Re Australian Teachers' Union and 14 Other Matters; Ex parte The State of Victoria & Ors (M8-93 &

[1994] HCATrans 368

.J~

~ '---"~J:"

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne	No MB of 1993
In the matter of -

An application for a Writ of

Prohibition, a Writ of

Mandamus and a Writ of

Certiorari against THE

HONOURABLE JUSTICE MUNRO,

THE HONOURABLE DEPUTY

PRESIDENT WILLIAMS and

COMMISSIONER McDONALD

members of the Australian

Industrial Relations

Commission

First Respondents

THE AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

Second Respondent

AUSTRALIAN TEACHERS' UNION

Third Respondent

Unions(4) 101 8/6/94

Ex parte -

THE STATE OF VICTORIA and

THE HONOURABLE MINISTER FOR

EDUCATION FOR THE STATE OF

VICTORIA

Prosecutors

Office of the Registry

Melbourne	No Ml0 of 1993
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against THE

HONOURABLE JOHN WILLIAM

MacBEAN, A Deputy President

of the Australian Industrial

Relations Commission

First Respondent

KENNETH TURBET, A former

Commissioner of the

Australian Industrial

Relations Commission

Second Respondent

AUSTRALIAN NURSING

FEDERATION

Third Respondent

Ex parte -

THE STATE OF VICTORIA and
THE HONOURABLE MINISTER FOR

HEALTH FOR THE STATE OF

VICTORIA

Prosecutors

Office of the Registry

Melbourne	No Mll of 1993
In the matter of -
An application for a Writ of
Prohibition and a Writ of
Certiorari against THE
HONOURABLE JOHN WILLIAM
MacBEAN, A Deputy President
of the Australian Industrial Relations Commission

First Respondent

KENNETH TURBET, A former

Commissioner of the

Australian Industrial

Relations Commission

Second Respondent

Unions(4) 102 8/6/94

HEALTH SERVICES UNION OF

AUSTRALIA

Third Respondent

Ex parte -

THE STATE OF VICTORIA and

THE HONOURABLE MINISTER FOR

HEALTH FOR THE STATE OF

VICTORIA

Prosecutors

Office of the Registry

Melbourne	No M156 of 1993
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against THE

HONOURABLE JOHN WILLIAM

MacBEAN, A Deputy President

of the Australian Industrial

Relations Commission

First Respondent

HEALTH SERVICES UNION OF

AUSTRALIA

Second Respondent

Ex parte -

THE STATE OF VICTORIA and

THE MINISTER FOR HEALTH FOR

THE STATE OF VICTORIA

Prosecutors

Unions(4)	103	8/6/94
Office of the Registry

Melbourne	No Ml2 of 1993
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against

COMMISSIONER BEVAN JOHNSON

and SENIOR DEPUTY PRESIDENT

JOSEPH RIORDAN, Members of

the Australian Industrial

Relations Commission

First Respondent

KENNETH TURBET, A former

Commissioner of the

Australian Industrial

Relations Commission

Second Respondent

AUSTRALIAN NURSING

FEDERATION and HEALTH

SERVICES UNION OF AUSTRALIA

Third Respondents

Ex parte -

THE STATE OF VICTORIA and
THE MINISTER FOR HEALTH FOR

THE STATE OF VICTORIA

Prosecutors

Office of the Registry	Melbourne	No MlS of 1993
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against THE

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

First Respondent

Unions(4) 104 8/6/94

KENNETH TURBET, A former

Commissioner of the

Australian Industrial

Relations Commission

Second Respondent

HEALTH SERVICES UNION OF

AUSTRALIA

Third Respondent

Ex parte -

THE STATE OF VICTORIA and

THE MINISTER FOR HEALTH FOR

THE STATE OF VICTORIA

Prosecutors

Office of the Registry

Melbourne	No Ml7 of 1993
In the matter of -

An application for a Writ of'

Prohibition and a Writ of

Certiorari against THE

HONOURABLE JOSEPH MARTIN

RIORDAN, A Senior Deputy

President of the Australian

Industrial Relations

Commission

First Respondent

HEALTH SERVICES UNION OF

AUSTRALIA

Second Respondent

Ex parte -

THE STATE OF VICTORIA and
THE MINISTER FOR HEALTH FOR

THE STATE OF VICTORIA

Prosecutors

Unions(4)	105	8/6/94
Office of the Registry

Melbourne	No M20 of 1993
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against THE

HONOURABLE MICHAEL FRANCIS
MOORE, Vice President of the

Australian Industrial

Relations Commission

First Respondent

DAVID ROSS HALL, A former

Deputy President of the

Australian Industrial

Relations Commission

Second Respondent

AUSTRALIAN LIQUOR,

HOSPITALITY ANO

MISCELLANEOUS WORKERS UNION

Third Respondent

Ex parte -

THE STATE OF VICTORIA and
THE MINISTER FOR EDUCATION

FOR THE STATE OF VICTORIA

Prosecutors

Office of the Registry	Melbourne	No M21 of 1993
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against THE

HONOURABLE MICHAEL MOORE,

Vice President of the

Australian Industrial

Relations Commission

First Respondent

Unions(4) 106 8/6/94

AUSTRALIAN LIQUOR,

HOSPITALITY AND

MISCELLANEOUS WORKERS UNION

Second Respondent

Ex parte -

THE STATE OF VICTORIA and

THE MINISTER FOR EDUCATION

FOR THE STATE OF VICTORIA

Prosecutors

Office of the Registry

Melbourne	No M22 of 1993
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against

COMMISSIONER BERNARD FRAWLEY

of the Australian Industrial

Relations Commission

First Respondent

THE AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

Second Respondent

AUSTRALIAN LIQUOR,

HOSPITALITY AND

MISCELLANEOUS WORKERS UNION

Third Respondent

Ex parte -

THE STATE OF VICTORIA and
THE MINISTER FOR EDUCATION

FOR THE STATE OF VICTORIA

Prosecutors

Unions(4)	107	8/6/94
Office of the Registry

Melbourne	No M23 of 1993
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against THE

HONOURABLE PAUL ROBERT

MUNRO, THE HONOURABLE COLIN

GEORGE POLITIES and KENNETH

JOHN McDONALD of the

Australian Industrial

Relations Commission

First Respondents

DAVID ROSS HALL, A former

Deputy President of the

Australian Industrial

Relations Commission

Second Respondent

AUSTRALIAN LIQUOR,

HOSPITALITY AND

MISCELLANEOUS WORKERS UNION

Third Respondent

Ex parte -

THE STATE OF VICTORIA and
THE MINISTER FOR EDUCATION

FOR THE STATE OF VICTORIA

Prosecutors

Office of the Registry Melbourne No M24 of 1993

In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against THE

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

First Respondent

Unions(4) 108 8/6/94

STATE PUBLIC SERVICES

FEDERATION

Second Respondent

Ex parte -

THE STATE OF VICTORIA,

THE MINISTER FOR EDUCATION

FOR THE STATE OF VICTORIA,

DOCKLANDS AUTHORITY and THE
GREYHOUND RACING CONTROL

BOARD

Prosecutors

Office of the Registry

Melbourne	No M25 of 1993
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against THE

HONOURABLE JOSEPH MARTIN

RIORDAN, A Senior Deputy

President of the Australian

Industrial Relations

Commission

First Respondent

STATE PUBLIC SERVICES

FEDERATION

Second Respondent

AUSTRALIAN MUNICIPAL,

TRANSPORT. ENERGY, WATER,
PORTS, COMMUNITY AND

INFORMATION SERVICES UNION

Third Respondent

Ex parte -

THE STATE OF VICTORIA and

THE MINISTER FOR POLICE AND

EMERGENCY SERVICES FOR THE

STATE OF VICTORIA

Prosecutors

Unions(4)	109	8/6/94
Office of the Registry

Melbourne	No M26 of 1993
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against

COMMISSIONER ROBERT

MERRIMAN, A Member of the

Australian Industrial

Relations Commission

First Respondent

THE PRINTING AND KINDRED

INDUSTRIES UNION OF

AUSTRALIA

Second Respondent

Ex parte -

THE STATE OF VICTORIA and
THE MINISTER FOR FINANCE FOR

THE STATE OF VICTORIA

Prosecutors

Office of the Registry

Melbourne	No M30 of 1994
In the matter of -

An application for a Writ of

Prohibition and a Writ of

Certiorari against THE

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

First Respondent

AUSTRALIAN FEDERAL POLICE

ASSOCIATION

Second Respondent

Ex parte -

THE STATE OF VICTORIA, THE

HONOURABLE MINISTER FOR

POLICE AND EMERGENCY

SERVICES and THE CHIEF

COMMISSIONER OF POLICE

Prosecutors

Unions(4) 110 8/6/94

MASON CJ
BRENNAN J
DEANE J
DAWSON J
TOOHEY J
GAUDRON

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 8 JUNE 1994, AT 10.19 AM

(Continued from 7/6/94)

Copyright in the High Court of Australia

MASON CJ:	Mr Solicitor for South Australia?
MR DOYLE:	May it please the Court.  Just before resuming my

submissions, could I briefly revisit two questions

put to me yesterday portraying that fatal flaw of

counsel who always thinks the next day he can do a

little bit better. Just with reference to the

matter Your Honour Justice Brennan put to me of the

Commonwealth law affecting the control of the State

Parliament over appropriation; could I just say, in case I did not make it clear yesterday, that while

we acknowledge in that respect there is a limit on

Commonwealth power, on the other hand it is a

matter which has to be approached with some care

because obviously, as no doubt Your Honour realized

but I want to make clear I accept it as part of my

answer, there may be indirect effects from the

Commonwealth law which may require a State to expend money, for instance wage levels fixed for

teachers already. It can be said, "If you employ

them you will have to employ them at those rates."

And so there is that indirect effect which we would

not suggest it would be open to challenge as an

interference with the appropriation power.

A slightly more difficult example which, in my

submission, I do not need to grapple with is if the

Commonwealth were to impose standards for roads

which were used by interstate trade. Now it could

be said, "There the State has not got a choice.

Its roads are being so used and it has to spend the

Unions(4) 111 8/6/94

money to make the roads measure up to the

standard." That is the more difficult example and

in in our submission, that is where probably '

Your Honour's example to me lies, the requirement to keep employing the person and pay the person at a certain rate.

In our submission, we do not have to grapple with that particular problem because our submission

is based on a more fundamental objection to the

application of Commonwealth law, namely that the

State is entitled, in the relevant area, to

complete autonomy. So, I just want to make it

clear that our submission is that there is a limit

on Commonwealth power attributable to the principle

which Your Honour identified. It is not necessary

for our submission to spell it out because ours is

based on a more fundamental proposition.

BRENNAN J: So long as your fundamental proposition defines

the relevant area.

MR DOYLE: 

Your Honour, our proposition is that in relation

to the employment of those persons, the employment
of whom is an aspect of the State existing as an

independent entity and having the capacity to

function, that in that area the State is entitled

to complete independence. A little later this

morning I will come back to that table that I went

to in the course of answering Your Honour's

question yesterday just to explain how the

submission works.

BRENNAN J: The relevant area does not, in your submission,

cover the employment of people who are outside

paragraphs A to E or whatever it is on your sheet?

MR DOYLE:  No, Your Honour, although -

BRENNAN J: So, if there is an obligation to continue to

employee railway men or teachers at a certain

stated level then so be it.

MR DOYLE:  Yes, although - and, again, I need to make this

clear: our submission does not deny that in

relation to such persons the Commonwealth law may

fall foul of the point Your Honour identifies. In

other words, in our submission - and I do not want

to labour it unduly - there are a number of
implications flowing from the federal structure and

the fact that the States are separately organized,

and Your Honour has identified one of them and that

is one that may operate outside the area of

complete independence and autonomy which we

identify, just as the principle of undue
interference may operate outside that area also.

It would depend, obviously, on the terms of the

Unions(4) 112 8/6/94

particular Commonwealth law. So, we are not

suggesting - and I am anxious to make it clear -

that the submission we are putting today is, as it

were, a universal solvent or answer to all problems

of the Commonwealth/State relationship. The

submission we are putting is directed specifically

to laws of the Commonwealth which bear on the

employment of persons whose employment is an aspect

of the State having an existence and capacity to

function.

TOOHEY J: This is where I have some difficulty,

Mr Solicitor, with your use of section 106 of the Constitution and its relation to section 109. Is it part of your submission that any matters to

which the Constitution relates are somehow

immunized by the operation of section 106 from

Commonwealth laws, or do you seek to distil from

the Constitution of the States its most essential

elements and argue only that those elements are

protected?

MR DOYLE:  Your Honour, the way we put it is this: in our

submission, section 106 is an aspect of the same

principle or the same argument which we are putting to the Court, and another way of putting it is that

the argument which we put to the Court based on

Melbourne Corporation could be seen as a penumbra

or fringe around section 106, that in the

Constitution section 106 specifically continues the

Constitutions of the States. Who knows precisely

what that means? But our argument is that whatever

it means, the Melbourne Corporation principle

ensures that the Constitution, if I can put it this

way, will be able to function effectively, and if

one read section 106 as actually embracing all the employees we are talking about, then I suppose the

argument would become one which focuses wholly on

section 106.

But in our submission we, I suppose, assume

that what is preserved by section 106 is, in fact,

the very organs, that is, the legislature, the

executive and the judiciary, and then we say,

"Well, if they are preserved by section 106, surely

there is an implication from the Constitution that

those organs must be able to function effectively",

and that is what we seek to develop here, drawing

on the words of Mr Justice Dixon in Melbourne

Corporation, an implication from the concept of

independent existence and so that penumbra

surrounding those central organs which are, we

would submit, the Constitution of the States.

TOOHEY J: Is it implicit in that answer that Commonwealth

laws might touch some of the subject-matters to

which the Constitution relates so long as they do

Unions(4) 113 8/6/94

not, in your words, affect the independence of the

States?

MR DOYLE:  It is, Your Honour, in this sense - and it is

very difficult to give answers that are going to be

satisfactory for all situations but, in our

submission, common sense suggests that it is

necessary to distinguish between Commonwealth laws

which directly operate on the Constitution of the

State and then Commonwealth laws which operate in a

different area but may have some consequential

effect. So we certainly acknowledge the capacity

for that to occur. Other than that, having drawn

those two broad lines, I find it difficult to

answer Your Honour more specifically unless

Your Honour were to give me some specific example

of what you had in mind by "capacity to affect".

TOOHEY J:  I suppose in relation to some of the matters that

are dealt with in these logs of claims, there might

be a difference between a provision which precludes

the State from dismissing its employees within

those particular areas that you have taken us to,

without the permission of the Union and a provision

which perhaps simply goes to the rate of pay or

something like that.

MR DOYLE:	Your Honour, our submission is one of complete independence or autonomy and our primary submission
is that the Commonwealth cannot in any respect
directly regulate the employment of those persons.
But there is one qualification in our written
submission which I will come to a little later, and that is we acknowledge there may be an argument
that the Commonwealth can at least regulate wages,
argument proceeds on the basis that if the
and I will develop it fully later. But the of wages is nothing more than a payment of money,
maybe it can regulate wages provided it does so in
a non-discriminatory fashion.  Secondly, with this possible further proviso,
that it may only be able to regulate wages by
fixing minimum rates because, if it fixed a paid
rate, it would deny the State the ability to say to
a person, "I wish to employ you and pay you $2X if
there is an award fixing as a paid rate $1X". So
our submission does contain only, as it were, a
qualification if we are driven to it, the qualification that maybe even in the core area
which I identify the Commonwealth can regulate wages to some extent. But that is the only
exception we would make unless Your Honour has in
mind something which might be in a log but could be
said really not to bear on the employment, just to
have some very incidental effect.

Unions(4) 114 8/6/94

TOOHEY J: Yes, thank you.

McHUGH J:  Mr Solicitor, does your submission about

interfering with the State as such, and so on,

involve a denial of Justice Starke's proposition in

Melbourne Corporation that legislation or executive

action would be invalid if it curtailed or

interfered in a substantial manner with the

exercise of a constitutional power?

MR DOYLE:  No, Your Honour. We submit that the federal

structure of our Constitution requires the drawing

of a number of implications; one of them is an

implication which ensures autonomy to the States in

relation to the employment of those persons whose

employment is an aspect of the State existing in a

meaningful sense. There are other implications to

be drawn; the implication in relation to

discriminatory laws is one of those others; the

implication which Your Honour referred to there is

also one of those others. So we do not deny those

others are to be drawn.

We do accept, as I think Your Honour

Justice Dawson was pressing me yesterday, that you have to relate them in an intelligible fashion to each other but, in our submission, the origin of

them all is the need to make meaningful that

fundamental notion that the States are an

independent level of government and, as Your Honour

Justice Dawson pointed out - I think it was in QEC

or Tasmanian Dam - it is often easier to talk about what will offend the principle than to identify the

principle as such. But we do not deny that there

is a principle such as Your Honour Justice McHugh

identified and, in our submission, in some

respects, that is very much the track down which

the Victorian argument went. Of course, that is

our primary submission, the Victorian argument.

The submission we are advancing today is - - -

DAWSON J:  Can you do this, separate it out? Is there any

point in talking about machinery which you cannot

use, having regard to the other implications which

you say may be drawn?

MR DOYLE:  Your Honour, in a sense, my answer, with respect,

is yes and no. If our submission succeeds then the

State is entitled to autonomy in the area

identified. It may also be that consistently one

could say the Victorian submission succeeds and

because of the range of persons embraced by the

logs and the nature of the claims made, that one

would say that is, in any event, an undue

interference with the functioning of the State. If

one takes that view, then one would say you do not

Unions(4) 115 8/6/94

need to get to South Australia's argument, these

claims are unsustainable on a broader basis.

Our submission, I do need to make clear, is

put very much on this basis: if the Victorian

argument were to fail, a basis on which it may fail

is the basis identified by Mr Justice Dixon, the

need to maintain that distinction between existence

and powers, and what we are really putting to the

Court is if you reject the Victorian argument, and

if you reject it on that basis that it pays	insufficient attention to the distinction, there is
still something left, namely this principle of
autonomy in relation to those persons whose employment is an aspect of the State meaningfully
existing and having a capacity to function. So it,
in effect, says the rejection of the Victorian
argument is not the end of the road. There is still something to be faced up to after that, and
that is how we relate them, Your Honour.

DEANE J:  Mr Solicitor, can I prolong your

cross-examination?

MR DOYLE: Please do, Your Honour, it is helpful.

DEANE J:  I am a little bit uncertain as to where your

argument leads. We are dealing with all this on

the assumption that there is an interstate

industrial dispute. On that assumption, does the

argument lead to saying that the Commonwealth lacks

legislative power to confer jurisdiction to
conciliate and arbitrate in the case of such a
dispute, or is it an argument that, while that

jurisdiction may be conferred, there are limits

upon the orders which can be made to the extent

that they intervene and regulate this aspect of a

State's affairs? It is a question I should

possibly have asked the Solicitor for Victoria,

also, but we seem to be a bit up in the air as to

where the problem, as it were, crystallizes in this

particular series of cases.

MR DOYLE:  In our respectful submission it can actually be

expressed either way, because we are dealing with

an implication which limits the extent of

Commonwealth legislative power, and it is a bit

like the position in Nationwide News. You could

say, in our submission, either the Commonwealth has

no power to confer jurisdiction to conciliate and

arbitrate in relation to an industrial dispute

involving - - -

DEANE J:	It would be to confer compulsory jurisdiction.
MR DOYLE:	Yes, in relation to the persons identified in the

South Australian argument. Or you could, equally

Unions(4) 116 8/6/94

sensibly, say the Commonwealth has power in

relation to an interstate industrial dispute but it

may not make orders in relation to such persons.

Probably the former way is the strictly more

accurate way of putting it.

DEANE J:  I wonder if that is so. I mean, in a Constitution

where the fact that a State is a party to

litigation is in some circumstances seen as a basis

for conferring federal jurisdiction, I just wonder

whether, if your argument be correct, the focus

should be on the type of order that can be made in

the exercise of jurisdiction, rather than in the

legislative power to confer jurisdiction.

MR DOYLE:  Yes.

Certainly in terms of argument it is easier to focus on the other aspect. I would happily

accept that, although - again, I am sure

Your Honour has not misunderstood me. But our

argument is not in relation to these people that
there are some orders the Commission can make but
not others. Our argument is, as to these people,

there are no orders it can make.

DEANE J:  I mean, take, for example - to get away from this

case - a national union of economists, of which three members of the South Australian Treasury,

senior members, were active members and you have a

genuine interstate dispute involving all economists

including those three, would your argument go so

far as to say that the Commonwealth could confer no

jurisdiction at all?

MR DOYLE:  As to that dispute?

DEANE J: As to that dispute in so far as it related to the

South Australian Government as employer of those

three senior treasury officials.

MR DOYLE:  In my submission, what Your Honour is putting to

me is really the problem that was addressed in

Professional Engineers. What Mr Justice Dixon in

particular said there was, "You cannot say that

cannot be parties to an industrial dispute." But	Professional Engineers employed by the government
he went on to say, in a passage - I cannot remember
the page, but towards the end of his judgment, he
said, "It would be consistent with my judgment for
the Commission to hold that certain employees could
not be party because they are not employed in an
industrial capacity."

