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Content Type: AUNZ_CASES

Title Victoria v Commonwealth

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Number of documents delivered:1

Copyright © 2016 Thomson Reuters (Professional) Australia Limited

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Victoria v Commonwealth

Court:   High Court of Australia

Judges:   Brennan CJ, Dawson J, Toohey J, Gaudron J, McHugh J, Gummow J

Common title:   Industrial Relations Act Case

Judgment Date:   4/9/1996

Jurisdiction:   Australia (Commonwealth)

Citations:   [1996] HCA 56, (1996) 187 CLR 416   , 70 ALJR 680, 66 IR 392   , 138 ALR 129, 40 AILR

3-354

Classification:   • Constitutional law > Operation and effect of the Commonwealth Constitution  > General matters

> Relationship between Commonwealth and States generally > Effect of Commonwealth law on

States > General principles

• Constitutional law > Operation and effect of the Commonwealth Constitution  > Corporations

(Constitution, s 51(xx)) > Particular cases > Industrial relations

• Constitutional law > Operation and effect of the Commonwealth Constitution  > External affairs

(Constitution, s 51(xxix)) > Implementation of treaties and conventions > Generally

• Constitutional law > Operation and effect of the Commonwealth Constitution  > Powers with

respect to property > Power to acquire property on just terms (Constitution, s 51(xxxi)) >Acquisition of property > Particular cases > Other cases

• Industrial law > Commonwealth > Constitutional power > Heads of power > Conciliation and

arbitration > Generally

• Industrial law > Commonwealth > Constitutional power > Heads of power > External affairs

power

• Industrial law > Commonwealth > Constitutional power > Power to bind States and state

authorities > Impairment of government functions

• Industrial law > Commonwealth > Workplace rights and responsibilities > General protections >

Workplace rights > Adverse action > Prejudicial alteration of position

• Industrial law > Commonwealth > Workplace rights and responsibilities > Dismissal from

employment > Unfair dismissal > Jurisdiction > Generally

Jump to:

Headnote

High Court of Australia

Victoria and Others v The Commonwealth

4 September 1996

Constitutional Law — Constitutional validity of certain sections of Industrial Relations Act 1988 (Cth) — Powers of the 

Commonwealth — External affairs power — Power to make laws with respect to conciliation and arbitration for prevention and 

settlement of industrial disputes extending beyond the limits of any one State — Discrimination against the States — The 

Constitution , s 51(xxix), (xxxv)

Constitutional Law — External affairs power — Validity of certain sections of Industrial Relations Act 1988 (Cth) — Provisions 

giving effect to international conventions — Validity — Sections providing for minimum wages (Pt VIA, Div 1) — Equal remuneration 

for work of equal value (Pt VIA, Div 2) — Termination of employment (Pt VIA, Div 3) — Provisions in ss 170DE and 170EDA

relating to harsh, unjust or unreasonable test to grounds for unlawful termination exceed terms of relevant international convention 

and are partly invalid — Provisions severable — Parental leave (Pt VIA, Div 5) — Discrimination in employment (ss 3(g)), 150A,

170DF(1)(f), 170MD(5), 170ND(10) — Collective bargaining (Pt VIB, Div 2) — Right to strike and industrial action (Pt VIB, Div 4, s 

334A) — The Constitution , s 51(xxix) — Industrial Relations Act 1988 (Cth), Pt VIA, Divs 1, 2, 3, 5, Pt VIB, Divs 2, 4 

Constitutional Law — Conciliation and arbitration power — Validity of certain sections of Industrial Relations Act 1988 (Cth) — 

Provisions appropriate to effect purpose of power — Validity of provisions relating to minimum wages (Pt VIA, Div 1) — Equal 

remuneration for work of equal value (Pt VIA, Div 2) — Discrimination in employment (ss 3(g), 150A, 170DF(l)(f), 170MD(5),

170ND(10)) — Collective bargaining (certified agreements) (Pt VIB, Div 2) — Immunity from civil liability — Acquisition of property 

other than on just terms (ss 166A, 170M(3), 334A) — The Constitution , s 51(xxxv) — Industrial Relations Act 1988 (Cth), Pt VIA,

Divs 1, 2, Pt VIB, Div 2 

Constitutional Law — Protection of trade unions — Validity of certain sections of Industrial Relations Act 1988 (Cth) — Provisions a 

valid use of Commonwealth's corporations power — The Constitution , s 51(xx) — Industrial Relations Act 1988 (Cth), s 164 

