Justice Jeffrey Spender has ruled against Etheridge Shire Council in north Queensland, saying it was not qualified to be a trading or financial institution under the constitution, and thus, not an employer covered by Work Choices laws.

“The consequences of this conclusion are that the Etheridge Shire Council is not an ‘employer’ under the provisions of the Workplace Relations Act,” Justice Spender stated in his judgment.

He added it was “inconceivable” that the framers of the constitution intended that commonwealth should have powers to regulate the activities and business of the council.

The legal battle started when the Australian Workers Union (AWU), along with Australian Services Union and the State of Queensland, challenged the council’s attempt to implement a Work Choice style workplace agreement to cover its employees.

AWU national president Bill Ludwig said: “Our union always thought the idea that local councils could be defined as corporations – and so rope in all local government workers under the yoke of the hated Work Choices laws – was questionable.”

Mr Ludwig said while decision clearly meant the Federal Government could not make federal workplace laws to cover local government employees, the Local Government Association of Queensland (LGAQ) should be blamed for consistently promoting the “discredited” workplace laws to Queensland councils. 

LGAQ president Paul Bell defended the association, saying it would make no apology for seeking clarity on behalf of the council in a “complex” legal argument.

“Mr Ludwig…would do well to read Justice Spender’s judgment closely. Although the decision went against Etheridge, Justice Spender strongly vindicated the actions of the council in contesting the matter in an effort to have the uncertainty of constitutional corporation coverage addressed,” Cr Bell said.

“What we can assure the public of Queensland of is that its councils hold their workers, their abilities and devotion to their work in the highest regard.”

Local Government Association of Queensland executive director, Greg Hallam said this ruling would provide important case law around “the issue of a council being captured by the Work Choices legislation” and therefore, offer “greater legal certainty” to local councils.

“Justice Spender clearly evidenced the precariously uncertain position that local governments in Queensland found themselves in industrially and has strongly vindicated the actions of Etheridge Shire Council in contesting this matter in an effort to have this uncertainty addressed on behalf of all local governments,” Mr Hallam said.

The case was brought up late in 2007, at a time when the issue of Work Choices was a contentious one for Queensland councils, and one that had some bearing on the federal election result in 2007.

Mr Hallam said since then however, the State of Queensland, as part of its amalgamation of councils, “de-corporatised” all councils, excluding Brisbane City Council, to prevent the application of Work Choices in councils covered by the Local Government Act.

“As interesting as this case has been, it has no immediate operational implications or significant meaning for councils other than the possibility that it could influence the state government’s intentions on the future corporation status of councils, should the federal government not deliver the industrial reforms for local government which the state is seeking,” he said.