So, as I understand his judgment, he

approached it on the basis that, "There is

jurisdiction over the dispute, because there is an

industrial dispute, but there may be an incapacity

to make orders as to certain persons who are part

Unions(4) 117 8/6/94

of the dispute, when one ignores its constitutional
aspects, but once one takes into account the

constitutional aspects who then, you see, have to

be taken out of the dispute". In his reasoning

they fell out because their employment was not

industrial. On our reasoning they would fall out

because the employment is an aspect of the

existence of the State.

DEANE J: Then let me finally bring you back to my first

question.	In that case, would you say that the
Commission lacks jurisdiction completely to have	the State joined as a party, or would you say the
effect of your argument is upon its orders?

MR DOYLE:	Your Honour, with respect, does not the answer depend on the facts? Because if the State was
joined in the capacity exclusively as the employer of those three people, we would argue there is no
ability to join it. If it was joined because it
employed those three economists and others
performing different functions, the answer is there is capacity to join it but as to those particular
persons no orders can be made.
DEANE J:	It was joined because it was a party to an

interstate industrial dispute, in its capacity as

the employer of those three persons.

MR DOYLE:  Our argument would be that if the only relevant

persons are those three, then it cannot be joined
because, upon analysis, it is seen that they are

three people who cannot be a party to an industrial

dispute.

DEANE J: But if, contrary to your argument, one were to

take the view - and I am just putting this

hypothetically - that the Commission would have

jurisdiction to fix for example the minimum wage

binding on the State, but would not have

that the three treasury officials must remain in	jurisdiction, because of your argument, to order
employment. Would your argument then have to focus on the power to make orders?

MR DOYLE: Yes, certainly.

DEANE J: Or would you still say it was focused on

jurisdiction?

MR DOYLE:	No, I would accept, Your Honour, if on that fall-back argument of ours there is power to
regulate wages regardless of the function for which
the person is employed then the answer becomes,
"Yes, the State may be joined, and the issue now is what sort of order can be made or cannot be made?"

Union(4) 118 8/6/94

DEANE J: Thank you, I follow the way you put it.

MR DOYLE:  The other point I just wanted to come back to

from yesterday was what Your Honour Justice Dawson

was putting me about the origin of the principle

against discriminatory laws. Again, I just seek to

make, hopefully, my answer a bit clearer. In our

submission the origin of that principle seems to be

that which was identified by Mr Justice Dixon at

page 81, at the bottom of the page, in Melbourne

Corporation, (1947) 74 CLR 31 at page 81. Of

course the difficulty could be said to be, well,

why does it matter how the Commonwealth does it?

If it can do it under a general law, why cannot it

do something under a discriminatory law? In the

last paragraph on page 81 Mr Justice Dixon said:

I do no think that •..•. countenance have

been given to the notion that the legislative

powers of one government in the system can be

used -

and we would emphasize these words -

in order directly to deprive another

government of powers or authority committed to

it -

Now - - -

DAWSON J: But, it is the next words which I was

emphasizing.

MR DOYLE: Yes, I would attach them because I read them,

Your Honour, as also governed by those words, "in

order directly", in other words, putting it a

little more colloquially, "cannot be used for the

purpose of depriving another government of powers

or authority committed to it or for the purpose of

restricting that government in their exercise".

The point I was seeking to make yesterday is that our argument is this fall-back argument, if

the Victorian argument fails, proceeds on the

premise: if there is a distinction between

interference with powers and interference with the

existence, how do we work that out? We fit the

discrimination principle in, in this sense, that

although the Commonwealth can do something under a

general law, if its law is, in fact,
discriminatory, then you have here an exceptional
instance of the Court having regard to what can

loosely be called "legislative motive" and the

Court says, "Well, we know the Commonwealth could

do something under a general law but if the law is

discriminatory here, exceptionally, we are able to

say this is a law made in order, directly, to

Unions(4) 119 8/6/94

achieve that result, and what His Honour is saying,

as we understand him is that this is another aspect

of federalism that while powers are given to the

Commonwealth in relation to a subject-matter and

the exercise of that power in relation to the

subject-matter may affect the State in the exercise

of its powers, powers are not given to be used -

putting it very colloquially - to get at the State
in respect of the subject-matter, and that is the

principle that underlies discriminatory laws.".

DAWSON J: But, you see, a law which, on the face of it does

not discriminate, (a), discriminate because of the

peculiar position of the State.

MR DOYLE:	Your Honour, again, I do not deny that for a moment. There are two forms of discrimination:
discrimination on the face of the law and then there may be discrimination not on the face but in
the impact of the law.

DAWSON J: If that is the effect of the law, that affects

the State not only in its capacity as an employer

but, more particularly, in its capacity as a

government, that may provide the clue. All I am

saying to you is I understand your position. You

want to push aside the other submissions and say,

"Well, at least this is the fall-back position",

but I just wonder whether you can separate your

position from the others.

MR DOYLE:  We attempt to by, as I did yesterday, looking

closely at what His Honour said on the next page,

the notion of existence as independent entities,

and we then attempt to rationalize the two by

saying there is in fact a separate principle about

discriminatory laws. Far from it being a principle

of non-interference with powers, it is actually the

limit to the principle that the Commonwealth can

interfere with powers.	The principle is by a
general law in relation to a subject-matter within

power, the Commonwealth can make a law which

affects the exercise of State powers, but the limit

on that is that it may not use its powers for that

purpose. As I said, exceptionally in this respect

the Court indulges in the exercise of examining

what can be called legislative motive, and it says

that emerges from the discriminatory form, at

least, of the law. Query if Mr Justice Dixon had

in mind also discriminatory impact, which is not to

say he would not allow it but his remarks seem to

be focusing there on a law which in form is

discriminatory.

It could also be said what I am putting now is

the converse of what Your Honour the Chief Justice

said, that just as the States must take the

Unions(4) 120 8/6/94

organization of the Australian community as they

find it, surely the converse is that they cannot be

selectively isolated from that organization. That

would be another way of explaining or rationalizing

the discrimination principle. So we do submit on

this fall-back argument that it does hold together

and that in the end it does not break down and just

become another form of the other argument.

Your Honours, yesterday I had identified the

two general limitations to our argument, that is indirect effects and - I have actually forgotten

for the moment what the other limitation was, but

it does not matter. The third limitation which we

acknowledge arises from the fact that laws enacted

under section 5l(ii) have to be given separate

consideration. I wish to make our submission clear

on this. States are clearly subject to the

Commonwealth taxing power, and we deal with that in

our written submission in paragraphs 24, 53 and 54.

So that means that States can be subjected to

compulsory exactions for Commonwealth public

purposes and the State cannot claim immunity from

them.

In addition, it is established by the decisions of the Court that a law which on its face

is a law with respect to taxation will not cease to

be such a law because Parliament seeks to achieve a

purpose not within Commonwealth power.	In other
words, there can be a secondary object.	From that,

we submit it follows that because any tax will

diminish the resources of the State and require it

either to raise other taxes or revenue or to

diminish expenditure, it must follow that the

Melbourne Corporation principle does not have as an

aspect of it the notion that diminution of

resources will attract the Melbourne Corporation

principle. So we reason from the fact that States

are subject to taxes and that taxes in the end are

an exaction of moneys from a State, that presumably

then the Melbourne Corporation principle will not

focus on the exaction of money as such. Again,

that is not to deny that in an extreme case, a tax,

for instance, at a very high level on all revenue
of the State, might in another respect attract the

Melbourne Corporation principle, but we would argue that it follows from the cases that the mere fact

that the State is faced with the choice of raising

other revenue or diminishing expenditure does not

of itself attract Melbourne Corporation.

BRENNAN J:  Why is the taxing power not subject to the

qualification at page 83 that it cannot be -

Unions(4) 121 8/6/94

a law aimed at the restriction or control of a

State in the exercise of its executive

authority -

Say, for example, there was a tax levied upon the number of schools in the State?

MR DOYLE:  Your Honour, it will sound as if I am

shilly-shallying, but my submission to that is that

that principle still applies in relation to tax

laws, but has to be applied with particular caution

because one cannot say that the thing which

attracts the liability to the tax that you can

always then use it to say this is really a law
about the thing, and no longer a tax law. If we

hold firm to that principle we have to accept that

you cannot say as a general principle, "This is not

a taxation law; this is a law about whatever

attracts the liability to the tax."

On the other hand, bearing in mind the sort of

fundamental area we are in here, I would not want

to be seen as denying that in a particular case

when one looked at what was taxed and the nature of

the tax, that one could say, "This tax law is, in fact, aimed at the State." My submission is that that principle of discrimination has to be used

with particular care in relation to a taxation law,

and that is why, for instance, with respect, we
would agree with the majority in The Second Fringe

Benefits Tax case and not accept what Your Honour

said there. Your Honour's argument was, "As to

members of Parliament and judges and whoever at the

very core who got fringe benefits", Your Honour

said, "the fringe benefits tax cannot be validly

levied because that is to tax the State in respect

of the employment of essential functionaries. Our

argument would be, with respect, no, to use that

phrase, "A tax is a tax is a tax". It is still a

tax. It is merely a financial impost, and whether

the State pays the money because it sells cut

flowers, or whether it pays the money because it

gives a fringe benefit to a judge, it is still just

a tax which is a financial impost on the State.

But there may be an exceptional situation in

which one can say because we are dealing with, as

it were, fundamental principles here, nevertheless,

when you look at this law and its particular

application and the way in which the tax is levied,

it does bear the appearance of a taxing law aimed

at the State. So we say yes, the principle is

there, but has to be used with particular caution

relation to taxing laws.

DEANE J: Unless you can distinguish the taxing power from

the other powers, is not The Second Fringe Benefits

Union(4) 122 8/6/94

case against your argument in so far as it relates

to taxing fringe benefits in terms of members of

Parliament and judges?

MR DOYLE:  Yes, Your Honour, and that is our point. We do

say the tax power has to be distinguished, and that

paradoxically, the power which in the very early

days of Melbourne Corporation was seen as at the

forefront of this notion, in the light of

subsequent decisions of the Court, we accept has to

be distinguished and because a tax is never more

than a financial impost and because it does not

cease to be a tax by reference to the thing that

attracts the liability, one comes to the conclusion

that tax laws are in a special category, but

nevertheless we would maintain there may be an

exceptional case where the tax can be said to be

truly aimed at controlling the State.

DEANE J: But when you have a tax imposed on fringe benefits

provided to members of Parliament and identified as

such, it comes very close to being within the

general current of your main argument.

MR DOYLE:  Your Honour, if it was discriminatory in the

sense of aimed only at members of Parliament then

it would attract, but if it is on all persons and

happens to include members of Parliament, then in

our submission the answer which would have to be

given to a complaint by the States is, in the end

the State is being simply required to pay some

money and it does not matter why it is being

required to pay the money, that is still a tax law and the effect on the State is exactly the same as
any other financial impost on the State. There is

nothing about the effect on the State.

DEANE J:  I follow you. I am just wondering whether the

true distinction lies in what I was suggesting to

you before, and that is the difference between a

minimum wage and saying to somebody you cannot

dismiss your treasury officers?

MR DOYLE:  Yes. Well, Your Honour, we submit that

distinction is part of the thing we are talking

about.	We would not say that is it, that we argue
for this principle of autonomy.	We accept that

taxing laws are in a special category, and then we

have this fall-back, which actually flows in a

sense from that, that if the State cannot object to

something merely because it requires it to pay

money, then maybe it follows that it cannot object

to the fixing of minimum wages because all that does is to require the State to pay some money.

So, it really is a flow-on, or an implication of

the fact that tax laws are in a special category.

Unions(4) 123 9/6/94

DEANE J: But, if you are ultimately forced back to that

position, the second Fringe Benefits case really

goes out the window, does it not, in the sense that

with that ultimate fall-back decision? the majority judgment is obviously in conformity

MR DOYLE:	No, we would see the majority judgment as conforming to our whole submission because the
majority held that a fringe benefit tax could be levied on a State in respect of any person to whom
it provided a fringe benefit, and we accept that
because it is simply a tax, and we accept that the
State can be taxed in respect of fringe benefits to
judges, a payroll tax can be applied in respect of judges.
DEANE J:	One might equally say ones here concerned with the

general law for resolving interstate industrial

disputes in the national interest.

MR DOYLE: That is not the point with respect. The reason

why fringe benefits is right is that it was dealing

with a tax law which is in a special category

because it is nothing more than a financial impost

and the States cannot claim immunity from

Commonwealth financial imposts.

DEANE J: What I was really querying was whether one simply

asserts that, or one sees the explanation in this

area in the fact that an ordinary tax law, such as

that in The Second Fringe Benefits case on the

majority approach, does not seek to enter and

control essential State functions.

MR DOYLE:  No, Your Honour. The way we would put it is

actually the way Mr Justice Menzies seems to have

put it, because what I have put is actually a

summation of his judgment. But then there was one

important bit of his judgment which I have left out

and was coming to, and that is, as he said, "A tax

in respect of employment leaves the State and a

private employer free to employ whom it will". And

so what we would argue - if I can give Your Honour

the page reference. It is Victoria v The

Commonwealth, (1970-1971) 122 CLR 353 and, in

particular, at page 392. If Your Honours look at

the steps in the reasoning there, which are really

the steps I have been following, just above the

mid-point of the page, he says:

Of course the payment of the tax by an

employer upon wages paid is a burden, whether

or not the employer is a State. Every tax is

a burden -

we would say that is step one.

Unions(4) 124 8/6/94

This tax could not, however, be described as

an interference with the function of employers

who are not States. Such employers remain

free to carry on their businesses as they

choose -

step two. And then he says:

Similarly, the payment of the tax by a State does not interfere with the performance of its

functions. Crown servants may still be

employed at the will of the State -

that is step three.	And then step four, about four
lines down:

The most that can be said is that, because the

State pays the tax to the Commonwealth, it has

so much less money with which to carry out the

functions of government. Such a consequence

does not spell invalidity -

and step five:

The same sort of consequence follows, if, by reason of the imposition of a customs duty, a

State has to pay the Commonwealth tax upon

imports which it needs to carry out its

functions -

and we submit that, with great respect, does all

make sense. That once you accept the States can be
made to pay taxes, and the fact that a tax is

always a financial burden, the distinction he draws towards the middle of the page is the critical one.

He says a tax leaves you free to employ who you

will. Whereas, we submit, an exercise of the power

under section Sl(xxxv) does not except, query, as

to say a minimum wage.

So we accept the implication of what he says

may be that wages can be regulated, but we argue

that that is the limit of it and that that is

implicit in what he said there, and that that is

really the foundation of his judgment. So,

likewise, with the Fringe Benefits Tax case, the

State remained free to employ judges, free to have

members of Parliament, it is just that if it

provided a fringe benefit it had to pay that

burden. So we actually focus on that qualification

and submit that is why what we are putting is

consistent with what was decided in, and the

reasoning in, Victoria v Commonwealth and the

decision and reasoning in the Fringe Benefits Tax

case.

Unions(4) 125 8/6/94

So that is our third limitation, Your Honours.

In other words, in that sense I have endeavoured to

explain that taxing laws have to be treated as a

special case and are not entirely outside the
operation of what I am calling the Melbourne

Corporation principle, but requires special and careful treatment. So on that basis, Your Honours,

we

BRENNAN J:  Why can you not extrapolate from that approach

to the taxing power to the same approach in

relation to other powers? If you have once cast

over the notion of immunity of State

instrumentalities so that they remain open to the

operation of federal law, why is it, if the

exclusion from that is laws which are aimed at the

State, you should treat taxing powers in that way

but not other powers?

MR DOYLE:  In our submission, the reason why one has to

treat taxing powers specially is, I suppose, in

part - we endeavour to accommodate our argument to
existing authority - but it is the fact that in the

imposed upon a State, it would seem then that you would be creating a new principle which would limit Commonwealth powers in a number of

end a tax is nothing more than a financial impost. cannot be

respects that have never been suggested to date.

BRENNAN J:  I thought your argument was that there was a

central core of activity which was immune from the

intervention by Commonwealth law.

MR DOYLE:  Yes.

BRENNAN J: So that in relation to that core there was at

least some area of immunity of State

instrumentalities; an exception, if you like, to

the old notion. That exception - the bulwark
around it either stands firm or it does not.	Why

do you say you can breach it by a tax law, but you

cannot breach it by other laws?

MR DOYLE:  Could I deal with the second part first? My

submission is carefully confined to

section Sl(xxxv) and while, again, I do not for a

moment suggest that other heads of Commonwealth

power do not attract the Melbourne Corporation

principle, I focus specifically on Sl(xxxv) because

it has that capacity to be used directly on the

employment relationship. It is not so easy with
other heads of power to see that happening but if
it did happen then so be it.

So the way in which the principle operates in relation to section Sl(xxxv) may have some point or

Unions(4) 126 8/6/94

force that it does not have in relation to other

heads of power. The exception for taxes flows from

the acceptance of what Mr Justice Menzies says,
that in the end a tax is nothing other than a

financial impost and, once one accepts that, unless

one develops some principle by which financial

imposts are objectionable it seems impossible then

to sustain, for instance, the Steel Rails case. In

other words, you either have to accept States can

be made to pay money and, once you accept that, it

seems to follow that you have to accept they can be

made to pay money in respect of employment in this

core area.

So, while, if it was tabula rasa the States

might be - - -

DAWSON J: That raises the same problem, the States can be

made to pay money up to a point.

MR DOYLE:  Your Honour, I do not ever deny that there may be

extreme cases.

DAWSON J: They may not be extreme, they may be just because

of discrimination.

MR DOYLE: There may be discrimination.

DAWSON J:	And that will be enough.
MR DOYLE:	Yes.  Your Honours, my submission is focusing on

the facts of this case and endeavouring to develop

the principle of autonomy but, as I have said

before, it does not, for a moment, deny that there

are other federal principles which, in a particular

case, may be the first port of call,

discrimination, undue interference.

DAWSON J: You see, you would have to extrapolate to save

your argument and say, "And the mere payment of

money is necessarily not discriminatory by itself",

and you cannot say that.

MR DOYLE: With respect, Your Honour is putting to me, I

would submit, a false antithesis. It may or it may

not be, it just depends on the form of the law.

Sometimes it will be, sometimes it will not. It

may be because of the form of the law - that is the

States may be specially selected to bear the tax - or it may be the nature of the tax means that

private people will not be bothered by it but only

States will.

DAWSON J:  But you cannot stop where you stopped. You have

to ask, "And does the imposition of this monetary

obligation impair the functions of the States in a

Unions(4) 127 8/6/94

way in which in which it does not impair the

functions of other employers?".

MR DOYLE:	Yes, Your Honour, we accept that is a relevant question, but our argument would be that in the
Fringe Benefits Tax case, the answer to that
question was "No" but, in a different case on
different facts, the answer may be "Yes". All that
illustrates is that there are -
DAWSON J:	I suppose we are getting back to the same thing.

I say you are putting your head in the sand and it

is not helpful, but you say it is a fall-back

position.

MR DOYLE:  Yes, I am trying to brush the sand from my eyes.

Yes, Your Honour, it may mean all dressed up and nowhere to go, as Your Honour said, but on the

other hand there is this clutch of principles drawn

from federalism. If Victoria's argument succeeds,

then there is no need to come to our submission.

If it fails, then the point we are perhaps

labouring is that that is not the end of the road;

there is now another aspect of Melbourne

Corporation to be considered.

DAWSON J:  But are we bound to choose between the two or is

there some midway?

MR DOYLE:	The via media, I suppose, in a sense is a result that says there are just certain particular things
you cannot do.  That has not been embraced by me
and I think was at the fringes of Mr Graham's
submission. There may be that via media but, in
our submission, you are bound to choose in the sense that we would argue that there are the two distinct aspects: autonomy in relation to the existence of the State and then the separate
principle of discrimination in form or impact or, alternatively, undue interference, if I can just use that loosely to encapsulate the other sort of thing Your Honour Justice Dawson is referring to.
So you are not bound to choose but, in our submission, you are bound to recognize that there
are distinct principles and to try to put them all
as a single principle, in our submission, would tend to be misleading because we would argue that
the thing we are focusing on, the independent existence of the State, is something that needs to
be separately addressed. Perhaps under another
head of power that I cannot think of at the moment,
that would become the most important to look at
because there may be a head of power where it would
be difficult or impossible for the Commonwealth
really to significantly interfere or control the

Unions(4) 128 8/6/94

State. But on the other hand, the law may bear on

the organization of the State.

DEANE J: But why is the via media not your ultimate

fall-back position, and that is that you cannot

move into control, that where what is involved is

fixing minimum wages? You have got to take account

of the fact that it is a tribunal which is

presumably going to fix minimum wages at a level

which are appropriate to all employers of that

class of people in the country.

MR DOYLE:  Yes.

DEANE J: If the Commonwealth set up a tribunal to fix the

salaries of South Australian public servants, your

road would be strewn with roses, I would have

thought.

MR DOYLE:  If that was the only such tribunal and not one

for each State.

DEANE J: But we are not concerned with that here.

MR DOYLE:  No. But is Your Honour putting to me the true

position may be that you have to look at what the

Commission threatens to do, and then say, "Is that

in fact an undue interference?"

DEANE J:  I thought that your ultimate fall-back position

was not a denial of jurisdiction but a restriction

on orders that involve entry into the core area of

government and controlling the State's powers

within that area.

