Public Interest or Vested Interest

Employment Laws and the Constitution

Colin Howard

Ray Evans's suggestion of this topic for consideration at this year's conference was timely. For a nation which throughout its existence as a single country has been so continuously obsessed with its own, fortunately unique, way of failing to deal effectively with labour relations, both the occurrence of and the public opinion reaction to the Dollar Sweets, Mudginberri and Airlines litigation have even greater significance to the national life than has yet been perceived.

I say that because only a very small proportion of the Australian community has much knowledge of the background to our labour relations system or how the complex legislation on which it depends fits into the constitution. That last point is perhaps not particularly surprising. I seem to recall a survey of some kind during the past year or two which revealed that more than half the people questioned did not even know that Australia has a constitution.

It is a fortunate humanitarian coincidence that not a single survivor remains of the politicians and others who laboured so mightily in the 1890s to agree upon and draft the constitution. To discover less than a century later not merely that people had forgotten one's efforts but had very likely never heard of them in the first place would be depressing indeed. The nearest analogy which comes to mind is Mrs Thatcher overhearing the Queen inquire 'Margaret who?'.

The fact remains that the resurgence of the ordinary law of the land in labour relations, and the manifest approval that that development has received in public opinion, is a far greater break with this country's history as an independent nation than is generally realized. Partly this is because of the remarkable tolerance which the Australian community at large has displayed over the last eight decades for abuses of union power and consequent disruptions of the national life.

We really are a very patient people when it comes to tolerating the intolerable selfishness of others. We are rather like an over-protective family. Such families tend to produce a disproportionate number of spoilt children who refuse to grow up or accept responsibility for their self-indulgent follies. During the past decade however, coincidentally with the marked move in party politics of the ALP to the right (or perhaps I should say to somewhere left of centre since they started out so far to the left), even the long-suffering Australian public began to make clear that enough was already too much.

The manner in which the erratic but occasionally politically brilliant Joh Bjelke-Petersen dealt with the electricians in Queensland was a very clear sign of the times, the significance of which was observed by just about everyone except Mr Norman Gallagher. Perhaps in his case it was irrelevant. For one thing the BLF was by then so unpopular that nothing made any difference any more. Also of course he had had the good sense to stay in Victoria where the quaint local political customs include ensuring that the State government preserves its position in the pecking order by wasting even more public money than the BLF. And thirdly I remember the inimitable Norm disclosing to the media shortly before Christmas that the BLF was then financially better off than ever before. I do not doubt that fact but it does not say a great deal for our system of labour relations.

As a matter of law, as we all know, the major statute supporting this so-called system finds its constitutional base in a subsection of the document, 51(xxxv), which empowers the Australian Parliament to make laws for the peace, order, and good government of the Commonwealth with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State.

Something of the kind was first envisaged by Mr Kingston of South Australia on 9 March 1891 at the first convention debate on a federal constitution in Sydney. He subsequently formally proposed the adoption of a rather different version on 3 April 1891 but withdrew it almost immediately in deference to an objection from Sir Samuel Griffith, subsequently the first Chief Justice of the High Court of Australia, that Mr Kingston was proposing the establishment of a federal court and they had not got to courts yet.

[It has nothing to do with the present address but I cannot refrain from reporting that on the same page of this particular debate the next topic was a proposed power to legislate with respect to immigration and emigration. Advocating the adoption of the proposed version of that power, which was pretty wide, the redoubtable Sir Samuel commended it in the following terms: 'It will enable them to keep out Chinese, Hindoos or other aliens---even English, if necessary. It will enable them to impose conditions, if found necessary, such as America has imposed to prevent pauper and other undesirable immigration. It may under some circumstances be a very useful provision.' I wish that I had thought to draw that passage to the attention of my embattled former colleague Geoffrey Blainey some years ago. He would have found particularly encouraging the immediately following sentence: 'Sub-clause agreed to.']

After a promising start in 1891 interest in federation waned for some six years owing largely to economic downturn and a good deal of industrial unrest, of which the great shearers strikes are probably the best remembered. The next reference we find to a possible arbitration power is a very wide version, 'Industrial disputes extending beyond the limits of any one State', proposed on 17 April 1897 by a certain Mr Henry Bournes Higgins of Victoria, subsequently the fifth judge to be appointed to the High Court. It is in this debate that we encounter the first contributions of one of the two most effective and determined opponents of any such thing.

These were Sir William Downer and Mr Josiah Symon, both of South Australia. I am happy to say that each of them was a QC and therefore an ex-officio ornament to the debate. Actually Sir William did not make a particularly brilliant start. He professed not to understand the clause or to see what it meant. It turned out that his purported problem was in grasping how an industrial dispute could extend beyond any one state. I am bound to say in all fairness however that most of the other speakers, including those who shared Sir John's opposition to the clause, seemed to have about the same measure of difficulty in understanding Sir William's difficulty.

