Unions NSW & Ors v State of NSW

Unions NSW and others (the applicants) sought a declaration that the *Industrial Relations Amendment (Public Sector Employment) Act 2013* (NSW) (the Act) was invalid. The applicants contended that the Act, which amended the *Industrial Relations Act 1996* (NSW) to remove the right of public sector employees to have their industrial disputes determined by the Industrial Relations Commission of New South Wales (IRC) and instead mandated that such disputes be resolved through conciliation and arbitration by the Fair Work Commission (FWC), was beyond the legislative power of the State of New South Wales. The matter was heard by the High Court of Australia.

The central legal issue before the High Court was whether the Act, by divesting the IRC of jurisdiction over public sector industrial disputes and vesting that jurisdiction in the FWC, impermissibly infringed upon the constitutional separation of powers, specifically by encroaching upon the judicial power of the Commonwealth. The applicants argued that the FWC, as a federal industrial tribunal, exercises federal judicial power, and that the State legislation, by directing the FWC to arbitrate disputes that would otherwise fall within the purview of a State industrial tribunal, was an invalid exercise of State legislative power.

The High Court, by majority, dismissed the application. French CJ, in his reasons, explained that the FWC's arbitral functions, while involving the determination of rights and obligations, did not constitute the exercise of federal judicial power in a manner that would attract constitutional protection against State legislative interference. His Honour noted that the FWC's powers were primarily administrative and arbitral, designed to facilitate the resolution of industrial disputes rather than to adjudicate legal rights in the manner of a court. The Act did not purport to direct the FWC to act in a manner inconsistent with its federal character or to exercise powers that were exclusively vested in federal courts. Therefore, the State legislation was not invalid on the grounds of impermissibly encroaching upon the judicial power of the Commonwealth.

The application for a declaration of invalidity was dismissed.