WorkChoices: an analysis of union legal and parliamentary strategies

Union Membership 1911 – 2005.


The graph above shows the rise and fall of union membership in Australia over the past 100 years. Historic milestones have been added. To view the graph in detail click on the image and then click again to enlarge to see the detail.

The recent decline in the union movement is of great concern to unionists.

Soon (in 2007) the LeftPress collective will publish a book that analyses this decline and discusses strategies for renewal.


The QCU website states:

“Take action on November 30 – all around Queensland! Attend a venue from 8:30am onwards to watch the ACTU broadcast from the MCG”

So no march is planned and no speakers apart from the broadcast from the MCG.

In Brisbane, the Rank and File platform may be the only live platform on the day! [This platform was blasted off by the sound system put up by the QCU] I heard from a couple of rank and file people on the weekend that the Electrical Trades Union (ETU) and the Liquor, Hospitality and Miscellaneous Union (LHMU) are marching from Musgrave to South Bank for the broadcast and then marching back after.etu-marches-to-workchoices-rally.jpg

The Qld Council of Unions (QCU) do not appear to be even pretending that they are doing anything anymore.

If the Left were properly organised it could (in alliance with the Communications Electrical & Plumbers Unions (including the ETU), Construction Forestry Mining & Engineering Union & Builders Labourers Federation (Qld), the Qld Teachers Union, the LHMU (Misos) and Australian Manufacturing Workers Union) probably take over the entire day.

It is clear that these unions will be the mainstay of the protest.

Come to the open platform organised by the Rank and File Group.

Legal Strategy: High Court WorkChoices Decision

ALP-led Unions were briefed on the likely outcome of the High Court challenge as early as March, 2005:

The WorkChoices legislation will be passed because after 1 July 2005 the Coalition controls the Senate and challenges to the legislation in the High Court will almost certainly fail.”

—Griffith University industrial lawyer and union advisor, Margaret Lee, at Brisbane Labour History Conference “Unions and Industrial Relations Legislation: the Past and the Future” held at the Terminus Hotel, South Brisbane, on Saturday March 12, 2005.

This morning (14 November 2006) the unions’ legal strategy against WorkChoices vanished.

The High Court ruled that WorkChoices is both legal and constitutional.worklife-sthsideforum_photo-shot-at-meeting.jpg

As most industrial lawyers had predicted, the States and unions lost their high court challenge of the constitutionality of the WorkChoices legislation.

The challenge by unions and the states was based on narrow legal arguments about the meaning of the terms “employer” and “employee”.

The win by the federal government was convincing.

All parts of the WorkChoices (2006) legislation were upheld by the court, some parts unanimously.

The parties to the challenge were the Labour states, the Australian Workers Union, and ‘combined’ NSW Unions. The ACTU was not formally a party to the challenge.

Five judges Gleeson, Gummow, Hayne, Heydon and Crennan in a single judgement voted for the legality of WorkChoices; Kirby (from the left) and Callinan (from the right) voted against.

The Corporations Power
The issue of whether certain entities (like State Government agencies, trusts, and statutory entities) are corporations and covered by WorkChoices was not decided. In some cases State government agencies like Queensland Rail have already decided to accept WorkChoices becasue they employ workers throughout Australia.

Whether workers in local government remain under the state industrial system is not clear. The Australian Workers Union’s challenge to exclude local government workers from WorkChoices failed. The court ruled that it requires a specific case to determine that issue.

Constitutional corporations are determined on the basis of their financial activities not merely whether they are trading entities or that they make a profit.

It may turn out that organisations like the Red Cross and other NGOs that are set up to get tax concessions are covered by the WorkChoices legislation.

States Rights
State governments have lost their industrial power over employees of corporations.

The federal government now holds those powers.

One factor in the judgement was the move by ALP-led Victorian unions in the 1990s to federal awards away from the influence of the Kennett Liberal government. The High Court said:

In Victoria v The Commonwealth (Industrial Relations Act Case), Victoria, Western Australia and South Australia challenged a substantial number of the provisions of the previous Act, but they conceded that s 51(xx) (of the constitution) empowered the Parliament to make laws governing the industrial rights and obligations of constitutional corporations.

