E LAW - MURDOCH UNIVERSITY ELECTRONIC JOURNAL OF LAW ISSN 1321-8247 Volume 5 Number 3 (September, 1998) Copyright E Law and/or authors File: bull53.txt ftp://cleo.murdoch.edu.au/pub/elaw/issues/v5n3/bull53.txt http://www.murdoch.edu.au/elaw/issues/v5n3/bull53.html ________________________________________________________________________ Use (Abuse) of S.51(35) of the Australian Constitution Geoff Bull Murdoch University Law Student Contents * Section 51(35) And The AIRC * Need For Interstateness o Early High Court Cases * The Process of Interstate Dispute Finding * Case Studies o WA Coal Industry + CFMEU + The Coal Staff o Wesfarmers/CSBP o Comment * Future Use Of S51(35) * Conclusion * Notes Section 51(35) and the AIRC 1. Prior to Federation in 1901, Australia was divided up into six independent colonies, all asserting separate independence from Britain and from each other. From the 1850s on, there was a push for a closer association of colonies due to their common origins, culture, geography, foreign and defence needs, economic advantage and practical convenience. 2. In 1898 a motion to include in the Constitution, the right for the Commonwealth to legislate in industrial relations, was passed with a majority 22-19 vote. This motion eventually led to s.51(35) of the Australian Constitution, which provides that the parliament may make laws with respect to : Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State. 3. Section 51(35) was intended to define the limits of the Commonwealth's power to legislate in respect to industrial relations in Australia. 4. Section 51(35) has greater significance when read in conjunction with s.109 of the Australian Constitution, which states: When a law of a State is inconsistent with a law of Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid. 5. The combination of ss.51(35) and 109 of the Constitution allows industrial relations to be governed by Commonwealth legislation to the exclusion of most State legislation. At various times this can be attractive to either an employer or a union seeking to escape State legislation.[1] 6. There are a number of obvious limitations on the federal government's legislative power under s.51(35) of the Constitution. These limitations have been defined and articulated through numerous High Court decisions and can generally be summarised as follows: 1. The federal government cannot directly regulate industrial relations through legislation but may provide for the establishment of machinery for the settlement of disputes.[2] 2 That machinery is currently the Australian Industrial Relations Commission (AIRC) established under the Workplace Relations Act 1996 and must operate only by way of conciliation and arbitration when using the s.51(35) powers.[3] 3. Where the power under s.51(35) is relied upon the AIRC can only deal with industrial disputes and the Commission can only operate within the ambit of the dispute ordinarily created through logging of claims on employers by unions.[4] 4. The dispute must be of an industrial nature although the definition of industrial matter has been widely expanded by the High Court in recent years.[5] 5. The dispute must be one that extends beyond the limits of any one State to create a dispute of interstate character.[6] 7. It should be noted that there is no constitutional requirement that parliament exercise the power conferred by ss(35) That is a matter entirely for parliament's discretion. Having established the AIRC there is no constitutional requirement that it be established on a permanent basis. There is nothing to prevent the establishment of some other body having the role of conciliation and arbitration. 8. The above limitations can be contrasted with the jurisdiction of State Industrial Tribunals, which are normally limited only to the need to establish that an industrial matter exists.[7] 9. With the need to establish: (1) interstateness, and (2) that the subject matter is industrial, invoking the jurisdiction may seem arduous. In practice however, the prerequisites are easily satisfied and rarely tested. In many circumstances, parties consent to the jurisdiction of the AIRC without any investigation as to whether any of the tests above have been met and the Commission is happy to accept at face value its jurisdiction where no challenge is likely to be made. 10. The Workplace Relations Act 1996 (Cwth) has been drafted to be consistent with the power of s.51 (35) and thus industrial dispute is defined in s.4 of the Act as follows: (a) an industrial dispute (including a threatened, impending or probable industrial dispute); (i) extending beyond the limits of any one State; and (ii) that is about matters pertaining to the relationship between employers and employees; or (b) a situation that is likely to give rise to industrial dispute of the kind referred to in para (a); 11. While the words threatened, impending or probable are not found in s.51(35), the High Court has long held that an industrial dispute that has at least progressed to the stage of being threatened, impending, probable or likely comes within the scope of the legislative power conferred by s.51(35)[8] due to the use of the word 'prevention' in s.51(35). 