Australian labour law

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Australian labour law consists of a complicated combination of Commonwealth laws, state laws, and common law inherited from the United Kingdom as adapted and developed by Australian courts. It has had a unique development that distinguishes it from other English-speaking jurisdictions. This page focuses on the Commonwealth labour laws.

In Australia, any field that the Constitution does not give the Commonwealth power to make laws about is assumed to be a field the states can make laws about. In labour law, the result is a dual structure, where some employment issues and relationships are governed by Commonwealth laws, and others are governed by state laws or the common law.

It was originally thought that the Commonwealth's power to make laws about labour law was extremely narrow, and only to be that power provided by section 51(xxxv) of the Constitution, which gives the Commonwealth power to make laws "in relation to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one state".

Based on this constitutional power, the Commonwealth Conciliation and Arbitration Act 1904 sought to introduce the rule of law in industrial relations in Australia and, besides other things, established the Commonwealth Court of Conciliation and Arbitration. Its functions were the hearing and the arbitration of industrial disputes, and to make awards. It also had the judicial functions of interpreting and enforcing awards and hearing other criminal and civil cases relating to industrial relations law.

In disputes involving a company in a single state either, a union or industrial organisation will rope them into a federal award by arguing that they are part of an industry in which a dispute extending beyond the limits of any one state exist. (This can be done by finding another company which did similar work and serving them with a log of claims concurrently or by virtue of a company's membership of a peak industry body.) Alternatively, if the company was not covered by a federal Award it would be covered by the various States' industrial relations systems, and disputes are conciliated or arbitrated by the state industrial relations commissions which would create an industry rule Award.

However, since 1993, the Commonwealth government has used the corporations power in section 51(xx) of the Constitution[1] to enact labour laws of much wider import. The corporations power gives the federal parliament power to make laws with respect to "trading and financial corporations formed within the limits of the Commonwealth", as well as 'foreign' corporations.

In 1996, the Howard Government passed the Workplace Relations Act 1996, which replaced the previous Labor Government's Industrial Relations Act 1988, starting operation on 1 January 1997. The Act was substantially amended by the Workplace Relations Amendment Act 2005, that came into effect on 27 March 2006, which brought in the WorkChoices changes to Australia's labour law. WorkChoices came into operation in 2006, it gave effective control of 85% of the Australian labour law system to the Federal Government.

The Howard Government announced plans in 2005 to use this power to override state systems and unify industrial relations systems under a federal umbrella. The changes also included the introduction of an independent Australian Fair Pay Commission to set wages, and enhanced powers for the Office of the Employment Advocate and a corresponding lesser role for the Australian Industrial Relations Commission. These changes became known as WorkChoices. The theory behind this move was that the corporations power could be used to make laws about employment relationships between corporations and their employees. In modern Australia, where the corporation is almost ubiquitous in business, that effectively meant the corporations power could be used to make laws about almost all employment relationships.

The constitutional validity of the WorkChoices legislation was challenged in the High Court of Australia in New South Wales & Ors v Commonwealth.[2] The Court decided by a majority of 5–2 in November 2006 that all the WorkChoices reforms were valid. This was a major moment in Australian constitutional law history and in the history of Australian federal-state relations, confirming that the Commonwealth's powers were much wider than anyone had previously thought in past decades, and that the corporations power in particular can be interpreted very widely to enable the Commonwealth to make laws about all sorts of topics never envisaged by those who had drafted the Constitution.

A 2008 amendment to WorkChoices further expanded the federal government’s reach into employer-employee relations when it prohibited awards which were determined by reference to state or territory boundaries or did not have effect in each state and territory.[3]

The Rudd Labor Government repealed the 2005 Act by the Fair Work Act 2009,[4] which established Fair Work Australia [5] which commenced operation on 1 July 2009. The enactment of the Fair Work Amendment Act 2012[6] renamed Fair Work Australia to the Fair Work Commission.

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