The exchanges remind me of an item that I read in the Age newspaper last December which quoted an unnamed member of the legislature of the Northern Territory to the effect that his government had such respect for the importance to a local Aboriginal tribe of a certain sacred site that to prevent it from being harmed by a proposed mining development the government intended to move the site to another location. But, not for the first time I fear, I digress.

Returning to the origins of 51(xxxv), the Adelaide debate of 17 April 1897 also gives us the first picture of the passion for regulation of labour relations which Henry Bournes Higgins took with him onto the bench and, for all I know, to the grave. Having made three or four contributions of substance to the debate already, he insisted on adding an amendment as an afterthought after the Chairman had already put the question but before he received a vote. When Higgins finally drew breath and they managed to slip the actual vote into the proceedings the proposed legislative power was soundly defeated 22:12.

Just think of all the time, trouble and expense that the nation would have been saved if matters had rested there. Admittedly a lot of barristers would not have pursued prosperous careers but we cannot have everything. No doubt they would have found alternative sources of distress from which to earn an honourable living.

The irrepressible Mr Higgins however was again in evidence on 25 January 1898 in Melbourne when he initiated the longest debate on the matter, and the hardest fought, by proposing the adoption of a legislative power in the words which we now have. This debate reflected the previous one only more so. It has at least two very interesting features which go back as far as Sydney in 1891. The first is that it seems not to have occurred to most of the participants that they were taking pretty much for granted a mater which is of great concern to us here and now. This is whether the creation of a legislative forum distinct from the ordinary courts of law is an appropriate, or even a sensible, means of trying to deal with industrial disputes.

Although Downer and Symon were perhaps getting to this in passages to which I shall refer in a moment, there is no question that the dominant feature of the debate throughout was not whether statutory regulation was the best way to deal with the matter but whether the regulating should be done by the States or the Commonwealth. In other words, most of the delegates to the constitutional conventions saw the matter simply as yet another States' rights issue. This accounts more than anything else for the singularly unhelpful form in which this particular legislative power was finally set in concrete in the constitution.

The second notable feature, which so far as my investigations go was totally overlooked, was the potential which such a legislative power must necessarily have for cutting right across the economic management of the country at large. Free trade versus protection arguments had of course long been familiar and were a major influence towards federation in the first place. There seems however to have been little, if any, recognition that arguments of this kind were merely part of the enlarging responsibility being assumed by governments for economic management in every sense. The unsuitability of the conciliation and arbitration system in a modern economy has long since been perceived in this country. Nothing much has been done about it partly because of various vested interests but also largely because life without the conciliation and arbitration system has not been regarded as practical politics. Nevertheless it remains interesting that in the 1890s it was apparently not seen even as a factor in the situation. Perhaps Adam Smith had already been dead too long.

Returning to the 1898 debate, a less important but very noticeable feature is the frequency with which participants on one side or the other sought to strengthen their cases by reference, as always, to precedents. Also as always, the precedents tended to prove a couple of things well known to lawyers: that somewhere, sometime, someone has always made the same mistake before and that precedents tend to cut both ways depending on how they are used. Mind you, this last point was economical because it meant that both sides could use the same set of precedents.

In this connection New Zealand was much cited for its then system of industrial arbitration, provoking from Sir William Downer, after one of Mr Higgins's umpteen references to Kiwi-land, the response: 'Even the argument that New Zealand has done something is not sufficient to satisfy me of the correctness of the present [proposal].' Shortly afterwards this moved a delegate from Victoria with the dangerous name of Zeal to claim that something or other had been done right there, in Victoria. In this however he was over-zealous because he was promptly contradicted by Mr Alfred Deakin of, of course, Victoria.

Having survived these salvos Sir William went on to make the following prescient observations about the future consequences of adopting what is now 51(xxxv): 'We are now asked to hand over to the Federal Commonwealth a power of legislating with regard to internal concerns affecting every man, woman and child in every state. Every agreement they make, so long as a sufficient number of them combine together to kick up a row, may be made the subject of review before a tribunal. To pass legislation of this sort is in itself an invitation to extend the area of raising quarrels. Such legislation would tend to make such quarrels national, so as to create a power of interfering between individuals who are not satisfied with the contracts they have entered into.'

Mr Symon too came good in this debate to the following effect: 'I think that the insertion of this power in our Constitution is unnecessary, and will be absolutely mischievous. In fact, if this is to be carried out, it will create the greatest possible difficulty and complication, notwithstanding [that] all it does is simply to embody an expression of the sentiment of kindliness and good-will.'

