“THE CONTINUED STATE/FEDERAL INDUSTRIAL

RELATIONS DICHOTOMY AND IT’S IMPLICATIONS”

Stephen J. Kenner

Commissioner

Western Australian Industrial Relations Commission

March 1999

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(The views expressed in this paper are the personal views of the author and do not reflect the view of the WesternAustralian Industrial Relations Commission).

INTRODUCTION

In gathering my thoughts in the preparation of this paper, I was attracted to the editorial

appearing in the “The West Australian” on 3 December 1998, entitled “Save our Century

Merit Support”. The introductory passages of the editorial were quite apposite to the

proceedings over the next two days and they were as follows:

“The approach of the new millennium has focused people’s minds on how the futuremight unfold.

It’s arrival will be a time of renewal and of hope. People will see it as a chance for anew beginning with visions for a better society.

But millennium prognostications must be informed by the lessons of the past. The turnof the century is also a good time for stocktaking – to look at where we have been aswe decide where we should be going.

History is important not only because it helps us no identify mistakes that we shouldtry to avoid repeating but also because it helps to define our identity as a society. Itcan give us an understanding of how the values and customs that are vital to usevolved.”

Those observations are no less relevant to the ever developing and complex

interrelationships between the States and the Commonwealth in the field of industrial

relations.

As the topic of my paper is the State and federal industrial relations dichotomy, of necessity,

given the origins of the Australian model of cooperative federalism, it will have a

constitutional flavour. Given the very short time available, it will not be possible for me to

canvass this area in great depth. However, I will attempt to touch upon what I consider to be

some of the more significant issues in the area of State and federal relations. You will hear

from other speakers about a number of these issues in more detail, as the conference

program unfolds.

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THE CONSTITUTIONAL SETTING

Underlying the relations between the federal and State governments in the industrial

relations arena, are the relevant provisions of the Commonwealth Constitution (“the

Constitution”). It is the Constitution which provides the foundation for federal legislation in

all areas of the federal Parliament’s legislative powers, including those relating to industrial

relations. The Australian federal system of government, as enshrined in the Constitution,

provides for the existence of the Federal Parliament with it’s powers to legislate on matters

contained within the Constitution throughout Australia, whilst recognising the jurisdiction

and power of State and Territory governments to enact legislation within their particular

jurisdictions. As observed by P J Hanks in Australian Constitutional Law Materials and

Commentry 4th Ed at para 1.015:

“The Commonwealth Constitution” divided legislated authority between the newCommonwealth and States by conferring on the new Commonwealth Parliament powerto legislate “with respect to” a list of topics (the bulk of which appears in s 51), anddeclaring that the State parliaments should continue to have the legislative powers oftheir colonial predecessors except to the extent that the new Constitution “exclusivelyvested” a power in the Commonwealth Parliament or withdrew a power from the Stateparliaments: s 107.

Implicit in the system is the idea that the Commonwealth legislative power is specific(being confined to the list of topics), whilst that of the States is general (sometimes butinaccurately, described as “residual”). However, the course of history and judicialinterpretation have demonstrated that this division does not necessarily restrict orlimit the Commonwealth Parliament: the listed topics have been shown to besufficiently elastic to allow some expansion of Commonwealth power at the expense ofthe States: see, for example, the Engineers Case (1920) 28 CLR 129 (6.098), Stricklandv Rockla Concrete Pipes (1971) 124 CLR 468(8.047) and Commonwealth v Tasmania,(the Tasmanian Dam Case) (1983) 158 CLR 1(8.067) and 9.021) Also implicit in thedivision of legislative power is the prospect of conflict between Commonwealth andState legislation. The Commonwealth Constitution anticipated this problem andprovides that, in the event of “inconsistency”, the Commonwealth legislation prevailsand the State legislation is “invalid”: s 109.”

The heads of constitutional power relevant to the powers of the federal Parliament, are set

out in s 51 of the Constitution. Historically, in the industrial relations field, the Federal

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Parliament has relied in the main, on the conciliation and arbitration power contained in s 51

(35), which enables the Federal Parliament to make laws “with respect to conciliation and

arbitration for the prevention and settlement of industrial disputes extending beyond the

limits of any one State.” Of more recent times, the Federal Parliament has increasingly

relied upon other heads of constitutional power for the enactment of laws in relation to

industrial relations matters. These powers have included in particular:

(a) the corporations power: s 51(20);

(b) the external affairs power: s 51(29);

(c) the trade and commerce power: s 51(1); and

(d) the incidental power: s 51(39)

In particular, in enacting the Workplace Relations and Other Legislation Amendment Act

1996 (Cth) (“WROLA Act”), which effected very substantial amendments to the former

Industrial Relations Act 1988 (Cth) (“IR Act”), the Federal Parliament relied quite

extensively on the corporations power, particularly in relation to the new certified

agreements provisions. The reliance upon this head of constitutional power, and the specific

provisions as enacted, have implications in terms of federal and State relations, about which

I say something further below (see discussion in “Reconstructing Australian Labour Law:

A Constitutional Perspective” WJ Ford (1997) 10 AJLL 1).

