High Court dismisses challenge to WorkChoices

By Denise Fairservice

The High Court has dismissed the challenge by the states and territories and two union organisations to the constitutional validity of the WorkChoices legislation.

On November 14, by a majority decision of 5-2, the High Court dismissed the application and awarded costs to the Commonwealth.

In short, the states, territories and unions argued that the corporations power of the constitution could not be used to regulate the relationship between a corporation and its employees. The states, territories and unions also argued that parliament's power to make laws with respect to foreign, trading and financial corporations was limited to laws with respect to the "external relationships" of such corporations except for "conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one state". The High Court rejected these arguments and upheld the Commonwealth's reliance on the corporations powers.

Justices Kirby and Callinan dissented from the majority decision. Justice Callinan's dissenting judgment stated that WorkChoices trespassed on the functions of the states and the states should be left to manage their own industrial affairs for their continued constitutional existence. Justice Kirby argued that the majority of the High Court had gone beyond previous decisions made by the court, where the precise constitutional value of the extent of the corporations power had not been decided by the court "because for most of the past century, its reputation was regarded as axiomatic. It was self evident that the corporations power did not extend so far as the majority now holds it to do".

He also said that "a Constitutional Rubicon" had been crossed and there was no going back now. He also said that as the majority concluded that as not one of "myriad constitutional arguments of the states succeeds, this reveals...a profound weakness in the legal checks and balances that the founders sought to provide to the Australian Commonwealth".

Justice Kirby said that all the Commonwealth's responses to each challenge to the legislation should be overruled.

Howard Government announces further IR changes

• stand down provisions -- the amendments give employers an extensive right to stand down workers at any time there is a downturn in business or industrial action. The ACTU is concerned that this could lead to many workers being stood down without pay during the Christmas break. These provisions will also strengthen the employer's hand during industrial disputes.
• leave entitlements - the amendment provides a new cap that prevents the inclusion of overtime in calculating annual leave, sick leave and carer's leave. This will reduce the rate at which these entitlements are accrued each year, as personal leave payments will only be paid at the basic rate of pay minus overtime and penalty rates.
• cash out leave - the ACTU believes that the ability to cash out personal leave will help relatively few workers and will disadvantage those workers caring for children or family members who tend to need to use more of their available personal leave.
• redundancy pay <0x2014> the amendments formalise redundancy provisions which were somewhat vague in the original legislation but fail to close a loophole in the legislation which enables employers to cut the pay and conditions of workers in a new "green field" business or following a takeover or transfer of ownership of an existing business.
• <0x2022>record keeping - the amendments reduce the requirements on employers to keep adequate records of the hours that employees work which will make it difficult for workers to prove that they are underpaid if there is a dispute with the employer.
• Both the High Court decision and the amendments to the WorkChoices legislation have made the prospects of Australian workers a lot worse. This should strengthen workers' resolve to make the National Day of Union and Community Action on November 30 a resounding success.

Denise Fairservice is an Industrial Officer.

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Last Modified: 23 Nov 2006