Back in April 2015 we asked whether NSW local councils might be
"trading corporations" for the purposes of the
Constitution, even though the Local Government Act says they are
not corporations but are body politics of the State.
We were commenting on the High Court decision of
Communications, Electrical, Electronic, Energy, Information,
Postal, Plumbing and Allied Services Union of Australia v
Queensland Rail  HCA 11 (8 April 2015). The High Court
was dealing with the question of whether Queensland Rail Ltd, a
corporation, was a trading corporation, and the High Court said yes
it was. That meant that Queensland Rail Ltd came under the
operation of the Fair Work Act and was no longer within the
industrial relations realm of Queensland.
It was the sort of case which you might expect a union would
take all the way to the High Court as the stakes were high and the
The importance for local councils were the comments by the High
Court that the answer to the question of whether something was a
trading corporation was not to be found in state legislation but
rather was to be evaluated through the lens of the
The High Court's decision represents the law on the question
but a recent decision, again from Queensland, suggests that there
may soon be cases that will test the question of whether NSW local
councils are trading corporations notwithstanding being described
by the Local Government Act as body politics - whatever
that might mean from a legal point of view.
Dr Lim had approached the Fair Work Commission for an order
under the Fair Work Act against his employer, Trade and
Investment Queensland, to deal with his complaint of bullying. TIQ
happened to be a corporation under Queensland legislation but was
it a trading corporation? TIQ challenged the Commission's
On an appeal the Full Bench carefully analysed the evidence
about the activities of TIQ and came to the view that it was a
trading corporation. That meant that the case was to be returned
for further hearing and Dr Lim could continue with his complaint of
It is interesting that this dispute arose in the context of a
complaint of bullying. Dr Lim went through the travails of a
jurisdictional challenge and then a Full Bench appeal only to be
presented with a hearing yet to come on his substantive bullying
complaint. That is an awful lot of energy to invest. Complaints of
bullying can involve a lot of emotion; exactly the type of dispute
that might prompt somebody to "go all the way to the High
Just last week (Cowie  FWC 7886) a volunteer
complaining of bullying was unsuccessful in arguing that his
sporting association was a trading corporation – but he did
run the argument.
The TIQ decision is useful for teasing out the issues that might
be relevant in deciding whether something is a trading corporation.
It didn't really matter that TIQ was a public body funded by
the government, had few resources of its own, and earned not a
great deal of money from its own activities.
Nor did it matter that it was not about making a profit. TIQ had
income from some rental properties and received revenue for some of
its activities. That the activities were not for a trading purpose
did not necessarily exclude it from meeting the description of a
It is no doubt that many local councils within NSW are engaged
in activities of a trading kind. And if a court were to find that
local councils are truly corporate in their natures then it is not
too far of a jump to conclude they are trading corporations for the
purpose of the Constitution and therefore subject to the operation
of the Fair Work Act.
Whilst local councils and the unions appear quite happy to work
within the NSW Industrial Relations framework, that's not
always of use to an individual who wants to make a complaint of
bullying. Those without union support will gravitate to the Fair
Work Commission and perhaps test the question of whether local
councils are trading corporations.
A sleeper of an issue, but not beyond the bounds of
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