matrix and that is because Victoria does not challenge Part 7 on the basis of placitum (xxxv).
GLEESON CJ: But the note refers to arguments by Western Australia, South Australia and Queensland as well as Victoria.
MR SOFRONOFF: But we adopted Victoria’s argument, your Honour. So we are included in there because we have adopted them. I think that is how it is to read.
GLEESON CJ: I just had difficulty distinguishing between Part 7 and Part 8 in this respect.
MR SOFRONOFF: I will have to find out, your Honour, because I am - - -
GLEESON CJ: Perhaps you could give us a note about that.
MR SOFRONOFF: Yes, we will do that. That will be better.
GLEESON CJ: There is no reason why that cannot be included in one of the notes that people are handing in.
MR
SOFRONOFF: Your Honours, in aid of the process of defining the scope
of the power, we would finally refer to the dictum of
Chief Justice Latham
in the Bank Nationalisation Case
[1948] HCA 7; 76 CLR 1 at 184 to 185 where his Honour said:
Accordingly, no single power should be construed in such a way as to give to the Commonwealth Parliament a universal power of legislation which would render absurd the assignment of particular carefully defined powers to that Parliament.
KIRBY J: Was the ultimate reason for the decision in the Bank Nationalisation Case the application of section 92?
MR SOFRONOFF: That is right, your Honour.
KIRBY J: So that the content of the power that underpinned the federal legislation was not ultimately determinative?
MR SOFRONOFF: Central.
GUMMOW J: An unjust term, surely. The Court of Claims collapsed.
MR SOFRONOFF: Yes.
KIRBY J: And that is (xxxi) which has been read so that you read down other heads of power so that you do not ride a team of camels through (xxxi).
MR SOFRONOFF: Quite.
GLEESON CJ: Did the unjust terms issue go to the Privy Council?
MR SOFRONOFF: Your Honour, I do not recall. Those are our submissions, your Honours.
GLEESON CJ:
Thank you, Mr Solicitor. Mr Solicitor for South Australia. I
thought we were having Mr Jackson – we do not have to. Yes,
Mr Solicitor.
MR KOURAKIS: I am afraid I will have to
delay Mr Jackson, but only briefly. Your Honours, can I deal firstly
with what, in my respectful submission,
is a misstatement of our submission by
the learned Solicitor-General for the Commonwealth. South Australia has never
submitted on
its alternative contention that section 51(xx) did not enable
the Parliament to regulate activities undertaken for the purposes of
trade and
finance. Our submissions on that in paragraphs 57 to 60 make it plain
that, for the purposes of that submission, we accepted
the proposition that that
was at the outer limit of 51(xx) because the laws of the Parliament would
still be dealing with trading
and financial corporations, as such.
Just on the question of “as such”, Mr Bennett referred to Justice Gaudron’s statements in Chu Kheng Lim as being the only statements which took that approach to the aliens power. Of course, Justice Brennan did take the same approach in that passage from Cunliffe that has often been referred to in the course of this hearing.
Your Honours, it does not answer South Australia’s submissions so expressed to say that there might only be very few municipal, educational or charitable organisations that are ever found to be trading or financial corporations. South Australia referred to examples that come from decisions of the Federal Court. In short it is sufficient, for the purposes of our submissions, that there can be, it is possible for there to be, corporations that have that dual characterisation both as trading and financial corporations and religious or charitable corporations. Nor is the question of severance affected by the mere number of corporations that might attract that characterisation.
Ultimately, that must be, that is the question of severance, determined by the Act itself and that clearly manifests an intention that it apply to all employees of all constitutional corporations. There is just no basis to separate out some corporations because they are only few in number unless one can find the rule for severance in the context of the legislation.
Your Honours, can I turn to the question of business. A former President of the United States of America once said that the business of America is business. The economic or historical validity of that statement is not in question but it does illustrate the inherent ambiguity in the use of the word “business”. In its wider sense, the business of a corporation can, in fact, extend to anything it does in the exercise of its powers.