This may not impact negatively on the ALP in both Victorian and NSW state elections. But workers may lose faith in the ability of ALP-led unions to prevent their rights being taken away by AWAs.

The current federal government has assumed responsibility for workers throughout Australia (i.e. those employed by corporations and federal government agencies) .

Even if they weren’t previously, the state industrial commissions are now largely irrelevant to workers rights. There is a question as to what powers remain with the states. They may find themselves, as Judge Callinan said, ‘becoming no more than an impotent debating society‘.

Legal Strategy Defunct
The unions’ legal strategy against WorkChoices has vanished.

This places more pressure on the parliamentary strategy employed by ALP-led unions.

The ALP has pursued a high risk political strategy from the outset putting its faith entirely on the next federal election to win back workers rights lost over the past 10 years (and more).

The question that I pose is Where will the people who voted for Bartlett last timeThe parliamentary strategy for the unions is a high risk strategy.

Workers may be forced to disobey the WorkChoices legislation.

When that happens the Labor states will have a choice, support the workers involved against the federal government or become irrelevant.

The unions’ strategy is flawed.
Not merely because the majority legal advice to the unions and states was that their challenge in the High Court would fail.

Even with the unions’ current strategy of a parliamentary solution and doing nothing to challenge the laws in the workplace, there has been a serious tactical error by the unions.
It would have be better to hold the legal challenge back, leaving the legislation untested in the
courts, until after the federal election.

My reasoning is this:
Suppose the ALP strategy goes to plan and they win the election and (as expected) do not control the Senate.
Repeal of the WorkChoices legislation will get bogged down in the Senate with the coalition and employers holding out on any real change. This is what happened with the secondary boycott legislation in the Trade Practices Act during the Hawke years. in the end, it was never repealed, much to the chagrin of the Meatworkers and other unions.

Tactically it would have been better for an ALP Federal government (not only the states and the unions) to challenge the legislatiion in the High Court after the election.

Not because the Howard appointed judges would rule any different, but because ALP federal government could challenge the laws in the Senate, threatening a double dissolution by lambasting the conservatism of the judges, the Senate, the coalition and the employer lobby.

Politically, this may have delivered much to the Labor government and a chance for unions and federal ALP to deliver on their promise to bin the laws where chance of success under their strategy now appears remote, if not impossible.

Ian Curr
15 November 2006

Bush Telegraph has been asked the following question:

What constitutes a “constitutional corporation” under WorkChoices Legislation?

While the High Court upheld the Commonwealth as being able to include industrial relations under corporations power it did not offer any ruling on what constitutes a “constitutional corporation”.
Some lawyers argue this could apply to schools (even state schools), public hospitals local goverment and other test then applies to clubs and associations public sector entities, even though they are not incorporated, based on an activity test.

That is not on an incorporation or entity test, which defines the difference between partnership, sole trader and company but on the activity that the body performs.
This widens the net to include churches, charities and sports clubs etc.
Did any other part of the judgment refer to these points.

My answer to these questions is as follows:
Section 51(xx) of the Australian Constitution states:

“51.The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: – (xx.) Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.”

Thus ‘constitutional corporations’ are either ‘foreign, trading or financial corporations’.

I have not yet read much of what the High Court says in the WorkChoices case. It is 290 pages and I do not want to print it out (not yet anyway). However I have spent some time looking at it online and have scanned it thoroughly looking for definitions that relate to the above questions.

Previous cases in the High Court (Concrete Pipes Case, Fontana films, Tasmanian Dams etc) talk about the meaning of “trading or financial corporations”. This gives rise to the two contending ‘tests’ that referred to in the above question – the ‘original purpose’ and the ‘activities’ test.

The High Court does not refer specifically anywhere in the WorkChoices case to the ‘activities’ or ‘purposes’ tests.

What they do talk about is the character (‘internal’ as opposed to ‘external’ function) of constitutional corporations. Much of the discussion that I have read refers to the Trade Practices Act.
Former High Court judge Brennan had another test ‘discriminatory operation’) test.

