Interpreting fair work and industrial instruments

Interpreting modern awards and enterprise agreements

Many employment law cases hinge on the meaning to be ascribed to a clause or clauses of a modern award, enterprise agreement or other instrument such as a contract. Here is a passage from a recent Federal Court case which summarized the principles to be used when doing so.

“Principles of interpretation

The general approach to the manner in which industrial instruments such as the present Enterprise Agreement are to be construed is well-settled.

An oft-repeated formulation of that general approach is that provided as follows by Madgwick J in Kucks v CSR Ltd(1996) 66 IR 182 at 184:

Legal principles

It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.

But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.

See also:  Transport Workers’ Union of Australia v Linfox Australia Pty Ltd [2014] FCA 829 at [30], (2014) 318 ALR 54 at 58per Tracey J; Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2015] FCA 532 at [6] per Logan J; Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd (No 2) [2015] FCA 1088 at [240], (2015) 253 IR 391 at 436 per Murphy J; Australian Workers’ Union v Cleanevent Australia Pty Ltd [2015] FCA 1477 at [13] per Flick J.

It is also well-settled that the words of an award are not to be construed “in a vacuum divorced from industrial realities”:  City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813 at [57], (2006) 153 IR 426 at 440. French J (as his Honour then was) observed as follows in that case (at 438 to 439):

[56]       The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or 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’. It may also include ‘… ideas that gave rise to an expression in a document from which it has been taken’.

His Honour continued on to observe (at 440):

[57]       It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities – City of Wanneroo v Holmes(1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned – see eg Geo A Bond and Co Ltd (in liq) v McKenzie [1929] AR 499 at 503-4 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):

‘Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.’”

Tomvald v Toll Transport Pty Ltd [2017] FCA 1208 delivered 12 October 2017 per Flick J