Principles of interpretation of awards
- There was substantial agreement on the principles. In his written Outline of Submissions Mr Latham submitted:
"3. The principles in relation to the interpretation of awards are clear. In Public Service Association and Professional Officers' Association Amalgamated Union (NSW) v Industrial Relations Secretary [sic: Secretary of the Treasury] [2014] NSWIRComm 23, 87 NSWLR 41 at [104], Walton J held that
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.
4. The process begins and ends with the text. As the Full Bench held in NSW Fire Brigades (quoted with approval in [2014] NSWIRComm 23, 87 NSWLR 41 at [113]
In interpreting the provisions of an award the intention of the drafters must be ascertained by reference to the actual words used (and those words should be given their plain, ordinary meaning), thereby disclosing the underlying purpose or object of the award and its context, using that term in its broadest sense, including extrinsic material. Thus, attention must at all times be given to the meaning and effect of the award as it appears from the plain and ordinary meaning of the words used: see Zoological Parks at [43]. It is not permitted to attach to a provision of an award a meaning which the words of the award cannot reasonably bear.
5. 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: Kucks v CSR Ltd (1996) 66 IR 182 at 184
6. As Madgwick J also held in Kenoss Contractors Pty Ltd v Warren 147 IR 390 at [35]: the text must, despite any judicial straining of it, reasonably bear the meaning assigned to it: the Court is not simply to embark on a process of inventing provisions it thinks ought to have been made in substitution for those that were made.
7. …
What is relevant to that determination?
8. As Walton J held in PSA v Industrial Relations Secretary [2017] NSWSC 1473, 271 IR 77 at [59]:
In order to ascertain the meaning of a provision of an award which is susceptible to more than one meaning, even after the consideration of the immediate context of a provision, recourse may be had to the circumstances surrounding the making of an award in order to see what the circumstances were with reference to which the words of the award provision were used. Within those parameters, reference may be had to a mutually known factual matrix present at the making of the award, including the conduct of prior negotiations, the forming of an agreement and, more generally, the history of the provision. Evidence is not admissible to ascertain the subjective intentions of the parties. Nor is evidence of their conduct subsequent to the commencement of the instrument admissible."
- Ms Raper submitted:
"12. The Commission's powers and approach when interpreting an industrial dispute for the purpose of dispute resolution were conveniently summarised by the Commission recently in the matter of Health Services Union New South Wales v Ambulance Service of New South Wales [4] at paragraphs 9-16 and 39 with regard to the use of extrinsic material (see also Health Service Union NSW v Ministry of Health re infectious cleaning allowances [5] at [7-12].
13. Broadly, the appropriate approach to be taken in applications of this kind is:
(a) Consideration needs to be given to the actual words used, and their plain ordinary English meaning, and the context in which the words are used: Bryce v Apperley [6] ; New South Wales Fire Brigade Employees Union and New South Wales Brigades [7] , and Zoological Parks Board of New South Wales v The Australian Workers' Union, New South Wales [8] ;
(b) Industrial instruments are to be construed not only according to the text but also by their context in the wider scheme or structure of the instrument including with reference to extrinsic material: Polan v Goulburn Valley Health [9] at [32];
(c) A purposive approach should be taken when construing awards, consistent with s. 33 of the Interpretation Act 1987 (NSW): Director of Public Employment by her agent the Commissioner of New South Wales Fire Brigades v New South Wales Fire Brigade Employees' Union [10] at [46] and [47], as cited in Health Services Union New South Wales v Ambulance Service of New South Wales [11] at [14];
(d) An industrial instrument is to be understood in the light of its industrial context and purpose and the commercial and legislative context in which it applies: Amcor Limited v CFMEU [12] at [2], [13], [30] as cited in Health Service Union NSW v Ministry of Health re infectious cleaning allowances [13] at [10]; and
(e) Where the meaning of an industrial instrument cannot be discerned on its face, the history of the provision and past conduct of the parties evincing intention is relevant: Transport Workers' Union of Australia v Linfox Australia Pty Ltd. [14] "
- Mr Fox submitted:
4. The jurisprudence of the Commission in the interpretation of industrial instruments is well settled. The relevant principles have been recently set out. [15]
5. The Commission may also be informed by the approach of the Fair Work Commission in Berri [16] , which clearly set out principles of interpretation. Regard should, of course, be had to the different legislative context and the nature of enterprise agreements as distinct from awards.
Contextual Approach
6. A clause should be interpreted in its context. That context includes:
a. The clause as it appears in the agreement, by reference to place and arrangement.
b. The instrument as a whole.
c. The legislative context.
d. The industrial circumstances.
Purposive Approach
7. A purposive approach to the interpretation of instruments is necessary. Where not expressly stated, purpose should be inferred by reference to construction [17] .
8. The clause has a beneficial purpose and should be interpreted consistently with the conferring of that benefit. The nature of this benefit is to be discerned by reference to construction.
Disposition to extrinsic material
9. The admission of extrinsic material is limited to where an ambiguity is established. The 'True Rule' in Codelfa [18] requires that before having regard to extrinsic material the Commission must have found that the terms of the award are ambiguous in their meaning. The Commission will not be able to pass this barrier, even if it were it would not be assisted by the extrinsic evidence filed by the respondent.
a. Codelfa has been accepted into the jurisprudence of the Commission [19] .
b. Extrinsic material can only go to objective evidence of intention. Evidence of subjective intention is inadmissible in all circumstances.
- I would strike only one cautionary note relating to the submission of Mr Fox about the need to find ambiguity before having regard to extrinsic material. In Public Service Association and Professional Officers' Association Amalgamated Union (NSW) v Secretary of the Treasury [20] , Walton J, President, after discussing at length the judgment of Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW quoted his Honours conclusion, at [125] as:
"His Honour concluded (at 352):
The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although ... if the facts are notorious knowledge of them will be presumed."
He then observed at [127] - [128]:
"Understanding context will have utility if, and in so far as, it assists in establishing the meaning of an award provision. The context includes recourse to extrinsic materials but such considerations cannot displace the meaning of the text of a clause of an award or become an end in itself.
In order to ascertain the meaning of a provision of an award which is susceptible to more than one meaning, even after the consideration of the immediate context of a provision, recourse may be had to the circumstances surrounding the making of an award in order to see what the circumstances were with reference to which the words of the award provision were used. Within those parameters, reference may be had to a mutually known factual matrix present at the making of the award, including the conduct of prior negotiations, the forming of an agreement and, more generally, the history of the provision. Evidence is not admissible to ascertain the subjective intentions of the parties. Nor is evidence of their conduct subsequent to the commencement of the instrument admissible."
(Emphasis added)
- It is noteworthy that Walton J, in connection with the interpretation of awards did not repeat the reference to ambiguity but preferred the broader test of "susceptible to more than one meaning". The meaning so described is one that is reasonably open [21] . His Honour also began and ended his analysis of the principles by reference to the seminal decision of Street J in George A. Bond & Co Ltd (in liq) v McKenzie [22] . His Honour said:
"Now speaking generally, awards are to be interpreted as any other enactment is interpreted. They lay down the law affecting employers and employees in their relations as such, and they have to be obeyed to the same extent as any other statutory enactment. But at the same time, it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result, as this award in fact did, from an agreement between parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore, in construing an award one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award"
(Emphasis added)