This extract from a decision of the Federal Court deals with the issue of the admission and utility of evidence of past practices and understandings to the interpretation of industrial instruments.
“The broader context
Endeavour sought to support its construction of the relevant clauses of the 2017 and 2021 EAs by reference to a significant body of evidence concerning the background to these documents. The Union did not present an alternative version of the history, but sought to exclude this entire body of evidence as irrelevant. The basis for that objection is connected with the controversy concerning the proper scope of “context” in the construction of enterprise agreements, referred to above. I admitted this material, subject to hearing submissions on the use to which it could properly be put, on the basis that a definitive ruling on relevance could only be made after resolving the issue of principle discussed in what follows. (On further reflection, the preferable understanding may be that the 2017 and 2021 EAs are instruments made under and given effect by statute, and any facts arguably relevant to their proper construction are therefore “legislative facts” whose proof is not subject to the ordinary rules of evidence: see eg Allianz Australia Insurance Ltd v Estate of the Late Summer Abawi [2025] NSWCA 85 at [56] (Kirk JA, Adamson and Stern JJA agreeing). If that is right, the relevance or otherwise of the background material is a substantive question of law rather than an issue for a preliminary evidentiary ruling.)
There are in effect two elements to the background matters sought to be relied on by Endeavour. I will seek to summarise these relatively briefly before turning to the question of principle concerning their relevance.
The underlying awards
Pursuant to s 186(2)(d) of the FW Act, an enterprise agreement cannot be approved by the Fair Work Commission (the Commission) unless the Commission is satisfied that the agreement passes the “better off overall test” (the BOOT). The terms of that test are set out in s 193 of the Act and require, for an employee covered by an award, that the employee would be better off under the terms of the agreement than if the relevant modern award applied.
Documents submitted to the Commission by Endeavour in support of approval of the 2017 and 2021 EAs included analysis seeking to establish that in each case the proposed EA satisfied the BOOT. The Union also submitted a document supporting the registration of each of the EAs, although these did not canvass the BOOT. The analysis that was undertaken for the purposes of the BOOT took as the relevant award the Electrical Power Industry Award 2010 (the 2010 Award) (for the 2017 EA) and the Electrical Power Industry Award 2020 (the 2020 Award) (for the purposes of the 2021 EA). Each of the EAs also included an express provision to the effect that it applied to the exclusion of the relevant award (2017 EA cl 2.2.1; 2021 EA cl 2.2.1).
The 2010 Award (as in force at the time the 2017 EA was approved) contained the following provision in relation to overtime.
26.1 Overtime
(a) Overtime is payable at the following rates:
For overtime worked on
Overtime rate
Monday to Saturday—day workers and non-continuous shiftworkers
Time and a half for the first two hours and double time thereafter
Monday to Saturday—continuous shiftworkers
Double time
Sunday
Double time
Public holiday
Double time and a half
(b) Day workers who work overtime on a Saturday, a Sunday or a public holiday will receive a minimum payment of three hours on each such occasion.
The 2020 Award (as in force at the time the 2021 EA was approved) contained the following provisions.
- Overtime
[Varied by PR723895]
19.1 Overtime is payable at the following rates:
% of minimum hourly rate
Monday to Saturday—day workers and non-continuous shiftworkers
First 2 hours
150
After 2 hours
200
Monday to Saturday—continuous shiftworkers
200
Sunday
200
Public holiday
250
19.2 Day workers who work overtime on a Saturday, a Sunday or a public holiday will receive a minimum payment of 3 hours on each occasion.
19.3 Part-time employees may be entitled to overtime in accordance with clause 10.4.
[19.4 varied by PR723895 ppc 20Nov20]
19.4 Casual employees may be entitled to overtime in accordance with clause 11.5. The casual loading prescribed by clause 11.2(b) will not be paid for overtime hours worked.
