Australia: The High Court Says Yes To The Work Choices Legislation

Last Updated: 21 November 2006
Article by Jeremy Cousins

On Tuesday, 14 November the High Court handed down its 401 page Judgment on the States’ challenge to the Work Choices legislation. A majority of 5:2 supported the validity of the Act. Interestingly, the breakdown between the majority broadly supports the predictions of those in the Court based on the Justices’ body language and comments from the Bench made during the proceedings.

There is now no uncertainty about whether or not the national system is here to stay.

Some employers may have been ‘sitting on the fence’ awaiting the High Court’s decision, not quite sure what to do and when to do it. Now, there are no excuses. 2007 (and, indeed, the rest of 2006) will be the time to start acting.

Seven actions were brought soon after Work Choices came into effect in March this year seeking declarations that the entire act was invalid, or alternatively, that specific provisions were invalid. All of the challenges made were unsuccessful with costs awarded against the States and two unions.

Crux Of The Issue

The crux of the issue in the States’ challenge focussed on the breadth of the ‘corporations power’ in section 51(xx) of the constitution. Of course, the Federal Government only has the power to enact laws where it has the power to do so emanating from the Federal Constitution. Until the early 90s, Federal industrial relations laws were based on what has been called ‘the conciliation and arbitration’ power set out at 51(xxxv) of the Constitution. This was available for the ‘prevention and settlement of industrial disputes beyond the limits of any one State’.

The Corporations Power

The ‘corporations power’ allows Federal laws to be made with respect to ‘trading’ corporations. The majority recognised that a corporation’s dealings with its employees are part of its ‘trading activities’ and rejected the argument that a distinction should be drawn between ‘external’ and ‘internal’ relationships of a corporation so to limit the corporations power to only ‘external’ issues.

We have, in the past, seen a number of parts in the Workplace Relations Act (1996) Cth (the Act), such as the certified agreement and Australian Workplace Agreement provisions enacted based on the ‘corporations power’ and not the ‘arbitration’ power, but nothing to the scale of the Work Choices amendments. The majority said that if Work Choices should fail on the basis of constitutional invalidity, then so should the earlier legislation.

Another argument against the use of the corporations power for workplace laws was essentially that ‘if the conciliation and arbitration power has always been used in the past, why is the Federal Government all of sudden using the corporations power?’ The High Court rejected this argument and has demonstrated a willingness to allow a much broader use of the corporations power.

The majority noted that in one of the most significant industrial cases in 2004, Electrolux Home Products Pty Ltd v Australian Workers Union [2004] 221 CLR 309, the constitutional underpinning of certified agreements in the Act (as it then was) was ‘noted, but not questioned’. Further, the majority noted that no party in the proceedings questioned the validity of the Trade Practices Act 1974 (where based on the corporations power) in its application to domestic (intra-State) trade of constitutional corporations.

Justice Kirby’s Dissent

Mr Justice Kirby’s strong and characteristically eloquent dissent led him to describe the Commonwealth’s use of the corporations power in this way as a species of ‘co-ercion’. The title ‘Workplace Relations Act’ was retained for comfort reasons only, given the radically altered thrust and content of the amendments. He concluded that in ‘moving the Constitutional goalposts ... the imperative to ensure a "fair go all round" ... is destroyed in a single stroke’.

He lamented the crossing of a ‘constitutional rubicon’ from which there was rarely a going back despite its attack on core Australian values and the serious imbalance it presented to the Federal character of the nation’s governance.

Justice Callinan’s Dissent

Mr Justice Callinan, also at odds with the majority, offered in terms of length the largest Judgment in the decision. He opens with the finding that ‘Work Choices’ is ‘well beyond, and in contradiction of what was intended and expressed in the Constitution by the founders’ and that nothing less than the future integrity of the Federation and the existence of powers of the States are at stake.

Justice Callinan gives a detailed review of how those founders and their successors historically approached the interface of capital and labour, from the Convention Debates onwards, where despite the myriad of cases and reviews, until now no one had contemplated the corporations power being used in this way. He also noted that the 36 or so attempts to enlarge the only relevant power - industrial power - by referenda had repeatedly been rejected by Australian voters. His concern over the impact on what he sees as the critical concept of the ‘Federal balance’ was also emphasised, despite what he saw as its ‘disparaging’ treatment by the majority, who seemed content to see the Parliament of a State reduced to an ‘impotent debating society’.

What Next?

Every employer should be clear on its legal status and whether or not the Act applies to it. For many employers, the Act may not apply. For some employers it may not be immediately apparent whether or not they are a ‘constitutional corporation’ (unless in Victoria or the Territories) and therefore whether the Act applies. If there is any doubt, immediate advice should be sought.

One can now expect greater confidence in use of the Act by employers and, to that end, a consideration of your future workplace relations strategy can now be embraced.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.