Constitutional Law — Validity of certain sections of Industrial Relations Act 1988 (Cth) — Acquisition of property on just terms — 

(1996) 66 IR 392

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There can be no acquisition of property in the modification or extinguishment of a right or interest that has not yet accrued — No 

infraction of the power by s 334A which prevents an employer from refusing to pay striking employee — The Constitution , s 

51(xxxi) — Industrial Relations Act , ss 166A, 170M(3), 334A

Constitutional Law — Validity of certain sections of Industrial Relations Act 1988 (Cth) — Discrimination against the States — 

Provisions appearing to bind the States should be read down so as not to have effect of determining terms and conditions of those 

employees at higher levels of government — States not to be impaired in capacity to exercise government functions — Industrial 

Relations Act 1988 (Cth), ss 170DG, 170FADiscrimination — Validity of certain sections of Industrial Relations Act 1988 (Cth) relating to discrimination in employment 

Wage Fixation — Validity of certain sections of Industrial Relations Act 1988 (Cth) relating to minimum wages 

Termination of Employment — Validity of certain provisions of Industrial Relations Act 1988 (Cth) relating to termination of 

employment — Provisions in ss 170DE and 170EDA relating to harsh, unjust or unreasonable test to grounds for unlawful 

termination exceed terms of relevant international convention and are partly invalid — Provisions severable 

Judgment

Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ.

The States of Victoria, South Australia and Western Australia have each brought proceedings against the Commonwealth seeking

declarations that certain provisions of the  Industrial Relations Act 1988   (Cth) (the Act) are invalid. By consent, an order was made

that the proceedings be heard together and a case was stated in respect of all three matters by Dawson J for the consideration of

the Full Court. The questions in the case stated, together with the answers we propose, appear at the end of these reasons.

The Act is expressed to bind the States. [1]

It will later be necessary to refer in detail to the challenged provisions. For the moment, it

is sufficient to note that they were inserted into the Act by the  Industrial Relations Reform Act 1993   (Cth) (the Amending Act) and

the Industrial Relations Amendment Act (No 2) 1994    (Cth) (the Second Amending Act). The relevant provisions of the Amending

Act commenced on 30 March 1994 and those of the Second Amending Act on 30 June 1994. Since these cases were argued,

additional amendments have been made by the  Industrial Relations and other Legislation Amendment Act 1995   (Cth) (the 1995

Act). These amendments commenced on 15 January 1996. There has been no application to re-open and to amend so as to

challenge the validity of changes made by the 1995 Act. Accordingly, we will consider the submissions upon validity as directed to

the Act as it stood before the commencement of the 1995 Act.

In general terms, the provisions of the Act which are challenged in these proceedings allow for the imposition of, or impose,

obligations on employers with respect to minimum wages, equal pay, termination of employment, discrimination in employment and

family leave, and provide as well for collective bargaining and the right to strike.

The Commonwealth claims that many of the provisions in question were enacted pursuant to its power with respect to external

affairs. [2]

This is because a number of these matters are the subject of Conventions which have been adopted by the General

Conference of the International Labour Organisation (the ILO) and ratified by Australia. [3]

Some matters are the subject of

Recommendations adopted by the General Conference of the ILO. [4]

Freedom of association and the right to strike are said to be

the subject of customary international law. However, the plaintiff States argue that, contrary to what was said in the judgments of

the majority in The Commonwealth v Tasmania  (the Tasmanian Dam  Case ), [5] the power to legislate with respect to external

affairs does not extend to the implementation of treaty obligations unless the subject matter of the treaty is one of international

concern. According to their argument, the ILO Conventions and Recommendations on which the provisions in question are based

are not concerned with matters of that kind. As well, they argue that the ILO Conventions and Recommendations do not impose

obligations or, if they do, the provisions in question are not capable of being viewed as appropriate or adapted to their

implementation. In some instances, they say, the provisions are simply not directed to any relevant external affair.

The Commonwealth claims that some of the above provisions and other provisions of the legislation were enacted pursuant eitherto its power with respect to conciliation and arbitration

 [6]or its power with respect to corporations.

 [7]The plaintiff States argue to

the contrary. As well, they contend that some of the provisions effect an acquisition of property other than on just terms, in breach of

that requirement in s 51(xxxi) of the  Constitution . Finally, they contend that some provisions are invalid in their application to the

States by reason that they infringe the implied constitutional prohibition against legislation which discriminates against the States or

prevents them from functioning as such.