12. While the functions of the AIRC include preventing industrial disputation it cannot take a pro-active role unless there is at least a threatened, impending or probable dispute[9] for its jurisdiction. Need for Interstateness 13. A plain reading of s.51(35) suggests that the general control of industrial relations is the province of the States on the understanding that most industrial disputes relate to subject matters that are limited to the relationship of employers and employees in any one State and do not extend beyond State boundaries. However, the percentage of federal award coverage in Australia[10] indicates that s.51(35) has been utilised more often than may have been anticipated. Federal Award coverage - 31.5% State Award coverage - 44.5% No award coverage - 20.0% 14. Excluding State Industrial Commissioners with dual appointments to the AIRC, the AIRC employs approximately 52 full time Commissioners, indicating there is no shortage of interstate industrial disputes. This is a substantial increase than earlier this century, for example in 1909 only seven matters came before the Court of Conciliation and Arbitration [11] Early High Court Cases 15. The early High Court cases concerning s.51(35) often referred to the intention of the framers. In 1908 the High Court held that the connotation or meaning of a given term in the Constitution remains fixed as it was in 1900, while its denotation or the extent of its application changes according to circumstances[12] It is interesting to note that early High Court judges such as Higgins, Isaacs, Barton and O'Connor were all members of the National Australasian Convention of 1897, which discussed the drafting of the Australian Constitution. Despite this affiliation they still managed to disagree on the application of s.51(35) in their decisions. Griffith CJ who didn't attend the Convention was often in disagreement with fellow justices in finding that interstate industrial disputes under 51(35) did not exist, preferring to rely on his understanding of the Constitution's intention, of only allowing federal jurisdiction of industrial disputes where they clearly traversed interstate boundaries. 16. The views of the High Court when considering s.51(35) must be examined in light of eight Justices O'Connor, Higgins, Isaacs, Powers, Rich, Starke, Gaudron and Kirby, having either previously or contemporaneously served on federal industrial bodies. 17. The broad view of these Justices in interpreting s.51(35) suggests they may have been influenced by their experiences on these Tribunals. 18. The intent of the Constitutional framers was raised in 1908 by O'Conner J in Federated Sawmill, Timberyard and General Woodworkers Association of Australasia v James Moore and Sons Pty Ltd (The Saw Millers case)[13]. O'Connor J was particularly concerned with the intention of the framers of the Constitution. That intention was that an industrial dispute must genuinely traverse State boundaries. It must always be remembered the intention of the British Parliament when dealing with the subject practically, that they had in mind actual differences between employer and employees, differences of a kind public interests demanded should be submitted to a federal tribunal. They were thinking of real industrial disputes not of industrial disputes that existed only on paper or got up for the attainment of some other ulterior object than the settlement of differences between employers and employees. 19. In 1910 Griffith C J expressed the need for genuine interstateness in a dispute in Australian Boot Trade Employees Federation v. Whybrow & Co[14] (Boot Trade case). He stated at p.281 that discontent with a State law couldn't be described as a dispute in any sense. The Chief Justice went on to state, that to hold such a view admits the federal tribunal to substitute its uncontrolled volition for the will of the parliaments of the States. 20. Two years later he repeated those comments in R v. The Commonwealth Court of Conciliation and Arbitration and Merchant Service Guild[15] (Merchant Service Guild Case). The dispute must be actually existing and actually extending beyond the limits of one State before such an occasion can arise. Mere mischief-makers cannot therefore, by the expenditure of a few shillings in paper, ink and postage stamps create such an occasion. 21. In the Merchant Guild Case, 83 respondents were served in identical terms with a demand that the claim be acceded to within 15 days. 22. At p.599 the Chief Justice stated that before an industrial claim can develop into an industrial dispute, there must be some real opportunity of discussion between the parties concerned. A log of claims was the first notification of any dissatisfaction by the employees concerned with their existing conditions of service. The Chief Justice posed the question, whether at the expiration of the 15 day time frame an industrial dispute extending beyond the limits of any one State would automatically come into existence of which the Commonwealth Court of Conciliation and Arbitration would have cognizance? He held that to reach that conclusion, ss (35) would need to be read as: ... arbitration for the settlement of industrial claims made in identical terms in two or more States", so that the whole field of regulation of domestic industrial affairs would be potentially transferred from the State legislatures to the Arbitration Court at the will of any body of employees or employers who chose to go through the form of making a written demand. 23. Another early case dealt with by the High Court concerning interstateness was the Federated Felt Hatting Employees Union of Australia v. The Denton Hat Mills Ltd & Ors[16]. The Union had served a log of claims which they argued should govern the conditions of work and wages of members of the union in three States. The three states, New South Wales, Victoria and South Australia, all worked under different state systems and conditions of employment. 24. In that case Griffith C J stated that the power conferred by parliament by ss(35) is not a power to transfer the control of industrial enterprises to a tribunal by empowering it to accede to any and every demand made by employees. Where logs of claims are used to take control of industry out of the hands of employers by seeking federal award coverage; such attempts, in the words of Griffith C J are (p 94), "a fraud on the Constitution". 