MR DOYLE:  I would maintain my original position,

Your Honour, that in a sense that is a false

dichotomy. Going back to your example: if the

only three State employees are in the core area,

there is no jurisdiction in relation to that

dispute; if there are six employees, three who are

in the core and three are not, there is

jurisdiction as to dispute over the State but there

is a limit on what can be done.

DEANE J:  I follow that is your primary argument, that

minimum wages cannot bind the State - - -

MR DOYLE:	May be a special case.
DEANE J:	Once you say that though

MR DOYLE: Sorry, our primary argument is, yes, they cannot,

but then we say it may be an implication from what

we say about taxes is you can regulate wages.

Unions(4) 129 8/6/94

DEANE J: Minimum conditions that do not relevantly control

I mean, the requirement that there be one lavatory'

for every 20 people or so on.

MR DOYLE:  Our answer to that, Your Honour, is that the

principle is not one of control. The principle is

one of autonomy and independent existence and that

therefore you do not have to ask the sort of

question implicit in that, "Does that amount to

control?" Our argument is based on independent

existence. The other aspect we would urge which I

mentioned yesterday is that, in our submission, it

is not an appropriate position for this Court to be

put in to have to make a qualitative assessment and
say is this really control.

DAWSON J: Is that right, Mr Solicitor? In the real world,

what happens is that the arbitration commission or

whatever it is called, the Industrial Relations

Commission, proceeds to deal with the dispute State

by State and it makes a separate award which may be

different from other awards in part settlement of a

dispute on a State-by-State basis.

MR DOYLE:	Yes.
DAWSON J:	Is that not getting very close to the sort of

control which is obviously relevant? It does not make an overall award, as I understand it, fixing

wages across the board for public servants in

Australia, and that is the SEC case.

MR DOYLE:  Yes. I suppose my answers to that, Your Honour,

are first of all, it does not matter if it is

control or not because we insist on autonomy.	As
to whether it is in fact control or not, corning

back to Mr Graham's argument, I think I would have

to concede that the mere fact that it proceeds that

way does not seem to make it control. The question

becomes, "What is it doing and what orders is it

making?"

McHUGH J:  I was going to ask the respondents' counsel this,

as to whether the Commonwealth could set up a

tribunal to regulate the wages of State public

servants but, assuming that they cannot, that is

what happens in practice in this particular field.

What you will have is an award which will probably

be called the State Public Servants (Victoria)

Award, so it will be an award set up or made by a

Commonwealth tribunal which just regulates the

conditions of employment of State public servants.

MR DOYLE:  Yes. I do not want to trespass into Mr Graham's

argument - I take it Your Honour is not suggesting a discrimination argument, you are assuming such a

tribunal for each State - - -

Unions(4) 130 8/6/94

McHUGH J:  No, but it just seems odd that in substance there

is no difference between the two things in effect.

MR DOYLE:  Yes.

McHUGH J: It is not as though the federal award will apply

generally, so that it applies to clerks in BHP,

clerks in the public service and so on, the award

will be directed specifically to the State public

service.

MR DOYLE:  Yes, well

DAWSON J: And to the public servants of one State.

MR DOYLE:  Yes. In my submission the answer would be that,

again, the real question there is - well, perhaps I

am just stating the obvious - does that State by

State regulation of wages in that manner amount to

control?

DAWSON J: You say it may or it may not, that is not our

argument.

MR DOYLE:  Yes, but on our argument you would not get to

that because unless we are driven to our fall back,

you would say, "But in any event you are entitled

to autonomy in that area as to the key people, the

core people. As to the others, then if that

amounts to control offensive to Melbourne

Corporation it will still fall under another aspect

of Melbourne Corporation."

McHUGH J: This is all created by the problem of paper

disputes in a sense, that once you get control on

day one, you have control forever.

MR DOYLE:  Yes, from the way the system works, that it does

not, as it were - - -

McHUGH J: This problem would never have arisen apart from

the doctrine of paper disputes.	If you had to look
at real life disputes one would	deal with them on
an ad hoc basis.

MR DOYLE:  Exactly, and then walk away and say, "Get on with your life and come back to us if you need to."

MCHUGH J: Yes.

MR DOYLE:	Yes, if that is the real thrust of what Your Honour is saying, that it was, as it were, on-
going control, then we accept that is a particularly significant thing, and it seems rather
different from merely settling the dispute and then
leaving the parties to get on with their
lives - yes, we would accept that.

Unions(4) 131 8/6/94

DAWSON J:  Why is no one concentrating some attention on

that aspect of paper disputes?

MR DOYLE: If that is directed to me, Your Honour, I - - -

DAWSON J:	I am just generally interested.
MR DOYLE:	Perhaps those to whom it is directed generally

should answer that, Your Honour. I am working hard

enough at this aspect of Melbourne Corporation

without taking on paper disputes.

Your Honours, I should then go, having developed that principle of autonomy, to that

question of "What is the State?" which I have

really to a considerable degree foreshadowed, but I

should just make clear our submission. In other

words, if you accept the notion of autonomy, then

what is the State? What is protected? And as I

said yesterday, we focus on what the State is

rather than what it does, and in our system the
State as a body politic is the legislature, the

judiciary and the executive government, which means at least the Governor and the government ministers.

That is probably the area of section 106, and as I

said earlier this morning, then there is this

penumbra.

In our submission, for the State to exist, the

legislature for a start has to be able to meet and

enact laws and transact its business, and it needs

people for that purpose. The judiciary has to be

able to sit and to hear and decide cases, and it

needs people for that purpose; and the executive
has to be able to administer such valid laws as the

Parliament has enacted; it has to collect the public revenue; it has to answer to Parliament for the expenditure of that revenue, and again, to exist meaningfully, must have the capacity to

formulate policies and to propose laws and, in our

submission, for that purpose it needs people.

So the notion of the State existing, in our submission, is very much linked to the idea that

the State in a real sense to exist needs people,

needs agents, and we say and submit that those

people who are an aspect of the State existing in a

meaningful sense, that is the protected area.

We would include, as we do in the written

submission, public officers provided the function

they perform such as mine, dare I say, or the

Director of Public Prosecutions is an aspect of the

State existing, and also agencies of the State if,

again, those agencies perform a function which is

an aspect of the State's existence.

Unions(4) 132 8/6/94

We would draw a distinction where the State, in the current jargon, privatizes something or has

that thing done pursuant to a contract. If we

could take prisons; we would argue that prisons are

an aspect of the existence of the State because for

a State to exist, as we know it, it must police the
general criminal law and punish those who breach

it. Now, in our system punishment means prison; it

may take other forms. So if the State itself does

that through employees, then that is the existence

of the State.

If the State chooses to privatize the prison

and simply hire someone to do it, then we submit

the principle must operate a bit differently. The

Commonwealth could not control the contract between

the State and the person who runs the prison, but

it would not flow on our argument that the persons

working in the prison are outside section Sl(xxxv)

if they are simply working for an independent

contractor who has entered into a contract with the
State.

So for better or worse we do not use a kind of

creeping shield of the Crown argument out to those
functions. Our argument is if the State does them,
then in that respect the State is protected if they
are aspects of the existence of the State. But if
the State privatizes them, a prison - or it might

substantially farm its treasury out to a big firm

of accountants. Again, we would say the contract

between the State and that firm is immune from

Commonwealth control, but the people working in the

firm as accountants are prima facie under

Commonwealth control in the ordinary way, and the fact that they are doing that function does not

alter things. However, that is not central to

today's argument, but I do just need to make it

clear how our argument operates when a function is

privatized.

The other point I would want to make, which I

touched on yesterday, that this is not an argument

which, in our submission, enables the Court to pare

the State back to the bare minimum. If a minister

has 10 policy advisers it is not to the point to

say you could get by with one. The question is, if

those persons are employed to enable the minister
to function meaningfully as a minister of State, as

distinct from just providing a service, then they

are within the core area and it is up to the State

to decide how many it will have.

We submit that that also is an aspect of the

State having a complete governing institution of

its own which it is entitled to organize

unilaterally. Nor, I would wish to stress, is our

Unions(4) 133 8/6/84

argument one which distinguishes between

governmental and non-governmental activities. At

the risk of labouring it, we focus on what it means for the State to exist; we do not focus on what the

State does.

So to put it very crudely, the State, we would

submit, could not exist without a Treasury

function, without what I will call an

Attorney-General function. The State as we know it

could exist if it did not provide education, health

care, community welfare, any of those services. If

it is said, "Are you not really just trapped in

accidents of history?", we would answer that by

saying, "In a sense, yes, but what is the State for

our purposes other than that which we know it to be

historically?" So you are driven to look at the

State as we know it.

Could I then just go back to those charts I

have provided to the Court. I will just do this

briefly to illustrate the application of our

submission. There were three organization charts

and that typed list. The typed list, Your Honour,

I have already covered and the top half of it, Part

A, there we just focus on a minister of State

having the capacity to operate as such. B down to

Fare really function based, in other words, things

that are aspects of the existence of the State, and

I perhaps do not need to elaborate on them as I

touched on that yesterday.

Could I go to the organizational charts, and

this is purely illustrative, and perhaps start with

the one relating to the Department of Premier and

Cabinet. I know that Your Honours do not know the

details that lie behind the various boxes there and

neither, in fact, do I. But my argument is that

when you look at the description of those

functions, they are the sorts of things which have

to be done for the State to exist and function

meaningfully.

A possible exception is on the left-hand side, the second one down, "Multicultural and Ethnic

Affairs Commission". That looks like just some

function the State performs. But we would argue

that when you look at the other boxes there, they

are all the sort of things which one would say are
aspects of the State existing, and in the bottom

right corner, "Corporate Services". Again, in the

modern jargon that means keeping that little

department going. If this was an operational
department like Education you may say that that is

really predominantly providing education and so not

protected. But in a core department like this we

would submit it is protected.

Unions(4) 134 8/6/84

If you could then look at the next one

relating to treasury, which has got the "Under

Treasurer" at the top. There we would say again,

going from left to right, the left line of boxes, revenue raising, we would argue that is an aspect

of the State existing. The next line is the budget

line, formulating and presenting a budget.	The
next line is economic advice.	The fourth line:

you would need to know about what is being done in

the realm of finance here. Is it, for instance,

just investing State revenues or is it some broader

function? So, we would say, that is an area where

closer examination would be required.

The next one, Your Honours,

"Attorney-General's Department": we would argue

that the government cannot exist, as we know it,

without having an Attorney-General. The principal legal adviser to the government and then those who

assist him in that function. Now, we would say,

most of that department would be out of -

McHUGH J: Well, I am not sure that is right these days. I

mean, the Commonwealth contracts services out, does

it not? Ministers have even got to get independent

advice from outside the -

MR DOYLE:  That is the point, Your Honour. The function is

essential; the State may do it itself, in which

event it is entitled to autonomy; it may hire

people to do it, in which event the contract, we

would argue, would be immune from Commonwealth

control, but the function is critical. As to

"Attorney-General's Department", we would submit

everyone above the thick, black, horizontal line

looks like the sort of people who enable the

Attorney to function as such. The far left side,

"Consumer and Business Affairs", that just looks

like an activity of government and so would be open

to regulation. On the right-hand side, those small

boxes, one would think "Public Trustee", "Liquor

Licensing Commissioner", they would be open to

regulation, but "Solicitor-General", "Director,

Public Prosecutions", "Parliamentary Counsel",

again, an aspect of the existence of the State.

The final one, just to illustrate the

contrast, what you might call an operational

department, "Education and Children's Services",

there, we would submit, the exercise would be to

see which of the people are linked to the

performance by the minister of his function as a

minister, as compared with people who are really just involved in the provision of the service to

the public. So, one would thin~, from left to

right, that "School Operations" would be an area

for Commonwealth regulation. Probably "Children's

Unions(4) 135 8/6/94

Services" which, I think, relates to pre-school,

and perhaps over on the right at that level

provision of the service, but other people would be

"Director Personnel" and "Director Corporate

an aspect of the existence of the State.

Now, I have got no doubt that Your Honours

will be told several times that this is hopelessly

impractical, and that neither this Court nor the

Commission can embark on that sort of exercise.	We
would make two answers:	first of all, that was

precisely the exercise contemplated in Professional

Engineers, albeit on a smaller scale. When you

read Mr Justice Dixon's judgment he made that very

point, he said:

We are holding today that such people -

that is, professional engineers employed by the

government -

may be parties to industrial disputes, but

nevertheless there may be particular

professional engineers who, because of the
particular function they are performing,

cannot be.

And so, while it was in a different context, what

is industrial and what is not, in our submission,

the Court contemplated the very thing would have to

be done, and he said, perhaps happily for him,

"Well, the Commission can surely sort that out."

So that is our first answer, that it is not, as it were, some new problem confronting the Court.

And our second answer is that it is a necessary

task, difficult as it may be, because otherwise,

then surely the ultimate position is, anyone can be regulated except, perhaps, those who you would say	fall under section 106 and does then the Court, as	it were, surrender the field to the Commonwealth or
does the Court embark upon what we would submit is
the inappropriate task of deciding, "Is this really control or not?", as to which we would submit, as I
did yesterday, that in reality the Court has no
legal measuring stick there and would be embarking
upon a highly subjective policy content-type
examination of the provisions of an award to decided if this Court thought that was the sort of
control inimical to the existence of a State. And
we submit the Court would be on, as it were, a kind
of slippery slope there which could not produce
satisfactory results.

The other point is that if our submission is

rejected then we would argue it follows that in

Unions(4) 136 8/6/94

this core area a State, by an award, can be

required to employ people it does not wish to

employ, organize them in a manner it does not wish

to organize them, keep their services when it does

not wish to keep them and structure its

organization in a way in which it does not wish to
structure it. If that is so, then we would say -

sort of rhetorically - what is left of what

Mr Justice Dixon contemplated, the independent

existence of the States, because if that can happen

then, in fact, that aspect of the existence of the

States is entirely subject to Commonwealth

regulation unless, as it were, the regulation goes

right to the extreme and then gets caught by some

other principle of effectively sterilizing the

States which, we submit, is a principle the Court cannot meaningfully grapple with.

BRENNAN J:  Does that not rather cast some doubt upon the

validity of the Melbourne Corporation case itself?

If one says, "Commonwealth powers can be exercised

over State instrumentalities but, in accordance

with the Melbourne Corporation case, they cannot be

used directed at the States to control the States'

existence or the manner of its existence and that

is the reason why we have this implication." Now,

if you say it is not really possible to determine

where control can start and finish, then perhaps

the whole notion is wrong but I do not understand

you to be saying that.

MR DOYLE:  I think, Your Honour, we are happy with

Melbourne Corporation. Our answer to that, with

respect, would be that we are dealing with a

fundamental principle and one which it is dangerous

to attempt to state in encyclopaedic terms, and

that in that particular case Their Honours were

dealing with a discriminatory law. They related

what they said to a broader principle. The thrust

of it, we would submit - the broader principle has

the aspect of autonomy, which I have identified in

particular, the aspect of discriminatory laws and

then another underlying aspect of Commonwealth laws

which have such an effect on the States as to

really control or sterilize them.

My answer in particular to Your Honour would

be that aspect of Melbourne Corporation was not

worked out in detail there, as it did not need to

be, nor has it in any subsequent case and, in our

submission, it is not of itself, this notion of

control, a particularly satisfactory principle.	So
we would accept all the fundamentals of criterion which requires the Court to assess, "Is
this control or not?"

Unions(4) 137 8/6/94

BRENNAN J:  Does that not come down to, if you analyse it to

its basis, a rather difficult conceptual exercise?

A State, after all, is a repository of power.

MR DOYLE:  Yes.

BRENNAN J: But being a repository of power its function is

nothing but the exercise of power. If you say the

power which is reposed in it, that being of its

essence, is subject to Commonwealth power, then you

have in a sense destroyed the immunity of the

State. So that, if it is a question of the extent

of power against that which is power, you do not

really have this dichotomy between the repository

of power and power itself.

MR DOYLE:  No. Your Honour, we would go along that route to

this extent: that it could be said that in one

respect we are saying that the power to act as an

Attorney-General and the power to act as a

Treasurer are two powers which are an aspect of the

existence of the State, and that is as far as we

go. The difficulty we have is in identifying some

other limit than that, that selects health or

education as a protected power but railways as not.

We submit that of course what Your Honour says

is right in the sense that the dichotomy which

Mr Justice Dixon drew in one sense is meaningless

because what does it mean to exist and have no

powers, but it reflects the constitutional fact

that Commonwealth laws under section 109 are

assured of superiority.

So in a sense - which I have been striving for

in these submissions - we do have to grapple with

that antithesis between, on the one hand, giving

proper operation to Commonwealth powers and

allowing them to affect State powers, but on the

other hand preserving the States as meaningful

entities, and that leads us to focus on what it

means for the State to exist and to draw that

distinction between that and the mere exercise of

powers.

So in a sense we accept what Your Honour says

but would argue that in the end you are driven,

doing the best you can, to make sense of what we

would submit is an obviously right underlying idea,

that you cannot protect the exercise of functions,

but those two particular functions I have
identified, which are an aspect of the existence of

the State you do protect. If the Court found there

were others that were in truth an aspect of the

existence of the State, then so be it. Presumably,

that might be on a basis of what is common in

Australia, perhaps as at 1900, for governments to

Unions(4) 138 8/6/94

do but that seems a difficult sort of concept and
seems a qualification which is so large that one
would wonder whether Mr Justice Dixon, anyhow,

would have accepted it.

Your Honours, I think I have adequately

developed my fall-back submission about wages.

Could I just tell the Court that is dealt with in

our written submission in paragraphs 25, 26 and 27,

and I will not further develop it now.	So,
Your Honours, that is the submission we advance:	a
principle of autonomy for those aspects of the
State which are aspects of its existence. If one
says, "Why autonomy?", our answer is that it results from the constitutional conception of two levels of government independent of each other.

Could I finally then just come back to a point

Your Honour Justice McHugh put to Mr Graham,

taxation of State property. In our submission,

section 114 sits there as an exception to the

ability of the Commonwealth otherwise to tax the

States, and it may be said that in a sense

section 114 assumes there is such an ability.	So
114 fits with our submissions as an exception.

State banking and State insurance; on our argument,

again they are mere functions of the State which

would not be protected. So presumably the

rationale for those limits on Commonwealth power is

that for reasons that seemed good at the time, it

was thought appropriate to limit Commonwealth power

in a manner in which it would not be limited by our

submissions.

Could I finally mention, Your Honours, I am

hesitant about bombarding the Court with further

paper, but we did prepare a table in relation to log M24 simply to show how that would operate in

the South Australian situation.	We went through it
item by item in the log.	In one column we have

said very briefly in a few words what the clause of

the log seeks, then in the next column we have

listed two or three South Australian statutes

relating to public employment and the sections of

them on which that item of the log would impinge.

It is purely for illustration and I do not

actually want to develop it orally, but the

solicitors for one of my friends on the left wrote

to us objecting to us using this on the basis,

which I acknowledge, that we did not provide it
with our written submission. It was provided, I

think, about a week ago today. So I do wish to

provide this to the Court but, in the light of that objection - and I must admit I am not sure which of

my friends it was whose solicitors wrote, but I

Unions(4) 139 8/6/94

raise the question of whether I may provide this

document to the Court or not.

MR KENZIE:  May it please Your Honours, having regard to the

way in which the debate has developed in the

proceedings, the objection that some of our clients

originally made to the production of this material

would appear to have been overtaken, and it is not

pressed.

MASON CJ:	Thank you.
MR DOYLE:	If the Court pleases, then I provide to the Court

copies of that table and I do not wish to address

any submissions to it. They are our submissions,

if the Court pleases.

MASON CJ: Thank you, Mr Solicitor. Mr Solicitor for New

South Wales.

MR MASON:  Your Honours, at the risk of drawing attention to

ourselves, we do not have an outline of our outline

of submissions. The original document is the only

written material to which we refer the Court. I

wish to divide my submissions into three parts: a

brief examination of the sources of the limitations

which we submit must descend upon the arbitral

power of the Commission; secondly, some discussion

about the content of the core area, as it has been

referred to, or the are of constitutional

functions; and thirdly, a brief mention about some

of the American authorities.

As to the source, there are potentially three

bases upon which the governmental interests of the

States may be protected to some degree from an

arbitral award. The first is Melbourne Corporation

and the QEC case establishes, in our submission,

that that is a relevant limitation upon

section Sl(xxxv). The second is section 106 and,

Melbourne Corporation and 106 are not coterminous	in our submission, the QEC case demonstrates that	in the extent of the protection that they afford. It is rather difficult to see how section 106 would
have been the basis of the protection for the
Queensland Electricity Commission except perhaps on
the approach taken by Victoria as to the extent of the executive function of the State.

The third potential limitation are some of the

relevant limits on the concept of what is an

industrial dispute under section Sl(xxxv) and we

briefly will say something about the concepts of a
purely management dispute in the context of the

public sector, and the concept of a purely

political dispute, again in its application to

public sector employment.

Unions(4) 140 8/6/94

In relation to section 106 the respondent

unions address some general submissions at
paragraph 61 and following of their detailed

submissions. There are two aspects of the general

interpretation of section 106 which we wish to

address some remarks.

At paragraph 63 and 67 of the respondent

unions' submissions, reference is made to passages

in the judgment of Chief Justice Griffith and

Justice Barton in McCawley's case 26 CLR which

appear to be relied upon by the respondent unions
as supporting the proposition that the content of

the expression, "Constitution of each State"

section 106 is confined by reference to the

Constitution Acts of the 1850s and 1860s which were

in force in 1900. The submission is, in effect,

that picking up some statements from McCawley's

case something that impacts upon the judiciary

whose source of power is found in the Supreme Court

Act rather than the Constitution Act is outside of the protection of section 106.