In their submissions the States placed much emphasis upon what were said to be the limits of the external affairs power and, in

essence they sought to disturb what appear to be settled aspects of the scope of that power. As to the other grounds of challenge

(save, perhaps, those denying the support of the certified agreement provisions by the conciliation and arbitration power), the

parties were more in dispute as to the particular application of settled principle.

Accordingly, assessment of the specific submissions of the plaintiff States will be assisted by reference to some particular aspects

of the executive and legislative power of the Commonwealth with respect to external affairs. Thereafter, it will be convenient to

outline the framework of the legislation and, then, to turn to the particular provisions which are challenged in these proceedings.

(1996) 66 IR 392

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The external affairs power

The powers of the Commonwealth in relation to external affairs are of two kinds: executive and legislative. The executive power

conferred by s 61 of the Constitution  is of the same character as, and is no narrower in scope than, the prerogative power of the

Crown in relation to the same subject. The executive power extends to the signing and ratification of treaties. The legislative power

conferred by s 51(xxix) on the Parliament is to be distinguished from the executive power. The former extends to the enactment of

laws implementing the provisions of treaties entered into by the Executive so as to bind the Commonwealth. [8]

(i) Executive power

In 1900, the self-governing colonies had no power to enter into treaties, declare war or peace, or send or receive ambassadors; it

was no answer by Britain to a complaint to it by a foreign state that the conduct complained of had been committed by a

self-governing colony. [9]

In 1895, as a result of discussions the year before at a Colonial Conference at Ottawa, the Colonial Secretary and former Viceroy of

India, Lord Ripon, reaffirmed as a fundamental principle that any agreement entered into with a foreign power, affecting any part of

the dominions of the Crown, was an agreement between the Crown and a foreign state, and that the power to make treaties was

vested solely in the Imperial Government.  [10]

That power might be delegated, with legislative approval, to subsidiary authorities.

This had been done in the previous century in the case of the East India Co.   [11] What the Colonial Secretary did in 1895 was to

emphasise that there was no such general delegation in favour of the self-governing colonies.

However, from about 1880 the Imperial Government had instituted a practice of consultation with those colonies that had advanced

towards constitutional independence before concluding commercial treaties which applied to them. There also developed a practice

of including in such treaties a clause providing for voluntary adherence by those colonies who wished to do so. Before 1900, some

17 treaties had been adhered to or acceded to independently by one or more of the colonies in Australia pursuant to the procedure

for separate adhesion or accession made in the treaties themselves.  [12]

In addition, Todd, writing in 1894, stated that the legislature

in any colony was free to determine whether or not the passing of a law was necessary to give effect to a treaty entered into

between the Imperial Government and any foreign power in which such colony had a direct interest.   [13]

As the result of developments after federation, in which Deakin played a significant part, it was to the Commonwealth that the

Imperial authorities turned for consultation with regard to proposed international agreements which might affect or concern

Australia. On 3 January 1908, the Secretary of State for the Colonies wrote as follows to the Australian Governor-General:

  [14]

“His Majesty's Government are pledged to the view that, so far as the relations of Australia with foreign nations are

concerned, the Government of the Commonwealth alone can speak, and that for everything affecting external communities

the Government of the Commonwealth alone are responsible to the Crown. It follows from this that adherence to no treaty or

convention with a foreign Power, whatever its subject matter, can be notified for which the Commonwealth has not made

itself responsible; in other words, which is not made on behalf of the Commonwealth.”

Australia became a signatory to the  Treaty of Versailles.  [15]

Along with the other self-governing Dominions, Australia became a

member of the League of Nations and held mandated territory under the authority of the League.   [16] Whilst for some time practice

may have lagged well behind theory, these steps have been taken as indicative that by 1919 the Commonwealth had assumed

international personality.   [17] These developments have been of primary importance for the content of the executive power

conferred by s 61 of the Constitution .

In a passage in  R v Burgess; Ex parte Henry ,

  [18]

which was repeated by Mason J in  Barton v The Commonwealth ,

  [19]

Latham CJreferred to the object “which must have been in contemplation when the  Constitution  was enacted”, and continued:

“Australia was established as a new political entity and Australia was to be given control of her own external affairs. Under s

61 of the Constitution  the Executive Government of the Commonwealth can deal administratively with the external affairs of

the Commonwealth … The execution and maintenance of the Constitution , particularly when considered in relation to other

countries, involves … the establishment of relations at any time with other countries, including the acquisition of rights and

obligations upon the international plane. The most obvious example of such action is to be found in the negotiation and

making of treaties with foreign countries.”