Central to the question of federal and State relations, is the operation of the terms of s 109 of

the Constitution. Section 109 provides:

“109. When a law of a State is inconsistent with a law of the Commonwealth the lattershall prevail and the former shall, to the extent of the inconsistency, be invalid.”

The extent and operation of this provision of the Constitution is pivotal in relation to the

dichotomy between federal and State industrial relations in Australia. There has been a very

substantial body of case law has built up over the years by way of decisions of the High

Court, as to the meaning and effect of this provision of the Constitution much of it

incidentally, in the area of industrial law. It is well beyond the province of this paper to

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examine this issue in any detail. However, some passing reference to some cases may assist

in putting the subsequent discussion of the practical working effect of federal and State laws

in this area into perspective.

Inconsistency, for the purposes of s 109 and s 152 of the Workplace Relations Act 1996

(Cth) (“WR Act”) may arise in two senses. Firstly, where the federal law by its terms

discloses an intention to cover the field to the exclusion of a relevant State law. Secondly,

where by their terms, both the federal and State laws are directly inconsistent in the sense

that their provisions collide. This analysis does not involve a legal inconsistency as such,

but is rather a question of inconsistent results given a set of primary facts: Airlines of New

South Wales v N.S.W. (No. 2) (1965) 113 CLR 54 at 79-80.

A classic statement of the law in relation to the covering the field test of inconsistency was

that of Dixon J in ex parte McLean (1930) 43 CLR 472. In that case, his Honour observed

at 483:

“When the parliament of the Commonwealth and the parliament of the State eachlegislate upon the same subject and prescribe what the rule of conduct shall be, theymake laws which are inconsistent, notwithstanding that the rule of conduct is identicalwhich each prescribes, and s 109 applies. That this is so is settled, at least when thesanctions they impose are diverse. But the reason is that, by prescribing the rule to beobserved, the federal statute shows an intention to cover the subject matter andprovide what the law upon it shall be. If it appeared that the federal law intended tobe supplementary to or cumulative upon State law, then no inconsistency would beexhibited in imposing the same duties or in inflicting different penalties. Theinconsistency does not lie in the mere co-existence of two laws which are susceptible ofsimultaneous obedience. It depends upon the intention of the paramount legislature toexpress by its enactment, completely, exhaustively, or exclusively, what shall be thelaw governing the particular conduct or matter to which its attention is directed.When a federal statute discloses such an intention, it is inconsistent with it for the Statelaw to govern the same conduct or matter.”

It is trite to observe that an award of the Australian Industrial Relations Commission

(“AIRC”) is not itself a law of the Commonwealth. For the purposes of s 109, an award has

the force and effect of such a law for the purposes of any inconsistency argument: ex parte

McLean (supra); Metal Trades Industry Association of Australia v Amalgamated Metal

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Workers and Shipwrights Union (1983)152 CLR 632 per Gibbs CJ, Wilson and Dawson JJ

at 641-642. Therefore, the inconsistency exists not by reason of the award, but from s 152

of the WR Act: T A Robinson and Sons Pty Ltd v Haylor (1957)97 CLR 177 at 182; Doa v

Australian Postal Commission (1987) 162 CLR 317 at 337. There have been many

instances where the High Court has considered inconsistency issues (see for example: R v

Clarkson; ex parte General Motors Holden Pty Ltd (1976) 134 CLR 56; Collins v Charles

Marshall Pty Ltd (1955)92 CLR 529; Ansett Transport Industries (Operations) Pty Ltd v

Wardley (1979-1980)142 CLR 237; Belton v General Motors Holden Pty Ltd (No. 2) (1984)

154 CLR 633).

Direct inconsistency on the other hand, may arise where there is a collision between the

federal law and the State law in the sense that the subject of the law can only obey one law

by disobeying the other: R v Licensing Court of Brisbane; ex parte Daniell (1920) 28 CLR

23. Further, direct inconsistency may also be found in circumstances where one law takes

away a right or privilege which the other law confers: Clyde Engineering v Cowburn (1926)

37 CLR 466 at 477-9,490 & 522; Colvin v Bradley Bros Pty Ltd (1943) 68 CLR 151 at

160,161&163; Blackley v Devondale Cream (Vic) Pty Ltd (1968) 117 CLR 253 at 258.