25. Griffith C J went on to state that the object of the power of s.51(35) is to prevent and settle real industrial disputes and not to facilitate the creation of fictitious disputes, with a view to their settlement by a Commonwealth tribunal. The reasoning of the Chief Justice in the 1914 Felt Hatters case was, some 80 years later repeated by the High Court in SPSF ex parte Attorney General (the SPSF case) [17] when they held that a claim that the AIRC should exercise general regulatory power does not give rise to an industrial dispute. The Process of Interstate Dispute Finding 26. Industrial disputes extending beyond the limits of any one State are predominantly precipitated by a union (less frequently by an employer) by serving on employers a log of claims, usually in ambit form. The ambit log is accompanied by a letter of demand, requiring agreement to the claims in full, within a specified time usually around seven days. The union does not normally negotiate with employers prior to serving the log of claims or prior to seeking a dispute finding from the AIRC. As Isaacs J stated in the Merchant Service Guild case p.607, the only difference between s.51(35) disputes and what would be normally understood by the term 'industrial dispute' is that the dispute extends beyond State boundaries. 27. In State jurisdictions, industrial disputes do not, as a rule, develop through a formal serving of an ambit log of claims on employers. The process of ambit logs served concurrently in more than one State in an artificial procedure designed purely to meet the requirements of s.51(35). 28. Once an interstate industrial dispute is settled by the issuance of a federal award, then federal award regulation will become the norm. It is unusual for an interstate industrial dispute to be settled through the issuance of a federal award and then for the industrial regulation to revert back to a State jurisdiction. The ability to maintain an interstate industrial dispute is due to the ambit nature of the claims originally served on employers. It is rare for a single issue in an industrial dispute to become an interstate industrial dispute, yet surely this must have been what the Constitutional framers had in mind. An interstate dispute finding relates to all matters contained in the log of claims, which usually cover all aspects of the employment relationship. 29. Reliance on s.51 (35) of the Constitution is not limited to unions. On occasions it may be desirable for employers in conjunction with unions to obtain federal award coverage. There may be strategic reasons, such as removing State unions and substituting a Federal union or avoiding State industrial legislation. 30. Some industries are predominantly covered by federal awards while others are predominantly covered by State awards. For example, the maritime, transport and construction industries are generally industries under federal award coverage[18], while retail, mining and hospitality are generally State regulated industries[19]. 31. There are very few industries that are not conducted by employers in more than one State. The industries that are now covered by the federal industrial system are not of themselves more prone to interstate industrial disputation. Rather, following the initial interstate industrial dispute finding, the AIRC has determined that federal award coverage is more appropriate than State award coverage.[20] 32. Where an industry is purely State-based this does not prevent a finding of an interstate dispute if some community of interest can be show. In 1987, Peko-Wallsend Ltd was successful in obtaining an interstate industrial dispute finding between three of its subsidiary companies: King Island Scheelite (off the coast of Northern Tasmania). Mount Morgan Ltd (a gold mine in Queensland). Robe River Iron Associates. 33. Scheelite mining occurs only in Tasmania, iron ore mining only in Western Australia. An interstate dispute was still found to exist due to the common proprietary interest of Peko-Wallsend Ltd in the three companies. Case Studies 34. The two following case studies demonstrate at a practical level, the abuse of the interstate industrial dispute power under the Constitution by both unions and employers. WA Coal Industry 35. On 1 December 1993 the Western Australian Liberal/National Party Coalition Government gave effect to a new Act known as the Workplace Agreements Act 1993. This Act provided for the usurping of State industrial awards and agreements by the registration of Workplace Agreements between employers and employees by the Commissioner of Workplace Agreements. This legislation was the centrepiece of the coalition's industrial relations platform prior to its successful election to government. The Minister for Labour Relations stated in his Second Reading Speech that the Act would establish an alternative system of Workplace Agreements between employers and employees where no State award will apply as long as a Workplace Agreement remains in force. The Minister stated that the Act would return the control of workplace relations to the hands of those people most directly concerned, that is the employer and employees. 