Facts
The High Court of Australia in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 (‘Engineers Case’) considered the scope of section 21AA of the Conciliation and Arbitration Act (Cth). The Conciliation and Arbitration Act was passed purportedly in reliance on section 51(xxxv) of the Australian Constitution. Section 51 (xxxv) of the Constitution refers to the Parliament of the Commonwealth having power to make laws with respect to “conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of one State”.
The Amalgamated Society of Engineers was a labour union that applied for an award establishing wages and conditions for their members working for three state government employers. They wished to apply this award – which offered higher wages – to the state government employers using the Conciliation and Arbitration Act.
Issue
The main issue was whether the word “industrial” in section 51(xxxv) of the Australian Constitution encompasses legislation by the federal government regulating a state government and its employees. In other words, could the Conciliation and Arbitration Act bind a state government’s Crown or should it be restricted to private sector employers?
Decision
The key principles can be ascertained from the reasons of Knox CJ, Isaacs, Rich and Starke JJ.
First, the Crown is indivisible. The two main principles that influence interpretation of the Constitution are the common and indivisible sovereignty of the British empire and the principle of responsible government at the national level. This view treats the Constitution as effectively establishing a unitary state, with the states being subsumed within a greater whole. Federalism is by this understanding just a convenient form of organization, not a genuine bulwark for state rights.
Second, the Constitution should be interpreted as an ordinary statute in the broadest manner possible, because of its aforementioned status as an expression of imperial sovereignty. The majority judgement said that “it is the chief and special duty of this Court faithfully to expound and give effect to [the Constitution] according to its own terms, finding the intention from the words of the compact, and upholding it throughout precisely as framed”. The Constitution should be interpreted according to the “ordinary rules of construction” in which the document is “read…naturally in the light of the circumstances in which it was made, with knowledge of the combined fabric of the common law, and the statute law which preceded it”.
Third, the Commonwealth Parliament is presumed to possess “plenary” authority unless the Constitution says otherwise. The court noted the “possible abuse of powers is no reason in…law for limiting the natural force of the language creating them…it rests upon those who rely on some limitation or restriction upon the power, to indicate it in the Constitution”.
The case established a novel approach that favours expanding federal government power by minimising the importance of state rights protections in sections 106 and 107 of the Constitution. Because of this approach, the doctrine of reserved powers and the doctrine of implied immunity of instrumentalities are no longer good law.
Outcome
The Court – five judges against one dissent – decided in favor of the Amalgamated Society. Disputes between the union and a state government could be heard in the Commonwealth Court of Conciliation and Arbitration since the Commonwealth Government has the power to make awards binding on state government employers. As the Court put it, “We therefore hold that States…when parties to industrial disputes in fact, are subject to Commonwealth legislation under pl. xxxv of sec. 51 of the Constitution”.
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