Having set the scene insofar as the relevant provisions of the Constitution are concerned,

and the tests as to inconsistency, I now turn to consider how the federal and State

jurisdictional dichotomy has unfolded in practise.

As often is the case when looking to the present and future, the historical relationship

between the Commonwealth and the States in this area is illuminating and provides some

insight.

HISTORICAL PERSPECTIVE ON STATE/FEDERAL AND RELATIONS -

FEDERAL DOMINANCE?

Undoubtedly, since the decision of the High Court in Amalgamated Society of Engineers v

Adelaide Steamship Co Ltd (1920) 28 CLR 129 (“the Engineers case”) the Commonwealth

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adopted an expansive role in the industrial law field (see “Return of State Awards – Section

109 of the Constitution and the Workplace Relations Act of 1996” CG Williams (1997) 10

AJLL 170). This was accompanied by an expansive view adopted by the High Court of the

definition of “industrial dispute”: Jumbunna Coalmine, NL v Victorian Coalminers

Association (1908) 6 CLR 309; R v Coldham; ex parte Australian Social Welfare Union

(“the Social Welfare Case”) (1983) 153 CLR 297. Subsequent to the Social Welfare Case,

the High Court has, on a number of occasions, revisited the issue of the meaning of

“industrial dispute” for the purposes of the federal legislation. An example of the continued

expansive interpretation of the meaning of “industrial dispute”, is contained in the

judgements of the Court in Re Amalgamated Metal Workers Union and Ors; ex parte the

Shell Company of Australia Ltd and Ors (1992) 174 CLR 435. In this case, the majority of

the Court suggested that an “industrial dispute” may encompass a matter not directly within

the control of an employer, as long as the employer has some influence over the particular

matter. The Court observed:

“And now that an industrial dispute is defined in terms of “a dispute about”, ratherthan in terms “a dispute as to”, it would seem that, at least in some cases, it may benecessary to look beyond the question whether it is in the power of an employer togrant a claim and to consider, instead, whether the employer’s assent or dissent iscompletely irrelevant. Of course, in many, perhaps most cases, the fact that theemployer has no power to grant the claim will indicate that it is not, in terms of Act,“about (a) matter pertaining to the relationship between employers and employees.”

(See also Australian Federation of Air Pilots v Eastern Australian Airlines Pty Ltd and Anor

(1992) 47 IR 216; Re Alcan Australia Limited and Ors; ex parte FIMEE (1994) 181 CLR

96).

Refrain From Hearing Power

Historically, the principal provision in the federal legislation that has impacted on federal

and State relations, has been the federal power to refrain from hearing a matter, on the basis

that the particular dispute or part of it, has been, is being, or is proper to be dealt with by a

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State industrial authority (see s 41(1)(g) Conciliation and Arbitration Act 1904; s 111(1)(g)

IR Act; s 111(1)(g) WR Act.

One may be forgiven for thinking that given the terms of the Constitution requiring there to

be an “interstate industrial dispute” to attract the jurisdiction of the AIRC, the potential for

conflict between the federal and State systems is easily resolved - those disputes that are

intrastate are the province of the State jurisdictions and those that are interstate fall within

the federal jurisdiction. However simple that may seem on its face, in practice, this area has

given rise to extensive and complicated litigation.

This federal power has enabled the AIRC and its predecessors to refrain from further

dealing with an industrial dispute in circumstances where, in the exercise of it’s discretion, it

has considered that the subject matter of the dispute is best left in the relevant State

jurisdiction. A very substantial body of case law has built up over the years in relation to the

operation and effect of these statutory provisions (see discussion in “Yielding the Field; the

Australian Industrial Relations Commission’s Discretion to Refuse to Invoke it’s Own

Jurisdiction” Justice P Gray and S R Marshall (1990) 3 AJLL 36). Early decisions of the

then Conciliation and Arbitration Commission, in dealing with the refrain from hearing

power, placed significant weight on the retention of the “status quo” in terms of coverage by

State industrial tribunals. For example in, Federated Hotel, Club, Restaurant, and Caterers

Employees Union of Australia v Abbott (1928) 26 CAR 489, Dethridge J set out criteria

upon which jurisdiction would be left with State industrial tribunals. Later, in Merchant

Service (Bay Harbour and River Vessels) Award 1957 (1960) 96CAR 141 at 143, Foster J

set out a number of matters he considered relevant to the exercise of the discretion to refrain

from further hearing a matter. Subsequently, in what became known as the “Albion Reid

approach” (Australian Workers Union v Albion Reid and Ors (1975) 173 CAR 174) a Full

Bench of the Commission observed that:

“The underlying philosophy of the Act is to settle by award industrial disputes sodefined. The provisions of s 41(1)(d) assume the existence of such a dispute but granta discretion to the Commission to dismiss or refrain from proceeding to an award incircumstances therein provided. It is perfectly logical to proceed from the premise

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which is embodied in the philosophy of the Act and to conclude he who wishes theCommission to dismiss or refrain from further proceeding should establish a casebefore the Commission to do so”.

