The Secretary, Prime Minister’s Department, has forwarded the following Memorandum for advice:

The attached copy of a memorandum received from the Secretary, Works and Railways Department, on the above subject, is forwarded by direction.

Before the matter is submitted for Ministerial consideration advice is desired as to the legal position of the Commonwealth in the event of it desiring application by consent of the Act to the Commonwealth as an employer.

The Memorandum of the Secretary, Works and Railways Department, reads as follows:

In 1922 the Queensland Government passed the Unemployed Workers’ Insurance Act. Regulations under this Act have been forwarded to this office by the Acting Works Director for Queensland. These regulations provide, inter alia, that every employer within the State shall contribute to the Fund the sum of 3d. per week with respect to each worker whose rate of wages is fixed by the Award or Agreement, and shall deduct from the wages of each such worker a similar sum, and both contributions shall be paid into the Fund.

Since the Act was passed, this Department has carried out very little day labor work in Queensland, but at the present time, owing to urgency, is erecting the South Brisbane Telephone Exchange building by this method. The workmen have produced their cards as prescribed in the Regulations under the Act for affixing the stamps, and were informed by the Works Director that the Act does not apply to the Commonwealth.

The Commonwealth Crown Solicitor has informed the Postmaster-General’s Department that the Commonwealth does not come within the definition of an employer under the Act, and he is of opinion that the Act does not apply to the Commonwealth or Commonwealth Public Servants, and that the Commonwealth cannot compel employees to contribute to the Fund.

The Crown Solicitor’s ruling was referred to the Public Service Board which advises that the question of application by consent of the Act to the Commonwealth as an employer is one of Government policy.

The Works Director, Queensland, has raised the point as to what will be the position of the employees who have been out of employment for any time after ceasing work with the Commonwealth, and, in consequence, apply for sustenance as provided in the Act. It is considered that a general ruling should be given, which would apply to all Commonwealth Departments employing labor in Queensland, and the matter is referred to your Department, in order that a general policy might be decided upon.

The position of the Commonwealth in regard to the Act is explained in the Crown Solicitor’s Opinion (with which I agree) as follows:

The Act, in my opinion, does not apply to the Commonwealth or to Commonwealth Public Servants.

The scheme of the Act generally is to provide for an Unemployed Insurance Fund by means of contributions from the following sources, viz.,

1. Workers;
2. Employers of workers; and
3. Money provided by the State Parliament.

The scheme is compulsory as regards workers and employers, and is wholly subject to the jurisdiction of the State.

It is clear that the Commonwealth does not come within the definition of employer under the Act, and it is clear also that it is not within the compulsory provisions of the Act.

If the Commonwealth is not an employer under the Act, it is difficult to see how a Commonwealth Public Servant could be a worker under the Act, as the definition of ‘Employer’ fits in with that of ‘Worker’ and one cannot exist without the other.

On the construction of the Act itself, and quite apart from constitutional considerations, I think that the Act does not apply to the Commonwealth or to Commonwealth Public Servants.

From a constitutional point of view, I think that a State Act would not bind the Commonwealth. See Municipal Council of Sydney v. Commonwealth 1 C.L.R. 208.

A Commonwealth Public Servant in his capacity as citizen would be subject to State law, but I do not think he would be in his capacity of Commonwealth Public Servant, as it would mean that he would, as such, be subject to State domination. Under section 52 of the Constitution the Commonwealth Parliament has exclusive power to make laws with respect to transferred Departments, and a State Parliament has, I think, no power to legislate as regards officers in the Postmaster-General’s Department in their capacity as such officers.

As the Commonwealth does not come within the definition of ‘Employer’ in the State Act, I am doubtful whether the Act as a whole could be applied to the Commonwealth. There are certain provisions which, obviously, could not be applied, e.g. section 7, which provides that the State Government may direct employers to take steps to remedy unemployment, and that the Unemployment Council may impose penalties on employers who do not comply with such directions.

Possibly an arrangement might be made with the State for the passage of legislation applying section 5 of the Act to the Commonwealth in relation to temporary and casual employees only.

In my opinion, regulations could be made under section 97(1)(e) of the Public Service Act 1922 to give effect to such an arrangement in regard to temporary employees. In the case of casual employees, it would be necessary, when engaging such employees, to arrange for the deduction from their wages of unemployment insurance contributions; otherwise it might be difficult to enforce payment of such contributions. I think such an arrangement could reasonably be regarded as incidental to the employment of casual workers.

[Vol. 21, p. 106]