Employment and Industrial Law

Interpreting federal enterprise agreements

Enterprise agreements can be tricky creatures to read and understand. The are a number of reasons why. Those reasons include:

  • enterprise agreements are often drafted by a large diversity of people;
  • in most cases, those people are not lawyers or skilled draftsmen;
  • the wording in enterprise agreements can be the product of years (and sometimes decades) of negotiation and industrial tension between different generations of trade union officials, employer representatives, and employees;
  • understanding the meaning of the words used may require a background knowledge of the unique history and workings of the employer’s enterprise;
  • broad or ambiguous words may have been deliberately used to describe an obligation because the people who negotiated the agreement could not reach agreement on more specific words;
  • the employees who voted to approve an enterprise agreement may not have shared the same understanding about the wording of the agreement as the people who negotiated that wording;
  • there may be mistakes or inconsistencies in the drafting; and
  • other times, the words used may have been poorly chosen.

While employers, employees and trade unions may have a view about what the words in an enterprise agreement mean, that view will never be decisive. This is because, ultimately, it will be up to a judge or an arbitrator to decide the meaning of the words used and how those words apply to the facts of the case.

In June 2017, the Full Bench of the Fair Work Commission handed down its decision in AMWU v Berri Pty Limited [2017] FWCFB 3005. In paragraph [114] of the Berri decision, the Full Bench set out the factors that the Fair Work Commission should consider when interpreting enterprise agreements. I will not be replicating those factors in this article. Berri is currently the leading case on interpreting federal enterprise agreements.

Before rushing off to a court or tribunal with a dispute about the wording of an enterprise agreement, it is important that you have a good understanding of the decision in Berri and how it impacts on your argument. If your matter is before the Fair Work Commission, you will be expected to deal with the considerations outlined in Berri (until that decision is altered by a different decision).

If you have any doubt or confusion about how the Berri decision applies to your case, you should seek legal advice.