I think it is far to say that this decision was subsequently adopted and embraced by the

federal Commission as the dominant approach to the exercise of the discretion for many

years thereafter.

Cases decided by the AIRC in dealing with applications to refrain from further hearing, have

highlighted a number of factors which have tended in the past, to influence the exercise of

this discretion. Amongst others they have included:

(a) the nature of the industry and whether it is a “national industry”;

(b) the business conducted by the employers sought to be bound by the

federal award in terms of any consistency between the States;

(c) whether and if so to what extent the relevant award extends to the entire

industry;

(d) the wishes of the parties;

(e) the bonafides of the union and the “realities” of a dispute, ie whether the

dispute is a genuine interstate industrial dispute or is one merely contrived for the

purposes of attracting the Commission’s jurisdiction; and

(f) the effectiveness of State industrial tribunals.

Notwithstanding the earlier decisions of the AIRC to vacate the field in favour of the

continuation of State coverage, more recent cases, in particular those subsequent to the

enactment of the IR Act and further amendments effected by the Industrial Relations Reform

Act 1993 (Cth), appeared to shift the balance in favour of federal coverage over the States.

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However, the most recent amendments to the IR Act effected by the WROLA Act, in

particular the enactment of s 111AAA, has fundamentally affected the operation of the

refrain from hearing power and potentially in turn, the relations between the State and

federal jurisdictions. I will consider this matter later in this paper.

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Mechanisms to Promote Co-operation and Co-ordination

The enactment of the IR Act, following the recommendations of the Hancock Report of the

Committee of Review into Australian Industrial Relations Law and Systems (“the Hancock

Report’), introduced a number of initiatives to foster greater co-operation and co-ordination

between federal and State industrial tribunals.

The history of legislative developments in this area is set out in an article by Justice A J

Boulton “Mechanisms for Promoting Co-operation Between federal and State Industrial

Tribunals” (1990) 3 AJLL 6). I need not set out the detail of these changes. In that paper,

Justice Boulton highlights in particular, provisions of the former IR Act providing for dual

appointments (ss 13-14); regular meetings between the President of the AIRC and the heads

of State industrial tribunals (s 171); regular meetings of the Registrars of the federal and

State tribunals; provisions for members of AIRC to deal with a particular state industrial

dispute or claim upon request from a State tribunal (s 173); the reference of federal

industrial disputes to a State tribunal for determination (s 174); joint proceedings of the

AIRC and a State tribunal (s 175); conferences between the President or a Deputy President

of the AIRC and a State tribunal (s 176); and joint sittings in relation to oil industry matters

in New South Wales (s 177). Boulton J notes the need for greater co-ordination and co-

operation between the federal and State systems.

Almost all of these provisions, remain in the WR Act in substantially the same form. These

mechanisms to foster greater co-operation and co-ordination have been enhanced by the

approach of the federal government, in terms of its proposals for greater harmonisation

between the State and federal systems

Furthermore, wage fixing principles and National Wage Case decisions have been adopted,

by and large, by the States. Indeed, the WA Act requires the WAIRC to adopt the terms of

an AIRC National Wage Case decision, unless there is good reason not to. This has been of

recent times, a very important means of promoting consistency and co-ordination between

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the AIRC and State industrial tribunals in the wage fixation arena, focussing now as it does,

on the “safety net” role of awards in the system.

THE WROLA ACT – A SHIFT BACK TO THE STATES?

Whilst there have existed for many years, statutory mechanisms to resolve the inherent

tensions between the federal and State systems of industrial regulation in Australia, the

amendments effected to the IR Act by the WROLA Act in 1996-97, have arguably reversed

the trend previously seen, in terms of the pre-eminence of federal legislation and coverage in

this area of activity. Whilst the government of the day has not gone as far as some groups

would have liked it to have in terms of industrial relations legislative reform, the changes

brought about by the WROLA Act, do in my view, represent a very significant change to the

nature of federal and State relations. Additionally, the Western Australian Parliament has

also enacted legislation that has also potentially significantly impacted upon federal and

State relations.

