A New Province for Law and Order

A Constitutional Basis for the Federal Coalition's Industrial Relations Policy

S.E.K. Hulme

A. Introduction

The Federal Coalition's industrial relations policy calls for a system of industrial relations radically different from that which has existed in this country in the past. In a paper delivered at a conference of this Society in September 1991, Mr Greg Craven raised the question whether the constitutional powers of the Commonwealth would suffice for the implementation of that policy. He came to the view that legislation "will be attended by major constitutional difficulties", which might not be insuperable, but which "are undeniably grave". I have been invited to revisit that area for you tonight. Your organisers having rejected my suggestion that this was not a very gentlemanly thing to do to people who have worked hard all day and have just had a very pleasant dinner, I fear that I must do as I was asked.

B. Some Features of the Established Industrial Relations System

Even in a gathering of people known to think about little else than industrial relations systems, it is convenient to call to mind certain facts concerning the existing Commonwealth system.

(1) The Commonwealth Parliament's principal power with respect to industrial relations is that given by placitum (xxxv) of s. 51 of the Constitution, to make laws "with respect to---

"(xxxv) Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State:".

It is under that power that the existing system exists.

(2) Placitum (xxxv) does not give the Parliament power to legislate directly for the prevention and settlement of industrial disputes. The power is to legislate for conciliation and arbitration for such prevention and settlement, so that what is done for prevention and settlement of disputes is done by the conciliator and arbitrator, not by a law passed by the Parliament. The power is to create an agent having a power which the principal does not.

(3) Parliament exercised that power in enacting the Conciliation and Arbitration Act 1904. The Act's statement of its principal objects included the establishment of a Court of Conciliation and Arbitration "having jurisdiction for the prevention and settlement of industrial disputes". The Court, supplemented by Conciliation Commissioners, was to prevent and settle disputes by conciliation and arbitration.

(4) Following the decision of the High Court in R. v Kirby; ex p. Boilermakers' Society of Australia (The Boilermakers' Case) (1956) 94 C.L.R. 254, the conciliation and arbitral functions of the Court passed to a Conciliation and Arbitration Commission, later transmuted to the Industrial Relations Commission: see the Industrial Relations Act 1988. For the purposes of this paper the variety of names is irrelevant. What is said here as to the Court is true as to the successive Commissions.

(5) The power given to the Court by the words of pl. (xxxv) as repeated in the legislation, turned out over the years to be very wide. For a start, the "dispute" was seen not as the strike (or other overt incident), but as the underlying disagreement. And it was held that such a disagreement could be deliberately created for the purpose of creating an industrial dispute which the Court could then arbitrate. Windeyer J. once commented:

"The dispute here is a "paper dispute". To permit the creation of a malady so that a particular brand of physic may be administered must still seem to some people a strange way to cure the ills and ensure the health of the body politic. But the expansive expositions by this Court of the meaning and effect of par. (xxxv), especially in the Burwood Cinema Case (1925) 35 C.L.R. 528 and in Amalgamated Engineering Union v Metal Trades Employers' Association (1935) 53 C.L.R. 658 have brought a great part of the Australian economy directly or indirectly within the reach of Australian industrial law and of the jurisdiction of the Commonwealth industrial tribunal."
See Ex parte Professional Engineers' Association (1959) 107 C.L.R. 208 at p. 268.

(6) Thus the power was not merely a power to deal with overt confrontations in fact extending beyond one State; it extended to dealing with paper disputes as to conditions of work, with the interstate element being provided by having a multiplicity of parties. An intended function of preventing and settling disputes became a function of prescribing conditions of work. The fixing of a "fair" wage for this dispute became an ongoing function of fixing a basic wage for award after award, and finally for awards generally.

(7) Skilful use of the "ambit claim" and of the power to "reopen" an award already made often enabled the parties to keep a subsequent dispute within the jurisdiction of the Court even though that subsequent dispute had no real interstate element at all.

(8) By 1947 the activities of the Court itself were in fact confined to a few large matters (in particular the "basic wage"), and all other disputes were handled by Conciliation Commissioners (whose functions involved arbitrating as well as conciliating): see the comments of Mr. R.M. Eggleston Q.C. in his paper Industrial Relations, in Essays on the Australian Constitution (1st edn., 1952) at pp. 186-187.

(9) The range of matters capable of giving rise to an industrial dispute, and the range of things an award might properly do, was steadily extended. In particular the principle was adopted that an award could relate to the conditions of employment of persons other than the members of the union which had created the dispute. The decision of the High Court in Metal Trades Employers Associations v Amalgamated Engineering Union (1935) 54 C.L.R. 387, Dixon J. dissenting, was based on a principle which Dixon J. later described as follows:

"The principle upon which the decision rests is that the interest which an organization of employees possesses in the establishment or maintenance of industrial conditions for its members gives a foundation for an attempt on its part to prevent employers employing anyone on less favourable terms. As a result an industrial dispute may be raised by it with employers employing none of its members and an award may be made binding such employers and regulating the terms and conditions upon which they may employ unionists or non-unionists."
See R. v The Commonwealth Court of Conciliation and Arbitration; ex parte Kirsch (1938) 60 C.L.R. 507 at p. 537.

(10) The concept of "industrial dispute", long read down as if the relevant words were something like "disputes in industry", was finally seen as applying to disputes arising with respect to employment of all types, and as including all "disputes between employees and employers about the terms of employment and the conditions of work":
See R. v Coldham; ex parte Australian Social Welfar0e Union (1983) 153 C.L.R. 297 at p. 312.
The result was the growth of the powers of the tribunal under its various names, laying down conditions of employment including those relating to hours and wages and cost of living increases and such things for people before or not before the tribunal, with a freedom which a Commonwealth Treasurer or Parliament might well envy. Further years confirmed Eggleston's summing-up of 1952:

"But enough has been said to demonstrate that the inter-pretation in the provision by the High Court has enabled Commonwealth tribunals to extend their influence to an extent which the framers of the Constitution could hardly have contemplated. Eggleston op. cit. at p. 208.