19.5 For the purposes of calculating overtime each day stands alone.
These were the base line provisions which needed to be (and were asserted to be) improved upon by the provisions of the 2017 and 2021 EAs set out above. The existence of common ancestors can be glimpsed in the way the respective provisions deal with overtime on Monday to Saturday and then on Sundays and public holidays. The 2020 Award, it will be noted, provided expressly that for the purposes of calculating overtime “each day stands alone”. Minds may differ as to whether this was a provision deliberately excluded from the 2021 EA, or a part of the underlying award structure that was taken as read in the negotiations for that EA. What is clear, at least, is that the Union’s construction of the 2021 EA does not need to be adopted in order for the BOOT to be satisfied.
Previous awards and enterprise agreements and how they were administered
On 14 June 2017, Endeavour became the employing entity for employees in what was termed the Endeavour Energy Network Asset Partnership following a decision by the New South Wales Government to lease the State’s electrical network to a consortium of superannuation funds and investment firms. The former employing entity, known as Endeavour Energy, had been established in 2011 due to the division of what was formerly Integral Energy and the sale of its retail division to private interests. From then, Endeavour Energy built, maintained and operated the electrical distribution network across parts of New South Wales. These historical changes in corporate structure do not need to be explored for present purposes. It is sufficient to refer to Endeavour as the employer from June 2017 and to its predecessor entities in relation to earlier periods.
Endeavour placed before the Court the industrial instruments that have governed it and its predecessor entities, and their field staff, since 1997. The overtime provisions outlined above have remained in substantially the same form in each successive instrument.
(a) Clause 6.1.1 of the Integral Energy Conditions of Employment Award 1997 (the 1997 Award) dealt with “Overtime Penalties”. It contained provisions in materially identical terms to lines (a) to (g) of cl 14.2.1 of the 2021 EA, although they were not set out in exactly the same order (and there was no apostrophe in the equivalent of line (g)). It also contained provisions dealing with minimum breaks before resuming work and payments for travelling time.
(b) Substantially identical provisions were contained in cl 6.1.1 of each of the Integral Energy Conditions of Employment Awards 2001, 2003, 2005 and 2007 and cl 7.1.1 of the Integral Energy Award 2008.
(c) The same, or essentially the same, provisions appeared in cl 9.1.1 of each of the Endeavour Energy Enterprise Agreement 2010 and the Endeavour Energy Enterprise Agreement 2012 before being included, as noted above, in the 2017 EA.
This repetition is not particularly meaningful in itself. However, it becomes meaningful in the light of:
(a) the evidence of Ms Murison that the provisions governing penalty rates for overtime have been administered by Endeavour in a manner consistent with its interpretation of the current provisions since she commenced her employment in May 2016;
(b) “Overtime and Allowance Guides” produced by Endeavour in October 2011, January 2014 and February 2016, which also reflect an understanding to the effect that an employee became entitled to payment at double time only after completing two hours of overtime on a particular day (which is consistent with the evidence of Mr Woolsey and Mr Walton, both long standing employees of Endeavour and its predecessors, concerning overtime paid to them); and
(c) the lack of overt disagreement with this understanding of the provisions on the part of the Union or employees until after the commencement of the 2021 EA.
As to the last of these points, it appears that a proposal for all overtime to be paid at double time was included in a combined log of claims submitted by the Union and other relevant organisations around November 2020, as part of the bargaining process that led to the 2021 EA. The proposal was discussed in bargaining meetings but was rejected by Endeavour and did not find its way into the 2021 EA. During the cross-examination of Mr Woolsey it also emerged that a former organiser, Mr Currie, had put to him outside a bargaining meeting in 2017 that Endeavour’s interpretation was wrong and it should be paying at double time when more than two hours of overtime had been worked in a week, but this point was not raised in the bargaining process. The interpretation of the relevant provisions now being advanced by the Union may therefore have been in its contemplation for a considerable time; however, it does not appear to have been advanced overtly as the proper construction of any of the Award or EA provisions that preceded the 2021 EA.