36. As a result of the passage of this legislation, a number of Western Australian unions determined that the federal system of award regulation would provide better protection for their members as a result of changes to the Industrial Relations Act 1988 (Cwlth) introduced by the then Federal Labor Government. One such union was the Coal Miners Industrial Union of Workers of Western Australia (CMU). Their federal body was the Construction, Forestry, Mining, Energy Union (UMW Division) (CFMEU). In addition to the CMU, the Australian Collieries Staff Association Western Australian Branch, Industrial Union of Workers (ACSAWA) also determined to move industrial coverage to the federal jurisdiction using the endeavours of their federal body, the Australian Collieries Staff Association (ACSA). Construction Forestry Mining and Energy Union 37. The CFMEU served an ambit log of claims on Western Australia's coal mining companies, The Griffin Coal Mining Co Pty Ltd and Western Collieries Ltd on 18 February 1994. CMU members in Collie WA were not aware of the alleged industrial dispute until a meeting was held in Collie eight days later on 26 February 1994 at which they were advised of the log and subsequently endorsed it. Evidence given by the CFMEU's witnesses at the dispute hearing included the union's desire to seek federal award coverage to escape the WA Workplace Agreements legislation. This was referred to by the Chairman of the then Coal Industry Tribunal of Australia[21] (CIT Aust) in his decision where he stated: There is no doubt that the objective of conferring jurisdiction on the Tribunal loomed large in the thinking of the officers of the CFMEU and perhaps amongst members in Western Australia. 38. The Chairman then went on to state: I have found that the demand did have as an aim the establishment of federal jurisdiction in Western Australia but in view of the authorities I have referred to and the evidence before me I conclude that that was not the only aim of the claim and therefore the claim should be held to be genuine. 39. Evidence from the Federal Secretary, was that the union genuinely demanded what it sought in the log of claims and would seek to obtain the demands over time. This was despite not knowing what was contained in the log of claims or what terms and conditions governed WA coal mining employees. 40. On 24 March 1995 the Chairman of the CIT Aust found that an interstate industrial dispute existed between CFMEU and the two Western Australian coal-mining companies and two coal mining companies in NSW. The coal mining companies in NSW had never had any association with the WA companies and were in different markets. The eastern states coal-mining companies exported coal whereas the WA companies produced coal for power generation only. They were not connected by being in competition for the same markets, their only community of interest was that they were mining the same product. This is consistent with the SPSF Case where the fact that the employees were in the same industry the "pubic service" was sufficient to establish a community of interest. 41. At no stage prior to or subsequent to the dispute finding, did the CFMEU ever attempt to negotiate with either WA company any of the conditions contained within the log of claims. This was hardly indicative on any real industrial dispute. 42. On 8 November 1995 Duncan D.P. now with the AIRC following the abolition of the CIT Aust, revoked his dispute finding following an application by the WA Coal companies on the basis that the service of the log of claims by the CFMEU was not in accordance with the union's rules.[22] 43. As a result of the revocation of the dispute finding the CFMEU served another log of claims on the WA coal companies and on other eastern states coal operations. 44. On 30 October 1996, Harrison C from the AIRC, again found that a dispute existed between the two WA coal companies the CFMEU and some eastern states coal mining operations[23]. Since the original serving of the log of claims in February 1994, again the two WA coal companies have never been approached by the CFMEU to discuss the log of claims. In fact, what had been occurring, was that the local WA union, the CMU had negotiated enterprise agreements with both coal employees. which had been ratified before the Coal Industry Tribunal of WA. Both enterprise agreements covered all the terms and conditions of employment of WA coal miners, confirming the belief that the interstate finding was simply a fall back position should workplace Agreements be offered to WA coal miners. The Coal Staff 45. The circumstances involving the ACSA are similar to those of the CFMEU. 46. On 27 June 1996 Harrison C of the AIRC found that following service of a log of claims by the ACSA on 14 September 1995 an interstate industrial dispute existed between the ACSA, the WA coal companies and some eastern states coal companies. 47. The log of claims served on 14 September 1995 was the fourth log served within a period of three years, but the only one progressed to the dispute finding stage. No explanation was provided by the union as to why the previous three logs were served then later withdrawn. Members of the ACSA, gave affidavit evidence in relation to the union's stated objectives in serving the log of claims. This evidence clearly indicated that there was no genuine dispute. Some of the uncontradicted evidence of ACSA members was in the following terms: It was made clear at this meeting that the log of claims was deliberately made so ridiculous in the terms of the pay and conditions sought that no employer could possibly afford to pay the demands made. It was deliberately drafted so a dispute could be created. It was confirmed by the union officials at the meeting that the union's only intention was to obtain a mythical dispute finding in order to save time if at any stage union members decided they wished to have a federal award. It was purely a safety net if the company takes action against members. Indeed the union advised once the dispute had been found it does not have to be acted upon. He reiterated (the union official) that the dispute finding process was to enable a choice to be put to members as to whether they wanted federal award coverage in lieu of existing state award coverage. If a dispute was found no action would be taken and the matter will be placed on the back burner. 48. In regard to this evidence, Harrison C stated that he gave little weight to the evidence of the ASCA members[24], but relied on what the union said and not its members. 