As things stood in 1900, the subjects of treaties were various. This is significant for the present case, because it indicates that the

limited view of the scope of federal legislative power, urged by the plaintiff States, does not proceed from an accurate

understanding of the range of subject matter to which s 51(xxix) applied as it stood as long ago as federation.

It was recognised by 1900 that there was a continual expansion in the range of the subject matter of treaties entered into between

Great Britain and other states. This was acknowledged in the contemporary Australian writings of Professor Pitt Cobbett.  [20]

And,

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Oppenheim, writing in the first edition of his work in 1905,   [21] declared:

“[E]xperience has shown that the different States have also many non-political interests in common which can better be

satisfied and fostered by a general treaty between a great number of States than by special treaties singly concluded

between the different parties. Such general treaties have, therefore, since the second half of the nineteenth century, more

and more come into being, and it is certain that their number will in time increase.”

The term “Convention” came to be used to identify a treaty by which several states arranged for the regulation of matters affecting

all of them. Conventions have emerged from the deliberations of international organisations as well as from multilateral negotiations

on a particular subject matter.

The “oldest international organization in the world”, the International Telecommunication Union, was established in 1865 as the

International Telegraph Union.  [22]

By the turn of the century about 30 states were members.  [23]

The Universal Postal Union was

inaugurated in 1874.   [24] India and Canada obtained separate votes in the Universal Postal Union and, in 1885, the Australian

colonies collectively obtained one vote.  [25]

Berne was the seat of the administration of both the International Telegraph Union and

the Universal Postal Union. The International Convention for the Protection of Industrial Property was signed at Paris in 1883 and it

provided for the establishment at Berne of the office of the International Union for the Protection of Industrial Property. The result

was to provide international recognition for the rights of inventors. The rights of authors of literary and artistic works were given

similar recognition by the Berne Convention 1886.   [26]

Before 1900, modern international arbitration had developed, beginning with the Alabama Award 1872; bilateral treaties greatly

extended state submission of future disputes. This process was further advanced with the Hague Convention for the Pacific

Settlement of International Disputes 1899, which established the Permanent Court of International Arbitration.  [27]

There was activity also in the fields of what now would be called international human rights, world health and environmental

protection. The Geneva Convention 1864 laid the foundations of the International Red Cross.  [28]

The General Act for dealing with

the Suppression of Slavery in Africa, signed at Brussels in 1890, provided for the maintenance of a bureau to collect all information

on measures connected with matters dealt with under the General Act.  [29]

Abuses against inhabitants of the Pacific Islands were a

major concern of the Imperial Government. This had been reflected in the  Pacific Islanders Protection Acts of  1872 [30]

and 1875  [31]

(UK) and the establishment of the High Commissioner for the Pacific.

Conventions were negotiated affecting health and the environment. The Convention of London, signed by the African colonial

powers in 1900, sought to preserve the native fauna of that continent;  [32]

a convention signed at Berne in 1878 sought to prevent

recurrence of the damage done to the wine industry by the phylloxera epidemics of the preceding decade;  [33]

and several

conventions dealt with the threat to public health by the spread of cholera and the plague.  [34]

These developments in the conclusion of general treaties between a great number of states, with provision for permanent

secretariats, continued after World War I with the foundation of the ILO. By that time, the responsibility for treaty-making had been

transferred, at least in substantial measure, to the Executive Government of the Commonwealth.

Thereafter, there was growth in the number of Australia's international engagements which, rather than being concluded in the

name of the Sovereign as contracting party in respect of Australia and passed under the Sovereign's Sign Manual and the Great

Seal of the Realm, were concluded in the name of the respective governments and the instrument of ratification passed under the

Great Seal of the Commonwealth, signed by the Governor-General and countersigned by the Minister for External Affairs. In the six

years after 1931, approximately two-thirds of Australia's international engagements were made in the form of agreements between

governments.  [35]

(ii) Legislative power — s 51(xxix)

As a general proposition,  [36]

under the common law, entry by the Executive into a treaty is insufficient, without legislation to

implement it, to modify the domestic or municipal legal order by creating or changing public and private legal rights and obligations.

In 1892, in argument before the Judicial Committee in  Walker v  Baird ,[37]

the British Attorney-General had conceded that he could

not maintain the proposition that the Crown could sanction an invasion by its officers of the rights of private individuals whenever it

was necessary to compel obedience to the provisions of a treaty. In the first edition of Halsbury's Laws of England, which stated the

law in 1909,  [38]

the prevailing view stated by contributors, who included the future Sir William Holdsworth, was:

“Treaties … are in general binding upon the subject without express parliamentary sanction; but the previous consent of, or

subsequent ratification by, the legislature is legally necessary to their validity in certain cases.

