This decision of a Full Court of the Federal Court contains a particularly useful analysis of the legal principles to be followed when interpreting an industrial instrument such as an award or enterprise agreement, in particular that the words have primacy over past practice.
“Principles of construction of industrial instruments
An award, made under the FW Act, is an “instrument” recognised by the Acts Interpretation Act 1901 (Cth). As a consequence, the principles of construction in that Act apply to an award as if it were an Act, and as if each of the award’s provisions were a section of an Act: see s 46 of the Acts Interpretation Act; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 at [52]; Construction, Forestry, Mining and Energy Union (Construction and General Division) v Master Builders’ Group Training Scheme Inc [2007] FCA 435; 161 IR 86 at [33]. Therefore, an award must be interpreted in a way which promotes the purpose or object underlying the Act (s 15AA of the Acts Interpretation Act) and where extrinsic material may aid its construction: s 15AB of the Acts Interpretation Act; City of Wanneroo at [54]; Master Builders’ at [33].
The principles governing the construction of industrial instruments were recently distilled in Australian Workers’ Union v UGL Resources (Contracting) Pty Ltd [2025] FCAFC 107 at [12], concurring with and summarising the principles as contained in the Full Court in James Cook University v Ridd [2020] FCAFC 123; 278 FCR 566 at [65]:
(1) The starting point is the ordinary meaning of the words, read as a whole and in context (including the industrial context), citing City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362 at 378; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 at [53]; WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 at [197].
(2) A purposive approach is preferred to a narrow or pedantic approach — the framers of such documents were likely to be of a practical bent of mind, citing Kucks v CSR Ltd [1996] 66 IR 182 at 184; Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16]; WorkPac at [197].
(3) The interpretation turns upon the language of the particular agreement, understood in the light of its industrial context and purpose, citing Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241 at [2].
(4) Context is not confined to the words of the instrument surrounding the expression to be construed. It may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include ideas that gave rise to an expression in a document from which it has been taken, citing City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union at [53]; Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518; Australian Municipal, Administrative, Clerical and Services Union v Treasurer (Cth) [1998] FCA 249; (1998) 82 FCR 175 at 178.
(5) Recourse may be had to the history of a particular clause, citing Short at 518.
(6) A generous construction is preferred over a strictly literal approach, but the instrument should make sense according to the basic conventions of the English language, citing Geo A Bond and Co Ltd (in liq) v McKenzie [1929] AR 499 at 503-4; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union at [57], City of Wanneroo v Holmes at 380.
(7) Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry, citing City of Wanneroo v Holmes at 378-9; WorkPac at [197].
Although these principles are often cited, care must be exercised to ensure that there is not indiscriminate application of them to all “industrial instruments”, without accounting for differences in the nature of those instruments and how they have evolved over time under different statutory regimes regulating Australian industrial and workplace relations. The principles applicable to the interpretation of enterprise agreements made under the FW Act may not neatly apply to modern awards made under the same Act. Care must be taken to have regard to the statutory scheme under which instruments are made. We will return to this issue further below.
As will be evident from the disposition below, the parties, but particularly the MEU, sought to aid their interpretation of the disputed clauses by the relevant “context”, being the historical evolution of the awards and associated Tribunal (being the former Coal Industry Tribunal), Commission and Full Court decisions said to divine the intent or purpose of the provisions. These submissions appeared to mirror certain of the arguments before, and adopted by, the primary judge, as will be apparent from the above.
Whilst it may be accepted that account may be taken of the broader context (as observed by the Full Court in UGL, at points (3), (4) and (5) above), we would note the obvious: First, context is not an end in itself, the language of the instrument remains the start and end point: King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [123].
Secondly, the context needs to be established in fact and account needs to be taken as to what can truly be presumed from that context. As is evident from the primary judge’s reasons, certain presumptions were made as to what constituted the genesis for the disputed provisions, by the identification of certain historical stepping stones on the path to the current relevant iterations of the awards. However, the history does not reveal a complete path and the history does not reveal so clear a bright line as to intention as the MEU urged and the primary judge accepted.
Thirdly, within the consideration of context, submissions are made about the “intention” of the “framers” no doubt alluding to that aspect of Madgwick J in Kucks v CSR Ltd [1996] IRCA 141; (1996) 66 IR 182 at 184. Given an award has a legislative or quasi-legislative force in the process of construction, as adverted to by Wheelahan J in King at [122], the search is not for the actual subjective intent of the makers of the instrument, but the process of construction must direct attention to the words that are actually used, citing Zheng v Cai [2009] HCA 52; 239 CLR 446 at [28] (French CJ, Gummow, Crennan, Kiefel and Bell JJ); Certain Lloyd’s Underwriters v Cross [2012] HCA 56; 248 CLR 378 at [25] (French CJ and Hayne J); City of Wanneroo v Holmes [1989] FCA 533; 30 IR 362 at 379 (French J).
Fourthly, the inquiry is to discern the objective, expressed intention from the text of the instrument in light of context and purpose: Amcor Ltd v Construction, Forestry, Mining and Energy Union & Ors [2005] HCA 10; 222 CLR 241 at [2] (Gleeson CJ and McHugh J); SZTAL v Minister for Immigration & Border Protection [2017] HCA 34; 262 CLR 362 at [14] (Kiefel CJ, Nettle and Gordon JJ).
