The states and the unions challenged the validity of the new laws, saying they were unconstitutional because they were set up under the corporations power in the Constitution.
However the High Court has found the laws are valid, and that it was appropriate for the Government to base its new laws on the corporations section of the Constitution.
The Court also rejected the challenges to particular sections of the Act.
Two of the seven judges, Micheal Kirby and Ian Callinan, dissented from the majority.
Justice Kirby, in his dissenting decision, said Work Choices should be declared completely invalid and declared the case important in the context of constitutional power in Australia.
"The majority concludes that not a single one of the myriad constitutional arguments of the states succeeds," he said.
"Truly this reveals the apogee of federal constitutional power and a profound weakness in the legal checks and balances which the founders sought to provide to the Australian Commonwealth."
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