Perhaps I can intrude here that in private conversation in the late 1950's Sir Owen Dixon made the comment that it had been a fundamental mistake to attach the name "Court" to the Commonwealth Court of Conciliation and Arbitration, and the name "Judge" to the persons constituting it. The principal function was essentially different from that of a court. A court determines what the parties' rights are. This tribunal lays down what the parties' rights shall be, which is essentially a legislative function, not a judicial one. No good could come, he believed, from the people of Australia being led to believe that what was done by this arbitral tribunal was done by a court. The realisation of the nature of the function led of course to the Boilermakers' Case, and to the jurisdiction of the initial Court being split between two new bodies the Commonwealth Industrial Court (now replaced by the Federal Court) and the Commonwealth Conciliation and Arbitration Commission (now the Industrial Relations Commission). The Commission has no "Judges", but appointments of its Presidential Members are usually made from practising lawyers, and once appointed they look like and have rights like judges. If it be true that only a lawyer or quasi-lawyer can properly fulfil the role of Presidential Members of a body set up to determine what ought to be, not what is, that itself may be a serious criticism of the system.

C. Coalition Policy

The Coalition's Industrial Relations policy (I speak from the document "Industrial Relations Policy 20 October 1992", which has different paragraph and page numbering from that of the document dated 1990 referred to in earlier commentaries) sets out to handle industrial relations matters in this country in a very different manner from that described earlier. In particular, for present purposes:

(1) Persons not in an "award area" can enter into whatever employment relationships they wish, with or without a contract in writing, and with no prescribed minimum conditions: para. 2.9. I take an "award area" to include an area covered by an award and an area for which an award is sought.
(It is curious that one has to get so far into the Policy document to find this proposition. The early part of the Policy centres on people who need to obtain their freedom from the award system. Only at para. 2.9 does it deal with people who, like the Apostle Paul and Mrs. Adamson's lioness Elsa, were born free.)

(2) Individuals or groups of employees within the award area are to be free to enter into workplace agreements with their employer.
Alternatively they may:
i) Remain for the being time under their award and the total Commission system;
ii) Remain for the time being under a certified agreement under s. 115 of the Industrial Relations Act 1988):
See Policy 1992 paras. 2.1-3, 2.6., 2.15.

(3) To enter into a workplace agreement is to exercise an option to leave the award system: paras. 2.2, 2.9. The Commission will have no function in relation to disputes arising in relationships other than those for which the parties have accepted its jurisdiction: para. 2.1. So the Commission will have no function in relation to disputes under workplace agreements.

(4) Workplace agreements can be entered into only between an individual employer and one or more of his employees: para. 2.7. A union or employer organisation cannot be a party to a workplace agreement: ibid.

(5) Workplace agreements must observe minimum rates of pay and conditions of employment: paras. 2.4-5. They must contain their own dispute-settling procedure: para. 2.4.

(6) Once entered into the workplace agreement will be legally enforceable. This is assumed (as in para. 5.4, imposing a limit on the awarding of damages) rather than stated. The assumption is justified. The workplace agreement will constitute a contract, and will automatically be enforceable at common law unless some statutory provision intrudes.

(7) The law will be amended to enable a date to be proclaimed for the termination of every award on its next anniversary, unless the parties to an award apply jointly for its continuation in relation to particular workplaces: para. 2.12.
i) If they so apply, the award will continue to apply in full force.
ii) Where an award terminates under para. 2.12 and no replacement workplace agreement has been entered into, the employee will continue to enjoy the conditions which applied under the terminated award: para. 2.13. This will be achieved by legislation "to incorporate those terms and conditions into the relationship" between employer and employee: ibid. Changes in the conditions will come by agreement: 2.13-14. The legislation will provide a dispute settling procedure, for although the employee is enjoying the conditions which applied under the award, the award will in fact have terminated, and disputes under it will not be within the jurisdiction of the Commission: para. 2.14. In effect the parties will inherit by legislation a contractual position.

D. The Constitutional Fears

As noted earlier, questions as to the constitutional basis for the necessary legislation were raised, and doubt expressed, in a paper read by Mr Greg Craven to a conference of this Society in September 1991.1 There is also in limited circulation a research assignment "The Constitutional Aspects of Deregulating the Labour Market", prepared in 1991 by Mr D.G.C. Purvis. Its Bibliography collects other literature on the matter. Mr Craven's title, You Agree, I Agree, But Will the High Court Agree ?, indicates one large part of Mr Craven's concern, namely the High Court. Mr Craven identified three principal grounds for concern:

a. That the essentially Irish Catholic labour background of several of the judges would lead them to see the Coalition proposals as "outlandish, unusual, threatening, and radical", with a cultural aversion to them arising instinctively.

b. That as regards "the scope of Commonwealth power" the Court reached a "highwater mark" in 1982 (he meant 1983) in the Dams Case (in fact there was only one dam, but no one likes to call it the Dam Case) and is now in a trend of retreat from that position, as shown by the Corporations Case. (Formally, The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 C.L.R. 1, and New South Wales v The Commonwealth (The Corporations Case) (1990) 169 C.L.R. 482). It is said to be "clear" that the Court "has lost some of its taste for an ascendant Commonwealth".

c. That decisions such as the Bank Nationalisation Case (Bank of New South Wales v The Commonwealth (1948) 76 C.L.R. 1) show that the High Court "is inclined to look askance at radicalism" (which ironically comes these days from the right), so that one must fear that the Coalition legislation "will not find a naturally sympathetic High Court".

The result of all this, it is said, is that one must fear that the Court would be likely to treat as fatal any constitutional doubts which might fairly be found to exist.

