Principles of the Interpretation of Awards
101It is worthwhile revisiting the principles applicable to the interpretation of awards, as this matter represents a relatively isolated instance of the interpretation of an award arising in declaratory proceedings before this Court.
102In George A. Bond & Co Ltd (in liq) v McKenzie at 503-504, Street J, then a judge of the Industrial Commission of New South Wales, succinctly stated the principles applicable to the interpretation of awards which have been long applied in the industrial jurisprudence of this State as follows:
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.
(See also Perisher Blue Pty Ltd v Australian Workers' Union (1999) 91 IR 274 at 283; Transport Workers' Union (NSW Branch) v Walker Civil Engineering (1999) 91 IR 153 at 166; Health and Research Employees' Association of New South Wales v Baptist Community Services NSW and ACT [2002] NSWIRComm 32; (2002) 122 IR 178 at [61]; Health and Research Employees Association of New South Wales, Re Dispute with Northern Rivers Health Service re Payment to Part-time Employees [2004] NSWIRComm 10; (2004) 135 IR 132 at [9]; Kingmill at [67]; Director of Public Employment (by her Agent the Commissioner of New South Wales Fire Brigades) v New South Wales Fire Brigades Employees' Union(2008) 180 IR 170; [2008] NSWIRComm 158 at [38], [39] and [59] ('NSW Fire Brigades') and Re Hospital Employees Administrative and Clerical (State) Award (1982) 2 IR 123 at 125.)
103The expression 'interpreted as any other enactment' in this passage is plainly a reference to statutory interpretation and has consistently been approached in that fashion: see NSW Fire Brigade at [38] and [39], such that Street J considered the principles of statutory interpretation should be applied to the interpretation of industrial instruments with specific refinements. (These principles have been applied in other jurisdictions, see, for example, City of Wanneroo at [107] with respect to the interpretation of awards and Australasian Meat Industry Employees Union (WA Branch) v Woolworths Ltd [2007] FCAFC 201; (2007) 164 FCR 420; (2007) 244 ALR 658; (2007) 170 IR 403 at 21 in the context of construing industrial agreements. Ultimately, the principles have been adopted by the High Court of Australia, albeit in the context of industrial agreements: see, for example, Amcor at [66].)
104These principles were given effect in the following two passages from the judgment of French J (as he then was) in City of Wanneroo at [53] and [57], as follows:
53 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" - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518; 46 IR 128 at 134 (Burchett J); Australian Municipal, Administrative, Clerical and Services Union v Treasurer of Commonwealth (1998) 82 FCR 175; 80 IR 345 (Marshall J).
...
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 George A Bond & Co Ltd (in liq) vMcKenzie [1929] AR (NSW) 498 at 503-504 (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.
105The principles stated in City of Wanneroo stemmed from a consideration that an award made under the Workplace Relations Act 1996 (Cth) had the force of law of the Commonwealth (see at [51]) and attracted the operation of that Act for the purposes of interpretation by virtue of s 46 of the Acts Interpretation Act 1901 (Cth). French J thereby proceeded to give effect to the provisions of ss 15AA and 15AB of the Acts Interpretation Act.
106In NSW Fire Brigades, the Full Bench stated that the Interpretation Act 1987 (NSW), by virtue of s 3(1) of that Act, applied to the interpretation of awards and thereby "entrenched" the long held principles stated in George A Bond & Co (see at [38]). Subject, to one reservation, I agree, with respect, with that conclusion.
107Section 5 of the Interpretation Act provides, inter alia, that that Act applies to 'instruments'. That word is defined in s 3(1) to mean "an instrument (including a statutory rule or an environmental planning instrument) made under an Act...". There would seem to be little doubt that an award is an instrument (see City of Wanneroo at [53]). Further, I consider that an award is an instrument made under an Act. Section 10 of the Act provides that the Commission "may make an award in accordance with this Act". Section 11 makes the award binding on all parties and an award, when made, is given the force of law by being made enforceable under the Act (see s 357): see Australian Communication Exchange Ltd v Deputy Commissioner of Taxation [2003] HCA 55; (2003) 201 ALR 271 at [61] and footnote (27).
108There may be some doubt, however, as to whether s 33 of the Interpretation Act, has application with respect to the interpretation of awards.
109Section 33 provides as follows:
33 Regard to be had to purposes or objects of Acts and statutory rules
In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object (emphasis added).
110Section 5(2) of the Interpretation Act provides "[t]his Act applies to an Act or instrument except in so far as the contrary intention appears in this Act or in the Act or instrument concerned" and s 5(6) states "[t]he provisions of sections 24, 28, 29, 30, 30B, 33, 42, 43, 69A, 75 and 80 that apply to a statutory rule also apply to an environmental planning instrument".