Well, this test was referred to by the plantiffs (the states and unions) under the broader title of the ‘object of command’ test.

They (the plantiffs) argued that this ‘object of command’, as a test of a constitutional corporation, should be rejected in favour of a ‘distinctive character’ test.

I read this to mean that banks should be distinguished from local government because they carry on financial activities (so, to this extent, the ‘activities test’ still prevails in the HC).

The states and unions were overruled on this (the ‘distinctive character test’) because the High Court said that their arguments put the cart before the horse (my words).

The HC ruled that you did not need to go into this to decide s51(xx) of the constitution in this case.
A couple of excerpts about these tests are provided below:

1. In particular, in R v Trade Practices Tribunal; Ex parte St George County Council[201], the Court had held that a county council, established under the Local Government Act 1919 (NSW) for “local government purposes”, empowered to sell electricity and sell and install electrical fittings and appliances, and pursuing only those activities, was not a trading corporation. In his dissenting opinion, Barwick CJ had said[202] that “a corporation whose predominant and characteristic activity is trading whether in goods or services” was a trading corporation. But this view did not then command the assent of a majority of the Court[203]. – Majority judgment High Court in WorkChoices case.

2. “The command of s 45D was directed to any person; it imposed no obligation upon a corporation. The section was, however, designed to protect a corporation from certain conduct which was intended and likely to cause substantial loss or damage to its business. Section 45D in its application to trading corporations was held to be a valid law with respect to corporations.” – Majority judgment High Court in WorkChoices case.

The legislative purpose upheld by the high court was protection of corporations rather than regulation of them.

The majority judges in High Court are still influenced by Barwick who was cagey, never ruling on anything that he did not have to [note his dissenting opinion in (1) above].

Kirby puts it this way:

A needless exercise?

If s 51(xx) of the Constitution now provides a legitimate source for a comprehensive federal law with respect to industrial disputes, by inference it always did. All those hard-fought decisions of this Court and the earnest presentation of cases, the advocacy and the judicial analysis and elaboration within them concerning the ambit of s 51(xxxv) of the Constitution, were (virtually without exception) a complete waste of this Court’s time and energies. I say “virtually without exception” because occasional instances may exist where neither of the parties to an industrial dispute was a “constitutional corporation”.

As you may know, s45D (and E) of the Trade Practices Act was never repealed by Hawke/Keating government and I fear the same will happen again with the WorkChoices legislation, it will not be fully repealed by an ALP government.

My reasoning for this is given @

Incorporated associations (like charities and schools of arts) escape the same treatment as banks under the trade practices and tax acts (to name but two). State owned enterprises like the Qld government’s energy retailers Sun Retail and Powerdirect are clearly trading corporations, whether they are privatised or not. But when they start privatising functions of public schools, functions of local government, charities and sporting clubs the argument about which test you use becomes academic and irrelevant.
The AIRC registry has this to say on the questions raised above:

This fact sheet has been prepared by the Australian Industrial Registry. It is not intended to be comprehensive, but is designed to assist in gaining an understanding of the AIRC and its work. The Registry does not provide legal advice. 27 March 2006.

The Work Choices legislation, which has introduced a new, national system of industrial relations, is mainly based on the corporations power of the Australian Constitution. As such, the new system is designed for employers

known as constitutional corporations.

To be a constitutional corporation a business entity must be either:
a body incorporated under the Corporations Law that may be classified as
either a trading or financial corporation;

-a foreign corporation;

-a body corporate that is incorporated in a territory; or

-a body that is prescribed as a body corporate under legislation and is engaged in trading or financial activities.

It is the activities of the business entity that will determine whether that business entity falls within the definition of a trading or financial corporation.

By way of example, the courts have found the following to be financial or trading corporations (or both):

-a football club and football league trading corporations;
-a state superannuation board;
-public utilities;
-the Australian Broadcasting Corporation;
-the Red Cross Society;
-public hospitals; and
-a wholesalers and retailers trade association.

Business entities that do not fall within the definition of the constitutional corporations have been found to include:

-unincorporated associations and
-sole traders

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