I return to such considerations in due course. Meanwhile my task is to consider what the constitutional position is under some of the various heads of power which have been seen as relevant.

E. The Constitutional Basis for the Coalition Policy

1. Section 51 (xxxv):

The Arbitration Power

Mr Craven gives this power no detailed consideration, on the basis that it is "rightly ... conceded that it would not justify the enactment of industrial agreement legislation". He says in particular:

a. From its nature the provision looks to laws dealing with aggregated industrial interests, whereas Coalition policy is for the legislative individualisation of such interests.

b. It would be hard to characterise a law with respect to voluntary industrial agreements as a law with respect to conciliation and arbitration.

c. It would in very many cases be difficult to create the element of interstateness.

From those considerations the con-clusion is drawn that it will be necessary to look for the necessary constitutional support in more esoteric places, as in the corporations power and other powers not directly related to the issue. I note that Mr Purvis likewise finds "considerable obstacles" for the Coalition arising from the wording of pl. (xxxv): p. 19.

This is the main area I wish to deal with tonight. And I have to say that there seems to me significant error in treating pl. (xxxv) as being anything like as irrelevant as does Mr Craven. I accept readily enough that pl. (xxxv) may not suffice to support the whole policy. Probably no single provision of the Constitution will do that. It may well be a matter of depending on several sources of power. But once one accepts that, the relevant question ceases to be, Can I achieve the policy under this power ? It becomes the more limited one, To what extent can this power help me to achieve the policy ? And if one comes at pl. (xxxv) with that humbler question, which Mr Craven did not, I think the answer is in fact, Quite a lot.

Several matters need to be borne in mind:

(1) A law which repeals a law which is within a head of power, is itself within that head of power.2 A law repealing the Industrial Relations Act entirely would be valid, as a law with respect to conciliation and arbitration, within pl. (xxxv).

(2) There is no constitutional requirement that Parliament shall exercise the power conferred by pl. (xxxv)--- or (in general at least) any other power---at all, or to any particular extent. That is entirely a matter for Parliament.

(3) If Parliament does enact a law with respect to conciliation and arbitration under pl. (xxxv), there is no constitutional requirement:
a. That the conciliating and arbitrating be by a commission. (Parliament may enact that it is to be done by Three Wise Men, or a panel from the committee of the Housewives' Association, or the winner of the Brownlow Medal.)

b. That the conciliating and arbitrating be by one body. (Parliament might establish a different body for each industry, or however else it chooses.)

c. That the power to conciliate and arbitrate be given to someone with respect to every dispute which the Constitution would permit the Parliament to vest in someone. (Indeed if Parliament established a number of tribunals it would be forced to lay down which of them had power to conciliate and arbitrate which disputes.) It is for the Parliament to say what power to conciliate and arbitrate in respect of what disputes it chooses to confer on which body.

(4) There is no constitutional principle that the jurisdiction be given permanently. What Parliament has given, Parliament can take away. (Though I will not add, Blessed be the name of the Parliament.)

(5) A law saying how long an award made under the system the Act establishes shall remain in force seems to me a law "with respect to" conciliation and arbitration, and likewise a law imposing a time limit on awards already in force.

(6) It is too simplistic to describe the Coalition Policy as being about "voluntary industrial agreements" and then to say that laws about voluntary industrial agreements are not laws about conciliation and arbitration. That may all be true, but it misses the point. People can---in this Society it ought not to be necessary to stress the point---People can enter into voluntary agreements without Parliament saying that they can, and laws which are laws with respect to conciliation and arbitration can be conditioned on the presence or absence of a voluntary agreement.

For reasons (1) to (5) just given I would for myself see little reason to doubt that the arbitration power would support laws providing:

a. That existing awards shall cease to apply to persons who enter into a workplace agreement.

b. That existing awards shall terminate on their next anniversary, unless continuation is sought by the parties.

c. That the Commission shall not have jurisdiction as to disputes arising between parties who have entered into a workplace agreement, or between such other persons as Parliament prescribes.

d. That the Commission shall not have jurisdiction as to a dispute as to the conditions of employment of persons employed under workplace agreements.

All that would not of course get all of the workplace agreement side of things set up. But it would bring about the untying of things under the existing system, to accommodate such workplace agreement events as in fact happened. And doing that would open the way to much more: see point (6) above. Putting aside the case of minors (which is in fact specially dealt with), an employee (a person) does not need an Act of Parliament to authorise him to enter into a workplace agreement (contract) with his employer (another person). He has that right under common law, as a free person. All he needs is that no Act of Parliament (or award thereunder) tells him that he can't. And a law cutting back the Industrial Relations Act to ensure that neither that Act nor an award thereunder says any such thing is in my view a valid law, as a law under pl. (xxxv).

The comment would of course be justified, that laws such as these would merely remove obstructions to people binding themselves to agreements, and would not empower compulsion. Difficulties are then seen as regards such things as requiring that workplace agreements meet minimum conditions. If there is no power to make laws with respect to workplace agreements, how does Parliament ensure that workplace agreements meet minimum conditions?

No matter what your organisers have said, this is not the occasion to pursue the detail of legislative drafting. But I can say that I doubt if the problem is beyond the wit of man. Many laws about one matter affect conduct in other matters. Tax law offers many examples. The right to a deduction or a reduced rate of tax is frequently made conditional on arrangements meeting certain conditions which the Commonwealth cannot itself compel. No Commonwealth or other law says that any owner of an item of property on the Register of the National Estate must, or that he is authorized to, give it to the National Trust; or that the National Trust must, or is authorized to, agree to preserve that item of property for the benefit of the public. Section 78 (1)(aaa) of the Income Tax Assessment Act merely says that if those events do happen then the owner shall have a deduction of the value of the item of property. Practical control over superannuation has been assumed in much the same way. There are many other examples. Now a formal workplace agreement can only exist in an award area: cf. paras. 2.2 and 2.9 of the Policy. And only if a negotiated agreement fits the definition of workplace agreement will entry into it exclude the award. If the Act says that to qualify as a "workplace agreement" the agreement in fact negotiated must require payment of minimum rates and contain a dispute settling procedure, I would have thought that the problem of making such agreements meet minimum conditions and contain a dispute settling procedure would disappear. Why bother to sign an agreement which doesn't achieve anything? And certainly the employee will be protected, for if the agreement is not a workplace agreement he will remain under the award.