Heralding the arrival of the new federal statutory regime, an article in the “Financial

Review” on 31 December 1996 put it quite succinctly when it was said:

“State industrial relations systems have undergone significant reform in recent years.In Victoria and Western Australia, in particular, these reforms promoted deregulatoryindustrial relations policies which the Commonwealth was not prepared to pursue.The new federal Workplace Relations Act represents the Commonwealth’s return tothe forefront of industrial relations reform. Nevertheless, the Act has sought topreserve and potentially strengthen the State’s role in industrial relations. It givesemployers and employees choice on the most appropriate form of agreement. Thismay involve State rather than federal agreements. In a reversal of a nearly 100 yeartrend, State employment agreements can prevail over an inconsistent federal award…”

There are a number of provisions of the WROLA Act that may have a particular impact on

federal and State relationships. The terms of the new s 89A of the WR Act limit the AIRC’s

arbitral and award-making powers to 20 “allowable award matters”. Additionally however,

ss 89A (6) and (7), give the AIRC jurisdiction over “incidental matters” and “exceptional

matters”, subject to the prerequisites of those sub-sections being met. Further, by way of the

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transitional provisions contained in the WROLA Act, an 18 month transitional period from 1

January 1997 was prescribed, (now expired) following which all provisions in federal

awards, not being allowable award matters, are of no effect: Schedule 5 item 50 of the

WROLA Act. By the terms of item 51 of the transitional provisions of the WROLA Act, the

AIRC was required, following the expiry of the interim period, to convene a review of all

awards in force that are affected by s 89A, to ensure they are varied to remove the provisions

rendered of no effect by reason of s 89A. That process is now well underway throughout the

federal jurisdiction.

A Full Bench of the AIRC in the Award Simplification Decision (1997) 43 AILR 3-683 has

established guidelines for the review of awards for the purposes of s 89A and item 51 of the

WROLA Act. It was made clear in this decision that, in accordance with the provisions of

item 53 of schedule 5 of the WROLA Act, the Full Bench by its decision, was establishing

principles for individual members of the AIRC to follow. (See also: Application by FSU

(1997) 74 IR 446; Australian Colliery Staffs Association v Newlands Coal Pty Ltd (1997) 42

AILR 3-577; CEPU v Telstra Corporation (1997) 42 AILR 3-549).

It should be noted however, that the terms of s 89A of the WR Act operate in relation to the

AIRC’s arbitral and award making powers. It does not restrict the matters in relation to

which the AIRC may make a finding of an interstate industrial dispute: s 4 WRA;

Australian Municipal Administrative, Clerical and Service Union v Cab Australia Pty Ltd &

Ors (1997) 41 AILR 3-531. Section 89A would also not appear to limit the AIRC’s

conciliation powers: Construction, Forestry, Mining and Energy Union v Gordonstone

Coal Management Pty Ltd (1997) 42 AILR 3-602.

It is immediately apparent that the terms of s 89A may impact on federal and State relations

in a significant way. If the provisions of a federal award are invalid by reason of s 89A after

the 18 month interim period, that may be relevant in determining whether, and if so to what

extent, a federal award prevails over a State law for the purposes of s 109 of the

Constitution. Additionally, depending on whether an employer is a constitutional

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corporation or not, the effect of s 89A may leave room for a State common rule award to re-

enter the field of coverage previously excluded by the federal award.

A number of possible situations may arise. Take for example, the position of a

constitutional corporation bound by a federal award, that has been simplified by the AIRC to

exclude non-allowable award matters, (item 50 of the WROLA Act would operate in any

event, on non-allowable award matters). As a number of conditions of employment are not

caught by s 89A of the WR Act, such as for example, union rights of entry, study leave, and

occupational health and safety, there may be room for a State common rule award under the

Industrial Relations Act, 1979 (“WA Act”) to operate in the area not covered by the federal

award (see Williams supra at 171, 177-178). It should be noted however, that the

application of a State common rule award to a constitutional corporation is not automatic, as

by item 52 Schedule 5 of the WROLA Act, the corporation must apply to the relevant State

industrial authority to become bound by the State award.

However, in relation to an employer that is not a constitutional corporation, such as a

partnership or a sole trader, there is no requirement under the legislation for the employer to

apply to the relevant State industrial authority for the State common rule award to become

binding upon the employer. Therefore, in those areas that have been identified above, that

fall outside of the allowable award matters for the purposes of s 89A of the WR Act, a State

common rule award could have application. For example, this could give rise to the issue as

to whether a union, of which an employee of such an employer is a member, has residual

rights of entry under the relevant State common rule award in the case where both a federal

and State common rule award have application because of s 89A of the WR Act. This

would also give rise to consideration as to the operation and effect of Division 11A of part

IX of the WR Act, dealing with entry and inspection of premises etc by organisations, s

49AB of the WA Act and the operation of other federal instruments.

The area of union rights of entry is the subject of a paper by another speaker, later in today’s

program.