49. On 24 February 1997 a Full Bench of the AIRC dismissed an appeal by the WA coal companies on the basis that the log of claims was directed towards the protection and improvement of the salaries and conditions of employment of its members as evidenced by the General Secretary of the union. The Full Bench relied on the High Court's decision in R v Ludeke; Ex Parte Queensland Electricity Commission[25] where it was stated: But it is not an objection to the genuineness of the dispute that the purpose of delivering the log of claims is to create an industrial dispute, which will thereby give the Commission jurisdiction to make an award. 50. The confirmation of the interstate industrial dispute finding by the Full Bench was ironically five weeks after the registration of the Western Collieries Ltd Staff Agreement in the CITWA settlement of all claims relating to salaries and conditions of employment. 51. Since the dispute finding the ACSA has not approached either of the two coal mining companies to discuss any of their claims contained in their log confirming the artificiality of the dispute finding. Wesfarmers/CSBP Case Study 52. In April 1994 an interstate industrial dispute was found to exist between the AWU and: Tasmanian Fertilisers. CSBP Farmers Ltd. 53. The dispute finding was made by Hancock DP of the AIRC. In October 1996 Drake DP examined the process that led to the 1994 interstate dispute finding and determined that the resulting federal award and certified agreement between the AWU and CSBP should be cancelled. 54. The cancellation was due to a failure by the parties to disclose all relevant matters to the Commission and the fact that this failure was calculated and deliberate[26]. 55. The cancellation came about by an application by the Australian Liquor, Hospitality, Miscellaneous Workers Union (ALHMW) which requested that the certified agreement and award be cancelled. The General Manager, Human Resources, for Wesfarmers Energy Ltd gave evidence that he had contacted the federal office of the AWU and arranged for them to serve a log of claims on CSBP and Tasmanian Fertilisers - (CSBP were in the process of purchasing Tasmanian Fertilisers). 56. The General Manager, Human Resources had recommended to the Managing Director of CSBP that the company seek a federal award with the federal AWU being the only respondent. This was due to the increased industrial action from the ALHMWU which also had the majority of employees as members, but had State award coverage. A federal award with the AWU or a certified agreement with the AWU, which had constitutional coverage of all employees, would effectively lock out the ALHMWU. Drake DP in describing the obtaining of a federal interstate industrial dispute finding stated: The listing of these matters and the title of the award (Tasmanian Fertilisers Award 1994) could not have been more conveniently located as to venue or described so as to camouflage activities of the employer and the AWU (p.14). 57. The dispute finding and award were both obtained outside of Perth. The dispute finding was obtained in Hobart and the subsequent certified agreement was obtained by audiovisual conference with a member of the Commission in Adelaide. Drake DP went on to say: The AWU and the employer entered into a deliberate course of action to eliminate the applicant union from all awards and agreements at the premises of the employer in Western Australia by ambush. (p.21). Comments 58. The above two cases demonstrate an exploitation of s.51(35) by both employers and unions. 59. The two coal unions obtained interstate industrial dispute findings to enable them to utilise the AIRC on any dispute within the ambit of their log of claims to the exclusion of the CITWA at short notice. 60. To the 'person in the street', the actions of both unions would not have been categorised as an interstate industrial dispute under s.51(35) of the Constitution. The circumstances for these two unions were that in 1993 there was a potential that the WA State legislation may be used by employers to secure individual agreements which may usurp the role of the unions in the coal industry of WA. As a precaution against this, an interstate industrial dispute finding would provide quick relief if needed, by the issuing of a federal award to overrule any State individual industrial agreements pursuant to s.109 of the Constitution. 61. The requisite interstate dispute was achieved through logging of companies in other States who were not in competition and had no connection or interest in the WA companies, or any knowledge of the industrial dispute alleged by the unions. Despite the evidence of the unions own members stating that the log of claims were simply an attempt to obtain federal coverage and no more, the Full Benches of the Australian Industrial Relations Commission were prepared to take on face value the unions' evidence that they genuinely sought the claims in the logs of demand. The subsequent lack of action by both unions since the dispute finding confirms that either the unions have lost interest in the dispute or there was never any interstate industrial dispute in existence. 62. The result in the WA coal industry is contrary to Griffith CJ's ratio in the Boot Trade Case in 1910 when he stated that discontent with a State law cannot be described as an industrial dispute. His comments in 1912 in the Merchant Service Guild Case (page 595) are also pertinent.: ...in the case of a mere paper demand, where industrial operations go on as usual ...if a joint demand made by associated bodies of men employed, say, at Perth and Brisbane respectively on each of two employers who are engaged in the same branch of industry in those cities, but are unknown to one another and have nothing else in common, could (not) be regarded as an industrial dispute extending beyond the State of Western Australia to Queensland or beyond Queensland to Western Australia. 