I can see the possibility, if it were thought necessary, of a system of registration of workplace agreements, with only registered agreements having the effect of excluding the operation of awards, and with registration requiring compliance with the relevant conditions.

I do not mean that such devices are altogether easy, or that they will solve all problems. But it does seem to me that a very great deal of what is sought can be achieved by skilful (not always present these days) drafting well within the arbitration power. I feel very much more bullish as to this power than did Mr Craven.

2. Other Powers: General

I fear that what I have said as to calling pl. (xxxv) itself in aid does not exempt me from dealing with other possible sources of power, though I will do so much more briefly than I might have done otherwise. I make two preliminary comments.

A. Mr Craven says:
"Put simply, there is no fully satisfactory head of power for the passage of such legislation."

Again I suggest the more humble question: To what extent can this power help?

B. The Industrial Relations Act has already adopted drafting devices as long found in the Trade Practices Act 1974, for attracting all practicable heads of constitutional support: cf. s. 6 of that Act. Section 127C of the Industrial Relations Act as inserted by the Industrial Relations Act 1992, provides as follows:
"127C. (1) Section 127A and 127B apply only as follows:
(a) in relation to a contract to which a constitutional corporation is a party;
(b) in relation to a contract relating to the business of a constitutional corporation;
(c) in relation to a contract entered into by a constitutional corporation for the purposes of the business of the corporation;
(d) in relation to a contract relating to work in trade or commerce to which paragraph 51 (i) of the Constitution applies;
(e) in relation to a contract so far as it affects matters that take place in or are otherwise connected with a Territory;
(f) in relation to a contract to which the Commonwealth or a Commonwealth authority is a party.

(2) In this section:

"constitutional corporation" means a corporation to which paragraph 51 (xx) of the Constitution applies;
"contract" has the same meaning as in section 129A."

There will be nothing new in a similar device being applied more widely.

3. Section 51 (xx):

The Corporations Power

The precise terms of the power are:

"(xx) Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth."

It has become clear through a series of cases that the phrase "trading or financial corporations" has a wide meaning: see e.g. R. v Federal Court of Australia; ex p. W.A. National Football League (1979) 143 C.L.R. 190, State Superannuation Board v Trade Practices Commission (1982) 150 C.L.R. 282, Actors and Announcers Equity Association of Australia v Fontana Films Pty. Ltd. (1982) 150 C.L.R. 169, Fencott v Muller (1983) 152 C.L.R. 570, The Tasmanian Dam Case (l983) 158 C.L.R.1. It will apply to the vast majority of corporations, statutory or otherwise, which employ people in Australia.

There has been discussion as to whether the power is limited to enacting laws with respect to those activities of trading corporations which make them such, namely their trading activities; or whether the power extends to all things to do with such corporations. The latter view has prospered. The view is increasingly supported, that the pro-vision will support any law directed at trading corporations: see The Tasmanian Dam Case (1983) 158 C.L.R. per Mason J. at pp. 148-153, per Murphy J. at p. 179, per Brennan J. at p. 241, tending that way as earlier in Fontana Films, and per Deane J. at pp. 268-272. In his Southey Memorial Lecture, The Constitution---Major Overhaul or Simple Tune-up ?, Dawson J. has accepted that the majority view now is that pl. (xx) authorises laws with respect to anything to do with a trading corporation (1984) 14 M.U.L.R. 353. The view has been summed up in the phrase that any law in the form "No trading corporation shall" or "Every trading corporation shall" is valid: see per Mason J. at p. 149, quoting interestingly a passage from the 1909 judgment of Griffith C.J. in Huddart, Parker & Co. Pty. Ltd. v Moorehead (1909) 8 C.L.R. 330.

I doubt if that view will now be departed from. And I observe that a judge who was subject to attitudes of the kind Mr Craven notices would find himself in something of a quandary on this point. Attitudes of that kind lead one toward liking a wide corporations power. A judge who gave the power a limited ambit here would restrict what the power would justify in areas the judge did like to see the Commonwealth control.

If the alternative view were in fact accepted, that the law must relate in some way to the trading activities of the trading corporation, the question would arise whether a law governing the conditions of employment of those employed by the trading corporation was sufficiently related to the trading activities to be a law relating to the trading corporation's trading activities. I should have thought that it was. What Dawson J. (dissenting from the majority) required in The Tasmanian Dam Case, was that "the fact that the corporation is a trading corporation should be significant in the way in which the law relates to it": 158 C.L.R. at p. 316. Trading corporations are the great employers in this country, and the connection between the trading and the employment seems direct and obvious. They could not trade in any substantial sense without employing; they employ so that they can trade. Mr Craven suggests validity on the basis that the law is one for the protection and enhancement of the companies' trading activities, and alternatively that it is a law regulating activities undertaken by the companies for the purpose of trade. The second seems to me particularly true.

I should mention, to exclude it, the possibility of arguing that Parliament could not use the corporations power to support laws as to conditions of work, because that would be inconsistent with the existence of a particular conciliation and arbitration power in pl. (xxxv). It is true that in certain cases the existence of a limit in the expression of one power will lead to another being cut down. Thus pl. (xiii) enables the Parliament to make laws with respect to "Banking, other than State banking ..." It is established that the corporations power would not authorise a law with respect to State banking, because the restriction in pl. (xiii) is seen as being intended as a general restriction on Commonwealth power, not merely as a restriction on the banking power of pl. (xiii): see Bourke v State Bank of New South Wales (1990) 170 C.L.R. 276. It seems to me impossible to get from pl. (xxxv) any restriction limiting the making of laws with respect to conditions of work under other heads of power, and I note that the Commonwealth has long enacted such laws, as e.g. with relation to its own employees, and (under the trade and commerce power, pl. (i)) with respect to stevedoring.

