The Commonwealth and the States in the Australian Constitution - Essay Example

Distribution of legislative power between the commonwealth and the states in the Australian Constitution Introduction The Australian High Court’s decision of 14 November 2006 in the New South Wales & Ors v The Commonwealth has once again placed the issue of Commonwealth-States relations on the centre stage. Though the Court’s decision in amending the legislation Workplace Relations Act 1996 by Workplace Relations Amendment (Work Choices) Act 2005 favoured the authority of the Commonwealth over the States, there has been concern among States that it would undermine the federal balance. In fact, the change in legislation means a new work choice policy of the government, which led to the constitutional challenge. This article examines the distribution of legislative power between the Commonwealth and the states in the Australian Constitution, with a focus on the High Court's interpretation of the 'federal balance' of power between the two. It also highlights the tussle of power Genesis of Power Distribution Originally, the Constitution of the Commonwealth of Australia was a schedule to the Commonwealth of Australia Constitution Act 1900 (Imp) or An Act to constitute the Commonwealth of Australia, which came into force on I January 1901.1 Under the Australian Constitution, the legislative power is divided between two spheres: the Commonwealth and States. In principle, the Commonwealth has a limited number of enunciated powers. Most of these are concurrent with the state legislative powers; the residue remains with the state.2 Section 51 of the Constitution contains a specified list of powers related to a range of subjects and purposes, primarily in the 40 numbered paragraphs. This list does not leave any powers thus assigned to be exercised by the states. This pattern of distribution power between the Commonwealth and the States is modelled on the US Constitution. In principle, the States have freedom to enact legislation on subjects or topics where the Commonwealth has legislative power. However, there are limited examples where the Commonwealth does enjoy exclusive power, such as the imposition of customs3 and power to legislate in elation to the seat of government and other commonwealth place4 Section 51 of the Constitution provides a list of those topics on which the Parliament may legislate, which is often referred to as the Commonwealth's heads of power. The Parliament may, for instance, make laws on trade and commerce with other countries, and among the States. Following are the power that the Commonwealth uses: Section 51(i) – the trade and commerce power; Section 51(ii) – taxation; Section 51(xx) – the corporation power; Section 51(xxix) – the external affairs power; Section 51(xxv) –the industrial disputes power; Section 51(xxvii) –immigration power; and Section 122 – the territories power. According to Section 52, the Parliament may also enact laws on a range of specifically enumerated topics including Commonwealth places and the Commonwealth public service, while Section 90 empowers it to impose customs and excise duties. Besides, under s 51(xii), the Commonwealth Parliament is empowered to enact laws, which are related to "currency, coinage and legal tender". This means that Australia has a single currency, which was not the case prior to Federation. Other powers include "trade and commerce with other countries, and amongst the States" (paragraph 51(i)) and "external affairs" (paragraph 51(xxix)).5 In few areas, the Constitution provides exclusive law-making power to the Commonwealth. However, such exceptional areas, the distinction is clear, whereby the power granted to the Commonwealth deprives the States of the same power, so that they could enact valid laws. Above all, Section 90, for example, has the provision, which empowers the Commonwealth Parliament only to impose excise duties. Normally, in those areas where Commonwealth is granted with law-making power, the State Parliaments too have the same power. However, Section 109 acknowledges the chance of conflict between the Commonwealth and the State Commonwealth laws. The provision for "reserved State powers" and "implied immunity of instrumentalities" doctrines to ensure both the State and the Commonwealth were normally to be immune from each other's laws was developed by the original High Court.6 In 1920, this protection on State powers was swept away by the landmark decision in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers' Case).7 The Role of Australian High Court In principle, the Australian High Court is possessed with the jurisdiction to interpret the Constitution, including controversial legislations. A majority of High Court’s judicial interpretations have been focused on Section 51, i.e. cases borne out of disputes between the Commonwealth and the States. In practice, the High Court's jurisdiction is demarcated in its exercise between constitutional and federal cases which loom so largely in the public eye, and the great body of litigation between man and man, or even man and government, which has nothing to do with the Constitution, and which is the principal preoccupation of the court.8 The net impact of the High Court’s role in interpreting the power relationship between Commonwealth and states has been to facilitate Commonwealth encroachment on state areas of responsibility.9The general role of the High Court in Australian constitutional law is also considered, along with the separation of powers doctrine as it relates to the independence of the judiciary. The All Important Case The case has been "hailed as the most important constitutional case in 80 years.10 In this all important High Court case, which challenged the constitutional validity of the federal government's WorkChoics legislation gained wider protests froma union consisting os States and other parties. States of New South Wales, Western Australia, South Australia, Queensland and Victoria, along with the Australian Workers' Union and Unions New South Wales that brought the case before the High Court are the planitiff. The hearings started on 4 May 2006, and concluded on 11 May 2006, while the judgment was pronounced by High Court on 14 November 2006. The majority of the High Court findings vis-à-vis WorkChoices were held constitutionally valid. The WorkChoices legislation is an amendment to the existing labour laws, modifying the industrial relations system. More importantly, the Work Choices legislation would cover about 85 per cent of the Australian workforce by replacing the existing laws run by the States. The new law relies heavily on s 51(xx) i.e. the corporations power. Prior to the Work Choice, the Commonwealth relied on s 51(xxv) i.e. the industrial disputes power. With the new law in practice, the Commonwealth shall have the power to provide certain minimum working conditions to its employees, which was hitherto rested with rested the States. It means prior to the Working Relation Amendment (Workplace Choices) Act 2005, the States had control