Our submission is that the judgment of this

Court in Tracey and Ryan is directly to the

contrary and we refer Your Honours to the passages

in Re Tracey; Ex parte Ryan, (1989) 166 CLR 518 at

pages 575 in the joint judgment of Justices Brennan

and Toohey, and 547 in the joint judgment of

Chief Justice Mason and Justices Wilson and Dawson. said in Re SPSF (No 1), as I assume it will come to

be known, (1993) 178 CLR 249 at 278. Without

taking Your Honours to those passages, and

observing that in the joint judgment of the

Chief Justice and Justices Wilson and Dawson, there

was an element of reservation about the

proposition, our submission is that those passages

indicate that section 106 protects the judiciary of

the State from some form of federal trenching and
therefore the expression "Constitution of each

State" in section 106 must be given a conceptual

rather than a formal interpretation.

Your Honours, may I hand up ten copies of an

article by Mr Gilbert called, "Federal

Constitutional Guarantees of the States:

Section 106 and Appeals to the Privy Council".	It
contains a discussion to which we simply draw the expression "The Constitution of (a) State" in section 106. It also contains a discussion

commencing at page 357 to the expression "Subject

to this Constitution", which is the opening words

of section 106, and that is the matter to which I

now turn.

Unions(4) 141 8/6/94

Our submission is that the words -

subject to this Constitution -

at the commencement of section 106 do not mean

subject to the laws passed by the Commonwealth

Parliament. It has been observed before that there

is a textual antinomy between the opening words of

section 51 of the Constitution -

subject to this Constitution -

and the opening words of 106 that use the same

expression, and the question has been raised as to

whether there is an inextricable circle with no

guidance.

Our submission is that when those words are

used in 106 they have a narrower interpretation

than merely being subject to laws duly passed by

the federal Parliament. Rather, they preserve the

State Constitutions except so far as they have been

directly affected by the federal Constitution

passed in 1900. This is the argument we derive

principally from pages 359 to 361 of the article

that I have handed up, and if I can briefly state

four propositions to support it: the first is that

the federal Constitution expressly modified the

State Constitutions in many respects. For example,

section 52 and section 90 had an immediate and

direct modification upon State Constitutions, and

there was therefore a situation that had arisen

whereby a statement was called for to preserve what

was left.

Secondly, the closing words of section 106

suggest the narrower rather than the broader

interpretation of the expression, because the State

Constitutions were protected or preserved not unless affected by a federal law passed under

section 51~ rather until altered in accordance with

the Constitution of the State itself. Another way

of perhaps putting that point is to say that it was

section 109 that addressed inconsistency between

federal law and State laws.

The third reason we advance for adopting

Mr Gilbert's argument for the narrower

interpretation of the expression, "subject to this

Constitution", is that a broader approach, in

effect, renders the guarantee otiose because any

federal law, and indeed, this is the submission of

the respondent unions, any federal law passed duly under section 51 can affect the formal and perhaps

even the substantive constitution of the States.

BRENNAN J:	How is that?	How can that happen?
Unions(4)	142	8/6/94

MR MASON:  Even if 106 were not there, it could not happen,

in our submission, that section 106 firmly

preserves - - -

BRENNAN J: 

Is the Constitution of the States anything other

than the charter of its powers in a manner governed
by the Constitution as to the organs of their
exercise?

MR MASON:  No, I suspect not. I assume Your Honour is using

constitution of the States with a small c, rather

than any particular formal document. Rather, it is

a reference to the concept of the body politic

known as the State, which came into existence, in

effect, with the federal Constitution and that

historically had at least a legislature, an

executive and a judiciary.

BRENNAN J:	I do not understand why we should consider Constitution in section 106 in any different
meaning than that which we apply to Constitution
under the Constitution of Australia Act. Why is
the Constitution of the State not that which creates and distributes its powers and determines
the organs of their exercise?
MR MASON:	I would respectfully so submit.
BRENNAN J:	No Commonwealth law can touch that.
MR MASON:	No.

BRENNAN J: But that does not get us very far, does it?

MR MASON:  No, but it does mean that the opening words of

section 106 cannot be used, as it were, as an

entree that somehow or other determines the proper scope of section Sl(xxxv) in any self-evident way.

In the Port MacDonnell case, 168 CLR 340, at 381

there is a reference to the interaction between

section 106 and laws passed under Sl(xxxviii), but

that is a very special situation because

Sl(xxxviii), as the Court recognized in that

passage, clearly confers powers, lawmaking powers,
upon the States, albeit in partnership with the

federal Parliament.

I mentioned the possibility of some relevant

limitations upon Sl(xxxv) through the concept of

industrial dispute. We must accept and, with

respect, do accept, that Professional Engineers and

Coldham's case and Cram's case have given a broad

interpretation to the expression "industrial

dispute". But it is one that still has some

limitations.

Unions(4) 143 8/6/94

If one reverts to the test in Coldham,

speaking of how it would strike the "man in the

street", there must remain some management disputes

which to that hypothetical person would not be

regarded as industrial. And if one is dealing with

management disputes in the public sector in

relation to public sector employment, then there

may be particular contexts where it is possible to

say that cannot be characterized as an industrial

dispute.

An example I would offer the Court would be a

dispute between the Police Association and the

State government about the role of the ombudsman or

of ICAC in investigating complaints about police

corruption. To the police union it may be an

industrial matter and it may lead to disputation as

between employer and employee but it does not

necessarily follow, in our respectful submission,

that that would be characterized as an industrial

dispute within the constitutional connotation of

that expression.

Mr Justice Windeyer, in Professional

Engineers, 107 CLR, at page 271, speaking in a

military and also a quasi-military context, said,

about half-way down the page that:

A mutiny can never become an industrial

dispute by miscalling it a strike. This is

not because, as was put in argument, soldiers

are not employees. They are. Persons in

military employment are in ordinary language,

and sometimes for legal purposes, described as

employed, although their engagements are not
ordinary contracts of service. It is simply

that service in the naval, military or air

services "would not normally be classed as

giving rise to a trade dispute or included in

trade or industry". Similarly, service in the

police force cannot, in my view, lead to an

industrial dispute.

The next sentence, of course, is in a context that

may have some difficulty in being sustained since

Lee and Harper and Coldham when he said;

And this Court has held that school teachers

employed in the education service of a State

cannot be parties to an industrial dispute.

But however much one reorients that statement -

that is the respectful way in which one can put

it - in a post-Coldham era, there remains a germ of

essential truth about it, that, in our submission,

the concept of what is an industrial dispute does

not, when it involves a union in the public sector

Unions(4) 144 8/6/94

and the employer, necessarily self-evidently lead

to a power to make a federal award because certain

aspects of that dispute may, in the public

conception, be seen as being not industrial.

The other, and perhaps related, exception was

discussed in Portus' case, the case that was before

this Court last week, Reg v Portus; Ex parte

ANZ Banking Group, 127 CLR 353, particularly at

page 371 where, Your Honours will recall,

Mr Justice Stephen spoke about political disputes,

or disputes on political topics, as being capable

of being outside the realm of an industrial
dispute.

If one took an extreme example, the dismissal

of the premier by the governor would not be an
industrial dispute, one confidently suspects. Going

further down, a dismissal of ministerial advisers

because of political disloyalty perhaps would also
be seen as outside of an industrial dispute, rather

in the nature of a political confrontation.

Another example perhaps, remote though it may be

from factual reality, would be if one picked a Tasmanian context and assumed that the federal

Parliament had not passed the Tasmanian dam legislation, but that the Tasmanian union movement

wanted to stop the dam, and there was a

confrontation over an environmental issue, in our

submission, it would hardly be self-evident that

the Industrial Commission of the Commonwealth could

make an award on that matter. That sort of dispute

would be a political dispute and outside of the

concept of an industrial dispute.

Turning then to the content of the precluded

area, the core area, my learned friend, the

Solicitor for Tasmania, has referred the Court to

the passage in Leeth's case, 174 CLR at page 467,

where three of Your Honours spoke about the

constitutional functions of the State. It is, in

attempting to define or identify - it may be

impossible to define, but at least to identify,

what are constitutional functions of the State,

that the following submissions are directed: we

would adopt the alternative submissions of Victoria

and South Australia that have been put on this

matter and add the following, most of which I hope

is slightly new.

These submission perhaps can be characterized

as an ultimate fall back that look at the scope of

the orders that can be made affecting States.	In
our submission the proper or the more helpful

approach would be to concentrate upon the functions

involved rather than the functionaries. The

constitutional guarantee, whether based in

Unions(4) 145 8/6/94

Melbourne Corporation or section 106, is a

guarantee of the continuation of the States and
their capacity to function as such, however that

expression is defined.

A State functions through its resources and

its agents in so far as it uses its resources. The

example given by Your Honour Justice Brennan in the

Tasmanian Dam case about the Parliament House and

the limitations upon the federal power to acquire
the Parliament House is an example of a limitation
touching upon physical resources, but its primary

resource and its primary capacity are the people

who serve as, and for, the State. If one

concentrates, as we submit is helpful, upon the function rather than the functionary, there are

some consequences to the present arguments.

One consequence is that the importance or the

meniality of the particular employee's duty may not
be determinative. If one picks an important
personage, as a judge, we know that judges may be

subject to income tax or the State may be subject

to fringe benefit tax, so far as touches judges,

without a trenching upon the constitutional

protection of the States. I would hand to the

Court two cases that also suggest a functional

approach with respect to any immunity touching

judges. The first is an American case of Forrester

v White, 484 USR 219, and the second is a passage
from the judgment of Justice Kirby in Yeldham v

Rajski, (1989) 18 NSWLR 48, at 58 and 59. They are

in non-constitutional contexts but, nevertheless,

in our submission, the principles may be of

assistance. Forrester v White was a decision that

a:

State-court judge held not to have an absolute

immunity from ••••• suit which alleges that

judge demoted and discharged probation officer

on account of her sex, in violation of the

Fourteenth Amendment.

And, in the judgment of the court given by
Justice O'Connor, at page 563 of the lawyers'

edition, left-hand column about the middle of the

page, Her Honour said that:

Running through our cases, with fair

consistency, is a "functional" approach to

immunity questions other than those that have

been decided by express constitutional or

statutory enactment. Under that approach, we

examine the nature of the functions with which

a particular official or class of officials

has been lawfully entrusted, and we seek to

evaluate the effect that exposure to

Unions(4) 146 8/6/94

particular forms of liability would likely

have on the appropriate exercise of those

functions.

That approach would invite attention to the

particular clauses of the proposed award and their

impact upon the functioning of particular

officials.

The passage in Yeldham v Rajski is the

paragraph numbered 5. I will not read it, but

there Mr Justice Kirby endeavours to give some

examples of when a judge is immune and when a judge

is not immune in relation to acting as such and

acting otherwise than as such.

Those are examples, as it were, of a

functional approach at the top of hierarchy but, to go to the bottom of hierarchy without suggesting, I

hope, an inappropriate statement, if one looked at

the person who served the tea in the Cabinet room

as an example of a more menial task, surely in that

context federal rules that entrenched upon the secrecy or loyalty of that person might have a capacity to interfere with the proper functioning

of the State. I give that as an extreme example

but as one that perhaps illustrates that it is not

necessarily the person; it is the task and the

award clause that may be critical.

A second consequence of a functional approach

is that questions of privatization may be

irrelevant. Here I fear I may be putting~

submission that differs somewhat from my learned

friend, Mr Doyle. If one takes, for example, the Solicitor-General example that seems to have been

used, in Queensland the role of Solicitor-General

is a partially privatized function. In some places

the role of parliamentary counsel is privatized;

prisons may be privatized. It does not follow, in

our respectful submission, that that necessarily

means that a federal award can move in and affect	that function at will. It is the function rather
than the functionary that may be significant.

BRENNAN J:  I do not know that the function of a

Solicitor-General is other than privatized, is it?

One would hope not.

MR MASON:  The confidentiality privatized or the fact that

it is - - -

BRENNAN J: Any aspect of the work of a Solicitor-General I

would have thought was necessarily privatized.

MR MASON:  In so far as it is a personal function exercised

in person.

Unions(4) 147 8/6/94

BRENNAN J: And in a professional manner.

MR MASON:  And in a professional manner, yes. But whether

or not that is formally in an office or an

employment or a contractual relationship does not

affect the task, in my submission.

McHUGH J: Until 1893, was it not, the English Attorney and

Solicitor-General were paid their fees, counsel's

fees for appearing in cases. So you should

probably be charging $7000 a day or something.

MR MASON:  Historical arguments are sometimes painful. The

Court may be assisted by another analogy and it

arises from the discussion in Bradken's case and

Wynyard Investments - I will just give Your Honours

the reference and then make the proposition.

Bradken Consolidated v BHP, 145 CLR 107 and Wynyard Investments v Commissioner of Railways, 93 CLR 376,

at 394 and 396 and 397 in the judgment of Justice Kitto.

The point made in both of those cases, in

slightly different contexts, was that the

immunities of the Crown can affect subcontractors,

as well as officers of the Crown. The critical
question was whether the taking away of the
immunity would adversely affect the interests of

the Crown in relation to the task that those

persons were commissioned to do for the Crown.

Another consequence of a functional approach

may be that different clauses of awards have a

different impact upon the capacity to function and

a pay provision may be different to a provision

that affects the power to dismiss or to

restructure. Another consequence may be that one

looks at the policy function of the functionary,

the role of that particular person as being a

analogy of any assistance but in America there has	relevant matter. Again, the Court may or may not find the
been some discussion in the context of the first amendment about the propriety or otherwise of
public officials being dismissed from office when there is a change of government and the Supreme Court has drawn a distinction between policy
officials for whom it may be appropriate to apply a
patronage and loyalty test and officials who are
not in such a function, for whom the right to
freedom of speech may give them a security of
tenure. The two cases that discuss this are Elrod
v Burns, 427 US 347, and Rutan v Republican Party
of Illinois, 491 US 62. In the latter case,
Mr Justice Scalia, in dissent was very critical of the division which the earlier case suggested.

Unions(4) 148 8/6/94

Your Honours, in various contexts, Justices of

this Court have been critical of the concept of the
traditional functions of government - the

traditional and inalienable functions of government

and that concept as a useful tool. In the decision

of Deputy Commissioner of Taxation v State Bank,

174 CLR 219, at 230 to 231, the entire Court

rejected that as a useful tool in the context of section 114.

As has been referred to already in

Professional Engineers, Chief Justice Dixon, at

235, and Justice Windeyer, at 272 to 274, rejected

that as being a useful concept but, in our
submission, Professional Engineers, the rejection

of that concept should be seen in the context in which the concept was advanced. In Professional

Engineers it had been argued that if something is governmental it cannot be the subject-matter of an

industrial dispute and it was in that context that

the notion of governmental functions or certainly inalienable governmental functions was dismissed.

To recognize that there are judgments of this

Court that are critical of that concept, does not

and, in our submission, cannot remove the need for

the concept or some analogue of the concept to be

used in the context of the constitutional position

of the States. For as many passages that, as it were, reject the notion, there are passages that

use it in different contexts. May I just give the

Court three? In Bropho's case, 171 CLR 1, at

pages 15, 16, in the Registrar of the Accident

Compensation Tribunal v Federal Commissioner for

Taxation, 178 CLR 145, at pages 163 and 164, in the

joint judgment of four of Your Honours, the Chief

Justice, Justices Deane, Toohey and Gaudron,

reference is made to Crown or governmental

functions and functions which are necessarily

governmental in nature. Even Chief Justice Dixon

who, in Professional Engineers, rejected the	concept, used it in another context, for example,	in Farley's case when he was enunciating an early
version of the Cigamatic doctrine, 63 CLR 278, at
page 308, His Honour there drew a distinction between State laws that affected the Commonwealth
when the Commonwealth moved into a field covered by
general law, but His Honour said at page 308 point
7:

There is, however, a clear distinction between

the general law, the content or condition of

which, though a matter for the legislatures of

the States, may incidentally affect

Commonwealth administrative action, and, on

the other hand, governmental rights and powers

belonging to the Federal executive as such.

Unions(4) 149 8/6/94

Of course, I am not arguing in favour of the

Cigamatic principle, but I do submit that when one

is dealing with intergovernmental rights,

immunities and the impact of the Constitution upon

the constitutional functions of the polities, one

just cannot get away from the need, somehow, to

identify what is the State acting as such.

Necessarily that leads, in our respectful

submission, to the need to draw lines and it may be

easier to draw those lines as regards legislative

and judicial functions than it is as regards

executive functions. But there is no reason in

principle why the executive arm of the State should
be singled out for treatment that is different from

the recognition of the role of the State as

legislature and judicial arms.

The difficulty with applying the principles

that are recognized with respect to legislative and

judicial functioning and the penumbra of protection

that appears to be recognized for those

functionaries and functions, the difficulty in

applying it to the executive has been seen to be

based upon the fact that States move in and out of

particular activities, and the need to identify a

workable criterion for determining when the State

executive is immune from a federal award or from

aspects of a federal award and when it is not. The

logical position, a matter of strict logic, is the

one, in our submission, advanced by Victoria that

wherever the State moves to execute its laws, then

those functionaries who are involved in that

execution are the State, and we respectfully adopt

that as an alternative position.

A narrower view would be to look at the role

of the executive function of the State as being so
much of that as is concerned with the core

functions of government, and I do not wish to

repeat anything that my friend, the

Solicitor-General for South Australia has advanced.

A perhaps slightly different or narrower way of

putting it would be to look at those who are

involved with the executing of the rule of law in

the State, and at least with respect to the police

and prisons function, one can see that as being a

peg upon which to recognize that there must be

certain functions which attract the principle even

as regards the executive as distinct from the

legislative and judicial role.

Finally, Your Honours, something about the two American cases and the discussion of them in the

respondent unions' submissions at 35 to 39. The

American Supreme Court in Garcia v San Antonio

Metropolitan Transit Authority, 469 US 528, was

Unions(4) 150 8/6/94

seen by Your Honours in Lee and The Second Fringe

Benefits and by many observers, in effect, to

advance a complete retreat from the notion of there

being governmental functions. Garcia is discussed

or mentioned in Lee's case, 160 CLR at pages 452

and 453, and Second Fringe Benefits, 163 CLR at

page 360. But our submission is that it cannot

properly be applied or should not be followed in

this country if it is said to destroy the efficacy

of the concept of a constitutional or governmental
function.

It was a case involving the application of a wage and overtime federal law to employees of a

public transport authority of a State - I will call

it a State even thought it was a part of a State -

and the Court, by a majority of 5:4, rejected the

notion of a traditional governmental function as

being a useful tool for providing an exemption from

the scope of the commerce power of the federal

Congress. The judgment of the Court, delivered by

Justice Blackrnun, is very critical of the

difficulty in working with that concept,

particularly since at different points of time in

history certain things were treated as governmental

and certain things were not. Justice Windeyer's

judgment in Professional Engineers makes the same

point.

The case, in our submission, really turns upon a trust which the Supreme Court gave to the

political process, which trust cannot be carried

over to an Australian context, or cannot be carried

over uncritically. At page 556 in the judgment of

the Court the paragraph commencing:

Of course, we continue to recognize that

the States occupy a special and specific
position in our constitutional system and that

the scope of Congress' authority under the

Commerce Clause must reflect that position.

But the principal and basic limit on the

federal commerce power is that inherent in all

congressional action - the built-in restrains

that our system provides through state

participation in federal governmental action.

The political process ensures that laws that

unduly burden the States will not be

promulgated.

In our submission, that statement cannot be carried

over uncritically to an Australian context, and the
judgment really turns upon two matters: that idea of trust in a political process and the difficulty

in drawing the line between governmental, or

constitutional functions, and those that are not.

Unions(4) 151 8/6/94

As to the difficulty in drawing the line, our submission is that the Constitution requires it to

be drawn and we would submit that the dissenting

judgments in Garcia are to be preferred because, in

effect, there is a strong cry by the Justices for page 567, the judgment of Justice Powell, the the retention of the role of judicial review. At

bottom of the page of the text of the judgment,

His Honour says, in effect, that he saw the

majority judgment as an attack on Marbury v Madison

in the role of judicial review in the matter.

Justice O'Connor, to like effect, at page 580:

The Court today surveys the battle scene of

federalism and sounds a retreat. Like

Justice Powell, I would prefer to hold the

field and, at the very least, render a little

aid to the wounded.

At 581, about six lines down in her judgment: The true "essence" of federalism is that the

States as States have legitimate interests

which the National Government is bound to respect even though its laws are supreme.

Finally, at the very end of the judgment, 588 at

the bottom of the page, reference is made to the

difficulty in crafting:

bright lines defining the scope of the state

autonomy protected by National League of

Cities. Such difficulty is to be expected

whenever constitutional concerns as important

as federalism and the effectiveness of the

commerce power come into conflict.