The principal weakness of course with reliance on the corporations power is that its use says nothing where the employer is not a financial or trading corporation. But if I am right in thinking that a great deal of what is sought can be achieved through the arbitration power, very useful support could be gained from the corporations power. In particular:

A. Most of the large employers would be covered. As I recall the figures, although very many people in aggregate are employed by non-corporate employers, large non-corporate employers are rare indeed.

B. The home of awards is in government and large corporations. Non-corporate employers and their employees want little but to be left alone, and that is what the Policy seeks to do for them. Corporate cover would enable the Parliament to eliminate the interference otherwise flowing from the award system.

4. Section 51 (i):

The Trade and Commerce Power

This power gives the Common-wealth power to make laws with respect to:
"(i) Trade and commerce with other countries, and among the States."

It is premature to call this a sleeping-giant of a power, but it has long been noted that a very similarly worded power in the Constitution of the United States is a very active giant of a power: see generally the remarks of Sir Owen Dixon in the Bank Nationalisation Case (1948) 76 C.L.R.1 at pp. 380-383, to which on appeal the Privy Council said it could add nothing: (1949) 79 C.L.R. 497 at p. 633. It would not surprise if this power were a growth stock over the next generation or so.

Propositions already established are that:

1. The power extends to laws as to the employment of persons actually engaged in trade and commerce with foreign countries and among the States:
Seamens' Union of Australia v Utah Development Co. (1978) 144 C.L.R. 120.

2. The power extends to laws as to the employment of persons directly connected with such trade and commerce, as e.g. in stevedoring:
Huddart Parker v The Commonwealth (1931) 44 C.L.R. 492.

3. The power extends to industrial relations matters in relation to such persons:
R. v Wright ex p. Waterside Workers' Federation (1955) 93 C.L.R. 528.
The power is called in aid for the extended operation of the Trade Practices Act (see s. 6 (2)(a)(i) and (ii) of that Act), and in s. 127C of the Industrial Relations Act 1988 referred to earlier.

There seems to me the likelihood of a large supporting power here. And again one notices that any judge predisposed in favour of Common-wealth power is likely to be predisposed in favour of a large trade and commerce power. His quandary here would arise from the fact that the trade and commerce power would, unusually, be being used in support of legislation not leading to Commonwealth control. But in restricting the power he would be throwing a pretty big baby out with the bathwater.

5. Section 61: The Executive Power
6. The Nationhood Argument

Without going into detail, the observation seems sufficient that if the Policy is calling these powers in aid, it is in serious trouble.

7. Section 51 (xxix) The External Affairs Power

This power gives the Commonwealth power to make laws with respect to:-"(xxix) External affairs."

The power became notorious in the Tasmanian Dam Case, and has justly been seen as threatening the entire balance of the Constitution. It is no doubt for this reason that the Coalition Policy says that to the extent that it is necessary "the Commonwealth's full constitutional power, except the exter-nal affairs power, will be used."

See the Executive Summary at p. v of the Policy document.

My only comment as to this, is to pose the question as to how the Commonwealth, in enacting legislation, abstains from relying on a particular power. It is one thing to abstain from so drafting as to call a power in aid, in the manner that s. 6 of the Trade Practices Act and s. 127C of the Industrial Relations Act do. But a constitutional power can be relevant without being called in aid in that way. If a challenge to the Act were mounted, the High Court might well say that the issue was whether the Act was valid, not whether it was valid because falling within such powers as the Government of the day found politically correct, and wished to rely on. Or is the Act itself, as passed by Parliament, to take the surprising course of saying that to the extent that a provision is valid only because justified by the external affairs power, Parliament's intention is that the provision shall be invalid? I think the Coalition might have more difficulty in not relying on the external affairs power than it recognised when it put the entirely understandable disclaimer into the Policy.

Conclusion:

Generally then, and while seeing significant tasks for drafting, I would not have thought that achievement of the Policy was beyond the constitutional competence of the Commonwealth. And I cannot but observe that leaving people free to make their own agreements if they wish ought not to be.

F. The High Court of Australia

The published title of tonight's paper suggests that I will now say something about the High Court in the particular context of industrial relations. In fact I will speak rather more generally, and will confine myself to a few separate though not disconnected observations.

I would say first, Always remember that the Judges of the High Court are clever people. (In a less exposed position I would be prepared to discuss the possibility of exceptions to this statement, but it remains generally true.)

Second, I doubt if it is wise to note that in 1983 the Commonwealth won the Tasmanian Dam Case, and that in 1990 the Commonwealth lost the Corporations Case, and on that basis to conclude that the High Court "has lost some of its taste for an ascendant Commonwealth". In the first place, I would not have thought the two cases sufficiently similar to justify the basic comparison. The Corporations Case turned on the very particular wording of the corporations power. I can find nothing in what was said there to show how the Court would have approached a Tasmanian Dam Case occurring in 1990. In the second place, to draw a trend-line from two cases seven years apart is to go beyond what the data will fairly justify. The fact that it was 0 degrees celsius at 6 a.m. Monday morning and 25 degrees celsius at 4 p.m. on Friday afternoon simply does not justify drawing a straight line from 0 to 25 as representing the trend of temperatures over that period: and still less to see it as indicating a likelihood for the future. For all you know it was 45 degrees celsius on Thursday afternoon, and the trend on Friday was sharply downwards. The data is simply insufficient. Similarly here.