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It is also of note that arguably, the provisions of item 52 of Schedule 5 of the WROLA Act,

requiring a constitutional corporation to apply to a State industrial authority to be bound by a

State award, would not apply to a corporation formed after the expiry of the 18 month

interim period (see Williams supra at 178).

Section 152 WR Act and Inconsistency

In conjunction with this issue, is the operation and effect of the new s 152 of the WR Act,

dealing with inconsistency between State law (or State awards) and a federal award. Whilst

at first blush it may seem that not much has changed from the former provisions of s 152 of

the former IR Act, when one considers the possible effects of ss 152(1A),(2) and (3), a

marked difference becomes apparent.

There are a number of things to note about s 152. First and foremost, s 152(1) generally

reflects the position under s 109 of the Constitution, that federal awards will prevail over

inconsistent State laws and State awards. “Award” for the purposes of s 4 of the WR Act

however, now only means an award made under s 143(1) whereas previously, under the IR

Act, it also included other federal instruments, such as some federal agreements.

Secondly, s 152(1A) provides that if a State law gives protection to an employee against

harsh, unjust or unreasonable termination of employment, s 152(1) (the general

inconsistency provision) is not intended to affect the operation of the State law, so far as

those provisions are able to operate concurrently with the terms of the award. This

means that, subject to the scope and application of the relevant State law in relation to harsh,

unjust or unreasonable termination, the State law will continue to operate unaffected by s

152(1) of the WRA and s 109 of the Constitution, as long as they are not directly

inconsistent. (See also G McCarry Relationships Between the federal and NSW Industrial

Relations Systems (1998) 11 AJLL 69; Williams supra at 177-178; Mitchell v United Credit

(1998) 78 WAIG 2939).

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The specific implications of these provisions will be the subject of another paper at this

conference, however one is to remove at least this area of inconsistency between federal and

State law, in favour of the State systems.

The remaining provisions of s 152 deal with the effect of federal awards and State

employment agreements. The principle underlying these provisions is that a federal award

will not apply to an employee covered by a State employment agreement. This means that

subject to the requirements of s 152(5) being met, which I deal with below, s 109 of the

Constitution simply does not raise its head, as the relevant federal award is not binding, to

enliven its terms and effect. On first appearances, this looks much like a provision to

require the Commonwealth to vacate the field of regulation in favour of the States.

However, two important pre-conditions must be met before this will occur. First, the

agreement must be a “State employment agreement” as defined in s 4 of the WRA. This

provides that:

“State employment agreement means an agreement:

(a) between an employer and one or more of the following:

(i) an employee of the employer;

(ii) a trade union; and

(a) that regulates wages and conditions of employment of one or more of theemployees; and

(b) that is made under a law of a State that provides for such agreements; and

(d) that prevails over an inconsistent State award.”

Secondly, having got to that point, the “State employment agreement” must then satisfy the

requirements of s 152(5) which provides:

“(5) Subsections (2) and (3) do not apply to a State employment agreement unless theagreement is one that was approved by a State industrial authority under a State Actthat required the authority, before approving the agreement, to be satisfied:

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(a) that the employees covered by the agreement are not disadvantaged incomparison to their entitlements under the relevant award; and

(b) that the agreement was genuinely made, or that the agreement was not madeunder duress or that the agreement was made without coercion; and

(c) that the agreement covers all the employees whom it would be reasonable for theagreement to cover, having regard to matters (if any) specified in the State Act(such as the nature of the work performed under the agreement and therelationship between the employees in the part of the business covered by theagreement and the remainder of the employees in the business).”

Whilst it may be the case that agreements made under s 41 of the WA Act will satisfy the

first of these requirements, it could not be said that the second requirement in s 152(5) is

fulfilled under the WA Act. Therefore, State and federal relations will not be materially

altered in relation to federal awards and s 41 industrial agreements, by these provisions of

the federal statute. That is, prima facie at least, a s 41 industrial agreement under the WA

Act will still have to give way to a federal award, to the extent of any inconsistency,

applying the established s 109 tests.

A development in WA specifically intended to give effect to s 152 as it applies to the

relationship between federal awards and State employment agreements, was the enactment

of Part 2A of the Workplace Agreements Act 1993. By this part, a collective workplace

agreement, intended by the parties to prevail over a federal award and made for the purposes

of s 152(5) of the WR Act, will on registration by the tribunal established for this purpose

under the Part 2A, invoke the terms of s 152 of the WR Act.

As legislation in this State presently stands, this is the only situation where the “State

employment agreement” provisions under s 152 of the WR Act can operate, it would appear.

