This extract from a decision of the Fair Work Commission contains an excellent summary of the legal principles which are used to interpret an industrial instrument such as an enterprise agreement.
“Consideration
[68]
I have taken into account all of the submissions and evidence that have been provided by the parties.
[69]
Whilst the courts have recently reinforced the relevant principles that a Court and Tribunal should follow when interpreting enterprise agreements, the most concise and comprehensive decision which collated all of the historical precedent was the Commission’s Full Bench decision in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri).8 Relevantly, in Berri the Full Bench enunciated 15 principles:
“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:
1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a
[2026] FWC 2347
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disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
i. the text of the agreement viewed as a whole;
ii. the disputed provision’s place and arrangement in the agreement;
iii. the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
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10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
i. evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
ii. notorious facts of which knowledge is to be presumed; and
iii. evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”
[70]
From my experience, dispute settling procedures (DSPs) were introduced to ensure that there were proper discussions and consultation about a dispute before it was referred to the Commission for resolution. Disputes procedures provide an opportunity for the parties to discuss the issues pertaining to the dispute at an early stage of the process. Relevantly, the provision applies equally to both employers and employees. Disputes procedures also give senior management an opportunity to be involved in the process, to ensure that disputes are not referred to the Commission before they become aware of the issues pertaining to the dispute
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and have a chance to resolve it. However, this dispute was initiated by the senior management of the Respondent. Without discussion, consultation or notification, to any level of the Union, its membership, or the Respondent’s employees, Ms Roberts and the Respondent’s CEO, Mr Brett Lewis, unilaterally determined and then deducted the accrued annual leave and personal leave of the employees for the period that they were involved in PIA or subjected to employer response action. I have taken this into account.
[71]
I am bewildered that Ms Roberts “was quite cranky” that she didn’t know about this dispute being notified to the Commission, on the basis that she was the one who started the dispute. The fact that she directed the payroll officer to deduct the employees’ accruals without discussion is not disputed, nor is the fact that Ms Roberts did not advise Mr Clements of her actions. For the Respondent to now submit that the Commission should not determine this matter because the Applicant has allegedly not complied with the final step of the DSP is perplexing. I have taken this into account.
[72]
I conducted a Conciliation Conference in relation to this dispute on 11 February 2026. Amongst others, the Conference was attended by Mr Michael Taggart, the Northern District Vice President of the Union, and Mr Luke Murray, the Chief Operating Officer of the Respondent. Ms Roberts testified at the Hearing that the fourth step in the DSP would involve a meeting with the relevant union official and Mr Murray.9 On the basis of the discussion that took place at that Conference, at which Mr Murray and Mr Taggart were active participants, I am confident that this dispute would not have been resolved during a separate meeting between Mr Murray and Mr Taggart, if it were held. Further, knowing that Mr Murray’s superior, Mr Lewis, had endorsed the deduction of employees’ accrued leave, is another reason why I am confident that Mr Murray would not have changed the position of the Respondent. I have taken this into account.
[73]
One of the objects of the Act is for matters to be resolved by the Commission in a quick and efficient manner. During the Hearing, I adjourned for a short period of time, following the conclusion of Ms Roberts’ evidence, to allow Mr Fredericks to obtain instructions as to whether the CEO would be prepared to take a phone call from the Vice President of the Union in order to satisfy the final step of the DSP. After the adjournment, the Respondent advised that they were not prepared to adopt that suggestion but that they were prepared to adjourn the proceedings for a week to allow for a discussion to take place. The Applicant did not agree and the Hearing continued to its conclusion, with the Respondent pressing its jurisdictional objection. I was surprised at the steadfast response of the Respondent. Obviously their focus was on point-scoring rather than resolving the dispute. If the CEO wanted to change his mind in relation to this action that he endorsed, he simply needed to reverse the direction given to the payroll department or to his barrister. He did not need a meeting with the Vice President of the Union. I have taken this into account.
[74]
In Osborne v QCity Transit Pty Ltd T/A CDC Canberra (Osborne),10 Slevin DP dismissed a jurisdictional objection from the respondent in relation to the non-compliance of a disputes procedure on the basis that the process should be read with an eye to common sense. His Honour referred to the Federal Court decision in Maersk Crewing Australia Pty Ltd v Construction, Forestry, Mining, Maritime, Mining and Energy Union (No 2)11 where Colvin J said at [86]:-
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“The terms of a procedure for resolving disputes should not themselves be construed in a manner that turns them into an instrument for generating disputes as to whether the procedure itself has been followed. Such provisions must be construed having regard to their evident purpose as providing a mechanism by which to encourage discussion and resolution. They should be interpreted ‘practically and with an eye to common sense’ having regard to the context in which they will be applied so that they can be implemented ‘in a clear way on a day-to-day basis at work sites’, as seen in decisions such as Ramsay v Menso [2018] FCAFC 55; (2018) 260 FCR 506 at [39] (Dowsett and Collier JJ), applying Australian Building and Construction Commissioner v Powell [2017] FCAFC 89; (2017) 251 FCR 470 at [15]. See also, Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J); and City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813 at [57] (French J).”