Corporations conduct business in that wider sense whenever they enter into any contract of employment or otherwise or when they direct or allow their officers or employees to engage in any conduct. In the case of some trading and financial corporations, although a significant amount of their activity might be trading in financial, much if not most might not be. It follows from that, in our respectful submission, that simply because a corporation is characterised as a trading and financial corporation, it does not follow that all of its business in the wide sense will be conducted for purposes related to trade and finance. Charitable gifts made anonymously is just one example of, in my submission, many.
It follows, your Honours, that conduct, again including contracts of employment, may or may not be for the purposes of trade or finance although they may be characterised as undertaken in the course of the corporation’s business. Equally, ultimate consumers of goods, whether they are private individuals or charitable organisations purchasing goods or services to be put to a charitable use, are not, although engaged in business and the business of the charitable corporation, necessarily engaged in trading or financial activities.
It follows, your Honours, that not all contracts of employment can be said to be contracts of employment entered into for the purposes of trading or financial. Your Honours, if those propositions are accepted, that is, that not all business in the wide sense of a corporation is for the purposes of trade or finance and not all contracts of employment are for that purpose, although it can be accepted that there is a likelihood that employment contracts entered into by trading or financial corporations are for the purposes of trade or finance, it by no means follows that all contracts of employment made by such a corporation are made in its capacity as a trading or financial corporation.
In our respectful submission, the use of the word “business” avoids the result of the analysis that has just been given only because it is used ambiguously to refer to both activity that is undertaken for the purpose of trade and finance and activity that is not.
GLEESON CJ: I realise we have been over this before but could I come back again to where foreign corporations fit into the scheme of things. If it is only the trading and financial activities of trading and financial corporations that can be regulated, what is it of foreign corporations that can be regulated?
MR KOURAKIS: The business, if you like, which is its - - -
GLEESON CJ: The business?
MR KOURAKIS: - - - activity in Australia but not all its business. Not all its business will be activity in Australia that can be regulated.
GLEESON CJ: The Australian business?
MR KOURAKIS: Using it in the widest sense.
GLEESON CJ: The Australian business?
MR KOURAKIS: Yes. Your Honours, the passages - - -
GUMMOW J: Why is that so?
MR KOURAKIS: With respect to foreign corporations?
GUMMOW J: Yes.
MR KOURAKIS: Because the words “as such” applied to foreign corporations in just the same way, in our submission, as should be applied to trading - - -
GUMMOW J: Foreign corporations can act outside Australia in a way that the Parliament regards as deleterious to the Australian public interest?
MR KOURAKIS: They may be regulated pursuant to the external affairs power but - - -
GUMMOW J: No, pursuant to this power.
MR KOURAKIS: In my submission not, because this power is limited to foreign corporations as such, that is, corporations operating in Australia but incorporated in foreign places. Your Honours, the passages from her Honour Justice Gaudron in Dingjan have been referred to a number of times yesterday and today. Can I just make these submissions about them.
First, the passage from the reasons for judgment of his Honour Chief Justice Gibbs in Fontana that are relied on by her Honour Justice Gaudron come from the passage of the Chief Justice’s reasoning at page 185 which was directed to this issue. The legislation in Fontana was legislation which made conduct unlawful by reference to its effect on the business of a corporation.
It was argued in Fontana that the provision was therefore invalid because it was wider than the trading and financial business of the corporation. The whole Court, including Chief Justice Gibbs at 185, held that “business” in that provision of the Trade Practices Act meant only trading and financial business. His Honour the Chief Justice held that at page, as I said, 185; Justice Stephen, similarly, at 195; Justice Mason at 201; Justice Brennan at 221 and Justice Wilson at 215. That was the issue in Fontana.
As to the remainder of her Honour Justice Gaudron’s reasoning, with respect, the first full paragraph on 365 came down to this. In determining whether a corporation is a trading and financial corporation, it is necessary to look at all of its activities, business activities, trading and financial and other. If, after looking at all of its activities, a decision is made that it is a trading and financial corporation it can be regulated and therefore all of its activities can be regulated because after all one had to look at all of them to determine whether it was within power in the first place. In my respectful submission, that reasoning cannot be supported.
Your Honours, dealing with Schedule 6, the submission that was made against South Australia with respect to the transitional provisions was that the sections properly construed simply required and required no more than that the Commission have regard to the decisions of the Australian Fair Pay Commission. Clause 8(3) does that. I relied on clause 8(1) in the objects clause which, in effect, required the Commission to further the schedule’s objects by ensuring its decisions were consistent with the AFPC.