63. In the Wesfarmers/CSBP case, a union and employer jointly agreed to federal award coverage to ostracise one union from the employers' workplace. The method chosen was to invoke the jurisdiction of the AIRC by a contrived arrangement for the finding of an interstate industrial dispute. 64. The dispute was originally found by Hancock DP as there were no objections (which is normally the case) and it wasn't until two years later that the ALHMWU finally became aware of the actual circumstances and successfully sought to have the award and agreement set aside. Future Use of S51(35) 65. Under the amendments to the Industrial Relations Act 1988 resulting in the Coalition's Workplace Relations Act 1996 the incentive for unions at least to apply for federal award coverage should ease. Section 89A 66. Section 89A - Scope of Industrial Disputes - now limits the matters that can be included in an award of the AIRC. These matters are reduced to approximately 20 allowable matters in an attempt by the government to reduce awards to basic minimum entitlements. The incentive for a federal award with the s.89A limitations is significantly reduced where the state jurisdictions have no such limitations on awards. Part VIB 67. Union certified agreements can be obtained now without the need to obtain an interstate industrial dispute finding under Part VIB Certified Agreements. All that is necessary for a certified agreement is that the employer is a constitutional corporation[27]. In addition, Part VIA of the Act allows for initiation of a bargaining period where a certified agreement is sought which provides immunities against civil action being taken where industrial action occurs. These immunities are not available where a log of claims is served on employers to create an interstate industrial dispute, thus reducing the attractiveness of traditional logs of claims under s.51(35). Section 152(3) 68. Section 152(3) of the Act also allows State employment agreements to override federal awards where a no disadvantage test is met. In Western Australia the Workplace Agreements Act (WA) has been amended to allow parties to collective workplace agreements, which meet a no disadvantage test, to override federal awards, again reducing the desirability to obtain federal award coverage. Section 111AAA 69. The final nail in the coffin for s.51(35) dispute findings may be s.111AAA of the Federal Act, which requires that the AIRC cease dealing with any industrial dispute where a State award or employment agreement exists. A Full Bench of the AIRC has held that s.111AAA can be applied prior to a dispute finding.[28] The only exception to this directive is where the AIRC is satisfied that it would not be in the public interest to cease dealing with the dispute. Section 111AAA, (saving the public interest test), will only allow the AIRC to deal with award free or existing federal award employees, substantially eliminating the traditional use of s.51(35). 70. This does not mean that federal regulation will disappear as Parliament is now using other constitutional heads of power to regulate industrial relations, for example the corporations, external affairs and referral powers[29], but only that s.51(35) will not underpin this use. Conclusion 71. When one looks at the dispute findings of the AIRC and decisions of the High Court, there is an inescapable conclusion that to invoke s.51(35) of the Constitution is a relatively simple exercise. So simple is the task that other challenges to the finding of a dispute - other than to its interstateness have been raised by the innovative legal fraternity with limited success. These attacks are virtual subsets of the threshold question whether an interstate dispute exists and include: Is the dispute in an industry?[30] Is the subject of the dispute an industrial matter?[31] Is there a community of interest between the Respondents to the dispute?[32] Are the claims sufficiently precise?[33] Are the claims fanciful?[34] Are the demands genuine?[35] 72. The latest challenge to dispute findings by employers has been whether the claims have been made in accordance with a union's rules. Strangely the High Court has applied a more rigorous test to unions complying with their rules than any other objection to an interstate industrial dispute finding. In Re: CFMEU, Ex Parte Dean[36] a dispute finding was overturned because the log of claims wasn't properly authorised according to the union's rules when served, but later authorised retrospectively. 73. Where a union makes its log of claims ascertainable over a reasonable period of time, and where challenged, is able to provide evidence that it genuinely seeks what it claims and has complied with its rules, a challenge to a dispute finding is unlikely to succeed. Issues such as community of interest, industry, or industrial matter are no longer areas of any serious challenge. For example, the question of whether a matter is an industrial matter was answered with a broad definition in Re Cram and Others; Ex Parte NSW Colliery Proprietors Association Limited and Others[37] the High Court stated in a joint judgement: No doubt our traditional system of industrial conciliation and arbitration has itself contributed to a growing recognition that management and labour have a mutual interest in many aspects of the operation of a business enterprise. Many management decisions, once viewed as a sole prerogative of management, are now correctly seen as directly affecting the relationship of the employer and employee and constituting an industrial matter. 