over the employment conditions of many corporations. Now, all those corporations have come under the ambit of the Commonwealth legislation, even if they approve of it or not. Challenging the legislation, the plaintiff put forward a number of arguments about the extent or the limit of s 51(xx) as a source of Commonwealth legislative power. Among them was the argument that the Commonwealth Constitution creates a federation, and that the Court should keep in mind the overall goal of having a federation – that is, a system of powers shared between different governments – when deciding on the scope of any particular power, including s 51(xx). The Contentious issue: Constitution, s 51(xx) In the Workplace Relations Amendment (Work Choices) Bill 2005, the major modifications focused on "simplify the complexity inherent in the existence of six workplace relation jurisdictions in Australia by creating a national workplace relations system, which would be based on the corporations power that will apply to a majority of Australia's employers and employees.11 Since 1993, the Parliament has included provisions enacted in reliance on s 51(xx) in its industrial relations legislation. In Victoria v The Commonwealth (Industrial Relations Act Case)5, Victoria, Western Australia and South Australia challenged a substantial number of the provisions of the previous Act, but they conceded that s 51(xx) empowered the Parliament to make laws governing the industrial rights and obligations of constitutional corporations. The majority, strongly influenced by the now discredited doctrine of reserved State powers, held that s 51(xx) was to be read down because of the provisions of s 51(i), which empowers the Parliament to make laws with respect to trade and commerce with other countries, and among the States. The question was whether it also was a law with respect to corporations of the kind described in s 51(xx). Griffith CJ, who was in the majority, said 12: "It is common ground that [the relevant sections of the Australian Industries Preservation Act], as framed, extend to matters relating to domestic trade within a State, and the question is whether the power to make laws with respect to 'foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth' extends to the governance and control of such corporations when lawfully engaged in domestic trade within the State. If it does, no limit can be assigned to the exercise of the power. In paragraph 481-3, the Court noted that it is not necessary for this case to define or explain the scope of the corporations power, which restricts on laws regarding industrial disputes by s 51(xxxv). Since Strickland v Rocla Concrete Pipes Ltd ("the Concrete Pipes Case") 14, the corporations power has provided the constitutional basis for legislation prohibiting anti-competitive conduct by constitutional corporations, including conduct in what Griffith CJ called "domestic trade", notwithstanding the limitations upon the power of the Parliament to pass laws with respect to such trade contained within s 51(i). Why limit Section 51(xx)? Section 51(xx) contained provided a significant element of the plaintiffs' arguments, providing that it is essential to restrict reach of the power. However, what necessarily underpins the proposition that a different approach is required to the task of determining whether a law is supported by s 51(xx) is an implicit assertion about federal balance and, in particular, an implicit assertion that to give the ordinary scope to the legislative power with respect to the particular persons mentioned in s 51(xx). The plaintiffs' arguments proffering restrictions to the reach of s 51(xx) were not confined, however, to arguments about the social or political utility of federal balance.12 While there may be room for debate about whether the particular examples proffered by Higgins J are properly to be characterised as extreme examples or distorting possibilities, what is plain is that, as Professor Zines has written 242: "It is clear that any power of the Commonwealth, on the most restricted or the widest interpretation, might, if the federal Parliament were so inclined, produce results which, when viewed together with State laws, are inefficient, socially bad or downright ridiculous.”13 For example, no party sought to challenge the approach to constitutional construction that underpinned the decision in the Engineers' Case to reject the doctrine of implied immunities and the doctrine of reserved powers. As Windeyer J rightly pointed out in the Payroll Tax Case 246, theEngineers' Case is not to be seen "as the correction of antecedent errors or as theuprooting of heresy". There is no doubt that, as he continued 247, "[t]o return today to the discarded theories would indeed be an error and the adoption of a heresy". Conclusion The work choices principle marks a sharp break from the past experiences of federal balance of power between the Commonwealth and the States for two reasons: the focus of the legislation should be closely aligned with the “ebb and flow” of the hard-edges economic forces of the labour market to shrink employment. The second is that the Work Choices laws are different, as the Commonwealth has relied upon its power to enact laws vis-à-vis corporations laws. In principle, for the last 100 years, federal laws relied upon labour laws, which come under the States’ labour laws.14 The legislation is a complex piece of work consisting of 1,500 pages of statutory provisions and regulations that are intended to cover employer/employee relations. This is because the Commonwealth has an obsession to cover all aspects of legislation, which empowers it in decision making and bargaining. More importantly, the doctrine of federal balance may prove to be a test, because the legislation may raise the question of whether, and if so, to what extent, there are boundaries on how far federal workplace laws can encroach on the operation of States. In Re Australian Education Union (1995) 184 CLR 188, the High Court observed the following two elements are contained in the Constitution the protection for the States: It cannot discriminate against or single out one or more of the States for special treatment; and It cannot prohibition against laws of general application, which operate to destroy or curtail the continued existence of the States or their capacity to function as governments’ (emphasis added).15 References 1. The Constitution of Australia, Section 51 2. The Constitution of Australia, Section 90 3. The Constitution of Australia, Section 52 4. Owen Dixon (1952). "Address on being sworn in as Chief Justice". Commonwealth Law Reports 85: XIII. 5. Pelly, Michael. "Workplace test case: 54 lawyers line up", Sydney Morning Herald, May 5, 2006. 6. http://www.aph.gov.au/library/pubs/RB/2006-07/07rb04.htm#high 7. R. Joellen & P. Kathryn, 2006. Work Choices: A Guide to the 2005 Changes, Lawbook Co. 8. http://www.aph.gov.au/library/pubs/bd/2005-06/06bd066.htm#concluding 9. http://www.federationpress.com.au/pdf/Online%20Supp%20WorkChoices%20Chap%2017.pdf Read More