What emerges from this history is that the 2017 EA, and subsequently the 2021 EA, came into being in an environment where:
(a) materially identical provisions had been included in a series of industrial instruments covering Endeavour (and its predecessor entities) and its field staff;
(b) Endeavour (and its predecessor entities) had been paying its field staff on the understanding that, relevantly here, overtime on weekdays and Saturday mornings was payable at double time only after two hours of overtime had been worked on a particular day; and
(c) the correctness of that understanding had not been called into question.
Relevance of the background
The Union submits that these matters of background and history are irrelevant to the construction of the 2017 and 2021 EAs. It submits that an EA does not have “parties” in any contractual sense and the importation of concepts relevant to the interpretation of contracts (including reference to objective facts known to the parties as an aid to the construction of a contractual text) is therefore misplaced. Reliance is placed on the following authorities.
In Sheehan v Thiess Pty Ltd [2019] FCA 1762 (Sheehan), Colvin J said the following at [18]-[20] and [22].
Industrial agreements are not be (sic) approached in the same manner as commercial agreements. They are not the result of negotiations between parties who will be bound by their terms. Rather, they take effect as instruments given statutory force under applicable industrial laws. In the case of enterprise agreements, they operate only after an approval by the Fair Work Commission under s 54 of the Fair Work Act 2009 (Cth). In the present case, the agreement is a greenfields agreement. It was negotiated before work on the Wheatstone Project was undertaken. It was made to apply only to future employees of Thiess performing ‘on-site construction work for the Wheatstone Project’: see cl 3(1) of the Agreement. An enterprise agreement may be made with a registered Union for a greenfields site where the Union is entitled to represent one or more of the employees to be covered: s 177 of the Fair Work Act. That is what occurred in this case.
By reason of the requirement for approval, the Agreement only took effect on the basis of views as to the manner in which it would operate that were formed by the Commission. Those views were themselves informed by an understanding of the industry in which the Agreement would apply and the broader industrial context known to a specialist tribunal such as the Commission.
Further, enterprise agreements are to be construed as practical instruments that will apply to the working conditions known to employers and employees who work in the circumstances to which the instrument will apply. Otherwise, words in an enterprise agreement are to be given their ordinary meaning, read within the instrument as a whole and in context, including the legislative context: [WorkPac v Skene at [197]] followed in Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd [2018] FCAFC 182 at [8] (Reeves, Bromberg and O’Callaghan JJ).
…
Therefore, peculiar contextual matters that may have been commonly known to representatives of Thiess and the Union when negotiating the terms of the Agreement are not matters to be brought to account. The Agreement is within the category of instruments where it is intended to apply to parties who were not participants in the process by which the terms of the instrument were formulated. In such cases, it may not be appropriate for surrounding circumstances to be brought to account unless they rise to the level of matters that would be notorious or known to those intended to be bound by the instrument who did not participate in the negotiations or dealings by which the terms were formulated: see, for example, Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103 (a case concerned with planning consents); Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd [2006] FCAFC 144; (2006) 156 FCR 1 at [57]-[66], [73] (Weinberg J), [225]-[226] (Lander J), cp [123]-[124] (Kenny J) (a case concerned with company constitutions) and Westfield Management Limited v Perpetual Trustee Company Limited [2007] HCA 45; (2007) 233 CLR 528 at [36]-[39] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ) (a case concerned with easements).
An appeal from his Honour’s judgment was dismissed: Thiess Pty Ltd v Sheehan [2020] FCAFC 198. Nothing in the reasons of the Full Court casts any doubt on these observations.
Earlier, in Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84; 222 FCR 152 at [88]-[90] (Marmara), the Full Court (Jessup, Tracey and Perram JJ) said the following.