Thus, though treaties relating to war and peace, the cession of territory, or concluding alliances with foreign powers are

generally conceded to be binding upon the nation without express parliamentary sanction, it is deemed safer to obtain such

sanction in the case of an important cession of territory. And where taxation is imposed or a grant from the public funds

rendered necessary, or where the existing laws of trade and navigation are affected, or where the private rights of the subject

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are interfered with by a treaty concluded in time of peace, it is apprehended that the previous or subsequent consent of

Parliament is in all cases required to render the treaty binding upon the subject and enforceable by officers of the Crown.”

Later, in Chow Hung Ching v The King ,  [39]

Dixon J said that a treaty, “at all events one which does not terminate a state of war”,

has no legal effect upon the rights and duties of citizens and, “speaking generally no power resides in the Crown to compel them to

obey the provisions of a treaty”. His Honour cited  Walker v  Baird .[40]

Thus, as matters stand in Australia, and as they stood in 1900, the conduct of external affairs by the Executive may produce

agreements which the Executive wishes to translate into the domestic or municipal legal order. To do so, it must procure the

passage of legislation implementing those agreements if it wishes to create individual rights and obligations or change existing

rights and obligations under that legal order.  [41]

Of course, the pursuit of some aspects of external affairs by the Executive

Government does not require enabling legislation. In  Barton , Mason J concluded  [42]

that the making of a request to a foreign state

for the surrender of a fugitive offender alleged to have committed an offence against the laws of Australia falls within the executive

power of the Commonwealth, unless the prerogative be displaced by legislation. Another example is the preservation of friendly

relations with other countries, including the sending or receiving of diplomatic representatives. This is “an important part of the

management of the external affairs of the Commonwealth”.  [43]

Where, as in the present case, the Executive ratifies a Convention which calls for action affecting powers and relationships

governed by the domestic legal order, legislation is needed to implement the Convention. The question then arises whether the law

is supported by the legislative power with respect to external affairs. The spare text of s 51(xxix) must be construed to ascertain its

scope.

The phrase “External affairs” was adopted in s 51(xxix) of the  Constitution  in preference to “foreign affairs” so as to make it clear

that the power comprehended both the relationship between the Commonwealth of Australia and other parts of the then British

Empire and the relationship with foreign countries.   [44] As we have indicated earlier in these reasons, the Commonwealth of

Australia was established at a time of evolving law and practice in the external relations between sovereign powers and between

the self-governing units of the Empire. It would be a serious error to construe par (xxix) as though the subject matter of those

relations to which it applied in 1900 were not continually expanding. Rather, the external relations of the Australian colonies were in

a condition of continuing evolution and, at that time, were regarded as such. Accordingly, it is difficult to see any justification for

treating the content of the phrase “external affairs” as crystallised at the commencement of federation, or as denying it a particular

application on the ground that the application was not foreseen or could not have been foreseen a century ago.

From the foundation of the Commonwealth, and consistently with the earlier writings of Todd and Dicey to which we have referred,[45] informed observers took the view that the power to legislate with respect to external affairs included power to legislate with

respect to treaties, in so far as they affected Australia, which had been concluded by the Imperial Government. Thus, in  McKelvey v 

Meagher ,  [46]

Barton J said that it was probable that the external affairs power “includes power to legislate as to the observance of

treaties between Great Britain and foreign nations”. Writing as Attorney-General in 1902,  [47]

Deakin dealt as follows with the

omission of the words “and treaties” from s 51(xxix):

“The omission, as appears from the debates, was solely to prevent any assumption arising that the Commonwealth claimed

an independent power of making treaties. Legislation with respect to the enforcement of treaty obligations is clearly within the

scope of ‘external affairs’.”

The legislative power was designed to authorise the implementation of treaty obligations which bound Australia. At the time of

federation the source of such obligations was action taken by the Imperial authorities. However, given the scope of the legislative

power, it was at least implicit that it would authorise the implementation of treaty obligations accepted independently by the

Commonwealth of Australia, if and when the Executive Branch of government attained the competence to do so.

There was some suggestion in the submissions of the plaintiff States in the present case that what has come to pass with the

legislation they seek to impugn is something beyond contemplation at the time of the adoption of the  Constitution . Any such

proposition is, as we have endeavoured shortly to illustrate, too widely stated. The treaties which were part of the subject matter of

foreign relations in 1900, and the treaties that have since been made, embrace an ever-expanding range of topics.

The content of