Also of note, federal certified agreements under the WR Act will, adopting the traditional

“s 109 approach”, prevail over State laws, awards or employment agreements to the extent

of any inconsistency (s 170 LZ WR Act). To that extent, not much has changed from the

past. However, of interest, is the fact that in the case of Australian Workplace Agreements

(“AWA’s”), the policy of the WR Act is to exclude the application of State awards and

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employment agreements (s 170 VQ(4)) and for AWA’s to prevail over State laws (s 170

VR(1)).

Whilst AWA’s are subject to the “no disadvantage test” under the WR Act, this may lead to

a result where an essentially private treaty (AWA) may overide a State law on an important

social issue such as minimum leave entitlements, enacted by a State parliament (see

McCarry (supra) at 80). This would have the implication in the WA context, that an AWA

could have the effect of overriding for example, the Minimum Conditions of Employment

Act 1993 (WA).

Section 111AAA – State Status Quo?

A quite profound change to federal and State relations in the industrial field, occurred with

the enactment of s 111AAA of the WR Act.

This section provides that the AIRC must cease dealing with an industrial dispute, if it is

satisfied that a State award or State employment agreement governs the wages and

conditions of employment of the employees who are subject to the federal industrial dispute.

The purpose of the provision is to clearly protect existing State industrial regulation from

federal coverage – to preserve the “status quo”. In one legislative step, this provision has

effectively neutralised the terms of s 111(1)(g) of the WR Act, the refrain from hearing

power which it and its various predecessors have, for almost as long as the federal system

has been in existence, been the primary legislative mechanism dealing with federal

regulation in the face of State coverage.

Indeed, in Australian Rail, Tram and Bus Industry Union v Western Australian Government

Railways Commission (1997) 42 AILR 3-591, a Full Bench of the AIRC went so far as to

say that the effect of the enactment of s 111AAA lead to the implied repeal of s 111(1)(g).

The only qualification, albeit an important one, on the operation of this provision, is that the

AIRC may not cease dealing with a matter if it concludes it is not in the public interest to do

so. In practical terms, it would appear that once the AIRC becomes aware of the existence

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of State regulation in connection with an industrial dispute with which it is dealing, the

requirements of s 111AAA come into play, to the virtual exclusion of consideration of s

111(1)(g) of the WR Act.

Notably, the provisions of s 111AAA, when referring to “State employment agreements”, do

not qualify the definition contained in s 4 of the WR Act, as does s 152(5). This means

industrial agreements made under s 41 of the WA Act would be caught by the operation of s

111AAA.

There are many other areas that impact on federal and State relations under the WR Act and

the WA Act that are beyond the scope of this paper to canvass in detail. Some of these

include:

(a) the powers of the AIRC to restrain a State industrial authority from dealing with

a matter the subject of federal proceedings: s 128 of the WR Act (other than in

relation to State employment agreements);

(b) amalgamation provisions for registered organisations: ss 253 ZP, 253 ZU and

253 ZU WR Act;

(c) complimentary federal and State registration of organisations: ss 71 and 71A

WA Act;

(d) freedom of association provisions in Part XA of the WR Act; and

(e) provisions of the WA Act in s 37A and Part IIIA dealing with federal award

coverage.

All of these provisions of the WR Act and WA Act, directly impact on the legislative and

functional interface between the federal and State tribunals in this State.

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Victoria

A truly profound development occurred in Victoria with the passage of the Commonwealth

Powers (Industrial Relations) Act 1996 (Vic), which had the effect of referring the vast

majority of the Victorian Parliament’s powers with respect to industrial relations matters, to

the Commonwealth. Relying upon the terms of s 51(37) of the Constitution, empowering

the Federal Parliament to make laws with respect to “matters referred to the Parliament of

the Commonwealth by the Parliament or Parliaments of any State or States, but so that the

law shall extend only to States by whose Parliament the matter is referred…,” the Federal

Parliament enacted Part XV of the WR Act, dealing with matters referred by Victoria.

By the terms of these various enactments, the Victorian industrial relations system was

abolished, with the Victorian government handing the conduct of industrial relations in that

State to the Federal Parliament. This change was historic indeed.

The practical effect of Part XV of the WR Act, is to essentially create an intrastate industrial

relations system within the AIRC jurisdiction. The changes brought about by the ceding by

Victoria of its powers in relation to industrial relations matters and the enactment of Part

XV, fall into three broad areas.

The first area relates to the exercise of the AIRC’s functions and powers in the absence of an

interstate industrial dispute, concerning Victorian matters. Federal agreements, such as

certified agreements and AWA’s, may also be entered into by Victorian employers and

employees under these provisions. Protection from unfair dismissal contained in Division 3

of Part VI A of the WR Act, is also extended to Victorian employees.

