Do we still live in a federation? Should we care?

The High Court handed down an important judgement today on the legality of the federal government's industrial relations legislation. As expected, they found that it was legal. It doesn't really take a lawyer to see that the Constitution fairly explicitly gave power to the federal government in the relevant area. There is only one section (51xxxv) that refers to state powers in relation to industrial relations and that refers only to the settlement of disputes that don't extend outside state boundaries, not to the establishment of the framework in which such disputes might take place. My guess is that the only point of discussion is over what constitutes a 'corporation'.

Commonwealth Of Australia Constitution Act
Chapter I. The Parliament.
Part V - Powers of the Parliament

51.The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: -
....(xx.) Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth...
...(xxxv.) Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State...

Chapter V. The States.
109. When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid....

From Wikipedia:
In the first two decades of its existence, the High Court adopted a doctrine of reserved State powers combined with "implied inter-governmental immunities". The essence of the first part of the doctrine was that grants of power to the Commonwealth in the Constitution should be read in a restrictive way so as to preserve as much autonomy as possible for the States. The essence of the second part of the doctrine was that the Commonwealth and States were immune to each other's laws, and could not mutually regulate each other's governmental apparatus: for instance, they could not tax the wages of each other's employees or force each other's employees to submit to compulsory industrial arbitration.

There was little basis in the text of the Constitution for this doctrine although the judges who developed it had all been active members of the Constitutional Conventions and believed that it was implied in the nature of federalism itself.

...The doctrine was swept away in the 1920 decision in the Engineer’s case (after changes in the composition of the Court).[NB: another industrial relations case] The Court now insisted on adhering only to the language of the constitutional text read as a whole in its natural sense and in light of the circumstances in which it was made: there was to be no reading in of implications by reference to the presumed intentions of the framers. In particular, since there is no mention of "reserved State powers," only one express inter-governmental immunity (regarding property taxes: section 114), and, an express provision asserting the superiority of valid Commonwealth laws over inconsistent State laws (section 109), there was no longer any room for the doctrine previously asserted in favour of the States.

While the new IR legislation certainly demolishes a lot of rights that workers have gained over the past century, it isn't at all clear to me that the latest ruling on the Constitution is disadvantageous. At the moment we have Labor governments in all states and a Liberal federal government. It could just as easily go the other way. The states do not have a good historical record in protecting human rights - particularly those of Aborigines. What we need to do now is change the government at the federal level to get rid of this rotten legislation.

At a deeper level, it isn't clear that trade unions have much of a future in their present form. One consequence of the IR system we've had for the past century is that the unions have become part of a tripartite club revolving around the Industrial Relations Commission. Since wages and conditions were largely settled in a legal environment, membership and activism became secondary to the raison d'etre of the unions. Basically unions only survive in the diminishing proportion of large-scale units (especially the public service). Now that casualisation of the workforce has taken hold in a big way, it is difficult for them to recruit members - there has been a massive swing in bargaining power towards the employers and the destruction of the old arbitration system is merely a reflection of this, not its cause.

One could also make a point about the Prime Minister's interpretation of 'Australian values', which for most people includes the notion of fairness. The way Howard interprets this is extremely narrow - the Act in question is called the 'Workplace Choices' Act. This effectively means that employers get more choice over hiring and firing, while workers get more choice about whether to accept low pay or starve. The PM is clearly against the idea of workers being 'coerced' by unions into accepting high wages and protected working conditions. One of the biggest changes that the legislation brought about was the abolition, for businesses employing fewer than 100 workers, of the 'unfair dismissal laws' which, according to the government, were unfair to employers because they couldn't just get rid of anybody without having a good reason. In PM-speak, employers were being 'harrassed' by court cases over unfair dismissal. Under the new law, they won't be harrassed anymore and they can probably harrass their workers as much as they like. All's fair in love and class war.