Your Honours, we accept that it is a matter of statutory construction, but it comes down to this. If the provisions are construed in a way such that the Commission can exercise its own discretion after it has had regard to the decisions of the AFPC we accept they are within power. But if the effect of those submissions is that the Commission can only make an award which is inconsistent with the AFPC’s decisions, if there are special or convincing or strong reasons for doing so, then it impermissibly restricts the discretion of the - - -
KIRBY J: But all the federal legislation says, does it not, is “have regard to”?
MR KOURAKIS: No, your Honour, with respect, it does not. Clause 8(1) requires the Commission to exercise its functions “in a way that furthers the objects of” the Act and it is one of the objects of the Act to ensure consistency between the AFPC’s decisions and the Commission’s decisions. To require it to ensure consistency is to do much more than simply require it to have regard to the decisions. I said a moment ago it was the object of the Act. It is the object of this very schedule and that is the object that the Commission is required to further.
Your Honour Justice Gummow in the course of my learned friend, Mr Tracey’s, submissions referred to critical provisions that determine when the awards were to cease having effect and the Court was taken to clause 6. Clauses 57 and 59 also provide for determination of the award in different circumstances but in none of those provisions is the decision as to whether the award is to continue to operate left simply to the discretion of the Commission as the observation of Justice Dixon, as he then was, in the passage I took your Honours to in-chief suggests.
Finally, your Honours, on the Commonwealth’s submission that the schedule can be supported in any event on the basis of the incidental power, I make these submissions in reply. First, it can be observed, of course, that insofar as the Act applies to federal employees and employers no such transitional provision was necessary. It goes without saying that the Parliament could affect the transition by allowing simply for the legal effect given to awards to be phased out but of course that is not what it has done here.
Having allowed the Commission a power to vary the awards continued in effect the requirement that a discretion be left to the Commission remains. Otherwise, your Honours, of course, the Parliament could periodically enact schemes for conciliation and arbitration for short periods, legislatively extend the awards for long periods only, as I said, periodically, to bring back a short period of conciliation and arbitration. The use of the incidental power in that way could not possibly be allowed.
KIRBY J: Under the old Act, did the Parliament enact laws directly in respect of the employees of the Commonwealth, or did it accept the jurisdiction of the Commission?
MR KOURAKIS: Your Honour, I am not sure. I think it may have been a combination of both. Your Honour, I think there may have been at different times different forms of regulations for its own employees.
KIRBY J:
Because the Federal Government would have the power directly, one would
think, without the interposition of conciliation and
arbitration to regulate
the terms and conditions of the employment of its own employees.
MR KOURAKIS: Yes. In answer to a question from your Honour Justice Gummow in reference to the overseas activities of foreign corporations, apart from the external affairs power of course, there may be occasions when regulation of those activities is incidental to the regulation of their activities in Australia, but I maintain the submission that in 51(xx) itself what can be regulated are the activities of foreign corporations as such, that is, operating in Australia. If the Court pleases.
GLEESON CJ: Thank you, Mr Solicitor. Yes, Mr Jackson.
MR JACKSON: Thank you, your Honours. Your Honours, may I say first of all that your Honours will find some oral submissions by us referring to the Melbourne Corporation passage at lines 12900 and 12925.
Your Honours, could I come to deal first with Schedule 1 and the argument which my learned friend so elegantly described as being incomprehensible. The short position, in our submission, is this. The Parliament has power to enact laws with respect to corporations identified in section 51(xx). To be such a law, the law must have a connection with corporations of that kind which is, stating it in the positive form, real and substantial; stating it in the negative form, not insubstantial, tenuous or distant. The application of those tests involves a question of degree and judgment.
The Act contains a large number of provisions which refer to organisations and their activities. What are the organisations so referred to? They are organisations registered in accordance with Schedule 1 and in particular pursuant to section 19 of that schedule. Those organisations fall, for immediate purposes, into two categories, namely, those which are themselves constitutional corporations as defined by section 6 of Schedule 2 at page 679 or, on the other hand, associations – I am speaking of employees for the moment – which have a majority of members who are federal system employees as defined by section 18B(2).