(My emphasis)
I have taken this into account
[75]
Further, in Welch v Telstra Ltd,12 a Full Bench of the Commission made a number of relevant comments in relation to the strict compliance of DSPs:-
“[42] It is not uncommon for a dispute resolution provision of an enterprise agreement to provide for attempts to be made to resolve a dispute prior to it being referred to the Commission for conciliation or arbitration either in general terms or by reference to defined ‘steps’ to be taken to endeavour to resolve a dispute. Whether any ‘steps’ described in a disputes process are intended to prescribe mandatory limitations on access to subsequent processes of discussion, conciliation or arbitration is a matter that turns on the proper construction of the relevant agreement. At its heart, the resolution of a question of construction turns upon the language of the instrument, understood in light of its industrial context and purpose: Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 at [2] (Gleeson CJ and McHugh J) and [66]-[67] (Kirby J). Long-standing authority suggests it is justifiable to read an award or industrial agreement to give effect to its purposes despite mere inconsistencies or infelicities of expression, that meanings which ‘avoid inconvenience or injustice may reasonably be strained for’ and that an agreement must not be construed ‘in a vacuum divorced from industrial realities’: Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J); Workpac Pty Ltd v Skene [2018] FCAFC 131; (2018) 264 FCR 536 at [197] (Tracey, Bromberg and Rangiah JJ).
[43] Any procedural requirements set out in a dispute resolution provision should generally be construed with a degree of flexibility consistent with the industrial context in which those clauses are drafted and intended to operate: Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2) [2020] FCA 951; (2020) 298 IR 447 at [61] (Flick J). In this context, the decision of Bromberg J in Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2017] FCA 1245 is, in our view, instructive. That case concerned the construction of a dispute resolution process in an enterprise agreement which set out a four-step process involving an initial discussion with a Team Leader and then referral to the relevant Line Manager, discussion between an employee representative and the
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Executive Manager and then referral to the Commission. Bromberg J considered that the purposes of a disputes process in an enterprise agreement constituted significant contextual matters to be considered when construing its terms. His Honour said (at [78]):
It is important to bear in mind the ultimate purpose of dispute resolution clauses found in enterprise agreements. From the perspective of the FW Act, that purpose reflects the object set out in s 3(e) of “providing accessible and effective procedures to resolve grievances and disputes”. The intent of the framers of cl 28 should be construed in that context and with an appreciation that industrial harmony is of value to industrial parties and that dispute resolution processes provide a means of restoring and maintaining industrial harmony by resolving disputation. The framers of cl 28 would have also appreciated that, like all disputes, industrial disputes are more effectively resolved when all persons concerned in the outcome are included in the resolution process. To my mind, cl 28 should be construed in keeping with those understandings and, consistently with what Kirby J said in Amcor, the objective of achieving “a sensible industrial outcome” should be attributed to the framers of cl 28. It must also be appreciated, consistently with the observations in Kucks, that it should not be assumed that the framers of cl 28 were skilled in legal drafting.
[44] Bearing in mind the purpose of restoring and facilitating industrial harmony, his Honour (at [84]) did not read steps 1 and 2 of the disputes process (requiring discussion between the employee and the relevant Team Leader and Line Manager) as laying down ‘mandatory limitations on access to the processes of discussions, conciliation or arbitration’ facilitated by the clause. His Honour concluded (at [85]-[86]) that it was unlikely to have been intended that discussions must occur with an individual team leader in relation to enterprise-wide disputes which the team leader is unlikely to have the authority to resolve. His Honour’s conclusions were not disturbed on appeal: Energy Australia Yallourn Pty Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union [2018] FCAFC 146; (2018) 264 FCR 342 at [66]-[69] (Rares and Barker JJ) and [128]-[133] (Flick J). In this respect, we also refer to the approach adopted by the Full Bench in DP World (Fremantle) Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2019] FWCFB 3965 at [24]-[30].