In fact, Your Honours, we would submit that the minority views have been vindicated in a later	decision of the Supreme Court, Gregory v Ashcroft,	(1991) 115 L Ed 2d 410. That case decided that age
discrimination in the Employment Act, which was a
federal Act, was held not to apply to appointed State judges and that the mandatory retirement of
equal protection clause of the Fourteenth two judges in Missouri was held not to violate the
Amendment.
Our learned friends, the counsel for the respondent, have in their submissions,
paragraph 39, argued that Gregory v Ashcroft really
turns upon the interpretation of the federal law.
We would respectfully dispute that and say that what has happened, if one reads the judgment carefully, is that the Supreme Court has said that
the constitutional requirement was the factor that

Unions(4) 152 8/6/94

required the reading down of the broad words of the

federal law. I will just briefly direct the

Court's attention to the passages. At 422, I am looking at the lawyers' edition, at the bottom of the page:

This federalist structure of joint sovereigns

preserves to the people numerous advantages.

And then there is a list of what the advantages of federalism are. At 423 in the right-hand column,

next to (Sa, 6, 7) where the court is speaking

clearly in constitutional terms. At 424, the

right-hand column near the top, reference is made

to a case of Sugarman v Dougall, and a passage from

that judgment is set out at 424 and 425. Picking

up near the bottom of the page:

"each State has the power to prescribe the

qualifications of its officers and the manner

in which they shall be chosen" ..... Such power

inheres in the State by virtue of its
obligation, already noted above, 'to preserve

the basic conception of a political

cornrnunity' ••••• And this power and

responsibility of the State applies, not only

to the qualifications of voters, but also to

persons holding state elective and important

non-elective executive, legislative, and

judicial positions, for officers who

participate directly in the formulation,

execution, or review of broad public policy

perform functions that go to the heart of

representative government".

In our submission, the passage at 426 in the

left-hand column makes it very plain that what the

court is doing is applying this fundamental

constitutional principle to read down the

congressional legislation. Whilst there is

reference to Garcia's case near the bottom of 426

is in effect sounding a retreat from the principle	in the left-hand column, the judgment of the court
that one can trust the political process rather
than the judicial function of protecting the federal balance. If the Court pleases, those are our submissions.

MASON CJ: Thank you, Mr Solicitor. Mr Solicitor for

Queensland.

MR KEANE:  May it please the Court. I think Your Honours

have the written submissions that were filed

pursuant to Your Honour the Chief Justice's

direction.

MASON CJ:  We have.

Unions(4) 153 8/6/94

MR KEANE:  Your Honours will appreciate that those

submissions relate only to the Melbourne

Corporation issue. In that regard we adopt the

submissions that have been put on behalf of the

prosecutor and on behalf of New South Wales.

Your Honours, in our written submissions we refer
to some of the recent cases in the United States in

relation to the question, the debate, as to the

existence of limits that are implied in the

Constitution or necessarily implicit in the Tenth

Amendment on federal power to make laws against the

States.

Our learned friend from New South Wales has

mentioned some of those authorities. Might we
mention a couple of matters about them, hoping to

avoid repetition. We refer to those authorities in

our submissions to make the point that the American

retreat from acceptance of the existence of implied

limitations on the power of the Congress was based

on reasons which are unacceptable in the Australian

constitutional context. In addition, the American

authorities, in so far as they have recognized the

existence of the implied limitation, do afford, we

would submit with respect, some support for

formulating the test of the kind proposed at

paragraph 29 of our submissions, particularly in

relation to the third dot point.

Your Honours, just as the expansive

interpretation of the conciliation and arbitration power in Australia necessitates the identification

of a principle such as that expressed in the

Melbourne Corporation case, so did the liberal

interpretation of the commerce clause in the United

States stimulate the recognition in 1976 in

National League of Cities v Usery of an implication

that the legislative power given to the Congress

may not be exercised so as to compare the

capacities of the States to function as

governments. That implication is referred to in

paragraphs 5 and 6 of our written submissions. Without taking Your Honours to National League

of Cities at the moment, may we mention that it was said in National League of Cities v Usery at 842 to

845, especially at 844, that this implication was

to be derived from the federal nature of the

Constitution as well as from the Tenth Amendment.

The competing arguments for and against the

adoption of such a principle in the United States

can be seen to be arrayed in Garcia which our

learned friend, the Solicitor-General for New South

Wales, mentioned. As he mentioned, in that case

the implication was rejected.

Unions(4) 154 8/6/94

May we make the point, with respect, that in

Garcia by a 5:4 majority the Supreme Court held

that a federal law fixing minimum rates of pay and

overtime requirements for employees in public

employment applied to an urban transport authority

organized under State laws. The basis for the

majority decision was, as Mr Mason said,

dissatisfaction with the use of the notion of

traditional governmental services as the touchstone

of the reach of federal power. But what the

majority of the Supreme Court then did, having

found the test difficult to apply, was to abandon

the notion of any relevant constitutional

implication at all. Your Honours will see that

apparent in the judgment in Garcia at 530 to 531.

Here, of course, no one invites the Court to

dispense with the Melbourne Corporation principle

and, in our respectful submission, the implication

is securely established by the authorities. In

Garcia the minority who had formed part of the

majority in National League of Cities v Usery

disclaimed the necessity to adopt a touchstone

referable to traditional governmental services as

being essential to their decision. Your Honours,

that can be seen in the judgment of

Mr Justice Powell at 561 to 562. The question, as

we would understand the reasoning of the minority,

is whether in any case it can be seen that the

activity sought to be regulated is integral to the

structuring of governmental functions, and once

again, in common with our learned friend, Mr Mason,

we would submit that the focus of attention is not

on the functions of the functionaries, but of the

functions of the States exercising their

constitutional functions as governments.

Your Honours, two points can be made about

Garcia in the Australian context: firstly, as the minority point out, it is unsatisfactory for the

court to vacate the field of holding the federal

balance, particularly on the justification

proferred by the majority at 552 point 2 that:

"State sovereign interests are more
appropriately protected by procedural
safeguards inherent in the structure of the

federal system than by judicially created

limits on federal power."

As to the criticisms of that approach, we refer

Your Honours to the observations of Justice Powell at 564 point 4 to 565 and 579 in the last paragraph

in section IV, and the observations of

Justice O'Connor at 587.

Unions(4) 155 8/6/94

We would submit, with respect, that the

Australian experience has not been such as to commend the approach of the majority of the court

in Garcia on this point to this Court. And in any

event, with respect and more importantly, the

implication is securely established as, with

respect, is the responsibility of this Court to

elucidate its operation.

The second point strongly made in the minority underlying the federal imperative is that the power	judgments in Garcia is that the principle
to make governmental decisions at a particular level of government should reside with those representative of, and accountable to, the people
who elect them. In that respect, can we refer the
Court to the observations in the judgment of
Mr Justice Powell at 575 point 2 to 577, and
particularly the last paragraph at 577 and the
observations of Justice O'Connor at 578 point 4 to
579. In our submissions we mention at
paragraphs 17 to 19 that Garcia may not be secure as an authority and we do not, of course, with
respect, invite the Court to speculate in that
regard, but we simply draw attention to the fact
that there is, and there has been expressed in the cases to which we have referred the Court in our written submissions, continuing dissatisfaction
with the position that the ultimate constitutional
court has decided to, with respect, vacate its
responsibility to hold the federal balance by way
of judicial review, and in this regard, the minority in Garcia predicted a resurgence of the
approach in National League of Cities v Usery.
Your Honours will see that prediction in Garcia at 589 in the judgment of Justice O'Connor and at 580 in the judgment of Justice Rehnquist.

Our learned friends have taken Your Honours to

Gregory v Ashcroft as reflecting the approach

towards fulfilment of that prophecy. Can we simply

give Your Honours reference in Gregory v Ashcroft,

(1991) 115 L Ed 2d 410 at page 423, and

particularly at 435 in the first full paragraph of

the dissenting judgment in that case of

Justices White and Stevens. We mention that

because Their Honours were members of majority in

Garcia and Their Honours certainly regard the

decision in Gregory as inconsistent with the

decision in Garcia.

The other case in the United States,

subsequent to Garcia to which we would refer the

Court, is the decision of the Supreme Court in New

York v the United States, (1992) 120 LEd 2nd 120.

Your Honours, in that case the majority affirmed

the view that federal power did not reach to

Unions(4) 156 8/6/94

support a requirement that a State take action

within its province. The particular action that

was required of the State was to legislate to take

title to low level radio active waste within the

State's boundaries in the event that the State did

not make other arrangements for its disposal. The Court held, by majority, that such a requirement, that is to say that the State act to take title to

radio active waste which it would not otherwise

wish to act in respect of, was beyond federal

power. Can we refer Your Honours to the passages

in the judgment at 133, in the left-hand column,

half-way down; 137, in the right-hand column, the

first full paragraph; to 138, in the left-hand

column, at the end of the paragraph that comes from

over the page; and, 145, in the right-hand column,

the last sentence of the first paragraph and the

next full paragraph.

Your Honours, can we submit then that one does

not need to employ a concept of traditional

governmental functions as the touchstone of

impermissible control, but in that regard may we

observe, with respect, that this Court had no

difficulty in the QEC case in identifying the

generation and distribution of electricity as a

governmental function of the State, a function the

subject of the relevant constitutional implication,

albeit of the first limb rather than the second

limb of the Melbourne Corporation principle, if,

indeed, they are to be treated as separate concepts

rather than two ways of saying the same thing.

Your Honours, our submission is that a federal

agency may not, in settling an industrial dispute,

purport to regulate the composition of the

executive, legislative or judicial arm of a State.

The Commission may not require the State, just as

the State of New York could not be required by the

Congress to engage through its executive in

particular activities or a particular mix of

activities. Your Honours, in a situation where

resources are limited, to prescribe the numbers of

particular kinds of employees who are to be

engaged, the mix of employees by whom a State

executive is to carry out its functions and to fix

the costs of those components - if one may refer to

them that way - is necessarily to constrain the

States in terms of the functions it may carry out.

It necessarily impedes, with respect, the functioning of the executive government of the

State because it constrains the choices involved in

the processes by which its powers are exercised.

Your Honours will appreciate that in using that

language we are picking up the language and

submitting it is applicable of Your Honour

Unions(4) 157 8/6/94

Mr Justice Brennan, in the Tasmanian Dam's case,

158 CLR 1, at pages 214 point 5 to 214 point 9.

By way of concrete illustration in this case

may we refer, without asking Your Honours to go to

them now, to paragraphs 20 and 21 of Mr Stockdale's

affidavit filed on behalf of the prosecutors, at

pages 43 to 44 of the supplementary application

book. There the point is made that the carrying

out of the Victorian Government's budgetary

policies could be severely impeded by the decisions

identified there and it is said that the ability of

the Victorian Government to formulate and carry out

its policy decisions is sensitive to the amount of

the total wages bill and thus to changes in wages,

to the number of workers employed and to the efficiency of the deliver of their services.

Your Honours, with respect, this problem is

not a problem which arose in Re Lee; Ex parte

Harper or the Professional Engineers' case or,

indeed, with respect, in any of the other cases and
that is because in those cases there was no issue

about the choice of the State executive government

to engage in particular activities. If a

government chooses to engage particular employees

to perform particular services then it pays the price. Here the issue though is, with respect,

whether the State can be constrained in its choice

of whether to provide services or a particular
level of services and, in our respectful

submission, to force that choice upon a State

executive is not within the scope of the

permissible limits of Commonwealth legislative

power.

BRENNAN J: But that is rather eliding a difference, is it

not? If the State is to be given power to

determine whether it will provide services and the

limit of services that it will provide and services

can be provided only at a cost, why is it that the

State does not have to determine by reference to

the cost otherwise existing whether it will or will

not provide those services?

MR KEANE:  Your Honour, our first submission is the State

cannot be commandeered to engage in a particular

activity which is within its own governmental

functions. If it cannot be commandeered it elect

to refrain from activity in a particular area from

the delivery of services in a particular area and

from the engagement of those employees whose

services would be necessary to deliver those

services.

Unions(4) 158 8/6/94

BRENNAN J:  But if they choose to engage employees under the

terms of an award, does that infringe in any way

this area of immunity?

MR KEANE:  No, Your Honour. If they have chosen to engage

in a particular activity on the basis that they

have budgeted for it, then they pay the price. But

in this case one sees examples of awards that are

made in MB, Mll and Ml0, at least, where the

interim award has been to the effect that the State

shall not terminate services, even where the

employees are willing to accept a voluntary

redundancy package. It is precisely requiring the

State to remain in a particular field of activity

with a particular level of service.

BRENNAN J:	Do your submissions go at all, then, to M24?
MR KEANE:	Well yes, because we submit that it necessarily

constrains a State government in its choices as to

the services it performs to require it to engage

employees on particular terms where it has not

chosen to engage them.

BRENNAN J: Yes, but if the terms are set and it then

chooses to engage them, is there any problem?

MR KEANE:	we would not see a problem, no, Your Honour.
BRENNAN J:	You do not take your argument as far as saying

that, whatever the terms of an award may be, a

State, in exercising its powers, can do what it

chooses without breaching the award?

MR KEANE: Well, Your Honour, in the light of cases such as

Lee and Harper, which was a case which proceeded on

the footing that the State was employing school
teachers, then we could not see that we could

submit consistently with that that the State would

not be obliged to meet the terms of engagement.

Your Honours, those are our submissions. There is one matter in relation to the
housekeeping.	I gather one of the cases referred

to in paragraph 18 of our outline is not available

to the Court library; can we simply hand those

cases to the Court. Those are our submissions,

Your Honour.

MASON CJ: The Court will adjourn now and resume at 2.15.

AT 12.47 PM LUNCHEON ADJOURNMENT

Unions(4)	159	8/6/94
UPON RESUMING AT 2.20 PM:
MASON CJ: Mr Kenzie?

MR KENZIE:  If it please the Court. The Court has our

written submissions and, like some others, we have

not attempted an outline of those submissions. We

have thought that the most efficient way forward

would be for us, without repetition, to take the

Court, by reference to our submissions, to the

matters which have been raised in the proceedings,

and it seems to us that that is the most efficient

use of time, Your Honours.

Could I say a few words about some mechanical

matters. Firstly, the written submissions that

have been filed, as the Court will see, are filed

in relation to all of the matters and that reflects

co-operation between the parties so as to avoid

repetition of the submissions. I am instructed to

say that the submissions that the Court sees filed

have been filed as they are on behalf of all of the

respondent unions, save that the LHMU, Mr Bell's

client, has the position that the matters can be

resolved without recourse to the other respondent
unions' arguments on enforceability of awards.
Subject to that, the position of the unions the

Court can take to be as per the submissions. Mechanically, I am going to put submissions on

the matters dealt with in our written submissions,

with the exception of submissions on the

discrimination aspect of matters MS and Mll, which

Mr North will deal with. Mr Bell has clients

involved in the section lll(l)(a) matters and we

are not concerned with those and, as I understand

it, separate submissions, in addition to the

submissions that the Court has in these written

submissions, will be put in relation to the police

by Mr Shaw. But that is the framework, if one

likes.

Secondly, there has been some discussion about

some of the additional material provided to the

Court in the course of these proceedings.

Yesterday, the Solicitor-General for Victoria took

the Court to document 1 in the book of materials

that was handed to the Court yesterday morning. At
that time there was a question raised as to

agreement as to the accuracy of the contents of

that. We were not then able to respond as to that

because of the recency of the service of the

material on us. We have had the opportunity to consider that material now, and· our position is

this, Your Honours, whilst we maintain a position

Unions(4) 160 8/6/94

that there are some inaccuracies in that material
they are not inaccuracies which, as we can see,
bear in any way on the matters before the Court.

We say what we do because they may have relevance

to some other proceedings, but the Court, from our

point of view, can proceed on the basis of these

materials.

MASON CJ:  Thank You.

MR KENZIE: Thirdly, I should say something about the

proceedings in so far as they concern the

interstateness arguments, although I will not come

to that for some little time. The Court should be

aware that when the proceedings as a whole were

originally commenced it was only in relation to two

of them that the interstateness argument was

mounted. Subsequently, when directions had been

made or about the time that directions were made,

the prosecutor indicated that it wished to argue

interstateness in relation to all of the matters.

Now, that was agreed to by the respondent unions,

and those amendments, although I think that they

were not formally sought -

MASON CJ: They are in the papers.

MR KENZIE:  They are in the papers, and there is no

difficulty about that, but the reason for

mentioning it now is this, that the arguments about

interstateness proceed on the basis that it is

contended in each case that there is something

about the nature of a State and its relationship

with its employees that prevents it, as such, from

being a participant in a Sl(xxxv) dispute. In

other words, the interstateness arguments are put

before the Court not by reference to any evidence

which has been produced before the Australian

Industrial Relations Commissions or its

predecessor, but as an abstract proposition in each case. Neither the Commission nor its predecessor	has ever relevantly considered the interstateness	aspect of these cases.
Accordingly, there is no evidence that is before the Court, certainly none that has been
referred to, which would assist the Court in the task that might ultimately be relevant or
necessary, namely, a task of saying in respect of particular classifications of employee - senior public servants and the like - the sort of persons
mentioned by Your Honour Justice Brennan in SPSF,
whether the evidence in the proceedings permits a
finding that there is a community of interest as
between them and persons elsewhere to sustain an argument about interstateness.

Unions(4) 161 8/6/94

It is not that sort of debate. It is an

abstract debate which is able to be had because of

the consent of the organizations to it being had

because it was felt that there was no need for

evidence. I thought I should mention that at the

outset. There were some questions yesterday asked

about the link between the different individuals
who were the subject of the claims in Victoria and

the like. They are not matters which the evidence

will permit the Court to come to grips with in

these proceedings, in our respectful submission.

BRENNAN J:  May the argument give rise to a question which

really is a functionary's question, namely, whether

there are senior executives who cannot be subject

to an interstate dispute and others who can?

MR KENZIE:  Yes, it has been put in different ways at

different times. It has been put on the basis that

there may be some senior functionaries who, by

definition, are not caught by the constitutional

power, and we will come to that. That has been put

in the context of a search for industry and the

like.

More recently, there are references in some of

the cases to the question of whether the nature of

the duties of such senior functionaries and their

relationship to the State is such and perhaps so

unique so as to prevent those functionaries from

being involved in an interstate industrial dispute

which I think is the way in which Your Honour went

to it in SPSF (No 1). It has been put in different

ways. As we would put it, because of the way in

which we say the Court should have approached the

matter generally, those questions do not arise in
these proceedings - cannot arise in these
proceedings by definition. When they arise, then
they will be dealt with presumably on the basis of
evidence of the sort that was discussed in the

Aberdeen case, evidence as to all of those matters

which might support a community of interest between

those persons and their counterparts in other

States, whether in private industry or otherwise.

DAWSON J: But the dispute which was found was found upon

the only evidence before the Commission in each

case was the failure to accede to a log of claims.

MR KENZIE:  Yes, that is right.

DAWSON J: And it is on that evidence that it found a

dispute.

MR KENZIE:	That is certainly so, and we do not run away from that. But if this Court was required in
prerogative writ proceedings to determine the

Unions(4) 162 8/6/94

validity of a dispute finding, then presumably

evidence of the existence of a community of

interest would be - - -

DAWSON J:  I do not understand that. I mean, that was the

evidence before the Commission and the Commission

concerned, there is.

decided on that evidence that there was a dispute.

MR KENZIE:	Yes.
McHUGH J:	Was interstateness raised at the dispute level

before the Commission?

MR KENZIE: There were a number of disputes, Your Honour,

and the nature and extent of the debate in each

case is something of which I am not presently

appraised. The point about it is that there was

not sought to be put before the Commission, nor is there sought to be put before this Court, evidence

to show that there is no community interest between

any of the persons concerned. It is not the
subject of a decision of the Commission of which we

are aware, it has never been examined in any manner that has been put before the Court and the Court is

not asked to review any decision of the Commission

to that effect.

DAWSON J:  I still do not understand. The only

interstateness is the interstateness which arises

out of the failure to exceed to the log of claims

on the part of those who served them.

MR KENZIE:	Yes, Your Honour.
DAWSON J: No other evidence, that is it.	It could have had

other arguments and so on, but there were not.

That is it.

MR KENZIE:  In order for the prosecutors to succeed on the

interstateness issue, they would be obliged to

discharge the onus of proof and satisfy the Court

that there was no relevant community of interest in

the Aberdeen sense.

DAWSON J:  I do not see that that arises at this stage. A

dispute has been found on such evidence as there

was and that was restricted to the failure to

accede to a log of claims.

MR KENZIE:  Yes, Your Honour, perhaps if I can come to it in the fullness of time. We deal with the submissions

as they are mounted. All that I am anxious to do

at this stage is to alert the Court.

MASON CJ:  You have sent the signal.

Unions(4) 163 8/6/94

MR KENZIE:  Yes, Your Honour; thank you. Could I deal with

the submissions that we make about the
constitutional implication. Your Honours, we of

course accept that the cases have not thrown up a

description of the constitutional implication which

is statute-like and so on. The language which

appears in the judgments is varied but, in our

respectful submission, the thrust of the judgments

of this Court in relation to the implication is at

least clear. The thrust of it, we say, is

consistent with part A of our written submissions

and the thrust of it, which we say has its origins

in the decision of Justice Dixon in the Melbourne

Corporation case - the Court has been taken to

page 82 of His Honour's decision - reflects the

distinction between States as entities and bodies

being the repository of power.