Third, I doubt that it is correct historically to say that the Court has shown itself "inclined to look askance at radicalism". Was the Court looking askance at radicalism when it found the Communist Party Dissolution Act 1950 unconstitutional ? (Australian Communist Party v The Commonwealth (1951) 83 C.L.R. 1.) Mr Craven's own example of the Bank Nationalisation Case (Bank of New South Wales v The Commonwealth (1948) 76 C.L.R. 1) is at best arguable. In 1948 the suggestion of adding the step of ownership to the pervading government control of commercial activity to which Australia had become accustomed during the war was not as radical as latter day commentators might think. At that time nationalisation was much the go. Communist Russia looked impressive, and the Cold War had not started. England had nationalised the railways, coal, steel, health, and much more. In this country the banks were shocked at how little public outcry emerged in their support. So I doubt that nationalisation was seen as so very radical a step. And in recent decisions the High Court has shown itself the reverse of anti-radical in its own thinking. Welcome Australian Capital Television Pty. Ltd. v The Commonwealth (1992) 6 A.L.J.R. 695 or not (I do), welcome Mabo v The Commonwealth (1992) 66 A.L.J.R. 408 or not (I don't), you cannot deny the radical nature of the thought processes involved in both cases. I think Mr Craven's case on this issue fails.

Fourth---and further analysis is required of various aspects of what is involved in this proposition---I do think that the Court is increasingly and distinctly influenced by what it perceives as community attitudes. I instance as a regrettable example the Court's undignified backflip on s. 260 of the Income Tax Assessment Act, following the political and media and public outcry in relation to Harbour bottom schemes in particular and tax avoidance generally. To their discredit, Mr Fraser and Mr Howard (Mr Howard who had done more than any other person to control tax avoidance in proper ways) brought to a compliant Parliament retrospective legislation which opened the door for the cascade of retrospective legislation we were always warned would follow the first breach in the wall of principle. The High Court scampered to do its part, and distorted retrospectively a body of s. 260 doctrine which whether right or wrong (I think right) was we all thought well-established: Federal Commissioner of Taxation v Gulland (1985) 160 C.L.R. 55. As Deane J. said in dissenting, "When one comes to apply the 'settled' construction of s. 260 to the facts of the present case, the outcome is inevitable.": 160 C.L.R. at p. 97. The actual outcome imposed by the majority was the opposite, and without overruling anything. Indeed we really need not speculate as to the basic proposition. The reasons which Brennan J. gave in Mabo for rejecting the legal authorities which represented the law he was thought to be applying, were based on "The expectation of the international community "and" the contemporary values of the Australian people": 66 A.L.J.R. at p. 422.

Fifth, the position of a High Court judge, and the facilities provided to make life safe and comfortable, join with a number of other factors to limit the amount of contact the Judge has with the general community. High Court judges are not much found in the streets or on trams or in taxis or hotel bars. In almost all the social contact they do have, even among old friends, there is a degree of restraint in what is said to them, and in how it is said. One is rarely quite relaxed. What they know of community attitudes tends to be what they have read of them in the media, both the daily papers and the intellectual periodicals: and what they learn through the Associate.

Sixth, the usual practice for High Court Judges has been to have as an Associate a young person on his or increasingly her way into the profession. These days they are clever, bright, recently through a very good course at the University, brimming with confid- dence, and ready to keep the Judge flooded with ideas, suggestions, and references to current literature. And increasingly---one believes---they can be found writing draft judgments.

A practical conclusion can be drawn from all this. In his General Theory, Maynard Keynes comments that the world is ruled by ideas much more than by the practical men who think they are in charge of events. When one considers how ideas presented to and emanating from this Society have led within a very few years indeed to each of the two major parties claiming to be better than the other at tearing down the columns of the old Temple of Industrial Relations, one sees his point. Those who have ideas as to desirable future arrangements of Australian affairs, and who wish to have their influence on future decisions of the High Court, would do well to see that controversial matters are argued out not just privately but publicly: and argued well. What enters into the discourse of educated discussion is likely to form part of the Australian feelings which will increasingly play a part in forming decisions of the Court. A good article in Quadrant may in time have a greater effect on the course of decision than the highly paid advocate in his wig and a silken gown.

G. Sir Owen Dixon

At the risk of trespassing on your patience I would like, without warrant, to say a little more. I would like to speak to you of Sir Owen Dixon, a judge of the High Court from 4 February 1929 to 17 April 1952, and its Chief Justice from 18 April 1952 to 13 April 1964. I do so for several reasons. One is that this year has seen the twentieth anniversary of his death, on 7 July 1972. It is important to help keep alive an awareness of one of Australia's greatest sons. Another is that people like you often do know something of him, and wish to and ought to know more. And another is that a few days ago I came across a letter written by him, courteous and quirky and entirely typical, which brought back many memories of him.

There was in the Australian Law Journal two or three months ago a note of the anniversary. The comment was made, that at any rate in New South Wales, Dixon's judgments are not cited very often. Mildly surprised, I counted in that particular issue (admittedly not a sufficiently large sample) the number of references to judgments of all High Court judges there have ever been, and of Dixon separately. For all High Court judges, the total was 42. For Dixon, the total was 20. Fractionally under half of all the references to judgments of judges of the High Court, were to judgments of Dixon. This is being forgotten with a vengeance! It probably is true, that Dixon's judgments are not cited in that very considerable court the New South Wales Court of Appeal, and indeed in New South Wales generally, as much as one would expect. That has long been true. Dixon has never been given quite the position in New South Wales that he would have commanded had he gone to Fort Street. When he is, that might be a small and not altogether unimportant sign of a national maturity. He belongs to the common-law world, and that includes New South Wales.

