Corporations Power Problem PDF

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The Commonwealth Parliament enacted the Paid Parental Leave Act 2007 (Cth). Section 4 of this Act provides that: Eligible employees of an employer are entitled to three months paid parental leave. Section 3 of this Act states that: (1)

This Act only applies to employers that are: (a) constitutional corporations; (b) contractors providing services to constitutional corporations.

(2) A constitutional corporation means a corporation to which s 51(xx) of the Constitution applies. The Christian Brothers Inc is a body set up for the purpose of advancing Christian principles. It owns various properties in Melbourne; some of which it uses as church premises while others are rented out. It also has contracts to provide counselling services to the employees of large commercial corporations. Is Christian Brothers Inc required to provide paid parental leave to its employees under the Paid Parental Leave Act 2007 (Cth)?

Notes: - Constitutional corporation  is it a trading and financial corporation? Answer: The Corporations Power, under section 51 (xx) of the Constitution, stipulates that the ‘Parliament shall…have power to make laws for the peace, order and good governance of the Commonwealth with respect to: A. Foreign Corporations and; B. Trading or Financial Corporations…’. Foreign corporations, according to New South Wales v Commonwealth (Incorporation Case) (1990), refers to corporations which are formed outside the limits of the Commonwealth. Thus, we can conclude that the facts of this case does not portray those of foreign corporations. On the other hand, trading or financial corporations are formed within the limits of the Commonwealth, making them a ‘constitutional corporation’. According to the facts of the case, as per section 3(1)(a) of the Paid Parental Leave Act 2007 (Cth), it only applies to constitutional corporations. Therefore, the issue at hand is determining whether or not Christian Brothers Inc is a trading or financial corporation as per the corporations power. In order to identify a trading or financial corporation, the Courts have considered two tests; an Activities test and a Purpose test. It was concluded in the case of Queensland Rail (2015) that the preferred approach to examining the features of the corporation was to use both tests. In examining the purpose of the Christian Brothers Inc, it is stipulated that they are merely a corporation set up for the ‘purpose of advancing Christian principles’. However, in

examining the activities of the body, it is evident that Christian Brothers Inc is making revenue off both the various rented out properties in Melbourne and the counselling services they provide to the employees of large commercial corporations. It is reasonable to question the relevancy of providing counselling services as a means of advancing Christian principles and furthermore, their connection of owning and renting these various properties in Melbourne and their purpose as a body. However, the degree of activity which makes a corporation trading or financial must be assessed. In the case of R v Federal Court of Australia; Ex parte WA National Football League (Adamson’s Case) (1979), the Court was assessing whether the football club was a trading corporation. Mason J had a primary focus on the activities of the club, whereby the gate receipts, distribution of income against clubs and sources of income through broadcasting alongside the size of the revenue was assessed. He alluded to the club’s purpose as merely financial gain through his assessment. However, Stephen J, dissenting, looked at the clubs purpose and argued that there was no sharing of profits amongst members and that the purpose of the club was merely in promoting the game. This leads to the question of what degree of activity makes such a corporation financial or trading. Settled in the case of State Superannuation Board of Victoria v Trade Practices Commission (1982), the majority found that financial activities must form a substantial proportion of total activities, even though other more extensive non-financial, non-trading, activities also take place. The Majority’s view was held in Adamson’s Case and the football club was held as a trading and financial corporation under section 51 (xx) of the constitution. Therefore, it is reasonable to argue that the financial gains surrounding rent and the counselling service amounts to a ‘substantial proportion of total activities’, outweighing the purpose of merely advancing Christian principles. As the corporations power allows the Commonwealth to ‘permit or prohibit a trading This now brings a question of interpretation concerning what activities of a corporation can be regulated. Isaac J, in the case of, Huddart, Parker and Co Pty Ltd v Moorehead (1909), formulating the old view, argues that empowering law that depends on simply the specific objects of the power are distinguishable from domestic corporations, for example, for religious purposes, such as Christian Brothers Inc. Isaac J’s distinction is still cited in the broad view adopted within the case of New South Wales v Commonwealth (Work Choices Case) (2006)...