I will not reread the passage on page 82

point 1 because it has been referred to by the

Solicitor-General for South Australia, whose

submissions as to the nature of the implication,

the approach of this Court to the implication, are similar to ours. The Court has had the benefit of

that debate and we say that our submissions in

relation to the thrust of the implication are

consistent with Mr Doyle's submissions and are

consistent, Your Honours, with the fact that since

the Melbourne Corporation case in 1947 there has

not been a case in which a federal law has been

struck down on the basis of the non-discriminatory

arm of the Melbourne Corporation case.

McHUGH J: Have you read my judgment in Australian Capital

Television?

MR KENZIE:  Your Honour, I know that there are individual

judgments within decisions of the Court which go

the other way, as it were. Your Honour

Justice Brennan's decision in The Second Fringe

Benefits Tax case is an example. There His Honour	found that the fringe benefits tax brought the
relation to the central organs of government, as
His Honour described it. So that there have been
decisions of the Court are concerned, the absence judgments in which it is applied but as far as
of a decision of the Court upholding the Melbourne Corporation implication, in its general aspect, is
consistent with our submissions that that general
aspect does not go to the protection of State functions but it goes to the protection of States as entities within the federal system in the sense
contemplated by Justice Dixon.

Melbourne Corporation implication into play in

McHUGH J: But it is a question of what that means, is it

not?

Unions(4) 164 8/6/94

MR KENZIE:  No doubt it is a question of what that means but

one thing that it does not mean is this: it does

not mean that the principle protects those

functions which a State of the Commonwealth elects

to perform and describe as governmental, as such,

from the extent of federal power.

McHUGH J: But one is not striking at the States for the

Arbitration Commission to say, "You shall employ

this person or you shall not employ this person,

these are the rules for promoting people, these are the rules for getting rid of people.". Surely that

strikes at the very heart of federalism?

MR KENZIE:	Does Your Honour use that word in the discriminatory sense?
McHUGH J:	No, I am talking about generally.
MR KENZIE:	Your Honour, such a conclusion carries with it

the proposition that it is truly an essential

aspect of the functioning of States to employ
particular sorts of persons, and that involves the

debate that has been had - - -

McHUGH J:  I am not talking about trading activities, maybe

they are different, •.•.. criticism that has been

made of the description "governmental". But let us

talk about non-profit activities; running of

hospitals, running of police forces and so on,

ministerial advisers. It certainly is going a long

way to say that a Commonwealth instrumentality can

tell the States who they can employ and when and on

what conditions they can employ.

MR KENZIE:  Your Honour starts at one end of the spectrum as

it were. We concede, for the purposes of our

argument, that a federal award, whether it deals

with what has been described as the administrative

services exception or otherwise, may bring the

Melbourne Corporation principle into play, as a

matter of theory. We do not have any difficulty

with that as a concept. What we say is that the

way in which the matter has been approached by the

prosecutor and by those others who have sought to

limit the scope of the application of Sl(xxxv) to

the States, proceeds down the wrong path and asks

the wrong question.

If you ask the right question then you may

get, in a particular case, to a situation where you

say of a particular award, "That award, having the

effect that it does, brings the implication into

play", but you do not have the debate at the outset

and say, "An award may have the effect of bringing

the implication into play, and therefore Sl(xxxv)

does not apply to a class of people".

Unions(4) 165 8/6/94

McHUGH J: Why not? Supposing the 1944 referendum had

succeeded and the Commonwealth had got power over

wages, which I think was one of the proposals,

could the Commonwealth then set up a tribunal to

make awards to State public servants and control

the conditions of employment of State public

servants?

MR KENZIE:  That would be an act directed at the States

alone.

McHUGH J: What is the difference in substance between what

happens? You send a bit of paper along to a couple

of governments, and then you say, "Now a

Commonwealth Conciliation Commission can keep

control of them for the rest of their days with a

variation power as long as it's within ambit".

MR KENZIE: All the difference in the world, Your Honour.

If one starts with the focus that one is dealing

with a State award that has the effect of, say,

confining a State in terms of who it will employ as
a senior policy adviser and the like, and one then

moves to the stage of saying, "Now, there it is set

in stone into the future", and it is an award made

in relation to one State, then if you had that

result a question could be asked. But,

notwithstanding some observations that have been

made during the hearing as to the way in which

these things work out, there is no basis for the

belief that disputes involving States and their

employees or instrumentality employees work out in a way which involves segmented awards in different

States.

McHUGH J: But, piecemeal settlement of interstate

industrial disputes is almost the norm with the

Commission is it not?

MR KENZIE:	Whether it is the norm or not could not affect the general question which, as we understand it we
have to deal with initially, which is the extent of
section Sl(xxxv) to the States and their agencies.
The fact that an award might be made on a segmented basis, if made could then be looked at and someone
could say, "Is that a control or is the content of
that award something that brings the implication
into play?"

McHUGH J: Yes, but this all arises because of paper

disputes. You cast the dispute in wide enough

terms and then the Commission, as the Victorian

public servants award, Queensland award, and the

conditions vary from State to State. This all

arises because of papers, as long as it is within

the general area.

Unions(4) 166 8/6/94

MR KENZIE:  Your Honour, they may, but consistent with a

general paper log as much as with an oral demand,

an award may be made out of it which covers

classifications of employees in different States

and deals with them in the same way. If I can take

an example, one of the issues that has arisen in

relation to the Australian Nursing Federation group of cases is the move to national nursing standards. That is a large industrial issue.

McHUGH J:  That is an illustration of what happens, is it

not? Has the dispute not been partly settled in

Queensland seven years ago, they made an award, or

something?

MR KENZIE: That is true. It was in fact settled on a

State-by-State basis, or, so far, has been settled

on such a basis. But that may or may not have

happened. The fact that it may have happened, or

the fact that it did happen cannot be conclusive of

the extent of federal power to State employees.

McHUGH J: What do you say to a proposition that because of

the potentiality for a paper dispute system to

control the States, that that doctrine has no

application where the States are concerned? If you

have got a real life dispute it may be a different

thing.

MR KENZIE:  No suggestion or case dealing with an attack on

paper disputes per se, as we understand it, has

been mounted in these proceedings and we

really -

McHUGH J: But it does give the opportunity to control the

States in what they do with their employees.

MR KENZIE:  Your Honour, no more than would an interstate

industrial dispute that arose because of a

widespread industrial dislocation in various

States.

McHUGH J: Yes, I appreciate that, but that would be a real

dispute. Somebody would be saying they should get

a month's leave or they should get $200 a week, but

there is a claim here by somebody - I think the

teachers - for a million dollars a year.

MR KENZIE:  Your Honour, those points are not raised in this

proceeding.

McHUGH J:  I know, but it means that having regard to ambit,

the Commission would be able to control the

teachers for the next three centuries.

MR KENZIE:  Your Honour, may we say this., that when we come

to our submissions, they involve this proposition.

Unions(4) 167 8/6/94

Literally since 1904, parties have been looking for

some way to limit section Sl(xxxv) and it has taken

various forms, none of them satisfactory. Before

1920 there was the implied immunities doctrine,

subject to trading exceptions. After 1920 but

before 1983 it was industry. After 1983 there was

the question of administrative service. Now there

is interstateness, direct or indirect effect on

States, core functions of government and so on and

so forth, and now paper disputes for the purposes

of argument. All of these things are

unsatisfactory approaches to the construction of the federal power, in our respectful submission,

and the proper approach, as we are instructed, is

as per the Melbourne Corporation case. That

approach is as applicable to Sl(xxxv) as it is to

other heads of power.

DAWSON J: That may be, but that is not what is being put to

you. It may be that paper disputes do not work in

relation to States as they do in relation to other

employers. That is because you have not just got

an employer; you have got a government with a

capacity to govern. Not only a capacity to govern

but, in doing so, to set up a regime by which

disputes can be settled and by means of which the

employees look to the State as the focal point in

relation to their employment. On top of that, if

you merely put a paper dispute mechanism, it

ignores the reality of the situation which is not a

situation which exists in relation to other

employers.

MR KENZIE: There Justice McHugh's question to me does

merge, as it seems to me, with the proposition that

Your Honour was looking at in relation to the

discriminatory aspect of the Melbourne Corporation.

DAWSON J:  No one is saying that you could not have an

interstate dispute involving government, you could,

and if that was so then the original purpose of

section Sl(xxxv) would be fulfilled by the

Conunonwealth corning in and dealing with a dispute

which no one State could deal with.	But the paper
dispute situation is not that.

MR KENZIE:  Your Honour, in so far as the paper dispute

objection to jurisdiction, it proceeds on the basis that it has the result of effectively bringing into play the discrimination aspect of the

Melbourne Corporation case by treating parties who

are not similar as similar, then we would seek to

deal separately if we may with that.

DAWSON J: No, it is just being said there is no genuine

interstate dispute in relation to governments in

these situations.

Unions(4) 168 8/6/94

MR KENZIE:  Your Honour, we would submit that that is a far-

reaching proposition. It is one that has not been

mounted by the prosecutors in this case.

DAWSON J: They say there is not an interstate dispute, and

in any event we cannot be confined by arguments

which are mounted, we have got to look to to the

Constitution.

MR KENZIE: True, Your Honour, but it has not been put to

the Court that there is an absence of - -

DAWSON J: It has been put to you.

MR KENZIE:  Your Honour, we say two thing; that there is no

fundamental reason why a paper dispute cannot found

a constitutional dispute with a State any more than

there is a reason for saying a paper dispute cannot

found a constitutional dispute with anyone else,

and in so far as the suggestion rests on the

proposition that service of a paper log on a State

and an award that may follow has the result of

treating States like other industrial disputants,

even though in truth they are not, because it

affects them as governments as well as industrial

disputants, and it has that additional effect on

them, we say that there are a number of answers to

that proposition. Your Honours, if we may deal

with that now that it has been raised in this way.

Firstly, Your Honours, we do point to the

judgment of Justice Dixon in the Australian

Railways Union case, and if I could take the Court

briefly to that decision, which is in 44 CLR 319.

Your Honour, this case, which as can be seen from

page 320, appeared to have a paper origin arising

out of an application being made by the

Commonwealth Court of Conciliation and Arbitration

for variation or setting aside of certain awards

and the like, was dealt with by Justice Dixon in a

passage with which Mr Justice Rich agreed, at

page 390 in these terms - and it is about half a
page, Your Honours.	He said:

The question is whether awards of the

Commonwealth Court of Conciliation and

Arbitration prescribing minimum wages and

conditions of employment in the railway

services of the States were validly made.	I
think this Court should hold that they were
validly made.	We ought not to examine the

correctness of the rule adopted by the
majority of the Court in the Engineers' case

for the interpretation of the legislative

powers of the Parliament. This rule I

understand to be that, unless, and save in so

far as, the contrary appears from some other

Unions(4) 169 8/6/94

provision of the Constitution or from the

nature or the subject matter of the power or

from the terms in which it is conferred, every

grant of legislative power to the Commonwealth

should be interpreted as authorizing the

Parliament to make laws affecting the operations of the States and their agencies,

at any rate if the State is not acting in the

exercise of the Crown's prerogative and if the not discriminate against the States or their agencies.

The Court upheld it in a context in which

Justice Dixon was elaborating on the discrimination limitation on the Engineers' principle and

upholding the validity of the award and expressly
referred to discrimination. His Honour did not

hold, and it would have been inconsistent with the

result in the case for His Honour to have held,

that there was something which per se separated

States from other participants - - -

McHUGH J: Yes, but this judgment has to be read against the

background, as you pointed out, of the doctrine of

what was industrial at this time, and it was after

the State School Teachers', only two years after
the State School Teachers'. But taking up your

point about discrimination, the union asks a

Commonwealth functionary or agency to make an award

only against the States. It is not as though it is

asking a general award for clerks which affects

people in the steel industry and in government; it

is directed only to the States themselves.

MR KENZIE:  And not discriminatory in a constitutional sense

for that reason, in our respectful submission.

MCHUGH J:	Why not?
MR KENZIE:	Your Honour, for the reasons advanced in

SPSF (No 1), amongst other things. In that case

contentions that awards sought against the States alone attracted the implication because they were

discriminatory appear to have been rejected. Could

I remind the Court of that decision in 178 CLR 249,
and come firstly to the judgment of Your Honour

Justice Brennan at page 276 at the bottom of the

page:

Secondly, the prosecutors submitted that

the facts reveal impermissible discrimination

against the States for reasons which are

stated thus:

"Three States have been singled out by

these logs of claims, not employers generally.

Unions(4) 170 8/6/94

Even though numbers of employers have been

served in each State, they have been served in

their capacities as employers, or people in

charge of public servants of the States.

There is no doubt that these States have been

singled out for attention in a discriminatory
fashion."

The discrimination is said to consist in

the imposition of a burden on the States
alone, not on the States in common with other

employers, although the nature of the

employment is common to both the public and

private sector. The argument proceeds on a

false foundation. The relevant jurisdiction

of the Commission is a jurisdiction to make an

award in settlement of an interstate

industrial dispute. If there be such a

dispute and the States or their

instrumentalities are the only employer

parties to it, there is no discrimination in

subjecting them to an exercise of the arbitral

power in the same way as other employer
parties are subjected to an exercise of the arbitral power in settlement of disputes to

which they are parties. What "singles out"
the States in the cases now under

consideration is their character as employer

parties to an interstate industrial dispute.

The criterion of discrimination is not that

the employers in dispute are the States and

their instrumentalities; it is that the

States and their instrumentalities are the

employers in dispute. The latter is not an

impermissible criterion for subjecting the

States and their instrumentalities to the same burden as that to which other employers in

dispute would be subjected by service of a log

of claims.

To similar effect, could we give Your Honours a

reference to the judgment of Your Honour

Justice Toohey at page 297 point 9, where

Your Honour, dealing as we are here in many

respects with a hypothetical, namely, what might be

an award if one was made down the track some time,

said this:

The discussion is hypothetical because of the

view I have taken that there is no industrial

dispute. But if the log of claims had

reflected industrial reality in such a way as

to give rise to an interstate industrial

dispute (by, for instance, nominating

realistic rates of pay and allowances and by

differentiating between categories of

employees), the award making power of the

Unions(4) 171 8/6/94

Commission might not be excluded on the ground that an award would be discriminatory. Such

an award would not be directed against the

States in question except in as far as they

are employers nor would it treat the States

differently from other employers. The

identification of the employers against whom

an award is sought springs from the membership

rules of SPSF. An award would be made in

order to determine an industrial dispute that

had arisen affecting those States.	No doubt
it would be an award that determined

conditions upon which Western Australia,

Queensland and Tasmania employed members of

their public services. But that would be a

consequence of the.identity of SPSF and its

membership rules.

Your Honours, that part of Your Honour's

judgment was adopted by Your Honour

the Chief Justice together with Your Honours

Justice Deane and Justice Gaudron at page 271

point 5. We do submit that that is decisive, with

respect, in relation to the discrimination argument

that has been mounted, but we would also say this

in relation to -

McHUGH J: But it has all got to be read against the

doctrine that has prevailed since Lee v Harper.

So, if one is just looking at the matter completely

afresh, one might have a different approach.

MR KENZIE:  Your Honour, we can do no more than - - -

MCHUGH J: Well, I know, yes.

MR KENZIE:  - - -we have done, and we have done it.

Further, in relation to the suggestion that there

is some innate vice in treating parties who are not

the same as though they were the same, we would

respectfully submit that there is no principle

which strikes, of itself, at such an approach as

containing a vice. There is no innate vice in

treating different parties, parties on whom

something will have an effect - a different

effect - in the same way as other parties. Such an

approach, we do respectfully submit, will be valid

and lawful, and not be discriminatory in the

pejorative sense if it be legitimately directed to

a general purpose, a constitutional purpose, from

our point of view, and if there is a proportion

between what is done and the achievement of the

constitutional end.

Your Honours, we do say that we get some

support for that contention, although in

circumstances where the Court was examining

Unions(4) 172 8/6/94

discrimination by treating similar people

differently instead of treating different people

similarly from at least two sources. Firstly,

there is the judgment of Your Honour

Justice Brennan in Street v the Queensland Bar

Association, 168 CLR 461, and again - and I know

this is not exactly what Your Honour Justice Dawson

was talking about, it is the other side of the

coin, as it were - but none the less His Honour is
discussing the validity of an approach which does

involve some discrimination between similar

parties. Your Honour said at 510 point 2:

Although it is misleading to derive

principles from discrimination cases decided

under statutes which are not analogous to

s 117, I refer to these two turban cases as

illustrations of two propositions which are
inherent in the concept of discrimination.

First, discrimination on a prohibited ground

may be effected, albeit indirectly, when the

expressed ground is a natural or ordinary

concomitant of the prohibited ground. rational connexion with an objective unrelated

to the prohibited ground, it may not be

discriminatory. That is because a class which

is singled out for adverse treatment on a

ground which has a rational connexion with an

unrelated objective - Sikhs who refuse to wear
hard hats when the wearing of hard hats is a

bona fide occupational requirement, for

example - are relevantly unequal to others to

whom the ground applies and the difference in

treatment reflects the inequality. The

absence of discrimination consists as much in

the unequal treatment of unequals as in the

equal treatment of equals.

Then Your Honour referred to Gerhardy v Brown, and

the passage set out there in "The Concept of

Discrimination in International Law", which I do
not read.	Your Honour went on:

However, a difference in treatment on a ground which is rationally connected with an

unrelated objective will nevertheless be
discriminatory if the difference is not

proportionate to the relevant inequality -

I know that we have looked at the converse but

we say that the converse logically applies if you are dealing with parties who are ex hypothesi not

alike - and, with respect, we dispute, we submit

that that is not a correct hypothesis. But if you

assume the hypothesis we say that like treatment of

the State, even in circumstances where it be

Unions(4) 173 8/6/94

conceded that it is being affected as a government

and not simply as an industrial participant, would

not sound in invalidity.

You would have to look at the award, at least,

to see what was done. You would have to make a

judgment as to whether there was a rational

connection between the treatment of parties said to

be dissimilar for some reason, and apply the sorts

of principles Your Honour Justice Brennan was talking about there. Could we similarly give

Your Honours a reference to the judgment of
Your Honour the Chief Justice and Justice Gaudron
in Waters v Public Transport Corporation, (1991)

173 CLR 349. This is a brief passage, at 364,

point 2, at the top of the page, Your Honours said:

That approach is not very different from the

approach that has emerged in this Court in

relation to the notion of discrimination

that approach involves ascertaining

involved in sections 92 and 117 of the treatment,

whether there is a difference which might
justify different treatment and, if so,
whether the different treatment in issue is

reasonably capable of being seen as

appropriate and adapted to that difference.

So we say that there is no vice per se in similar treatment of differently affected parties.

It is a matter of looking at what is being done and

working out whether there is a relationship between

the legitimate end in view and what has actually

been done.

The consequence of that is that even if it be

accepted that States are relevantly different in

this regard, you would have to look at the

consequence of an award, when made, in order to

determine whether there had been discrimination in

that sense. It would not be a ground for saying

that Sl(xxxv) is per se inapplicable to State

disputes or State non-trading disputes or any one
of the other combinations that we have heard, at

the starter's box.

McHUGH J: Statute apart, Crown employments at will, can -

it could be the the Arbitration Commission bring in

notice provisions - - -

MR KENZIE: Requiring the State, for example, to employ

persons for longer than they - - -

McHUGH J: Cannot get rid of the Commissioner of Police or

an Inspector of Police without six months notice,

is it?

Unions(4) 174 8/6/94

MR KENZIE:  Your Honour, I am not seeking, for a minute, to

evade Your Honour's question but Your Honour is -

if I might say so with respect, going to the hard

case and putting it to me and our response is to

say that if one has an award in which, amongst
other things, there is a provision which will have
the effect of preventing the State from getting rid

of its senior treasury official, or perhaps

Commissioner of Police or some other senior person,

save on onerous grounds or, alternatively, if one

had an award which, on its face, applied to senior

executives, people who equated with middle - very

senior private employer executives, and imposed
preconditions, perhaps preference provisions,
although they have been perhaps watered down but

provisions like that, the same question would arise

and the answer may well be that in the context of

that particular award, and to that extent only, one

might argue that the Melbourne Corporation

principle is attracted.

We do not flee from that, Your Honour.

Neither do we flee from the conclusion that an award might theoretically attract the

Melbourne Corporation principle, even though it is directed to persons who might be outside the

administrative services of the State exception.

McHUGH J:  I am having some trouble with your argument.

Your argument seems to be all things to all men at

the moment. What is the dividing line?

MR KENZIE:	Your Honour, what we say is this, that the dividing line is the proper application of the
Melbourne Corporation principle to Crown employees,
and it is not a dividing line that is to be derived
from focusing on the status or function of the
persons affected. That is the vice, with respect.
We say that that diverts attention from the true
question in a constitutional sense.  The question
we are directed to is the question of whether what
is done amounts to a relevant constitutional
impairment.

Your Honour, in relation to the tax power, you

approach that question not by reference to whether

the tax power is exercisable in respect of

particular groups or classes of State employees or

functionaries - Your Honours' approach in The

Second Fringe Benefits Tax case aside for this

purpose. The approach is not that. The approach

is to say, "Look at the measure", and ask the

question in relation to the measure and then you

get your answer. If the law is a tax law so that

the State has to find a certain amount of money as
the price of employing people, then there is

nothing in that which has been held to attract the

Unions(4) 175 8/6/94

constitutional implication, neither would there be

anything in the way of an impairment to

constitutional power if what was done was an award,

say, for example, an award which fixed a minimum

wage.