Your Honours, as to the first class constitutional corporations, the validity of the provisions turns, principally, on the more general arguments as to validity of the Act as a whole but the considerations to which I am about to come in relation to the second class are also of some relevance. The second class is the person to whom I referred a moment ago and who I referred to in section 18B(2) at page 693. That provision, read with section 19(1)(d) means that an organisation must consist of at least 50 persons but the composition of that membership may have little to do with employment by section 51(xx) corporation.
May I
refer also, your Honours, to section 141(1) in volume 2 at
page 805. Your Honours will see that that provides:
(1) The rules of an organisation:
(a) must specify the purposes for which the organisation is formed and the conditions of eligibility for membership –
Your Honours, the terms of Schedule 1 make elaborate provision for the control and management of organisations referred to in that schedule. I will not go into detail about them but may I give your Honours an example. The provisions of Chapter 8 in Schedule 1, namely, sections 229 and following for reports and audits and if I give, as an example, sections 262 and 263. Could I refer also, your Honours, to section 280 and to section 196.
Your Honours, all these provisions have to be related back in one way or another to the corporations which are the subject of the section 51(xx) power. What I mean by that is that one has to have something tying them up with the provisions of the principal Act - as a principal part of the Act which do things in relation to – if I could use a generic term – such corporations. The closest one gets to such a connection with such a company is, in our submission, to be found in the two provisions already referred to about agreements, namely, sections 328 and 329.
Now, all that is required, your Honours - and this is, in our submission, the closest connection one can see – is that the organisation which may be a party to such an agreement is an organisation which has one member who works or would work under the agreement. Your Honours, that is the foundation upon which the edifice of great detail in relation to the organisations is set out in Schedule 1.
Your Honours, may I say a couple of other things about it. One is that it is, if I may say so, with respect, in our submission, immaterial that there is in a sense a choice whether to apply for registration. Rather, it is a question whether the provisions which deal with registration and which have the results which they do have results which are within power.
The second thing, your Honours, is that we would submit that the provisions – when one looks at the provisions of Schedule 1 they demonstrate fairly clearly that the Parliament has treated section 51(xx) as if it empowered not merely the making of laws with respect to the three types of corporation referred to in it, but also as a power to make laws with respect to industrial associations.
Your Honours, could I come to a third category of organisations and that is organisations which are already registered. They have such function - - -
KIRBY J: If I could just ask you to pause on that last point. You pointed out that one of the two categories for the regulation of the corporations is if they are themselves constitutional corporations, so that if the Parliament has regulated them under that head and if that is valid, then that is the end of that argument, is it not?
MR JACKSON: Well, it is, your Honour, but what you would have in those circumstances is a situation saying – it really would come down, I suppose, to saying whether the organisation – and this is the factual question – in a sense, was a trading, financial or foreign corporation. Now, that is probably unlikely to occur in the case of many employee organisations. It is depending on the ambit of one’s view of that concept. It is perhaps more likely, perhaps not more likely, to be the case in the case of employer associations, but it is an uncommon thing. But I suppose the answer is, your Honour, that unless one treats that as being – sorry, I will start again.
What your Honour puts to me may well be right, but it seems unlikely in view of the arrangement of the provisions in toto that it was intended that that part be entirely severable because your Honours will bear in mind that there is a severance provision contained in section 18D of Schedule 2 which really provides for severance in a particular and, with respect, somewhat peculiar – I mean, unusual, not particularly exotic – in an unusual way.
GLEESON CJ: Mr Jackson, there is a document from your side headed “SUBMISSIONS REGARDING CONSEQUENCES OF THE INVALIDITY OF SCHEDULE 1”. I just wanted to check that those are taken up in the matrix, are they?
MR JACKSON: I hope so, your Honour.
HAYNE J: Speak now or forever hold your peace, I think, Mr Jackson.
GLEESON CJ: It will give Mr Owens something to think about overnight.
MR JACKSON: Your Honour, I believe the answer is yes. If the answer should be any different, may I give your Honours a note on the matter – may I send your Honours a note?
KIRBY J: And more particularly, the consideration of 51(xxxv) is dealt with in the Victorian note.
MR JACKSON: There is one there for your Honour.