I first saw Dixon in March 1948, when as a very new law student I went down town from my University college in Melbourne to look at the High Court hearing the Bank Nationalisation Case. During a law course at Melbourne his judgments inevitably played a prominent part. As an articled clerk I was fortunate enough to be sent to attend his swearing-in as Chief Justice, on 21 April 1952. His appointment was honoured by a cable from Justice Felix Frankfurter of the Supreme Court of the United States, saying simply "Law is enhanced". After my return from three years at Oxford I went to the Bar at the end of 1956. From that time I was fortunate enough to see Dixon regularly, both while appearing before the court, and also socially, principally in a club he much frequented for lunch.

We all knew of course that he was a great judge. Just how his fame had spread had been brought home to me right back in the 1950's, when my Oxford tutor Dr J.H.C. Morris told me that Dixon was the greatest judge in the English-speaking world. On Dixon's retirement in 1964 the Prime Minister Sir Robert Menzies Q.C. spoke of testimony to similar effect from two Lords Chancellor of England and from Justice Frankfurter. Menzies spoke truly when he said how proud we were of Dixon, and how we felt "occasionally that some of the glory rubs off on us". On Dixon's death in 1972 Barwick spoke of him as "the most outstanding lawyer this country has produced". He added more, when he spoke of his recognition in America and in England as "the greatest judicial lawyer of his time in the English-speaking world". Oxford had given him its Doctorate of Civil Law, honoris causa; Harvard its Doctorate of Laws, honoris causa; and Yale its Howland Prize. For most judges, appointment to the High Court brings lustre. In the case of Dixon, said Barwick, "His lustre was shed upon this Court."

Indeed he had been much more than merely a great judge. In 1940 he was appointed Chairman of the Central Wool Committee, in charge of the implementation of the Wool Agreement between Australia and England, the foundation of the Australian wool industry for the whole of the war. Between 1940 and 1942 his very great administrative skills saw him made a member of the Australian Shipping Control Board, the Marine War Risks Insurance Board, the Commonwealth Marine Salvage Board, and the Allied Consultative Shipping Council in Australia. From 1942 until 1944 he took leave from the High Court and became the Australian Minister of State in Washington. In 1950 he was chosen by the United Nations Organization to mediate in the dispute between India and Pakistan over Kashmir. A solution to this problem finally eluded him as it has all others, but to this day his memory and the memory of his efforts in seeking a solution remain one of fine honour in both those bitterly contending countries.

That was the public, the great, the distinguished Dixon. I wish to speak more personally.

There was of course the utter integrity. I appeared in front of him on an application for security for costs in relation to an unimportant piece of litigation from Western Australia. Something to do, if I recall it accurately, with a sheep shearer's marriage. The sum involved was about 250 ($500). I thought what a funny system it was, that devoted the talent of one of the all-time judges to my little application. Rather like employing Don Bradman to oil a bat for me to bat with. Dixon did not think it at all inappropriate. It was part of the job as judge. Every case, every application of any kind that came before him got his utter attention, got the benefit of the entire ability which fortune had given him.

I remember next the courtesy, the happiness, at times the sheer fun of a court run by Dixon. At the start of proceedings the court itself would be silent for a time, as Counsel for the appellant swung into his opening. Somewhere into the opening, about ten minutes usually, there would be a cough. "Mr Thomson, is the issue really this, ..... ?" I remember saintly Louis Voumard Q.C. turning to me on such an occasion, and saying untypically "Jesus he's a master." Lou and I had worked on the matter for days. Dixon had identified and formulated the very difficult issue better, after ten minutes. From then on he might interfere little. He might interfere a lot. Not, however, interference by way of arguing against Counsel (who is not paid to admit to the court that his argument is wrong); more like (especially if Counsel were young) an invitation to look into the problem together with Dixon, noticing weaknesses, noticing strengths, till both were satisfied that all relevant aspects of the issue had been looked at. That left Counsel free to stress his points as he is paid to do, and would see him thanked for his assistance. "Thank you Mr Green, that has been most helpful." And left to Dixon and the court the responsibility of decision, without the comfort of Counsel having effectually been forced to surrender.

I am reminded in this regard of a question Dixon often put to young lawyers, "Who is the most important person in the court?" Various answers were of course given, usually, You Sir. With that put to one side, other possibilities were examined. The judge; the barrister; the solicitor; the Appellant; the Respondent; on a hot day the Court Crier, who could open the windows to let in some air. Dixon had one steadfast and illuminating answer: "The most important person in the court is the litigant who is going to lose. One of these parties who have brought this case to the court is going to lose. That person must leave the court satisfied with the system in which he has lost; satisfied that his Counsel and his case had fair treatment and every chance. With Dixon presiding he saw that happen in front of his very eyes. Every possible point had been noticed and considered. Counsel likewise left the Court satisfied. Each point he had discerned had been looked at; indeed, during argument he had somehow discerned one or two points he hadn't noticed previously, and he had pointed those out too. Win or lose---he didn't know which yet---he had had a good day. Arguing to Dixon wasn't all that hard, after all. Rather fun really. Indeed he had argued rather better today than he usually did. His tentative little joke had gone down well. And Dixon had thanked him as if he meant it. Must tell Peggy about that tonight. Hope I come here again soon. Dixon's answer to his own question was a very wise one, and not every judge has wit enough to heed it.

And even young Counsel really did learn to essay a tentative joke in Dixon's court. Dixon had no need to pursue his own dignity. It was simply there, undoubted and unchallenged. Laughter was frequent, jokes were welcome, and Dixon contributed his share. His laugh was unique; not a giggle, not a cackle, but certainly high pitched, and containing elements of both: "Heh-heh-heh". When he contributed a joke or made some devastating comment (as he often enough did) it would end in this explosion of a laugh.