It would not go beyond the constitutional

power because some line was crossed and it was an

award that was referable to persons employed within

the treasury. It would not cross the line, subject

always to considerations of whether we are talking

about persons capable of being within the

constitutional power, employees, if that be the

test, or something wider, if that being the test,

subject to that, the award does not become invalid;

the reach does not stop because you reach a

particular type of employee or functionary or - - -

DAWSON J:  I do not understand that. If you had a tax

directed just to State governments, that would be

very suspect, would it not?

MR KENZIE:  We agree with that, Your Honour.

DAWSON J: What you have got here is employment conditions

directed just to State governments.

MR KENZIE: Well, Your Honour, but they are so directed in

circumstances that are not discriminatory in the

relevant sense.

DAWSON J: They are, just for that reason.

MR KENZIE:  Your Honour, for the purposes of the argument,

if you had a federal award, a federal award may be

made by reference to States alone, it may be made

by reference to States and private employers, a

minimum wage may be fixed in relation to all

persons falling within classifications covered by

the award, and the reach of the constitutional

power would not be determined by reference to

whether you have reached a stage where you said,

here is a person employed in the treasury and that

person is beyond the constitutional power. If you

had a general tax, you do not answer the question

by looking for this line of departure.

DAWSON J:  No, you look at the particular tax in question

and the particular awards in question here are

directed to State governments.

MR KENZIE:	Your Honour, we can only put what we have put in relation to the SPSF case.
DAWSON J:	Indeed you have one union which is directed solely to employees of State governments.

Unions(4) 176 8/6/94

MR KENZIE:  Your Honour, if we are wrong in relation to what

we have put about the SPSF case, then what

Your Honour says follows and our argument with it;

we say that it is not discriminatory, and we are

if we are right in relation to our reliance on the

back to asking how it is you go about dealing with

this question, and do you deal with it by saying,

there is a need to draw a line, and it is a line

that is not the Melbourne Corporation line, but

another line, and our submission in relation to

that, Your Honours, is no. You apply the

Melbourne Corporation principle, and you do not

invent a new principle simply because we are

talking about the industrial power here.

BRENNAN J: 

The real problem is not really at the stage of

the making of the award, is it? It is at the stage
of the Commonwealth Act picking up the award and
giving it the effect of a federal law and applying

it to the State instrumentality.  Now, if I

understand your argument right, what you are saying

is, in picking up the text of the award, the

federal law cannot make the award operate so as to

infringe the State immunity.

MR KENZIE:  Your Honour, that would be so. I mean, if we

were dealing with an award that had provisions in

it which were found to attract the principle, that

would follow.

BRENNAN J: Is it the provisions that attract the principle

or is it the application of the principles io a

particular transaction which is left to the

initiative of a State?

MR KENZIE:	Your Honour, whether it be one or the other, for present purposes, a practical question gets
answered and can only get answered at the stage
when the award is made.  It is then that you ask,
question.
and it is only then that you can ask the relevant

BRENNAN J:  That is what I query. Why is it only then? Why

is it that the Sl(xxxv) power cannot be given as

full an operation as you would wish, on your

argument, sweeping aside any question of State

instrumentalities, making them subject to the

jurisdiction of the tribunal or whatever, and there

emerges then an award as general as M24. When you

see M24 applied to the secretary of the treasury

you know that it cannot work. If you had known

beforehand M24 would apply to the secretary of the

treasury, you could have said there is no

jurisdiction or, if there is jurisdiction, you

cannot make an award covering it.

Unions(4) 177 8/6/94

MR KENZIE:  Yes.

BRENNAN J: But you did not know that beforehand, and in its

practical operation you discover that it cannot do

that.

MR KENZIE:  We do not flee from the argument that the

limitation may be found in Sl(xxxv). It may be, it

depends on how you look at it. If you say Sl(xxxv)

is to be read subject to the Melbourne Corporation,

and we accept that that is so, then you know at the

time that an award is made whether Sl(xxxv) has a

reach which is sufficient to allow something to be

done to the particular person that is within the

constitutional power.	We do not flee from that
approach, Your Honour.

BRENNAN J: But the problem is this, is it not, that the

people who might at one moment be within the

immunity, at the next moment are not, depending

upon the duties they are performing that day.

MR KENZIE: With respect, that proceeds on the basis that it

is appropriate to approach this task by reference

simply to the question of what it is that people do. I mean, in our respectful submission, it is

not appropriate to do that. To take Your Honour's

approach in Tasmanian Dams, you have to look at the

Commonwealth law in operation. If you look at it

in operation you do not get your answer by saying,

"Look, this person is performing function X, and is

therefore outside Commonwealth power", because you

need to know more. You need to know what it is

that you are doing in relation to person x.

If, for example, you are talking about a

treasury employee - and it is assumed for the

purpose that all treasury employees can be treated

equally - it is one thing to say that an award

which imposes onerous conditions in relation to

recruitment, termination and the like, is within

constitutional power, or without. It is another	thing to say that an award which does no more than
impose minimal wage requirements, or minimal
conditions requirements, offends. You need to know
more than simply what it is that people are doing
before you ask the question.

If you equate, for the present purposes, wages

with tax, if one deals with financial imposts

alone, you do not come to the question of whether

the tax power extends to persons by reference to

their status. You come to it by reference to what

it does to the State. Now, in relation to Sl(xxxv)

it is asking the wrong question; certainly not

asking sufficient questions to say, "To whom will

this award apply?"

Unions(4) 178 8/6/94

Whether or not the award gives rise to a

constitutional implication problem must depend on

considerations which go beyond the identification

of who you are talking about, in our respectful

submission.

BRENNAN J:  I can understand that. But take the case for

example; a headmaster of a school, that you might

think is within the Sl(xxxv) power as to general

terms and conditions, and the headmaster is
appointed as a member of a select committee to

advise the minister on syllabus, and there is a question of transport and attendance fees. Who

determines that? Does Sl(xxxv) carry you that far?

MR KENZIES:  Your Honour, if the person is then an employee

for constitutional purposes, and if we are talking

about the remuneration of that person for - or

allowances for the purposes of transporting that
person from one place to another so that that

person can perform the function required, the

answer is that section Sl(xxxv), as long as we are

talking about employment disputes and not political

squabbles or other matters that the

Solicitor-General for New South Wales identified,

would go and would cover that situation.

DAWSON J: And in doing so is the Industrial Relations

Commission required to take into consideration matters of an economic nature?

MR KENZIE:	Yes.
DAWSON J:	So it takes into account the capacity of the

State to pay as well as what is a fair wage?

MR KENZIE: Yes, Your Honour.

DAWSON J: Well, is that not really entering right into the

heart of government?

MR KENZIE:  No more than it is when the Industrial Relations

Commissioner decides whether there is going to be

an award for the remuneration of railways servants

or any other group of people whether trading or

non-trading - - -

DAWSON J: That is all right, but then the Commonwealth, of

course, has the capacity to override that by

legislation. The State is put in the position of

having to accept the Industrial Relations

Commission assessment of its economic

circumstances.

MR KENZIE:  Your Honour, as I say, naturally the federal

Commission is empowered to - indeed, I think it

is - - -

Unions(4)	179	8/6/94
DAWSON J: Required.

MR KENZIE: 

- - - required to consider such matters as the

capacity of the State to pay, but it is equally
required to take those things into account, and if

you like, get into the nature of how government can

afford to govern in determining virtually any
industrial term and condition applicable to any of

the people who are potentially within the reach of

this debate. There is nothing magical about that,

and the fact that the Commission is required to

look at government's capacity to pay is not a
ground for drawing a barrier around the spread of

constitutional power, in our respectful submission. But, Your Honour, because of considerations

like that, may I say,- the likelihood of an award

being made which actually brings any of these

possibilities into play is another matter. One has

to envisage that a federal award will be made which

would have the effect of relevantly limiting the
capacity of the Treasurer to man the uppermost

levels of the treasury overriding whatever statutes

might apply, and regardless of considerations that

would be put by the State Government as to why such

awards would not be made.  You have to make those

assumptions.  You have also got to make assumptions

that all of the persons we are talking about are
otherwise within the reach of Sl(xxxv) - senior

treasury officials or members of the senior
executive service who may be on contract, who may

not be employees, raising the question of whether

Sl(xxxv) otherwise apply.  You have to make all

those assumptions, and then you have to assume that

the federal Commission says, "Yes, there is going

to be an award which is going to fundamentally

interfere with the upper echelons of government."

Then, if one likes, one can have the debate.

But, in our respect submission, you do not

have that debate at the outset. If you have it at

the outset, you do not have it on the basis of

asking questions which are foreign to the questions

which you would ask if you were applying the

Melbourne Corporation test. You do not have the

debate by saying, "Are these people in industry?

Are these people part of the essential functions of

government?" These things are diversions, in our

respectful submission, and all that they do is

divert attention from the true question. That does

not mean that the question is easy when you get to

ask it, but in a practical sense it probably is

because you have to get to a situation which really

is quite remote from reality, that is, industrial

reality, before you are going to get to the stage

of saying, "Look, is an award that stops the

Unions(4) 180 8/6/94

treasury employing its treasury officials for as

long as it likes valid?"

Your Honour, I make those submissions bearing

in mind what Your Honours had to say in Lee; Ex

parte Harper, where some of Your Honours said that

the history of industrial arbitration in Australia

which is now extensive does not bear out the

contention that the extent of the industrial power if applied to the States will bring about the sort of consequences that are going to bring the

Melbourne Corporation principle into play. If they do, they can be examined on the day, and the debate can be had and at that stage the material before

the Court would be the nature of the award that is

made, how it impacts on the participation by those

persons in their duties, whether those functions

are in truth essential to the role of government

within the framework of the Constitution, and so on

and so forth. That is the way one approaches it in

the context of the taxation power. Why is there a

different approach in relation to 52(xxxv)?

In our respectful submission it is only

because of historical accidents that one is having

this debate. It is because there has been one

limitation after another imposed or sought to be

imposed in relation to Sl(xxxv), possibly because

of the perceived spread of federal power. The fact

that federal power might be perceived to have such

a spread is not, in our respectful submission, a

basis for looking for additional reasons to reign
it in; far less reasons which carry within them
difficulties leading to about half a dozen

different explanations as to how you might draw a

line when in fact there is a perfectly good

constitutional implication which is readily

available to be used in respect of all of these

people.

Your Honours, the passage in Lee; Ex parte

Harper to which I was directing attention is in

160 CLR 430 and the passage I was thinking of in

the judgment of the Chief Justice, Justice Brennan

and Justice Deane commences at 452 and goes over to

453.      I would seek to direct Your Honour's

attention to those passages, 452 at about point 3:

According to the settled interpretation

of the power, it sustains the exercise by the

Commission of its authority in relation to

State employees, at any rate apart from those

engaged in the administrative services of a

State. The factors which have induced the

Court to so hold - the debilitating effects of

interstate industrial disputes and the

national importance of establishing machinery

Unions(4) 181 8/6/94

for their effective resolution, leading to the

view that the object of the arbitration power

is to enable the Commonwealth to establish a

means of settling interstate industrial

disputes which are incapable of settlement of

a single State - apply with equal force to

disputes involving employees engaged in the

administrative services of a State. To draw a

distinction between employees so engaged and

those not so engaged for the purpose of

denying the operation of the arbitration power

in the first case, but not in the second, on

the basis of the implied limitations would

seem to resuscitate in a new form the

discredited distinction between functions of

government which are "essential" or "truly
governmental" and those which are not. This

distinction, initially disowned in ..... ("the

Railway Servants Case") has been consistently rejected by the Court -

Reference to authority:

It is to be noted that the Supreme Court of

the United States, after embracing, for the

purpose of the implied constitutional

limitations, the distinction between functions

that are traditionally governmental and those
(National League of Cities v

that are not unworkable -

The reference to Garcia:

There is accordingly much to be said for the proposition that, assuming that there is

no discrimination against a State or singling

out, such as occurred in Queensland

Electricity Commission v The Commonwealth,

the exercise of the arbitration power in the

ordinary course of events will not transgress

the implied limitations on Commonwealth

legislative power. The exercise by the
Commission of its authority with respect to

the employment relationship between a State
and its employees in the course of settling an

interstate industrial dispute appears to fall

withins Sl(xxxv). Although the purpose of

the implied limitations is to impose some
limit on the exercise of Commonwealth power in

the interest of preserving the existence of

the States as constituent elements in the

federation, the implied limitations must be
read subject to the express provisions of the
Constitution.

Then Your Honours said:

Unions(4) 182 8/6/94

Where a head of Commonwealth power, on its

true construction, authorizes legislation the

effect of which is to interfere with the

exercise by the States of their powers to
regulate a particular subject-matter, there

can be no room for the application of the

implied limitations.

That last sentence was subsequently explained

and qualified in the SPSF case, particularly by

Your Honour Justice Brennan, and the qualification

is one that we would have no dispute or difficulty

with; we accept it, as it were, up to the hilt, for
the purposes of our submissions. But, in any
event, what one has in that case is the acceptance

of the spread of the power. That followed the

passage on page 451, where the Court traced the

history of arbitration, both at a colonial and

Commonwealth level, in relation to employers,

including public employers, in the passage

commencing at page 451 point 5, and at the end of

that examination, Your Honours said this, at the

top of page 452:

In a different context, dissociated from the

tradition of industrial arbitration in

Australia (which includes its extension to

public employment), the subjection by the

Commonwealth Parliament of the relationship

between a State and its employees to the

authority of its agency, the Commission, might

perhaps be thought to involve such a radical

subtraction from State autonomy as to attract

the implied limitations on Commonwealth power.

The scope of the arbitration power, viewed in

the light of the history of industrial

arbitration in Australia, does not support
this view.

Hence our submissions in relation to the reality of the situation. If we get to a situation where the

experience of industrial arbitration in Australia

does expose an award provision, which has the

effect such as those illustrated by Your Honour

Justice McHugh in argument - - -

McHUGH J: Yes, but the point is that this judgment is

speaking after 80 years of history, in which State

public servants were outside it, for practical

purposes.

MR KENZIE:  No, Your Honour. We would respectfully submit

that this judgment was written, although at a time

before the State Public Services' case, it cannot

be, as it were, devalued, because cases which might

have been run beforehand but which had not, as a

matter of history, were not before the court.

Unions(4) 183 8/6/94

Indeed, the treatment by Their Honours of the administrative services of the State aspect must

have been conceived to have had relevance to the

public service in general. I mean, it is just not

be assumed that Their Honours in dealing with

Lee and Harper were not aware of the implications

for the public service in general, and indeed, in

our submissions, page 23, we refer to the evidence

before the Court of the vast array of persons

employed by State government, State government

agencies and instrumentalities, covered by federal

awards made since the 1920s. So Your Honour as a

matter of history is correct, but we would

respectfully submit that the analysis of the

administrative services approach in Lee and Harper

cannot be so easily swept aside.

While Your Honours have that authority, I do

desire to direct the Court's attention to two

passages in Lee and Harper which, we say, are

supportive of our approach to the matter before the

Court. At page 443 in the judgment of His Honour

th.e Chief Justice there is an examination of the

very issue that is now being debated. His Honour

said at the top of the page this:

The expression "the administrative services of

the State" in that context cannot have been

intended to include all employees of the State

who happen to do some administrative work, but

its intended scope is rather obscure. If it

was intended to refer to "Crown officials

engaged in administering true, essential

governmental authority", to use the words of

Isaacs Jin -

the School Teachers' case -

the distinction which it suggests is an

illusory one ••••• But if a description of that

kind could sensibly be adopted, State school

teachers would not fall within it, as Isaacs J

himself held in -

the School Teachers' case, and this is the passage,

Your Honour:

A more appropriate approach is to consider whether the law whose validity is in question would impair the ability of the State to continue to exist and function as such, but

clearly provisions fixing the wages and

conditions of employment of school teachers

would not have that effect. Moreover, there

is no suggestion here of a law which is aimed

at, or discriminates against, a State or

States.

Unions(4) 184 8/6/94

Now, Your Honour, that is the approach which we

suggest is the correct approach in this context.

Would Your Honours be good enough to note that at

page 467 in the judgment of Justice Wilson, you
have a similar sort of approach which, although it

is more reflective of the lingering bonds of the

administrative services approach, has the same
result at the end of the day. His Honour, at the
top of 467, says in the fourth line:

In the light of c.Y.s.s., the appropriate criterion limiting the reach of the

constitutional power may now be expressed in

terms of whether the employee is engaged in

the administrative services of a State.

I pause there: that is perhaps reminiscent of

Justice Dixon's comments in Professional Engineers

and other comments, but to continue:

The critical consideration in applying that

criterion is whether the exercise by the

Commission of the authority conferred on it by

the Act would impair the constitutional

integrity of a State or agency of a State.	It
will be for the Commission to undertake that
consideration in the light of the evidence if and when the resolution of an industrial dispute involving the A.T.U. or the T.A.A. requires such an issue to be determined.
Again, we submit that that is the appropriate

approach. Your Honours, in our respectful

submission, unless our submissions be based on an

incorrect appreciation of the thrust of the

Melbourne Corporation judgments of this Court in

recent years and the thrust of that language is

very similar, we do say that at the end of the day

the task is to examine an award, not to say that
the power as a whole is incapable of application,

and to examine an award in its practical effect -

its operational effect, to use Your Honour

Justice Brennan's words again from Tasmanian Dam -

and then decide whether the implication is

attracted.

Your Honours, we have said some things in

paragraph 10 of our submissions as to

section Sl(xxxv) itself.	I do not need to labour
the points.	We have our submissions and I am

certainly not going to regurgitate the submissions,

but if I could give Your Honours a couple of

additional references. At the bottom of page 15 in

paragraph 10 we do refer to the text of Sl(xxxv)

and the fact that, unlike Sl(xiii) and (xiv), it is

not expressed to be subject to exceptions in

relation to State activities. Your Honour

Unions(4) 185 8/6/94

Justice McHugh, I think, also referred to

section 114, but we have focused on Sl(xiii) and

(xiv) because they really do relate to activities. If I could just ask Your Honours there to note

that there is a discussion of this point by

Chief Justice Isaacs in the ARU case, 44 CLR 319 at page 350 point 5 down to the bottom of the page. I

do not seek to read it, but it is there. Of

course, arguments based on principles of expressio

unius may be said to be dangerous bases upon which
to proceed. It is not the foundation of our

argument, but it none the less is there. I do not

think I need to take Your Honours to it, but it is

noteworthy that the Chief Justice there said that

the consideration which is being addressed in that

paragraph was:

a strong indication that sub-sec xxxv,

referring to industrial disputes ..... is not to be cut down by any implication excluding State

industries of any kind, railway or otherwise.

TOOHEY J: Mr Kenzie, could I just ask you this: on your

approach, to what extend should we be concerned, if

at all, with the range of matters sought to be

dealt with in the logs of claims and the range of

employees sought to be covered?

MR KENZIE:  Inevitably the Court would be concerned with

those matters, because it follows from our argument

that the Court would look at the operation of the

instrument, in our case the award, and look at it -

I mean one would not look at it necessarily clause

by clause, but one would look at it as an

instrument and one would ask, in relation to that

award as a whole, how it impacted operationally.

TOOHEY J:  I take it though from what you said that, again

on your argument, we would not concern ourselves

with evidence that pointed to the duties carried

out by particular employees.

MR KENZIE: If I said that I certainly -

TOOHEY J:	I may have misunderstood your argument.
MR KENZIE:	I am sorry, Your Honour, that is no doubt my

fault. I am certainly not saying that. I am

saying only that a focus on the nature and scope of

the duties of the persons affected alone is an

insufficient basis upon which to proceed because

that will tell you not what you need to know about

the impact of the document for constitutional
purposes. It is certainly appropriate to look at
the nature and scope of the duties of the persons

affected, as well as other matters. But the vice

Unions(4) 186 8/6/94

in what is being put to Your Honours, from our

point of view, is that lines are being sought to be drawn in the sand based only on considerations like

that and not based upon the operation of the

instrument. So we certainly do not want to suggest

to Your Honours that that would not be looked at.

We would not flee from the contention that an award which had a particularly intrusive effect,

because of the nature of the persons to whom it

applied and because of what it sought to achieve,

might attract the implication. But all that we

have said about that is that it is very difficult

to conceive of such an award being made, leaving

aside questions of whether senior executives and

other persons might be capable of being caught by

the constitutional power for other reasons. There

has been reference to judges and members of

Parliament in some of the submissions, and no doubt

one looks at that and instinctively says, "There

has to be a limit and now one is at the limit."

Other questions arise in relation to officers,

the holders of such office. Other questions which

concern the scope of Sl(xxxv) in a manner that is

not relevant, as we understand it, to these
proceedings: could a member of State Parliament
ever be affected by a federal award? Well, as they

were in relation to fringe benefits tax, that would depend, in our respectful submission - certainly if

it were, for example, a minimum rates award - on

considerations which have to do with whether such

persons would be within the reach of Sl(xxxv) on

the basis that they really were not employees, or

if employer/employee was not the test, whether they

were not for some other reason caught by the power.

DAWSON J: But that raises the question: could you ever

have an interstate dispute about the rates of pay

for members of State parliaments?

MR KENZIE:  If one starts from the point of view that they are otherwise within the constitutional power, that

there is not something disqualifying about the

nature of their relationship with the Crown that

means that you do not get to the question of

interstateness, because if they had all the common

cause in the world they would not be caught.	But
if you assume that they are persons who by
definition are not excluded, a proposition for

which we do not presently contend, but if you make

that assumption then what follows are all of the
questions and considerations that have been raised

in cases like the Aberdeen Beef case.