KIRBY J: Do you understand there to be any difference between - - -
MR JACKSON: There is, and, your Honour, we have a note which we have given you which is one page which deals with that topic. Your Honours, could I just say a couple more things about Schedule 1. Perhaps for once I have misunderstood the Commonwealth’s submissions or perhaps there is some - - -
GLEESON CJ: Other obstacle to their understanding.
MR JACKSON: It seemed to be suggested, your Honours, at some point that the operation of Schedule 1 to the Act might come to an end after three years. The position, of course, is only that because of clause 4 - Schedule 4 to the amending Act, an organisation which was registered prior to the commencement of the amending Act is not liable to have its registration cancelled under section 30(1)(c)(v) of Schedule 1 on the ground that it “is not, or is no longer, a federally registrable organisation”. Your Honours, that has the consequence that the transitional operation of Schedule 1 in that regard would depend on the terms defined in sections 18 to 18D and really is in that sense not severable.
Could I also say that a further argument was
developed that Schedule 1 could be regarded as valid on the basis of it
being a kind
of freestanding exercise of legislative power. Your Honours,
it is difficult, in our submission, to accept that proposition because
of,
amongst other things, the terms of section 5 of Schedule 1, and may I
come to that, your Honours. This is page 675 –
your
Honours will see that subsection 5(1) of the schedule says
that:
It is Parliament’s intention in enacting this Schedule to enhance relations within workplaces between federal system employers and federal system employees and to reduce the adverse effects of industrial disputation.
But then one goes on, your Honours, to see
what is in subsection (2):
Parliament considers that those relations will be enhanced and those adverse effects will be reduced, if associations of employers and employees are required to meet the standards set out in this Schedule in order to gain the rights and privileges accorded to associations under this Schedule and the Workplace Relations Act.
Now, your Honours, if one is looking to
see under Schedule 2 and looking to see is this a freestanding, as it were,
enactment, one
of the difficulties that arises is that nowhere in that schedule
does one see what are the functions of such an organisation. The
closest thing
is perhaps section 27 which is simply a fairly standard provision dealing
with the general powers of an incorporated
body.
Your Honours, it is one thing to say everyone who has a particular quality, a federal system employee, and they can go into these organisations, but if one is looking to see it as an exercise of at least the corporations power it does not appear to perform any relevant function until it is tied up with something else.
Could we refer also, your Honours, to a number of provisions, and I do not mean to say these are in any way exhaustive, dealing with the fact that the body is one whose functions appear to be those of dealing under the Act itself. May I merely mention to your Honours section 19(1)(e) and (1)(i) and (3) and section 28(1)(a) and (d)(iv).
May I come then to section 356. The argument on behalf of our learned friends appeared to be that simply because the provisions of Division 7 of Part 8 referred to what would be prohibited content there was not any difficulty in granting an unlimited – I will say a qualification to that in a moment – power to the Executive Government to make regulations specifying the matters which might be prohibited content.
Your Honours, we are not, of course, talking about a Parliament, the legislative power of which is not constrained by requirements as to subject matter. The nature of some of the section 51 legislative powers, notably section 51(i), is such that wide powers to regulate may be given to the Executive. But, your Honours, that is not so, we would submit, in relation to section 51(xx) where there must be some connection to corporations. In that regard, section 356 itself gives no guidance at all, and I went through other provisions of the Act to submit that none of the other provisions, including the regulation-making power and including the objects, made up the gap.
Of course, the regulations cannot be inconsistent with the Act and, of course, they must be consistent with the Act if one puts the two concepts together but that, your Honours, is the problem. In the end, in our submission, the arguments on behalf of the Commonwealth really come down to no more than that the regulations may provide the matter, which is prohibited content, and that matter is whatever the Executive Government decides is prohibited content.
