The Fair Work Act 2009 defines constitutional corporations as 'a corporation to which paragraph 51(xx) of the Constitution applies.'[1]
The Australian Constitution defines constitutional corporations as 'Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth'.[2]
This definition has two limbs that are 'comprehensive alternatives'.[3] This means that constitutional corporations are either 'foreign corporations' or 'trading or financial corporations formed within the limits of the Commonwealth'. Therefore, a foreign corporation does not need to be formed within the limits of the Commonwealth or be a trading or financial corporation to be classified as a constitutional corporation.[4]
Many incorporated employers in the private sector who sell goods or provide services for a fee will easily satisfy the criteria of a trading or financial corporation.[5]
The issue of whether an employer is a constitutional corporation usually arises where the employer is a not-for-profit organisation in industries such as health, education, local government and community services.[6]
A foreign corporation is a corporation that has been formed outside of Australia.[7]
A corporation which is formed outside of Australia, which employs an employee to work in its business in Australia, is likely to be a national system employer and therefore fall within the jurisdiction of the Fair Work Commission.[8]
Australia may include the Territory of Christmas Island and the Territory of the Cocos (Keeling) Island.[9]
There may be instances where people employed on ships or fixed platforms (both within and outside of the Exclusive Economic Zone and the Continental shelf) will be deemed to be performing work within Australia.[10]
Trading denotes the activity of, providing for reward, goods or services.[11]
The Commission will consider the nature of a corporation with reference to its activities, rather than the purpose for which it was formed.[12]
It does not matter if trading activities are a corporation's 'dominant' activity or whether they are merely an 'incidental' activity, or entered into in the course of pursuing other activities.[13]
A corporation will be a trading corporation if the trading engaged in is 'a sufficiently significant proportion of its overall activities'.[14]
A corporation can be a trading corporation even if it was not originally formed to trade.[15]
One factor that may be considered is the commercial nature of the activity.[16] When considering the commercial nature of a corporation's activity, the Commission will look at a number of factors, including:
A financial corporation is one 'which borrows and lends or otherwise deals in finance as its principal or characteristic activity...'[18]
The approach taken in deciding whether the activities of a corporation are such that the corporation should be considered to be a financial corporation is the same as the approach taken in deciding whether a corporation is a trading corporation.[19]
In Western Australia, a company which is not a constitutional corporation is generally not a national system employer and therefore not covered by the national unfair dismissal laws.
However, if one of the partners of a partnership is a trading corporation (such as a Pty Ltd company), the partnership can be a national system employer.[20]
A partnership is the relationship that exists between persons carrying on a business in common with a view to profit.[21]
A partnership is not a separate entity from its constituent parts. Each partner is jointly and severally liable for the partnership's obligations.[22]
A person can be defined as a separate legal entity, recognised by the law as having rights and obligations.
There are two categories of person:
[1] Fair Work Act s.12.
[2] Australian Constitution s.51(xx).
[3] New South Wales v Commonwealth 1990 HCA 2 (8 February 1990), [(1990) 169 CLR 482, at p. 504 (Deane J)].
[4] ibid.
[5] A Stewart, Stewart’s Guide to Employment Law (4th ed, 2013) at p. 36.
[6] ibid., at p. 34.
[7] New South Wales v Commonwealth 1990 HCA 2 (8 February 1990), [(1990) 169 CLR 482, at p. 504 (Deane J)].
[8] See also Gardner v Milka-Ware International Ltd [2010] FWA 1589 (Gooley C, 25 February 2010) at para. 24.
[9] Fair Work Act s.31.
[10] Fair Work Act ss.33‒35.
[11] Re Ku-Ring-Gai Co-operative Building Society (No 12) Ltd [1978] FCA 50 (18 December 1978), [(1978) 36 FLR 134, at p. 139].
[12] R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 (27 February 1979), [(1979) 143 CLR 190, at p. 208 (Mason J)].
[13] ibid., [(1979) 143 CLR 190, at p. 239].
[14] ibid., [(1979) 143 CLR 190, at p. 233].
[15] Garvey v Institute of General Practice Education Incorporated [2007] NSWIRComm 159 (28 June 2007) at para. 30, [(2007) 165 IR 62].
[16] University of Western Australia v National Tertiary Education Industry Union, Print P1962 (AIRC, O’Connor C, 20 June 1997) at p. 3; citing R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 (27 February 1979), [(1979) 143 CLR 190, at p. 209].
[17] University of Western Australia v National Tertiary Education Industry Union, Print P1962 (AIRC, O’Connor C, 20 June 1997) at p. 3; citing Re Australian Beauty Trade Suppliers Limited v Conference and Exhibition Organisers Pty Limited [1991] FCA 154 (18 April 1991) at para. 11, [(1991) 29 FCR 68, at p. 72].
[18] Re Ku-Ring-Gai Co-operative Building Society (No 12) Ltd [1978] FCA 50 (18 December 1978), [(1978) 36 FLR 134, at p. 138].
[19] State Superannuation Board v Trade Practices Commission (1982) HCA 72 (14 December 1982) at para. 19 (Mason, Murphy and Deane JJ), [(1982) 150 CLR 282, at p. 303].
[20] McInnes v North Perth Vet Centre [2015] FWC 2720 (Gooley DP, 21 April 2015) at para. 16.
[21] Butterworths Australian Legal Dictionary, 1997, at p. 851.
[22] McInnes v North Perth Vet Centre [2015] FWC 2720 (Gooley DP, 21 April 2015) at para. 13.
[23] Butterworths Australian Legal Dictionary, 1997, at p. 870.