His state-mate Mr Kingston then rather unwisely interposed 'That is something.' Mr Symon responded: 'But I say that this Constitution is not the place in which to introduce a merely barren expression of good-will. Unless it is going to be made use of in the strongest possible way ... it is no use putting it in at all ... But this [proposal] in its very terms is a contradiction. It provides for 'conciliation and arbitration for the prevention and settlement of industrial disputes. How on earth are you to apply conciliation, to apply arbitration, at all, unless first of all you have a dispute?'

He went on remorselessly to make the consequential point that once you had a dispute it was idle to talk about conciliation without the possibility of enforcement and that enforcement against large bodies of workers was for practical purposes impossible. Here of course, as other participants acknowledged, he hit upon one of the fundamental weaknesses of the whole concept. The parties to a contractual dispute can argue it out between themselves by negotiation without any kind of artificially imposed process of so-called conciliation. Conciliation without enforcement is superfluous. Conciliation with enforcement is not conciliation at all but an inferior substitute for the much more respected, objective and efficient process of taking the contractual dispute either to commercial arbitration or directly to the ordinary courts of the land to be decided according to law.

Neither Mr Symon nor Sir William Downer nor Sir Edmund Barton, one of the three original Justices of the High Court, spelt out what I have just said in the terms which I have just used, but each of them at various stages of the debates made explicit reference to the significance of the contract between, as they called it in those days, master and servant or master and man, which, now as then, lies at the heart of any industrial dispute. [I trust that any feminists present will understand that as far as I am concerned 'master and man' may be replaced, if they wish, by 'mistress and maiden'.]

Before leaving the convention debates on this matter allow me to confer a certain temporary immortality upon one of the later exchanges in the events of the adjourned continuation of the debate on 27 January 1898. It arises out of the frequency with which Mr Higgins expressed his faith in the wisdom of future federal parliaments. At this stage he was exchanging observations with a certain Patrick McMahon Glynn, yet another delegate from that loquacious State, South Australia. The passage runs as follows.

    'Mr Higgins: If the principle is bad the Federal Parliament will not adopt it.

    Mr Glynn: The honourable member must be an innocent in political life if he thinks that.

    Mr Higgins: Why should not the Federal Parliament be as wise as we are?

    Mr Glynn: No doubt, but that is not going very far.'

Rather surprisingly Sir John Forrest of Western Australia, a notable conservative as well as explorer, rose to his feet to give expression to the following complex sequence of observations: 'I intend to support the amendment of my honourable and learned friend. I must, however, say that I am not generally in sympathy with the proposals of the honourable member, and I have hesitated in my own mind whether, in following the honourable member in this matter, I am on the right track. But, for all that it may not be thought so, I have some liberal instincts, although my liberalism is not of the type of that of the honourable member or of many of those who generally support him. I have a greater regard for individual rights, I think, than probably the honourable member has.' In case all that left anyone a trifle confused as to where he stood on the matter or what he thought he was voting on, Sir John went on to explain that he was in favour of entrusting this legislative power to the federal parliament, not because he had any great faith in the federal or any other parliament but he thought it would do a better job than any of the State parliaments.

He chose his moment well because the clock showed 1.00 p.m. and the Chairman left the chair, which ruined Henry Bournes Higgins's lunch. At 2.00 p.m. however Mr Higgins sprang to his feet to express his 'appreciation of the fair, frank and courteous way in which the [proposal] has been treated on both sides.' From this encomium however he promptly made an exception of Sir John Forrest, adding rather broodingly: 'The only doubt I have, after all the debate, about the correctness of my view is that I am supported from such a quarter.'

The last word on this strange political alliance came from Sir Edward Braddon of Tasmania, who opposed the clause. To enjoy the full flavour of his observations one has to remember that to conservatives of the day the term 'liberal' meant 'socialist left'. At the conclusion of this memorable debate he observed: 'When the honourable member who moved this [proposal] rose I quite thought that he rose with the intention of withdrawing it. After seeing that that (proposal), moved by himself as an extreme liberal, and supported by (other) extreme liberals, came to be supported (also) by extreme conservatives, or I may say tories, I was all the more confirmed in that idea, (especially) when he admitted that the support of my right honourable friend (Sir John Forrest) almost convinced him he had better leave this matter alone.'

How much more interesting Australian politics would be today and how frequently we should tune into debates in Parliament were the elected representatives of the people capable of utilizing the English language to refer to each other in terms of such polished venom as their predecessors were a century ago. And so the matter was put to the vote and 51(xxxv), as it is now numbered, was approved by 22 votes to 19. A learned author writing in 1952 observed after fifty years of the result of that majority of three that what was said of the Statute of Frauds might be applied to this paragraph, that each word has cost a ransom. How right he was, is and unfortunately for some time yet will no doubt continue to be.