Our learned
friend, Mr Tracey, set out four propositions said to derive from the case
law on this point. The first was that the
Commonwealth may provide for
subordinate legislation in wide and general terms. Your Honours, of course
it may, but it must depend
on the subject matter being addressed. The second
point was that the repository of power was free to exercise a discretion and
Capital Duplicators was relied on for that. That is true, but what is
meant by that, one can see in a sense from Capital
Duplicators [1992] HCA 51; 177 CLR 248 at 265, what was said there,
your Honours, was, if one looks at the second paragraph on the page, the
second sentence:
It is clear from a reading of that part of the judgment of Dixon J. in Victorian Stevedoring which follows the passage previously quoted that his Honour considered that the separation of powers effected by the Constitution does not make the Parliament the exclusive repository of the legislative power of the Commonwealth and does not preclude the delegation of a legislative power by the Parliament to the Executive in such terms that the repository of the power is free to exercise its own discretion and judgment.
Now, that is so, your Honours. It is free to
exercise a discretion and judgment. The judgment of the Executive does not have
to
be fettered, but having said that, it does not follow, in our submission,
that one is talking about – and one can see this,
it is submitted
from looking at the passage in Victorian
Stevedoring [1931] HCA 34; 46 CLR 73 at 101, which was referred to. Your
Honours, if one looks at the passage - it is really, in a sense, the whole
of page 101 - there
is nothing to suggest that the Executive may have
an absolutely uncontrolled discretion as to the laws which might be made. Your
Honours, I referred earlier to page 101.
The third proposition,
your Honours, was that the power to make regulations will have the same
character as the statute. The reference
in that regard was Victorian
Stevedoring, again, at page 121 on this occasion. I think it is
paragraph 5 in Justice Evatt’s statement. Your Honours will see
that he
is referring there to the fact that:
regulations merely for the purpose of carrying out a scheme . . . will not prevent the section conferring power to make regulations from being a law –
et cetera. That is the context in which he makes the observation in the next sentence and I referred earlier to the fact that it is clear enough that the scheme he was talking about was one that was dealt with in that Act. I gave your Honours the reference the other day.
Your Honours, the fourth point was that if regulations once made were within the constitutional power, I think it was said, that was enough. Reference was made to R v Halton 138 CLR. Your Honours, could I say in that case there was no suggestion that the breadth of the regulation power in that case was itself a problem.
Your Honours, the last matter in this regard is what happens if section 356 is invalid. The result would be, we would submit, that section 356 would be struck out. There is nothing on which the other provisions of the Act, which are dependent on the specification of the matter which is prohibited content, could operate and the general regulation-making power would not, in our submission, assist.
Could I move then, your Honours, to something that is in relation to section 16. This is an issue on which submissions were addressed by Western Australia orally before. May I just say a couple of things about it. Your Honours, even if the field of regulation by the Act can be defined in the way in which the Commonwealth would define it, that is, as between employers and employees being constitutional corporations or of constitutional corporations, section 16(1) is not confined to that field. It excludes laws identified under that section so far as they would otherwise apply to an employee or to an employer. It is enough that the State law applies to one or the other of them. Your Honours, it does not exclude State laws so far as they regulate the relationships between those persons or which apply to employees and employers.
Your Honours, in relation to
section 16 also one does need to bear in mind that there are three ways by
which regulations can affect the operation of section 16. The first is
that paragraph (d) of the definition of “State or Territory
industrial law” in section 4 – that is page 13 of the
Act – enables laws to be prescribed for the purposes of that
definition. There are no specified
criteria for those laws. The second thing,
your Honours, is that section 16(2)(b) enables regulations to
prescribe laws to which section 16(1) does not apply. Again, no criteria
are specified. The third thing is that section 16(4) provides
that:
This Act is intended to apply to the exclusion of a law of a State or Territory that is prescribed by the regulations for the purposes of this subsection.
Section 16(5), of course, makes it clear
that they may be laws to which section 16(2) otherwise apply. Again, no
criteria specified.
Your Honours, the result is that whilst
section 16 lists certain kinds of State and Territory laws which are
intended to be excluded
or not excluded, the list is merely, in effect, a
default provision which can be varied by regulation.
Your Honours, the substantive effect of section 16 in those circumstances is the same as if it had simply provided that the Act was intended to operate to the exclusion of such State laws, we would submit, on any topic as are prescribed by regulation and that in default of regulation a number of kinds of State law are excluded. Your Honours, could we say also in relation to our learned friends’ submissions that the provisions of section 16 which authorise the making of regulations cannot be severed, we would submit, from the balance of the provision and to do that would alter its operation in a fundamental respect.
