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Etheridge Shire Council is not a trading corporation: Fed Court
22 August 2008
Etheridge Shire Council, which employs 65 people in Qld, is not a constitutional corporation and therefore was not entitled to lodge an employee collective agreement under the WR Act, the Fed Court has ruled. In a long-awaited decision shedding light on the status of local councils, Justice Jeffrey Spender on Aug 20 found the collective agreement the council lodged with the Employment Advocate on Oct 21, 2006 did not come into operation at any time and had "no force and effect as a workplace agreement under the WR Act". He said the "central question" to be decided in the case was whether the council, which had existed since 1882, was a constitutional corporation. This turned on whether it was a "trading or financial corporation". The AWU Qld brought the application challenging the council's ability to lodge a federal agreement, maintaining it was not a constitutional corporation but a creature of the state.
Justice Spender agreed Etheridge Shire Council was not a trading or financial corporation and therefore not an "employer" under provisions of the WR Act. "In my opinion, it is inconceivable that the framers of the Constitution and the parliament which enacted it intended that the Commonwealth should have the powers ... in respect of a local govt, which is a body politic of a state govt, having legislative and executive functions," Justice Spender said. If looking at it from a proportion of trading activities perspective, as advocated by the Commonwealth during hearings for the High Court Work Choices case, the trading activity of Etheridge was "quite insignificant" to its overall activities, he said. Its trading activities included operating a visitor's centre, road works, private works, hostel accommodation, a childcare centre, office space rental, residential property rental, sale of land, hire of halls, sale of water, and services provided by the Shire to the Fed Govt. "All of them, in my opinion, including even the road works aspect of the activity of the council, after close analysis, entirely lack the essential quality of trade," Justice Spender said. "Almost all of them run at a loss." Added to that, all the services had "public benefit" rather than financial objectives, he said. If Etheridge had been deemed a trading corporation, the Commonwealth would have the power to regulate it under the WR Act, he said. "Such powers would annihilate any concept in the Constitution of a federal balance, and in a very significant way, permit the Commonwealth to nullify the right of the state to govern in its local govt areas." (AWU Qld v Etheridge Shire Council. FCA 1268. 20/8/08)
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- Explanatory Memorandum for Stronger Safety Net Bill (PDF)
- Independent Contractors Act 2006
- Workplace Relations Legislation Amendment (Independent Contractors) Act 2006
- Workplace Relations Act
- Workplace Relations Amendment (Work Choices) Act 2005
- AIRC Rules 2007
- Workchoices Challenge: NSW v Commonwealth [2006] HCA 52
- Australian Industrial Relations Commission
- Workplace Authority
- Workplace Ombudsman
- Australian Building and Construction Commissioner
- Department of Employment and Workplace Relations
- ALP Election 2007 policy documents
- Australian Fair Pay Commission
- Award Review Taskforce
- AustLII: Workplace Relations Law Library
