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State law alters impairs or detracts from the

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State law ‘alters, impairs or detracts from the operation’ of the Cth law. Is the Commonwealth attempting to bind the state in a way that could curtail the capacity of the state to function?
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A Cth law may apply to a state, in which the state may seek to rely on the State Immunity doctrine: Melbourne Corporation. In order for the State to be immune 1. As a matter of statutory construction the Act will need to intend to bind the state: Bropho 2. The Act will need to breach the constitutional limitation 1. Does the Cth intend to bind the states? Applying Bropho , the Crown has presumptive immunity from Cth legislation unless there is an express or necessarily implied intention for it to be bound Intention can be demonstrated by language and context o Express words: ‘This Act binds the Crown’ o By necessary implication when general words are used: Bropho Examine ‘all circumstances’ Bropho Content and purpose of the particular provision Whether the ‘purposes of the statute would be otherwise wholly frustrated’ Province of Bombay 2. The Cth act will breach the constitutional limitation if, in substance or operation, QEC per Deane J, it entails a ‘special burden’ or a ‘curtailment of capacity’ on the State’s ability to function as a government: Austin per Gaudron, Gummow and Hayne JJ. Pre-engineers implied immunity of instrumentalities prevented Cth laws binding states and vice versa. Engineers Case overturned this doctrine allowing Cth legislation to bind state government instrumentalities (and in obiter suggested reciprocity). State Banking case established two exceptions to the Cth’s ability to bind states: Discrimination – Cth could not discriminate against states by singling then out for special treatment: applied in QEC Curtailing state’s ability to exist and function as such – any action on the part of the Cth (whether specific, or laws of general application that would this effect) which would ‘prevent the exercise of their normal and essential functions of government’ would necessarily be invalid However, in Austin the HCA reduced this to a single test: whether the Cth law curtails the capacity of a state to function A. Single test: Austin Does the law destroy or curtail the continued existence of the States capacity to function as governments? In AEU curtailing a state’s ability to function occurs where the Cth legislates over: Right to hire and dismiss employees, including the length of employment and conditions of dismissal Right to control senior members of government including ministers, ministerial advisers, heads of department, parliamentary officers and judges
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Therefore two facts are ‘critical’ to the functioning of the State and are protected by the immunity: o ‘the right to determine number and identity of employees whom it wishes to employ’ o ‘the number and identity of persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds’ o
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