… Under the FW Act, an enterprise agreement is an agreement in name only. Those who, by s 172(2), are empowered to “make” an enterprise agreement are the employer and “the employees who are employed at the time the agreement is made and who will be covered by the agreement”. A contract lawyer would assume that those persons would be parties to the agreement, and that the assent of all of them would be necessary for the agreement to be “made”. But the lawyer would be wrong on both counts. The FW Act does not identify the employer, or any employee, as a “party” to an enterprise agreement. Further, notwithstanding the specific empowering terms of s 172, it is not necessary for all the employees who are employed at the time an agreement is made and who will be covered by the agreement to assent to the terms of the agreement. Once a majority of those employees have agreed by voting, the agreement must be sent to the Commission for approval and, if approved, thenceforth applies to all the employees in the relevant group, even those who did not agree, and even those, subsequently taken into employment, who were not part of the relevant group at the time the vote was taken under s 182.
In his reasons, the primary Judge said that “Toyota contended and it was not disputed, that an enterprise agreement made under the FW Act is a form of delegated legislation”. It appears that that contention was made in the context of Toyota’s submission based on s 46 of the AI Act to which we have referred. However, although the FW Act provides that an enterprise agreement is “made” otherwise than by the Commission, the Act does more than merely impose conditions upon, and give additional legal effect to, an agreement made between private parties. The effect of the legislation is to empower the employer and the relevant majority of its employees to specify terms which will apply to the employment of all employees in the area of work concerned. The legal efficacy of those terms will arise under statute, not contract, and, as mentioned above, will be felt also by those who did not agree to them. Someone, such as an employee subsequently taken on, who had nothing to do with the choice of the terms or the making of the agreement, will be exposed to penal consequences under s 50 if he or she should happen to contravene one of the terms. When viewed in this way, it is not difficult to share in the perception that an enterprise agreement approved under the FW Act has a legislative character.
An enterprise agreement is a statutory artefact made by persons specifically empowered in that regard, and under conditions specifically set down, by the FW Act. It is enforceable under that Act, and not otherwise. There is, in the circumstances, no reason to approach the question of legislative intent with a predisposition informed by notions of freedom of contract.
Part of this passage was quoted by a later Full Court in Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50; 275 FCR 385 at [60] (Flick, White and Perry JJ) (Bianco Walling), in support of an observation that:
… enterprise agreements made under Pt 2-4 of the FW Act are sui generis. In particular they are not simply one form of a commercial contract in the conventional sense.
Marmara and Bianco Walling were, as I read them, not cases that turned on the construction of particular enterprise agreements. The observation that an enterprise agreement is not a contract—and should not be approached on the assumption that it derives legal force from the agreement of two or more “parties” to be bound by particular terms—is, with respect, obviously correct. However, I do not think it follows that the process by which an enterprise agreement acquires legal force and the background against which that process occurs have no relevance to the construction of the agreement; nor do I understand Colvin J to have gone that far in Sheehan. It is useful to note some aspects of the statutory process.
Pursuant to s 54(1) of the FW Act, an enterprise agreement comes into operation (so that a contravention of the agreement is a contravention of s 50) at a specified time after it is approved by the Commission. Section 186(1) requires the Commission to approve an enterprise agreement if an application for approval has been made under s 182(4) or 185 and the conditions set out in ss 186 and 187 are met. Among those conditions is a requirement that, if (as here) the agreement is not a “greenfields” agreement, it “has been genuinely agreed to by the employees covered by the agreement” (s 186(2)(a)).
Section 188 provides for the determination by the Commission of whether an agreement has been “genuinely agreed to by the employees covered by the agreement”. At the time the 2021 EA was approved, it provided as follows.
188 When employees have genuinely agreed to an enterprise agreement
(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre‑approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
Section 180 provided for steps required to be taken by an employer before requesting employees to approve an enterprise agreement. They included giving employees who would be covered by the agreement a copy of its text and associated materials (s 180(2)), notifying employees of the time and place at which a vote would occur (and the voting method) (s 180(3)) and taking all reasonable steps to ensure that the terms of the agreement and their effect were explained to employees (s 180(5)). Section 181 provided for employees employed at the time who would be covered by an agreement to be asked to approve it (with a requirement in s 181(2) that the request not be made until 21 days after the last notice in relation to representational rights under s 173). An agreement was (relevantly to this case) “made”, under s 182(1), “when a majority of those employees who cast a valid vote approve[d] the agreement”. Once an enterprise agreement was “made”, a “bargaining representative” (which might be the employer or a relevant employee organisation: ss 176-177) was required to apply to the Commission for approval of the agreement within a specified period (s 185).