A number of attempts have been made over the years to alter 51(xxxv) by amendment of the constitution. True to the character of the majority of proposed amendments in the years since federation, those relating to 51(xxxv) appear to have been designed for the express purpose of making matters worse rather than better. My favourite is the one introduced into the Senate in 1909 which proposed to insert into s.51, immediately after 51(xxxv), a new paragraph (xxxv)(a) to run 'The adjustment of industrial conditions in the various States.'

When one thinks of what the High Court has managed to make of the present wording, the mind really does boggle at the chaos which could have been wrought by the addition of such words as 'adjustment' and 'conditions'. Indeed, if the now established tradition of interpretation of 51(xxxv) were adhered to we could have had some interesting cases on which of the States were various and which were unvarious, or whatever the opposite of various may be. Eccentric though this proposed amendment manifestly was, it attained an equal vote in the Senate on 4 November 1909. This had the beneficial result that the motion was negatived.

The history of proposals to amend 51(xxxv) having been one of uniform failure does at least reveal the sole comfort to be derived from its existence. This is that we now have plenty of evidence that matters could have been constitutionally even worse than they are.

One of the oddest and least likeable things about 51(xxxv) is that in the national mind its legislative products are pre-eminent throughout the whole sphere of employment. In one sense of course they are in that they set up the framework for largely pointless tripartite debate between the government, the employers and the unions. Or quadripartite if you count the Commission itself. But there is no reason why this should be so.

The Australian Parliament has potentially wide power to legislate in all kinds of areas with respect to employment as something necessarily incidental to the execution of those particular subjects of legislative power. An obvious example is the all-pervasive federal public service but the power to make such laws is by no means confined to them. Just as obvious an instance is the trade and commerce power which supports employees of both Qantas and Australian Airlines and therefore, at least potentially, employees in any other commercial activity of an interstate character for which the Australian Parliament cares to make employment laws. Similarly there are powers to make laws with respect to most banking and insurance and also the media.

That last one is interesting, as you may know, because it depends on an adventurous but by now well-established piece of constitutional interpretation. The main power relied on is 51(i), which talks about postal, telegraphic, telephonic, and other like services. Radio and television have long since been accepted by the High Court as other like services. I stress that I am not for one moment suggesting that it would be a good thing for the national life for any government to get into even more statutory or quasi-statutory regulation of contracts of employment than is already the case. Nevertheless it is quite possible that it could do so as a matter of law and that it could do so without the smallest reliance on 51(xxxv).

The only doubt about this is that the interpretation of other legislative powers is necessarily affected by the very presence of 51(xxxv) in the constitution. The intellectual process whereby the High Court decides what is and what is not within, or at least incidental to, a head of Commonwealth legislative power is called characterization. The presence in the constitution of a power to legislate with respect to a particular subject matter affects this process of characterization in that it tends to bring about a process of demarcation between the scope of one legislative power and any others which in truth overlap with the first.

The High Court has to a considerable extent recognized this by developing a doctrine that the mere fact that a particular piece of legislation can be supported under one power does not necessarily mean that it cannot be supported under another. Nevertheless the general tendency to keep a check on the degree of overlapping is natural enough and certainly affects the whole process of interpretation of the Commonwealth's legislative powers.

I make this brief excursion into the technique of constitutional interpretation in order to bring out the point that the power of the Commonwealth to legislate with respect to employment, if it saw fit to do so, would widen under other powers if 51(xxxv) were removed from the constitution. This would be a good thing because it would make the power to legislate with respect to employment industry specific. It would avoid what we have got now, which is a blanket procedure that any registered union can invoke, whatever nook or cranny of the national economy happens to be its own cabbage or weed patch.

Were 51 (xxxv) not there, the Commonwealth would not only be pegged back a bit in the direction of the subjects into which the original draughtsmen of the constitution thought that it ought to have an input if it saw fit: it would also have the beneficial effect of requiring any federal government which was seized with enthusiasm for interfering between employer and employee in some particular industry to justify specific interference in that industry. At the moment it can effectively interfere anywhere and everywhere through the blanket machinery of a so-called conciliation (still no more than a futile piece of sentimental rhetoric) and arbitration system which as one of its earliest achievements gave birth to the basic wage with Henry Bournes Higgins acting as midwife.

The fact that most of the time that same system impedes what the government wants to do, whether good, bad or indifferent, and is far more the tool of the unions than of the government, still less the employees, is no comfort. I do not suggest that the Commission is deliberately or willingly the tool of the unions. I make the observation simply because long and painful experience has amply demonstrated that the machinery is inherently of much greater tactical benefit to the unions than to anyone else. This of course is exactly what Henry Bournes Higgins sought to achieve. His cast of mind on the High Court was that of the medieval English judge who advised a terrified litigant not to try to tell the bench what a certain statute meant because they had written it.

But I have spoken long enough. Let me conclude by citing the best description of 51(xxxv) that I personally have ever come across. It is the well known definition of a camel as a racehorse designed by a committee.

Why HR Nicholls?

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