74. Following the SPSF Case, there was some thought that the days of the ambit claim were gone. However, the decision of the High Court in Attorney General for Queensland v Senior Deputy President Riordan and Others[38] (Ambulance Officers Case) has put any thoughts of ambit claims being unconstitutional beyond doubt. In their joint judgement Brennan C J and McHugh J stated at p.12: Without a background of industrial experience, a bystander might easily conclude that they were not real and genuine claims, even having regard to possible developments in the foreseeable future and allowing some reasonable latitude in their formulation..... Possessed of special experience the respective Commissioners revealed no initiating error of principle in their findings (my emphasis). 75. The High Court then went on to state that the ambit doctrine had undoubtedly encouraged extravagant demands but to deny this outcome would be to turn a blind eye to the history of Australian industrial law. In the SPSF Case, Mason C J, Deane and Gaudron J J said at page 267, when concluding that the claims were fanciful, that: .......... The Constitution in s.51(35) speaks of "industrial disputes" not "industrial disturbances". Leaving aside questions that may arise with respect to the parties to a dispute, its subject matter and interstateness, all that is necessary to constitute an industrial dispute is disagreement as to the terms or conditions that should, in fact, apply to an employer and employee. Obviously, disagreement of that kind may come about as a result of a written demand and, thus, there is nothing inherently artificial about a "paper dispute". 76. But while the SPSF reasoning is no different from that of Griffith CJ in 1914 in the Felt Hatters Case such paper disputes have formed the basis for interstate dispute findings in the intervening 80 years. They have escaped scrutiny because the log of claims has been more particularised, but not necessarily more legitimate. 77. One could conclude that the High Court decision to revoke the dispute finding in the SPSF Case was an aberration in the normal process of serving logs of claims to create an interstate industrial dispute. The SPSF log had only four clauses one of which was the title clause, demanded a minimum wage of $5,000 per week and a minimum of $2,500 per week in allowances and CPI increases in wages and allowances. If a dispute were found on the basis of the log, the ambit of the log would essentially only have allowed for a wages clause in an award. It is not surprising that the Full Bench of the AIRC (while holding there was a genuine dispute) described the demand as simple and crude.[39] 78. The ETU log also subject to the High Court SPSF decision had no difficulty in satisfying the Court of its genuineness. That log was more detailed and while it had a claim of a weekly wage of $2,000 it had additional rates for other classifications and allowances. Simply because one union puts more effort in drafting its log the High Court was able to sanction the genuineness of the claim. 79. Mason C J in the Wooldumpers Case [40] commented on the artificiality required to invoke the jurisdiction of the AIRC. He was of the view that the structure of the Act has led to an over emphasis on the paper dispute arising from non acceptance of a log of claims and referred to the comments of Dixon C J, McTiernan and Kitto J J in R v Graziers Association NSW; Ex Parte Australian Workers Union[41]. The Graziers case referred to the artificial procedure for the production of an industrial agreement and in that case Fullagar J at p.333 referred to the entire system for conciliation and arbitration for industrial disputes under the Act as "highly artificial". 80. Despite his observations in 1989 Mason C J in Wooldumpers went on to say in the SPSF Case at p.268: Given the doctrine of ambit and given that there is nothing inherently artificial about written demands or "paper disputes", it will not often be the case that a written demand with respect to the wages or conditions of employees will be other than a genuine demand. 81. Despite the need for an interstate industrial dispute under s.51(35), the AIRC has come to be the body that has a significant role in regulating wages and conditions of employment nationally. This is clearly highlighted in the National Wage cases that are held from time to time under a centralised wage fixation system which determines wage increases to be flowed on to all federal awards. To invoke jurisdiction of a National Wage case the ACTU makes its claim under a number of key industry awards and provided there is ambit under the dispute findings that found those awards, the Commission is able to vary those awards to accommodate any national wage increase. The dispute findings that the Commission and the parties rely upon may have been made years prior the National Wage decision. 82. The High Court has adopted a generous view of s.51(35) when ambit logs of claims have been used as the vehicle to invoke s.51(35) and consequently jurisdiction of the AIRC. In adopting this generous view, the High Court has been inconsistent in its approach to the interpretation of s.51(35). 83. The wide view of ss 35 has resulted from two contrasting approaches. In widening the meaning of 'industrial dispute' the High Court in the Social Welfare Case refused to give the words of ss 35 their technical or legal expression, preferring to give them their popular meaning, what they mean to the 'person in the street'. While this is a perfectly legitimate approach, the High Court has never applied the 'man in the street' test to interstateness or genuineness. In the SPSF Case the High Court in maintaining a wide view of s.51 (35) stated that the bystander might have easily concluded that the log of claims was not real and genuine. It was acknowledged by the High Court that only because of the AIRC's 'special experience' could they ascertain that the claims were real and genuine. Had they taken the 'man in the street' approach the log of claims would not have constituted a genuine demand. 