If you get that far, you have to then ask, "In

the relationship between the States and those

persons, is there the possibility of establishing

Unions(4) 187 8/6/94

by appropriate evidence a community of interest which will pass the test?" That may or may not depend upon any particular set of circumstances.

DAWSON J: It is not self-evident, though, is it?

MR KENZIE:  No. No, it is not. It may be said that the

starting point would be, in relation to persons who

had singular duties, that one would need to

establish clearly a basis for a community of

interest. For example, it would be, if it were

possible to establish a community of interest in

relation to a particular industrial claims like

pay, then one would need to be satisfied that there was adequate evidence to disclose that these people
were not being simply tagged on to some other

general claim made in relation to public servants,

one might need to go to some of the other questions

which were addressed, in particular, by

Justice McHugh in the Aberdeen case.

A community of interest might be established

by showing that someone is in the same industry.

Industry may not be apposite for members of

parliament, you may need to go further.	You may
need to look, for example, at whether in a

particular case there is a relationship between the

persons affected and other persons employed in a
genuine industrial conflict, for example,

promotion, or other such things. In the case of a

member of parliament, it becomes, even if you make

all the other assumptions, perhaps pretty hard, but
it is not our case. There would be many other
questions that you would have to address before you
got into that arena, and which might provide a
ground for exclusion. But they were raised; we
deal with them by saying it is not a claim in this
case; we are certainly not seeking an award of that

nature in this case and there would be a very

substantial argument about the reach of Sl(xxxv)

which would be another argument, Your Honour. Your Honour, it has been suggested to me that

I may not have dealt adequately with a question

Your Honour Justice Toohey asked me, which I had

appreciated was focused really to the end result,

namely what would one make of the scope of an award if made. Your Honour may have been focusing on the

spread of the logs. I am not sure.

TOOHEY J:  I was. It was prompted by the nature of your

argument which in sense was saying, "Well, it is one thing to wait until the award has been made,

and then look at what impact it has", but here, as you were putting your argument, the Court is being asked to hold that something is not within the

reach of power, although there has been no

Unions(4) 188 8/6/94

examination of the precise duties carried out by a

number of the persons affected.

MR KENZIE:  Yes, certainly no opportunity to receive

evidence as to the relationship between the

performance of those duties and an award condition

which was imposed.

TOOHEY J:  I thought you were using that as an argument co

support your general proposition.

MR KENZIE:  I was.

TOOHEY J: But, then when I put the question to you I

thought you were retreating from that and saying,

"Yes, the Court can look at the range of matters

sought to be covered, the duties of the various

employees sought to be covered."

MR KENZIE: Yes, I apologize for that, Your Honour. I

certainly was not retreating, I was answering

Your Honour's question on the basis that it was a

question about whether it would be legitimate as an end result to look at the scope of an award if made as a whole. In other words, to look at the
question, not only of how it impacted on

individual X, but how it impacted on the State and

I was, mistakenly, answering Your Honour's question

by reference to the award. But, our response in

relation to the log is that, really, it is

impossible to know, at this stage, what will happen

and what the level of impairment of anything will

be. There just is not any.

TOOHEY J: Yes, I understand that.

MR KENZIE:  Your Honours, the only other thing I wanted to

do in relation to paragraph 10 of our submissions

was to give Your Honours an additional reference,

at the top of page 16 to the Tasmanian Dam's case,

158 CLR, in the judgment of Your Honour

the Chief Justice, at page 127 point 9 to

128 point 4. This is in relation to the general

approach to Sl(xxxv). Our approach is, firstly, to

examine the text, secondly, and in relation to
that, to look at the approach to Sl(xxxv) and, in
our respectful submission, the approach to Sl(xxxv)

as a matter of text is as per the passage in

Your Honour's judgment at those pages. I do not

think it is necessary to read them, they will be

familiar, I think, if Your Honours would add that

reference.

Then, in relation to the other side of the coin, as it were, that is, limitations flowing from

the structure of the Constitution, we also refer

there on page 16 to Your Honour the Chief Justice's

Unions(4) 189 8/6/94

judgment in the ACTV case, and in particular to the

underlying passages at the bottom of page 16. Our

general submission is the one that we make on the

top of page 17, and we do focus on this, although

we have put it in our written submissions. We say

that the maintenance of the administrative services
of a State exception involves the conclusion that

the exception discovered in relation to the now

discredited quest for industry, is coincidentally

justified on another basis, and we say that the

artificial construct does not reflect the

satisfactory approach to the Constitution.

Now, Your Honours, we then submit that there

is nothing in itself which requires, as a matter of

constitutional interpretation, the conclusion that.

a federal award in relation to, firstly, wages or

salaries, brings about the application of the

Melbourne Corporation principle or implication any

more than is the case in relation to the taxing

power. There is no relevant distinction for this
purpose between imposing a tax on States in respect

of their public servants, judges, MPs and the like,

and applying section Sl(xxxv), save for the

argument that some of those people may not, for

other reasons, be within the constitutional power.

Similarly, we say, that there is no basis as such for saying that when you move from wages to

conditions that the constitutional implication is

attracted; it would depend on more, much more. A

condition that certain facilities be provided to

public servants in relation to their employment

will not attract the implication because it is a

requirement that applies to the Treasury Department

any more than it will attract the implication if it

applies to the railways, for the same reasons as

Your Honours examined in the tax cases; you need to

go further.

Your Honours, the stage at which the subject to the instance, I think, of the interim	implication is reached might be debated now but,
award in relation to teachers, no particular award
provision has been identified, thrown up by the
prosecutors, put before Your Honours and advanced
as a relevant interference or impairment with the
State so as to attract the constitutional
principle. The interim award was, as we understand
it, suggested during argument, as attracting the
principle for reasons other than discrimination.
Mr North will deal with the discrimination aspects.
We are not really sure as to the basis upon which
it is suggested that the interim award as such
attracts the other more general arm of the
implication. In our respectful submission, if Lee and Harper be correct, and the terms and

Unions(4) 190 8/6/94

conditions of an award in relation to classroom
teachers would not attract the constitutional

principle, then that is a matter of general

application of that arm of the principle and not

based on discrimination, then there is no reason to

place the interim award in any different category

on that score, that is, discrimination aside. But

subject to those awards, this is not a case in

which the awards have been put before the Court,

subjected to scrutiny on the basis that they impair

the States; the case is a global one, and we meet

it by saying that such a global approach is

inappropriate.

DEANE J: What if the interim award had said, "The State

will employ no more teachers"? Why would that not

squarely raise the question?

MR KENZIE:  It could, for the same reasons that we concede

that the administrative services exception is not

the line. We do make the concession, Your Honour,

that there is no reason in theory why the principle

could not be attracted beyond that and therefore be

theoretically attracted by an award which applied

to a non-administrative group generally in some way

which in truth prevented the State from

functioning. But, Your Honour, that is the general

answer. The specific answer to Your Honour's

question is that even such an award, in our

respectful submission, would not attract the

principle, because to say that it did attract the

principle would involve the further proposition

that the teaching service was essential to the
continued functioning of the State as a State in

the Melbourne Corporation sense.

DEANE J:  No, it is not so much the teaching service; it is

a situation where a State conducts a teaching

service and schools, the ability to employ. The

next thing of course would be if the ability to employ its teachers in its service attracts the

implication, why not a general prohibition on

dismissing or terminating employment for redundancy

without the consent of some outside agency?

MR KENZIE:  Yes, an award, for example, that said that

public servants shall not be dismissed, save on -

but I will stay with Your Honours - - -

DEANE J: Well, these particular awards.

MR KENZIE:  There is an initial question as to whether an

award which did no more than say you shall not

employ teachers would be an award that would be

within - - -

DEANE J: Shall not employ any new teachers.

Unions(4) 191 8/6/94

MR KENZIE:  Your Honour, our first response to that would be

to say that even that award would not attract the

principle for the reasons that we have advanced

because the continued employment of teachers, the
continued decision of a State to employ teachers is
not essential to the functioning of a State for

reasons that I think were conceded by our friends

from South Australia.

DEANE J:  I probably have not been clear. I appreciate your

argument as to whether it does or it does not. I

do not quite appreciate your argument as to why it

does not raise a question to be addressed here and

now.

MR KENZIE:  It would, if there were such an award.

DEANE J: That being so, I do not appreciate your argument

as to why these awards precluding termination for

redundancy, even agreed redundancy, do not give

rise to an immediate question.

MR KENZIE:  We accept the fact that those awards having been

raised in terms, do raise the question, and indeed

we have directed submissions in particular to the

discriminatory aspect that has been alluded to.

All that we say - - -

DEANE J:  I was not concerned with an argument on

discrimination.

MR KENZIE:  No, Your Honour, it is there because we accept

the validity of what Your Honour says about having

to address these awards now. As to those awards,

we submit that it is not an impairment, in the

Melbourne Corporation sense, to control by way of federal award terminations save in accordance with

a specified principle. The awards are not blanket

embargoes on termination, they are awards which

provide that there will be no terminations save in

accordance with the application of specified

principle, so that the level of impairment is the

difference between being able to dismiss in

accordance with that principle, and being able to

dismiss otherwise. It is not an embargo on

dismissal per se. If it was an award that said you

cannot dismiss anyone in the whole teaching service
per se then other questions may conceivably arise.

All that those awards are are awards which provide

that there are terms and conditions in relation to

dismissal. The level of impairment is only the

difference between dismissal and dismissal on terms

and that is not an impairment which attracts the

principle, in our respectful submission. That is

the answer we give.

Unions(4) 192 8/6/94

It is the same as an argument about the level

of interference with the State budget that arises

because of a minimum wage requirement. The level

of impairment is not the money amount of the award;
the level of the impairment is the difference

between what the State would be practically paying anyway, in our respectful submission, and what the

award requires as a matter of practical operation.

True it is, it could be said there is another

angle to the impairment, Your Honour, and that is
the fact that the decision is being made by another
body, and so it is, but we are directed by the
authorities to the operational impact of the

impairment and our answer is that. Considerations

of discrimination raise other matters which will be

otherwise dealt with, Your Honour.

BRENNAN J:  I do not know whether this follows on from that

question, but I have been looking at the letter of

demand in the M24 matter which covers all your

employees, and looking at the clauses in the log of
claims, 26 to 31, starting with staffing levels and

ending with industrial democracy, it does not seem

to me that if those provisions were incorporated in

an award that there would be much left of

independent initiative on the part of the employer.

Does that raise a question at this stage as to

whether those can be the subject-matter of an

industrial dispute with the State, or do you say

that those matters have to wait until the award is

made?

MR KENZIE:	We do, Your Honour, because we direct attention to the operational impact of the federal law.
There is no operational impact that results from
the service of a log of claims. The operational impact, in the sense discussed in the Tasmanian Dam
case, arises either, as I originally put it, when
the award is made or possibly, as Your Honour put
it to me, when federal law operates in relation to
that award when made.
BRENNAN J: That at the same time, yes.
MR KENZIE:	But either way our answer is that, Your Honour.

DAWSON J: But that does not answer the question there

cannot be an industrial dispute within the meaning

of the Constitution with respect to those matters,

therefore there is no jurisdiction.

MR KENZIE:  Your Honour, one cannot raise - with respect,

that assumes at the dispute stage that every one of those items has to be regarded as joined, part of a

single package and only be - - -

Unions(4) 193 8/6/94

DAWSON J: But would that be right? It is the failure to

accede to those demands, each and every one of

them, that applies to the -

MR KENZIE:  The demands are not only put forward on the

basis that they are either all addressed as a

package or they are not addressed at all, they are

several clauses which are put together in a package

and one cannot reject the extent of the federal
power, at the outset, by saying, "It is to be

assumed that this is a dispute and only a dispute about the achievement of all of those things, and in a way which will then attract, at the end of the

day, the Melbourne Corporation which can then be

used as a basis for denying the existence of a

dispute".

BRENNAN J:  It is not a question of attracting the Melbourne

Corporation. The Melbourne Corporation is a

limitation upon power, and if we start at the end

of your day, and we say, "If an award is made in

these terms it will be struck down as to those

clauses by Melbourne Corporation", that means that

there is no power to make an award containing those

clauses, but the power to make an award is

dependent upon the existence of a dispute as to the

subject-matter. So that, if there is no power to

make it there is no purpose in having a dispute

which cannot found an award. Ergo, we come back to

the start of the day.

MR KENZIE:  If the log of claims contained what might be

described as a blanket demand, I mean a single
clause which attracted the principle, that might be

right, but if you are looking at a log as a series

of interlocking demands which have to be added

together to get you to the stage of saying there is

an impairment then it is not right, in our

respectful submission, because one is entitled to

look at the claims as specific claims. I mean the

Union is saying, "We want clause (a) and (b) and

alone or (c) alone", and if you look at (c) alone	(c) and (d), but if we can't have (a) we want (b)
there might be nothing wrong with it, as such, and
it is just an impractical and impossible exercise
to say, "We will look at that at the outset and
proceed on the basis that if there is no dispute on the basis that you want everything, and nothing if you can't have everything," then there is no
dispute at all.

BRENNAN J:  No, you may well be right and there may well be

a residual area of dispute, and obviously a paper

demand, if it is valid at all, is not struck down

simply because it contains an excessive demand.

But if you have got an area which you concede is

offensive to the Melbourne Corporation implication,

Unions(4) 194 8/6/94

it seems to me that that area must be regarded as

outside the arbitral power, and therefore whatever

is done by the Union or whoever is done so as not

to engage that power.

MR KENZIE:  Your Honour, we would concede that if you could

identify a clause in a log of claims which on its

face as a clause and which was identifiable as a

separate demand had that effect of its own, that

argument might be maintained.

BRENNAN J: Looking at those clauses, as presently

instructed, I would think that they go far too far
in relation to the upper echelons of the public

service. That is just a matter of impression which

I raise for your consideration. It may not go that

far in relation to the lower ones but, if my

impression is right, then we have got a problem -

at least I have got a problem - of saying, "Pro

tanto it survives, but to that extent it doesn't".

Where is the dividing line?

MR KENZIE:  If one identifies a clause and says that as a

global claim, and is a separately identifiable

claim, if acceded to in its entirety, it would of

necessity attract the implication, then presumably

one is in the area that Justice Dixon was in in the

Professional Engineers' case, and one then has to

ask the question of whether the Commission should

be asked to readdress that particular claim in a

way that would meet the problem. That problem
would be met by the Commission, on the hypothesis

Your Honour is putting, by the Commission examining

the evidence in relation to that claim and its

impact on those senior persons, and asking itself

the questions that in our submissions before we

suggested needed to be asked. That would follow.

BRENNAN J: Your argument really comes down to this then:

so long as there be one valid claim in the total

log which does not offend, or cannot be thought to

offend the implication, then the dispute is in

existence, the jurisdiction is attached, and the

rest must be left to the Commission to sort out?

MR KENZIE: Well yes, subject to the capacity of this Court

or the Industrial Relations Court, as it is now, to

review those findings, that is so, and that is - -

BRENNAN J: Well, it is a very attractive solution to this

Court.

MR KENZIE:  In our respectful submission it is the first

attractive solution that has been presented,

because all of the others have insurmountable

difficulties, with respect, but that is the way in

Unions(4) 195 8/6/94

which one would approach the question. You look at

the log; you examine the impact of the log; on our

submission, if a particular clause is one in which

you can not say whether it attracts the implication

one passes on; if granted in terms and in full one

passes on; if it potentially does that, well,

further questions need to be addressed, but they

have to be addressed, in our respectful submission,

on the basis of all the evidence, and not on the

bases that have been put before Your Honours.

TOOHEY J:  Does that mean that a different answer might be

given where a particular matter had not proceeded

beyond the log situation and one where an award had

actually been made?

MR KENZIE: That must always be a possibility. In our

submission, one is imagining a situation in which

one can tell from a log that if granted in full

there will inevitably be a relevant interference,

and Your Honours have our submissions on that. But

if you go the next stage, the answer in theory to

Your Honour's question is yes.

GAUDRON J:  Mr Kenzie, could I take you back to your answer

to Justice Deane about the level of impairment in

relation to the awards at MS and Mll. Can I take

it - and this is only for my own

clarification - that your argument about

enforceability has absolutely no application to the

awards at MS and Mll?

MR KENZIE:  It applies to the awards in MS and M - - -

GAUDRON J: The awards are - you have got to keep these

people in your employ.

MR KENZIE:  Your Honour, the problem with the notion of

enforceability is that - and our submissions on

enforceability are put on the basis of the existing

federal law, a position which could be changed by a

change in federal law, but assuming that federal	law remains as it is, then there is a regime for
enforcement of federal awards, including a federal
award of the nature existing in MS and Mll, but if
the State determined that it would not comply, one
would be in the arena of using the enforcement
mechanisms within the Industrial Relations Act and
those mechanisms are subject to submissions that we
have made in our enforcement submissions. So that,
those submissions do apply to federal awards on the existing state of law, no matter what the nature of those awards might be.

GAUDRON J:  I see, yes. Then the next issue I wanted to

clarify is this, or perhaps alert you to: I do not

see the force of your argument that the difference

Unions(4) 196 8/6/94

of the level of impairment is really the difference

between what is being paid now and what is going to

have to be paid, as it were. It seems to me there

is a vast difference when what is being paid now is

being paid pursuant to a regime which you, as a

State, can alter, and what has to be paid in

circumstances which, subject to your enforceability

argument, you are bound by.

MR KENZIE:  The difference is between the State's capacity

to terminate without compliance with the award

regime and compliance with that regime.

GAUDRON J: And your award regime in MS and Mll, there

virtually is no ability to terminate, is there,

except by consent?

MR KENZIE:  I am sorry, it is my fault because I have not taken Your Honours to the terms of it.

GAUDRON J: Except by consent?

MR KENZIE:  No, Your Honour. There is the difference

between the log and the award. As one finds, the

award in the Mll book is at page 115. This is the

final one. This, Your Honour, is the award that

was made by consent with the government. The

consent order on 22 January 1993 underneath the

application clause reads as follows:

In accordance with the provisions of this

clause and not otherwise the employer may
process Voluntary Departure Packages (VDP) in
the terms of or to the effect of the document

attached hereto and marked "A" -

The document attached and marked A was not gone to

in detail by the prosecutors. There is then a

machinery provision in clause 3, the mechanics of

which, I must confess, Your Honour - I am not

familiar with every line, but I am told - have the

practical effect of requiring consultation.

GAUDRON J: With the Union?

MR KENZIE: Yes, with the Union, but does not operate

GAUDRON J: In respect of each individual to whom the

package is offered?

MR KENZIE:  Your Honour, I think it requires consultation.

It is a provision which is practically calculated

to get over what the Union perceived as the innate
unfairness in the sudden introduction of the

program and required a means of consultation and,

in (d) on page 116, one sees that the requirement

that - in (c) there is a requirement that:

Unions(4) 197 8/6/94

employee shall have ten clear days in which to

accept or reject the offer.

An employee to whom an offer of a VDP is made

shall, prior to accepting the offer, be

entitled to advice and counselling in respect

of the offer from an official of the HSUA and

a financial advisor of his or her choice.

Such consultation shall take place during

working time -

et cetera. So that there are impacts on the State

in terms of the procedure and time, it is true, but
the level of impairment, if I might put it that
way, is the difference between the redundancy
package with or without a cooling off or

consultancy period, Your Honour.

GAUDRON J: But the level of impairment must, must it not,

take account of the fact that this award having

been made, the State is not free to depart from its

term, whereas, prior thereto, it was free?

MR KENZIE:  Yes.

GAUDRON J: Whereas prior thereto it was free.

MR KENZIE: That is right, that is the level of the

impairment.

GAUDRON J: And it is not simply the difference between the

voluntary redundancy package and the requirement of

consultation and advice.

MR KENZIE:  That may be another way of putting it,

Your Honour, but in operational effect that is not

relevantly distinguishable from the way in which we

put it, with respect. Operationally the State is
not free to go through the voluntary redundancy

process otherwise than in terms of the package,

whereas it otherwise would have been.	However one
measure of the impairment.
puts it, that is the difference and that is the
The question for addressing the present case

is: is that difference a sufficient basis to rank

as the first successful application of the

Melbourne Corporation principle on a non-

discriminatory basis? It is a long way away from

what the Court was talking about in the Melbourne

Corporation principle, in our respectful

submission.

GAUDRON J: Is the MS award to the same effect?

MR KENZIE:  No, that is even easier, Your Honour, that is

page 99 in the book in MS. That does not have even

Unions(4) 198 8/6/94

the requirement for consultation. I must say

Mr North is in a much better position than I to

deal with the detail of this, and when he comes to
the discriminatory aspect of these awards, or

allegedly discriminatory aspects, I am sure that he will be able to assist Your Honours more fully than

I.       I think he was in some of these cases, so that

if I can retreat gracefully by saying that there is

the text of the award. The level of impairment is

simply not sufficient to attract the principle. If

there is no discrimination these awards are valid.

I notice the time, Your Honours.

MASON CJ:  We will adjourn now and resume at 10.15 am

tomorrow.

AT 4.17 PM THE MATTER WAS ADJOURNED

UNTIL THURSDAY, 9 JUNE 1994

Unions(4) 199 8/6/94