111In my view, s 33 (and s 5(6)) of the Interpretation Act express the contrary intention to which s 5(2) refers, with respect to instruments such as awards, for the following reasons:
(1)Section 33 is expressly confined to an Act or statutory rule.
(2)That limitation stands in contrast to surrounding sections (see ss 31 and 32).
(3)Section 5(6) extends the provisions of s 33 referrable to a statutory rule only to a single class of instrument, namely, an environmental planning instrument. Given that such instruments are expressly, and discretely, referred to in the definition of instruments in s 3(1), the confinement of the application of s 33 to that single class indicates a statutory intention to limit, by s 5(6), the scope of that provision only to that class.
112The principles of statutory interpretation have been recently considered by the High Court in Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Thelander [2012] HCA 56; (2012) 248 CLR 378; (2012) 293 ALR 412 ('Certain Lloyd's'); Australian Education Union v Department of Education and Children's Services [2012] HCA 3; (2012) 248 CLR 1; (2012) 285 ALR 27 and Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500. An extrapolation of principles from those judgments was provided by the Court of Appeal in Brown at [39] - [40] and again in Public Service Association and Professional Officers' Associated Amalgamated Union of New South Wales [2014] NSWCA 116 at [44] and [45] and by a Full Bench of this Court in Public Service Association and Professional Officers' Amalgamated Unions of New South Wales v Department of Education and Communities [2013] NSWIRComm 32 at [24]. I will not attempt a summary of those principles but will incorporate them in the synthesis of principles relevant to the construction of awards below.
113Before undertaking that step, I would propose to refer to some seminal judgments of the Commission in which the principles for the construction of awards are discussed on the slightly broader basis of the proper approach to construing an instrument having legal force:
(a) In Kingmill, the Full Bench stated at [63]:
The interpretation of awards are, in our view, to be approached in accordance with the principles authoritatively stated by the Full Bench of the Commission in Court Session in Bryce. Hungerford and Schmidt JJ stated there (at 452):
In our view, in construing the true meaning of an industrial award, like any other instrument with legal force, the task requires an approach according to the actual words used and their plain, ordinary English meaning. As was said by Kelleher J in Re Dispute between Broken Hill Pty Co Ltd and the Federated Ship Painters and Dockers' Union of Australia, New South Wales Branch, Re Tank Tops [1961] AR (NSW) 312 at 314:
The meaning is to be ascertained primarily from a consideration of the words actually used and, while it is proper to pay regard to the surrounding circumstances and the purposes for which the provision was intended, this cannot justify a meaning being given to the words which they are not fairly capable of bearing. Particular words or expressions, having a special trade significance, however, may need to be construed in that light.
(b) In addition to the abovementioned reference to Bryce v Apperley in Kingmill, attention may also be directed to the following passage from Bryce (at 452):
Indeed, after referring with approval to what was said by Street J in Geo A Bond & Co Ltd (In Liq), as recited earlier, French J cautioned as follows in City of Wanneroo v Holmes (1989) 30 IR 362 at 379:
It is of course no part of the court's task to assign a meaning in order that the award may provide what the court thinks is appropriate - Australian Workers Union v Graziers Association (NSW) (1939) 40 CAR 494. Indeed it has been said that a tribunal interpreting an award must attribute to the words used their true meaning even if satisfied that so construed they would not carry out the intention of the award making authority - Re Health Administration Corporation; Re Public Hospital Nurses (State) Award (1985) 12 IR 122; Rogers Meat Co Pty Ltd v Howarth [1960] AR (NSW) 291; Re Government Railways and Tramways (Engineers etc) Award [1928] AR 53 at 58 (Cantor J).
(c) Finally, in NSW Fire Brigades at [43], the Full Bench observed at [47]:
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: Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321 (per Mason and Wilson JJ).
114Reference may also be made to the role of context in the construction of awards. This may be illustrated by reference to the principles stated in the following authorities:
(a) In Zoological Parks Board (NSW) v Australian Workers Union [2004] NSWIRComm 85; (2004) 135 IR 56 at [44] ('Zoological Parks') the Full Bench stated:
... The words must be considered in the context of the instrument as a whole although in a practical sense, some parts of the documents will be very significant and others less significant or of no moment at all. We note, in this respect, the observations of Walton J, Vice-President in Fox v GIO Australia Ltd (2002) 56 NSWLR 512; 120 IR 401 at [46] as follows:
[46] The modern approach to statutory interpretation insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by reference to legitimate extrinsic material such as explanatory memoranda and law reform reports, one may discern the statute was intended to remedy: CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408.