[45] The contextual considerations referred to by Bromberg J will frequently favour reading a dispute resolution clause in an enterprise agreement in a non-technical and facilitative manner and as not intended to result in any procedural non-compliance preventing a dispute being progressed, including by being referred to the Commission for conciliation or (if the clause so provides) arbitration. Such an outcome is inconsistent with the objective of dispute resolution provisions of an enterprise agreement to provide accessible and effective procedures to resolve grievances and disputes: see also Monash University v Murthi [2024] FCA 663 at [14] (Wheelahan J). The drafters of enterprise agreements can be taken to have understood that context. However, the construction of any particular enterprise agreement will always turn on the language of the agreement albeit understood in light of its context and purposes.”
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(My emphasis)
I have taken this into account.
[76]
The general rule when it comes to annual leave is that it accrues progressively throughout the year based on the amount of hours that an employee actually works. The general rule for personal leave is that an employee receives next years’ entitlement on the anniversary date of their employment. I have taken this into account.
[77]
I have taken into account the content of Exhibit 3, which is a document that exists on the Union’s website, titled “Considering going on strike?” Relevantly, there is a section with a heading “How will taking industrial action effect my entitlements?” which states:-
“In most cases PIA will not impact your entitlements or continuity of service. For the period industrial action is undertaken no entitlements like annual leave will be accrued, however the Fair Work Act prevents them from being taken away, even if the boss elects to take retaliatory action by way of a lockout”.
(My emphasis)
I have taken this into account.
[78]
I do not accept the Applicant’s submission that simply being on a roster, or being employed, automatically results in an employee accruing annual leave. The roster needs to be worked by the employee. To suggest otherwise is illogical and lacks commonsense or industrial precedent. I have taken this into account.
[79]
The Collins English Dictionary defines the word ‘employ’ to mean:- “to engage or make use of the services of (a person) in return for money”, and ‘employment’ to mean: “1. The act of employing or state of being employed 2. The work or occupation in which a person is employed”. As a result, I am satisfied that the term ‘employment’ in the Award has been taken out of context and misinterpreted by the Applicant. I have taken this into account.
[80]
I accept the unchallenged evidence or Mr Hill, who testified that he raised the deduction of employees’ entitlements with Mr Clements. Regarding this unchallenged evidence, I note that in the Full Bench decision of INPEX Australia Pty Ltd v The Australian Workers’ Union,13 it was stated that:
“[29] The Commission is not a court. It is not bound by the rules of evidence.6 It is required to perform its functions and exercise its powers in a manner that is quick, informal and avoids unnecessary technicalities. But when the Commission makes a finding of fact, it must proceed by reference to rationally probative material. That material may include, inter alia, evidence or, in an appropriate case, submissions. For example, it may be appropriate for a finding of fact to be made on the basis of an unchallenged submission made by one party, particularly when the other party is legally represented.”
(My emphasis)
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[81]
Further, a Full Court of the Federal Court of Australia stated in Ashby v Slipper14 that:-
“The second aspect, critical to this appeal, relates to the weight or cogency of the evidence: that is, as a general proposition, evidence, which is not inherently incredible and which is unchallenged, ought to be accepted: Precision Plastics Pty Limited v Demir [1975] HCA 27; (1975) 132 CLR 362 at 370-371 (per Gibbs J, Stephen J agreeing, Murphy J generally agreeing). The evidence may of course be rejected if it is contradicted by facts otherwise established by the evidence or the particular circumstances point to its rejection.”
(My emphasis)
[82]
Mr Clements could not recall this conversation but accepted that he made a phone call to payroll to seek an explanation for the discrepancy. Surprisingly, Mr Clements was advised that it was due to the complex payroll system rather than a direction from Ms Roberts.15 I have taken this into account.
[83]
In relation to Personal Leave, clause 18.2 of the Agreement states:-
“18.2 Accruals
18.2.1 Subject to Clause 18.2.2, on the commencement of employment and on each subsequent anniversary of the commencement date, each Employee shall be credited with three (3) weeks (105 Ordinary Hours) of Personal/Carer’s leave. Any Personal/Carer’s Leave which is not taken by an Employee will accumulate without limitation, subject to any cash out under clause 18.7.
18.2.2 Personal/Carer’s Leave will not continue to be credited through any unpaid Parental Leave. Upon return to work from Parental Leave, the Company will credit a pro rata amount of Personal/Carer’s Leave to adjust for the period of absence. For all other unpaid leave, Personal/Carer’s Leave will be credited.”
