In the case, the High Court struck down a Commonwealth law on the grounds that it impaired the capacity of a state to function as an independent government, the first time that the Court has taken such action.

[3] Under a Commonwealth law, the Australian Industrial Relations Commission could refrain from hearing a dispute if it thought it could be handled in a state body.

In a joint judgment, the Court accepted the tests of discrimination and structural integrity as laid down in Melbourne Corporation v Commonwealth.

Firstly, even though the purpose of the law was to discriminate against Victoria, that is not a factor to consider.

Being able to determine minimum wages and working conditions of its employees, especially those in the higher levels of government, is critical to a state's capacity to function.