Now, your Honours, overall in that respect we would submit the fundamental difficulty is that the State laws which are purportedly excluded by or under section 16 are not confined to the field regulated by the other provisions of the Act. No doubt some laws do not have to do that, but the State laws which may be excluded may lie quite outside the Commonwealth legislative power.
Your Honours, the final thing I wanted to say, if I may, is something in relation to the submissions made by my learned friend, Mr Hutley, and it is this. Your Honours, our learned friend, Mr Burmester, said that if one looks at clause 18B(2)(b)(ii) to (iv), the trade and commerce provisions, they involve a large – I am sorry, your Honours. May I say that contrary to what was said, the provisions of clause 18 do involve a large number of persons who would not be covered by clause 6 and that is all non-corporate businesspersons who are engaged in trade and commerce.
Your Honours, there is one
other point in that regard. If one looks at the position in relation to
Mr Hutley’s argument, if
one looks at the position of an employer who
falls within section 6 of the Act who has only 100 employees, if those
employees belong
to a union which has 99 other non-federal system employees,
then the employer can invoke the Act. It can invoke the Act in the sense
of
becoming party to an agreement with an organisation. However, if the
organisation has 101 other non-federal system employees,
that would not be able
to be registered and, your Honours, that is because of the majority
requirement, and our learned friend Mr
Burmester’s invocation of
section 19(1)(i) would not meet that point. Your Honours, it would
not meet, if I could use the
expression that was used earlier but one which I
use for convenience rather than adoption, the weirdness of the provision.
Your
Honours, those are our submissions.
MR BENNETT:
Your Honours, there are three short matters in those replies which are
to some extent new and which we seek leave briefly to answer.
I can do that
either in writing within seven days or attempt to do
it - - -
GLEESON CJ: What are, without developing them, just identifying them?
MR BENNETT: The argument put by my learned friend, Mr Walker, about the fact that his internal/external theory is justified by the fact that before the body can become a trading corporation it must do some trading which requires an employee and therefore everything to do with employment is in some way anterior – that argument.
GLEESON CJ: What is the second one?
MR BENNETT: The second one is the reference in my learned friend the Solicitor for Queensland’s submissions to the Commonwealth concession about the absence of authority and just explaining what that is absence of authority on.
GLEESON CJ: Yes, and the third one?
MR BENNETT: The third one is the explanation now given in rather more comprehensible form of what I described as the incomprehensible argument which I did not really deal with in my submissions.
GLEESON CJ: You have seven days to put it in writing.
MR BENNETT: If your Honour pleases. The other thing I should mention, your Honour, is that – and this may just require alteration of the document – the so-called matrix does not refer to the arguments about section 356.
GLEESON CJ: You are complaining about that?
MR BENNETT: No, not complaining, your Honour, I am just suggesting that if it is to be used as a guiding document that probably should be corrected somewhere.
GUMMOW J: Are you sure 356 is not there?
MR BENNETT: Yes, the argument is about regulations. In the list of regulation-making things that are attacked, that is not referred to.
KIRBY J: Mr Jackson was just dealing with it then.
MR BENNETT: Yes. Your Honour, all I want to say is that the matrix should be amended just to have a reference to that, if it is being used.
GUMMOW J: This is in paragraph 25, is it, of the matrix as it is? It has been left out.
MR BENNETT: Yes, that is where it probably should be added.
GUMMOW J: Is that right?
MR BENNETT: Yes, your Honour.
GLEESON CJ: That is in the highest tradition that you have drawn that to our attention.
MR BENNETT: If I seek leave to amend my learned friend’s document.
GUMMOW J: So in 25, is it, we add 356?
MR BENNETT: I am sorry, your Honour.
GLEESON CJ: To number 25 in the matrix we should add a reference to section 356, is that right?
MR BENNETT: Yes, and, your Honour, those who are sitting near me are suggesting that I should have asked for 14 rather than seven days, that being the period for all the other documents.
GLEESON CJ: Yes, that is all right.
MR BENNETT: Yes, if your Honour pleases.
GLEESON CJ: We are obliged to all counsel for their assistance and
we will adjourn until 10.15 on Tuesday, 16 May.
AT 4.02
PM THE MATTERS WERE ADJOURNED
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