The requirement in s 181(2) that a request for approval not be made until 21 days after a notice under s 173 had the effect that there would necessarily be a period of “bargaining”. Notice of “the right to be represented by a bargaining representative” was required to be given to each employee who was employed at the notification time and would be covered by the (proposed) agreement (s 173(1)). Such notice was required to tell the employee that they were entitled to appoint a bargaining representative (s 174(2)). For any employee who was a member of an employee organisation entitled to represent their interests, the default bargaining representative was that organisation (s 174(3)).
These provisions were materially the same at the time the 2017 EA was approved, save that s 188(2) was not included. (Section 188 has since been amended, and further provisions added, but the process required in order to meet the requirement of genuine agreement is in essence the same.)
What appears from this summary is that an enterprise agreement is capable of being approved by the Commission—and thereby given legal effect—only if the Commission is satisfied that it is the outcome of a process involving:
(a) the proposing of the agreement by the employer to all of the employees who are currently employed and will be covered by the agreement;
(b) those employees having an entitlement to be represented in a process referred to as “bargaining”; and
(c) those employees, being properly informed about the terms of the proposed agreement, approving it by a majority vote.
Integral to that process is the drafting and consideration (and potentially the refinement during bargaining) of a text which is put to employees and voted on by them. The process is very different from a contractual negotiation or the passage of legislation; however, like those processes, it involves people drafting, discussing and adopting a text. The factual matrix in which these steps occur, at least to the extent that it is known or reasonably knowable by the persons to whom the FW Act affords a role in the process, is logically capable of shedding light on the meaning of words that appear in the text. The fact that an enterprise agreement will bind future employees, who have played no part in its development and approval, does not gainsay this point: the same is obviously true of legislation, and does not dissuade the courts from searching (albeit in a highly structured and constrained way) for the intention of the legislature.
To hold otherwise would undermine the third, fourth and fifth of the principles set out in Ridd (above), which were identified by the Court in that case as “applicable to the interpretation of an enterprise agreement”. Denying relevance to the circumstances in which an enterprise agreement came into being would also require the document to be treated as if it conveyed meaning independently from its context, which is inconsistent with current understandings of how language works (see Harvey, above, and Leeming M, Common Law, Equity and Statute (Federation Press, 2023) at 90).
The evidence led by Endeavour and discussed in this part of the reasons is therefore relevant to the construction of the clauses of the 2017 and 2021 EAs presently in issue. The evidence as to how materially identical provisions in earlier instruments have been applied by Endeavour in paying its employees for overtime, and the lack of overt resistance to Endeavour acting in that way, is indicative of a shared understanding, among those who brought into being the text submitted to and approved by the Commission, concerning the meaning of those earlier provisions and thus the meaning that the provisions of the 2017 and 2021 EAs would bear. The Commission, in its brief reasons for approving the EAs, did not express views of its own about their effect (and there is no reason why it should have done so).
The understanding emerging from these aspects of the background supports Endeavour’s construction of the controversial aspects of the text (which, I have concluded above, is the preferable understanding of the EAs read as a whole). Such a shared understanding could not, of course, replace the text of the 2017 or 2021 EA or be given effect in preference to that text. However, it can properly provide assistance in identifying the true meaning of parts of the text whose signification is unclear.
Disposition
The originating application must therefore be dismissed.
Endeavour has not sought costs, presumably in the light of s 570 of the FW Act. I am not aware of any reason to consider that circumstances justifying an order for costs under s 570(2) might exist. There will therefore be no order as to costs.”
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Endeavour Energy Network Management Pty Ltd [2025] FCA 1202 delivered 2 October 2025 per Kennett J