Laughter was welcome because the work of a judge was, Dixon more than once remarked, hard and unrewarding. The work had a single aim: to decide correctly according to law; and in doing so to develop the law in the manner of the common law. Nothing was allowed to interfere with that. Counsel for a Government asked that a constitutional case be decided by a certain date, for some reason of convenience to the Government. Dixon was not going to have his court put on a time table for this or any other case, for this or any other Government. He heard Counsel out silently, and without the usual courtesy of looking to inquire what his brethren might think of the application, said tersely: "It is more important that this case be decided correctly, than that it be decided soon. The court is adjourned." There was abundant steel there on the rare occasion indeed that it was needed.

Outside the Court he was regarded by almost all who had contact with him as a person somewhat apart from the rest of us. He was a person of such enormous distinction, and had been for so long, had been a High Court judge for so long, had left the Bar so young, so long ago, that very few people indeed felt in any sense his equal. Indeed one could not talk to him without sensing that this was someone different to anyone one had ever met. One or two very senior Supreme Court judges (Sir Charles Lowe, Sir Charles Gavan Duffy) addressed him as Dixon. So I suppose did Menzies. Probably the other High Court judges did the same, ex officio as it were. To the rest of humanity he was "Sir Owen". In his late years perhaps Lady Dixon, Alice Brooksbank whom he married in 1920, was the only person in the world who called him "Owen".

That sounds forbidding. In fact he was the opposite. In his retirement speech he said "I believe in young everything." He certainly did when having lunch. At one of his clubs there was what was called the Judges' Table, and he knew that if he lunched at that Club he was in danger of being made to lunch there. "I'm paid to work with judges, not to lunch with them---heh---heh---heh." A particular annoyance was the tendency of some of the judges who lunched there to seek a very authoritative kerbside view on whatever problem was currently troubling them. One judge opened a conversation: "I had a point arise in front of me this morning, Sir Owen, that would interest you." Dixon looked at him sardonically and said "I doubt it---heh---heh---heh." He resumed his lunch in peace.

For such reasons he usually lunched elsewhere, amid graziers and doctors and bankers and others of the manifold members he knew there. And here he would gather to himself the young, sitting spellbound while the great man talked---with his habitual happy slander---of events and people in Australia and overseas. One felt that one was being given an insight into things that otherwise one would never have known. And one was. An encyclopaedia of inside information as to events in Australia was lost when Dixon died.

Whether one had lunched with him or not, any barrister having coffee after lunch was likely to find the Chief Justice alongside him saying "Can I offer you a ride back ?" If you accepted---you usually did--- he would pass on to chat to others, and you kept your eye open and followed him out when he left a few minutes later. "He had never learned to drive a car himself, and in Melbourne and Sydney he was driven in a great black Armstrong Siddeley, two of four such cars brought out for the 1954 Royal Tour. The bureaucrats had suggested that these two be the Prime Ministerial cars, and I have a hazy recollection of being told that Menzies did try one of them for a week or so before deciding that he preferred the big Buick he had been driven in for some years (in which he could sit comfortably in his preferred front seat), and assigning the Armstrong Siddeleys with loving malice to Dixon. Dixon never much liked the grandeur of the big car, but it did let him provide welcome hospitality. Conversation and laughter continued until the car reached the Court. There everyone got out. Even if it were raining, the car was not sent on the further hundred yards or so to Owen Dixon Chambers. The car was provided by the Australian taxpayers to drive the Chief Justice of Australia to the Court; not to let him give separate rides to friends. Distance did not matter. There was no such concept as that of reasonable honesty. Integrity was an absolute.

In 1963 Dixon was admitted to the Order of Merit, the Order of 24 persons admission to which flows from the personal nomination of the Monarch.3 Like many another I wrote to offer my congratulations. No doubt I said something to the effect that not only I but the whole of the Victorian Bar was very proud of him. Punctually I received the letter I have here. In listening to it please remember that at the time it was founded, the Order of Merit was intended to have an emphasis toward political and military distinction, an emphasis which has changed over the years.

"My Dear Hulme,

I am compelled by a very slight injury to my hand to answer you in type."

Note the assumption that apart from the injury he would have written by hand. He would have too. To everyone who had written. The injury prevented that. But I was not to be concerned. The injury was "very slight".

"I am very grateful for your letter. Whatever views you or the Bar generally or any section of the Bar may have formed, the truth is that the O.M. was intended for other attainments, and that you will see somewhere or other if you read widely enough."

You will notice the traditional legal distinctions being gently parodied in the first part of the second sentence, and in the later part of that sentence the assumption that my reading is likely to be sufficiently wide for the kind of esoteric knowledge involved.

"I have read comments in The Times about every appointment to the Order for some years. I do not remember seeing one approved.

With kindest regards,

Yours sincerely,

(Owen Dixon)"

Typical indeed. Who else would even be aware that he had read comments in The Times about every appointment for some years ? And quirky indeed. Could a new recipient of one of the world's great awards express more firmly his confident belief that he would soon be reading in The Times comments on his own appointment, and finding it likewise disapproved? And perhaps be looking forward to doing so?

It is time to cease. I have trespassed on your hospitality, but in a good cause. The law in Australia has not had another such a man, before or since. In all fields of endeavour Australia has had but few. We forget such men at our peril.

References:

1. Greg Craven You Agree, I Agree, But Will the High Court Agree?, published in the booklet Labour Market Reform, The Constitution and the Law, published by The H R Nicholls Society in December 1991.
2. I can see at least one probable exception to this proposition, namely an Act to repeal those provisions of the Judiciary Act 1903 which operate to bring into existence the High Court of Australia. Section 71 of the Constitution says that "The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia..." There could be an argument that once Parliament has exercised its legislative power to call that Court into existence, s.71 requires the continuance of that Court. And if you don't think that argument would win, I do.
3. Seven Australians have been appointed to the Order of Merit: Samuel Alexander, philosopher; Gilbert Murray, classical scholar; Sir Macfarlane Burnet and Lord Florey, medical scientists; Sir Owen Dixon, jurist; Sir Sidney Nolan, painter; and Dame Joan Sutherland, opera singer.


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