The second major area relates to minimum conditions of employment. Previously, under the

former Victorian Employee Relations Act 1992, certain minimum conditions of employment

were prescribed. Section 500 of the WR Act now provides for these minimum conditions of

employment. Additionally, the function of establishing minimum wages has also been

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transferred to the AIRC. Finally, Part XV provides for transitional provisions in relation to

registered associations that existed under the former Victorian legislation.

The changes brought about by these developments in Victoria are unique in the Australian

context. The extent to which other States may consider a similar course in the future

remains to be seen.

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Unfair Dismissal Jurisdiction

Another consequence of the enactment of the WROLA Act, has been to substantially change

the access to unfair dismissal remedies federally. Under the former IR Act, applications in

relation to unlawful dismissal could be made by all employees, subject to the legislative

income cap and some specified exclusions.

The changes to Div 3 of Part VI A of the WR Act now mean that access is, subject to other

defined categories, restricted to employees covered by federal awards and employed by

constitutional corporations. This change of access has impacted on the WAIRC.

As published in the 1998 Annual Report of the Chief Commissioner of the WAIRC,

applications pursuant to s 29(1)(b)(i) of the Act increased in number from 593 in 1995/96 to

1203 in 1997/98. Claims involving a combination of unfair dismissal and contractual

benefits increased from 159 to 578 over the same period. This trend has continued, as for

example, in the month of February 1999, of a total of 249 matters referred to the WAIRC,

109 of those matters were unfair dismissal or combination unfair dismissal and contractual

benefits applications.

FURTHER HARMONISATION

The process of promoting greater co-ordination and co-operation between the federal and

State systems of industrial regulation is being given impetus by the federal government. In a

Ministerial Discussion Paper entitled “Improving Access and Service Delivery:

Administration of the AIRC and the Registry” the Hon Peter Reith MP, Federal Minister for

Employment, Workplace Relations and Small Business, has outlined proposals for achieving

improved working relationships between federal and State tribunals and registries.

These proposals include promoting more harmonious service delivery in the areas of award

compliance and advisory services; promotion of concurrent appointments to both federal and

State tribunals; and the promotion of the contracting of federal registry services to the States,

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where appropriate. The principles underlying these proposals have been supported and

further developed through the Labour Minister’s Council (“LMC”), with the LMC in May

1998 re-endorsing the further adoption of concurrent federal and State appointments and

integration of registry services.

In WA, these initiatives have led the Department of Productivity and Labour Relations to

now provide federal award compliance and advisory services on behalf of the federal

government, on a contract basis. Also, a closer working relationship between the AIRC and

WAIRC industrial registries is being pursued.

The discussion paper foreshadows further consideration of these and other matters to

provide ongoing harmonisation between the federal and State systems.

SUMMARY AND FUTURE DIRECTIONS

It has been an inherent feature of Australian industrial law that there has been an

overlapping of federal and State regulation. In large part, that has been a function of the

Australian model of co-operative federalism, underpinned by the Constitution, which

preserves the legislative rights and prerogatives of the States in the federation.

For practitioners in the field of labour law and labour relations, this has meant contending

with the complexities of the “dual system”. Mechanisms have existed in both the federal

and State legislative schemes, to deal with the inevitable conflicts that occur from time to

time.

The interaction between federal and State law has, over the years, ebbed and flowed

according to the particular provisions of the statutes and the approach to their interpretation.

Of recent times the early 1990’s saw the federal jurisdiction expand further into areas

traditionally regulated by the States. The developments of 1996 and subsequently, appear to

have at least to an extent, reversed that trend, to enable the continued operation of State law

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and perhaps its enhancement, in some cases. Whatever be the balance between the two

systems, the dychotomy remains.

There are a host of issues that may arise. For participants in the system, the complexity of

the inter-relationships between federal and State legislation means there is a need to have

regard to the following, amongst others:

• the area of federal and State award coverage may mean that for a

federally regulated enterprise, that a State common rule award may also apply;

• the interaction of agreement provisions is complex and great care

needs to be taken in specific terms of the drafting of provisions of agreements and

attention to their terms when considering State and federal overlap;

• for those in the State jurisdiction with existing State regulation

and keen to remain so covered, the prospects of so doing appear to be enhanced; and

• there may be some uncertainties as to remedies for unfair

dismissal.

As to the future of State and federal relations as we approach the new millennium, the

federal government appears to be continuing the thrust of greater harmonisation within the

“dual system”. It remains to be seen as to the extent to which these changes provide greater

integration of the two systems. Also of interest will be whether the recommendation of the

Hancock Committee in 1985, for one unified system of industrial relations, is revisited in the

longer term, depending on the views of the respective State and federal governments. If so,

perhaps this may be the challenge for the next millennium?