Fifthly, in this case the “intention” is said to have manifested from the surrounding industrial practices prior to or after the inception of the instrument. Care needs to be taken with respect to both. As to the former, it cannot be presumed merely because of a practice before the inception of an instrument that it was intended, without more (from the text or other extrinsic material) that the instrument sought to cement that practice. As to the latter, as the principles of associated with post-contractual conduct reveal, caution must be exercised. Different considerations arise when divining “intention” with respect to enterprise agreements (where parties have negotiated and sought approval from the Commission with respect to an agreement). The form of the bargain is not without complexity as recognised in Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84; 333 FCR 152 at [88]- [89] and does not sit comfortably with contractual notions given those who are the subject of the instrument may not have voted in favour of it at its inception: See the reasoning of the Full Court in Qube Logistics (Rail) Pty Ltd v Australian Rail, Tram and Bus Industry Union [2025] FCAFC 73 at [23]. Therefore, care must be taken when attempting to apply jurisprudence arising in the context of enterprise agreements to industrial awards and vice versa.
Sixthly, the derivation of “intention” involves consideration of the particular species of instrument, taking into account how the instrument was created, as divined from the process required under the applicable statute. By way of illustration, the process by which a “modern award” has evolved is very different to its predecessor instruments and this informs what may be gleaned as to the “framer’s intention”. Critically, unlike predecessor instruments, the making of a modern award does not involve the resolution of an industrial dispute between an individual employer and its employees, or an organisation of organisations representing one or particular employers or employees, or employers or employees in the relevant industry or trade. Rather, under Pt 2-3 of the FW Act, the Commission must undertake the task of formulating the terms of a general award that will regulate the relationship of employers and their employees nationally, so as to achieve the modern award’s objective in respect of an entire industry or particular persons or classes of persons covered by the award (ss 134, 143).
Additionally, attention must be given to when the modern award was made and the applicable award modernisation regime. The award modernisation process commenced in March 2008. Part 10A of the former Workplace Relations Act 1996 (and thereafter under Pt 2-3 of the FW Act) prescribed (and now prescribes) the process for the Commission to follow when it makes a modern award. Notably, however, a review of these respective pieces of legislation demonstrates that their objects, the process and what was to be contained in modern awards is different. A stark illustration of the difference in the legislative regimes was that initially, according to the former s 576C of the Workplace Relations Act 1996 (Cth), the genesis of a modern award was that the Minister of Workplace Relations made a written request to the President of the Commission stipulating in that request the process to be carried out, the time by which that process must be completed and could include what matters should be included in the modern award. As observed in Beauglehole v Griffin Coal Mining Co Pty Ltd [2018] FCA 899 at [44], 122 modern awards commenced on 1 January 2010. This illustrated the monumental overhauling of the award system, to create (by consolidation of thousands of awards) modern awards, in a very short period of time.
Another difference, by way of example relevant to this appeal, is s 147 of Part 2-3 of the FW Act requires that a modern award must include terms specifying or providing for the determination of the ordinary hours of work for each classification under the Award. The former modern award provisions did not so require such terms.
Accordingly, given the statutory overlay of the award modernisation process, the search for the “intention” in the context of the consolidation of many awards, involving many industries, parties and prior custom and practice, can be difficult if not impossible. Furthermore, to the extent that the Commission gave reasons as part of the modern award process, they were often limited (understandably given the gargantuan task being undertaken). As a consequence, the jurisprudence considering the construction of modern awards, and the search for “intention”, reveals the caution that must be exercised when looking back at pre-award modernisation awards and submissions made to the Commission in the context of those earlier processes and extrapolating out that such an “intention” was thereafter adopted as part of the award modernisation process: See for example Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638 at [36]- [38]; Zader v Truck Moves Australia Pty Ltd [2016] FCAFC 83 at [36].
Further, we would observe that, by this award modernisation process (and despite its haste in the early years), it is now ordinary that many legal hands are involved in the process leading to the creation of such modern awards and therefore, times have changed. It should not be assumed, as was previously the case the instruments may have been drafted by lay persons. Modern awards are made and varied by the Fair Work Commission. Its President is a judicial officer and many of its members have been qualified lawyers and are otherwise drawn from a wide pool of professionals with expertise in the field of industrial and workplace relations. It follows that, unlike the past, it should not be assumed that modern awards have been drafted by lay persons: cf Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union ( Nine Brisbane Sites Appeal) [2019] FCAFC 59; 269 FCR 262 at [5] (Allsop CJ); Kucks v CSR Ltd at 184 (Madgwick J).
More generally, care should be exercised in assuming, without good and principled reason, that the rights, entitlements and duties of employers and employees under a “modern” award made by a contemporary industrial tribunal should be determined by practically minded employers and employees having regard to the annals of industrial arbitration reports in respect of industrial awards and instruments made under entirely different legislative schemes.’
OS ACPM Pty Ltd v Mining and Energy Union [2026] FCAFC 59 per Raper and Shariff JJ delivered 7 May 2026