[84]
This provision fits with what normally occurs and the ‘general rule’ that I stated above. Whilst the NES provides a minimum standard of having personal leave accrue on a time-served basis (s.96(2) of the FW Act), that is not the normal arrangement in a large number of unionised workplaces. In such workplaces, they traditionally adopt the next years’ accrual of personal leave on the anniversary of an employee’s commencement without recourse to the attendance record of the employee in the preceding year. I have taken this into account.
[85]
The Respondent submitted that the accrual of personal leave whilst on PIA would be considered to be the payment of strike pay in accordance with s.470 of the FW Act. I do not agree. Section 470 was introduced to stop the payment of wages to employees who were taking industrial action and who would not cease that industrial action until the employer agreed to pay them for their lost time. This practice was common in the building and construction industry. That is the intent of the legislation, not the accrual of 0.44 hours of personal leave for every day that an employee is involved in PIA. Whilst I accept that some employees may have their untaken sick leave paid out upon retirement or retrenchment in accordance with clause
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18.6 of the Agreement, that does not guarantee that there will be the payment of any money as a result of any personal leave accrual during PIA. The simple fact is that an employee may exhaust their personal leave accrual at any stage during their employment. I have taken this into account.
[86]
I note the submissions of the Applicant and its questions to Ms Roberts and Mr Clements in relation to the making of the 2021 Agreement and the respective statutory declarations that were filed. I also note that there is no evidence provided by the Union that would suggest that the Union disagreed with the information contained in these statutory declarations. On that basis I assume that the current submission from the Applicant is nothing more than a thought bubble, in an attempt to find an argument to support this application, rather than any historically held view as to the veracity of the Respondent’s statutory declarations.
[87]
I note the decision in Carter. I do not necessarily agree with this decision. In my view, if an employee is ready, willing and able to work, and the employer refuses to allow that employee to work due to employer response action, then the employee should not be penalised in relation to his annual leave accrual. I do not accept that a lockout is the same as a standdown, as suggested in Carter. Having been involved in both scenarios in my former role, I can easily distinguish between the two situations. If an employee is involved in PIA, then they know they are not going to be paid. But there are no financial consequences, apart from any opportunity costs, for the employer if they engage in employer response action. Such a scenario does not meet the ‘fair go all round principle’ which was the foundation stone of the FW Act. However, on the basis that a Full Bench has endorsed the decision at first instance, then I am obligated to follow this precedent. Therefore, annual leave does not accrue whilst an employee has been locked out as a result of employer response action.
[88]
The Respondent’s submission in relation to s.470 is basically an admission that it breached the FW Act during the last period of PIA in 2021. During that dispute, the Respondent advised its employees that it would not accrue annual leave and personal leave during periods of PIA. However, it did not deduct any accrued leave from its employees. Based on its submission, what occurred in 2021 was a contravention of the FW Act. Luckily for the Respondent, I do not agree with this submission so I will not refer the Respondent to the General Manager of the Commission to initiate proceedings.
Conclusion
[89]
It is not in dispute that this dispute continues to exist and would have returned to the Commission at a later stage if not determined at this point. In fact, the Respondent suggested that the Commission should continue to take evidence and then simply adjourn for a week to allow for a meeting to occur. The Respondent made no suggestion of an opportunity to submit fresh evidence, but simply make final submissions. This would have resulted in a delay and a waste of time and money for the parties and the Commission. Such a proposition lacked commonsense and logic.
[90]
Whilst it is prudent for the parties to follow every step in a DSP, there may be extenuating circumstances which renders the full process unnecessary. This dispute is one of those circumstances. I am satisfied and find that the Objects of the Act and commonsense
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should take primacy in this situation. Such an outcome is pragmatic and efficient for the parties and the Commission and follows the ratio in Yallourn and Osborne.
[91]
As a result, I am satisfied and find that the Commission has jurisdiction to deal with this matter.
[92]
I am satisfied and find, for the reasons stated above and supported by Exhibit 3, that employees are not entitled to accrue annual leave whilst they are involved in PIA.
[93]
Following the Full Bench decision in the Carter Appeal Decision, I am satisfied and find that employees do not accrue annual leave whilst they are subjected to employer response action.
[94]
I am satisfied and find, for the reasons stated above, that the Respondent is not entitled to deduct hours from employees’ personal leave balance because they have been involved in PIA or subjected to employer response action.
[95]
The Respondent is directed to rectify the personal leave accruals within the next 14 days.
[96]
I so Order.”
Application to deal with a dispute – Mining and Energy Union Northern Mining and NSW Energy District Branch (MEU) v Rix’s Creek Pty Limited [2026] FWC 2347 delivered 28 July 2026 per Riordan C