84. What the High Court has allowed, over time, in logs of claims: a union need have no intention of obtaining the claims immediately[42] a claim which could not possibly be met presently or in the foreseeable future a predominant purpose can be to create a dispute so as to give jurisdiction to the AIRC[43]. 85. The above concepts would not seem to fit with what the "person in the street" views as an interstate industrial dispute. Nor could such an approach be said to be necessary to .....keep pace with the progress of the country and adopt themselves to the new developments of time and circumstances[44] 86. The absurdity of this system was captured by Windeyer J in Ex Parte Professional Engineers Association[45] when he stated: 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. 87. It appears the High Court has allowed the absurdity to continue for too long to redress it now. Kirby J in the Ambulance Officers Case (p 42) was of the view that because paper disputes were so deeply entrenched in authority of the High Court they should not be disturbed. 88. But this view wasn't taken in the Social Welfare Case. In significantly expanding the definition of 'industrial' by jettisoning the concept of the need for the dispute to be in an industry, the High Court stated they were fulfilling the object of s.51 (35) of enabling settlement of a dispute that couldn't be settled by a single State or its Tribunals.[46] 89. Creighton and Stewart comment[47] that the founding fathers of the Constitution considered that the powers of 51(35) would be rarely if ever used as most disputes would be dealt with at a State level; this is in complete contrast to what has happened. 90. R M Eggleston QC in his paper Industrial Relations, in Essays on the Australian Constitution (1st edition; 1952) at p.208 stated that the interpretation by the High Court of s.51 (35) has enabled the Commonwealth Tribunal to extend its influence to an extent which the framers of the Constitution could hardly have contemplated. 91. While it is acknowledged by both High Court judges and academics, that s.51 (35) has expanded beyond its original intention, the High Court refuses to address the problem on the basis that it has gone on for too long. This seems hardly an approach to be taken by a body provided with the role of ensuring our laws and practices are consistent with our Constitution. Notes [1] In 1986 Robe River Iron & Associates (an employer), sought federal award coverage, as they were unhappy with the unfair dismissal laws in Western Australia, which did not exist under federal law, due to the need to satisfy 51(35). This has now been overcome by the Commonwealth relying on other heads of power for its unfair dismissal laws. [2] Mills & Sorrell - Federal Industrial Law 5th Ed p1. [3] Griffith C J Australian Boot Trade Employers Federation v. Whybrow & Co (1910) 10 CLR 267 @ 280 [4] R v Court of Conciliation and Arbitration, Ex Parte, Whybrow (1910) 11 CLR 1 @ 61 [5] The concept of managerial prerogative has been all but eliminated since the 1980s. Re Cram; Ex Parte NSW Colliery Proposition Association Ltd (1987) 163 CLR 117 [6] Jumbanna Coal Mine, No Liability v Victorian Coal Miners Association (1908) 6 CLR 309 @ 373 [7] See s.23(1) of the Industrial Relations Act 1979 (WA) [8] See decision of Deane J in Re Federated Storemen Packers Union of Aust; Ex Parte Wooldumpers (Vic) Ltd (1988/89)166 CLR at 328 and SPSF ex parte Attorney General (1992) 178 CLR 249. [9] S.89 Workplace Relations Act 1996 [10] ABS Award Coverage, May 1990, Catalogue No 6315.0 [11] Plowman; 'Forced March': The Employers and Arbitrations" Foundations of Arbitration S. Macintyre & R Mitchell (eds) 1989 [12] Attorney General for New South Wales v Brewery Employees' Union of NSW (1908) 6 CLR 469 [13] (1908) 8 CLR 465 @ 505 [14] (1910) 10 CLR 266 [15] (1912) 15 CLR 586 @ 595 [16] (1914) 18 CLR 88 [17] (1992) 178 CLR 249 [18] Transport Workers (Federal) 1983 Award, Stevedoring Industry Award 1991, AWU Construction and Maintenance 1989 Award [19] Shop and Warehouse (Wholesale & Retail Establishments) Award WA, Telfer Gold Mine Fly In/Fly Out Award, Restaurant & Tearoom & Catering Workers Award WA. [20] See for example, ETU v. SEC of Victoria and Another Print L6639 (1994) [21] CFMEU v. Griffin Coal Mining Co CR 4808 (The CIT Aust has been abolished) [22] CMFEU v. Griffin Coal Mining Co Pty Ltd Print M6839 [23] CFMEU v. Griffin Coal Mining Co Pty Ltd 81 IR 299 [24] ACSA v. Griffin Coal Mining p.10 Print N2853 [25] (1985) 159 CLR 178 @ 183 [26] ALHMWU v. CSBP and Farmers Ltd Print N5681 [27] Relying on s.51(20) and not s.51(35) of the Constitution [28] AWU v Australian Maritime Officers Union P4289 unreported. [29] 51(37) which allows a State to relinquish its control to the Commonwealth, which the State of Victoria has recently, utilised. [30] R v Coldham, Ex Parte Australian Social Welfare Union (1983) 153 CLR 297 [31] ibid [32] Re AMIEU, Ex Parte Aberdeen Beef Co Pty Ltd (1993) 16 CLR 154 [33] R v Heagney, Ex Parte ACT Employees' Federation (1976) 137 CLR 86 @ 100 [34] Re Shop Distributive and Allied Employees Association, ex parte Lamsoon (Australia) Pty Ltd & Ors High Court B2 of 1996 unreported (Ambulance Officers Case) [35] ibid [36] (1994) 181 CLR 539 [37] (1987) 163 CLR 117 at 135 [38] Matter B2 of 1996 (unreported) 5/8/97 [39] SPSF v. Western Australia 44 IR 86 @ 101 [40] (1988) 166 CLR @ 321 [41] (1956) 96 CLR 317 @ 324 [42] Australian Tramway & Motor Omnibus Employees' association v Commission for Road Transport & Tramways (NSW) (1938) 50 CLR @ p440 [43] R v. Conen, Ex Parte, Workers' Compensation Board of Queensland (1981) 38 ALR 129 @ 134 [44] R v Brislan; Ex Parte Williams (1935) 54 CLR 262 @ 282 [45] (1959) 107 CLR 208 @ 268 [46] Social Welfare Case (1983) 153 CLR 297 @ 314 [47] Labour law at page 36