(b) In Short v F W Hercus Pty Ltd (1993) 40 FCR 511 ('Short') at 518-519, Burchett J stated:
But even if the language, read alone, appeared pellucidly clear, the tendency of recent decisions - and this is the other answer to the argument put - would seem to require the court to look at the full context. Only then will all the nuances of the language be perceived.
(c) In Amcor, Kirby J stated at [66]:
In the interpretation of the Constitution and of legislation, Australian courts have passed beyond the age of the magnifying glass. No longer do courts (or industrial tribunals) seek to give meaning to contested language considered in isolation from the context in which the words are used and the purpose for which the words were apparently chosen. Nowadays, the same insistence on context, as well as text, permeates the approach to interpretation that is taken to legally binding agreements. Indeed, before this approach became normal in the courts, in the interpretation of contested instruments it was often the approach adopted for the construction of industrial texts. This was in keeping with an inclination of such tribunals towards practical, as distinct from purely verbal, constructions in that area of the law's operation.
115Putting aside for one moment the refinements applicable to award interpretation to which Street and French JJ alluded, these statements of principle may be synthesised as follows:
(1)The legal meaning of 'a provision of an award' is to be ascertained through a process of construction by which the intention of the provision is deduced. It is the duty of the court to give the words of the award a meaning that the authors of the award are taken to have intended them to have;
(2)The process of construction must begin with a textual analysis of the words of the provision, that is, a consideration of the ordinary and grammatical meaning of the words;
(3)Whilst the surest guide to the meaning of an award provision is language used in a provision of an award, the meaning of the text may require consideration of the context (which includes, inter alia, consideration being given to the instrument as a whole). Thus, the initial step to construction may involve construing the words of an award provision in context;
(4)The consideration of the words of the provision of an award in context includes examining the general purposes and the policy of the provision derived from a statement of policy in the award or from the terms of the award. Thus, the legal meaning may be ascertained by reference to general purpose, consistency and fairness, although, again, the purpose of a provision derives in its text and structure. A relevant consideration in this respect is the mischief remedied by a provision. (See Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [47].);
(5)An examination of the purpose of an instrument is very much part of the traditional approach to award interpretation. It was accepted by Kelleher J in Re Dispute between Broken Hill Pty Co Ltd and the Federated Ship Painters and Dockers' Union of Australia, New South Wales Branch, Re Tank Tops [1961] AR (NSW) 312 at 314 that it is proper to pay regard to "the purposes for which a provision is intended" (as quoted in Bryce v Apperley at 452 and Kingmill at [63]). An application of this approach may be found in the judgment of Hill J in Australian Workers Union (NSW) v Pioneer Concrete (NSW) Pty Ltd (1991) 38 IR 365 at 380, where it was stated that provisions in awards must be construed reasonably and realistically, "having regard to their purposes and objectives". I will add further to this consideration when returning to the notion, developed in the dicta of Street and French JJ, that a generous construction should be adopted in the interpretation of awards;
(6)The determination of the purpose or intention of a provision of an award neither permits nor requires a search for what those who drafted or made the award had in mind when the award was made: see Construction, Forestry, Mining and Energy Union (NSW Branch) v Delta Electricity [2003] NSWIRComm 135; (2003) 146 IR 360 at [44] and NSW Fire Brigades at [47]. Further, it is not for the court to construct its own idea of a desirable policy, import it to the award maker and then characterise it as the purpose of the provision: see Brown at [40] (Bathurst CJ).
116A related question concerns the extent to which extrinsic material may be employed in award interpretation.
117In Certain Lloyd's at [25], French CJ and Hayne J provided a summary of the principles concerning the use of extrinsic materials in statutory construction as follows:
Determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials. The purpose of a statute resides in its text and structure (28). Determination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted. It is important in this respect, as in others (29), to recognise that to speak of legislative "intention" is to use a metaphor. Use of that metaphor must not mislead. "[T]he duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have" (30) (emphasis added). And as the plurality went on to say (31) in Project Blue Sky:
Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision.But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction (32) may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning."
To similar effect, the majority in Lacey v Attorney-General (Qld) (33) said:
"Ascertainment of legislative intention is asserted as a statement of compliance with the rules of construction, common law and statutory, which have been applied to reach the preferred results and which are known to parliamentary drafters and the courts."
The search for legal meaning involves application of the processes of statutory construction. The identification of statutory purpose and legislative intention is the product of those processes, not the discovery of some subjective purpose or intention.
118These principles were reaffirmed by Crennan and Bell JJ at [68]. Their Honours continued at [70] as follows:
While consideration of extrinsic materials should not displace the clear meaning of the text, the purpose of a provision may be elucidated by appropriate reference to them...it is uncontroversial that in determining the meaning of the text of a statute or provision a court may take into account the general purpose and policy of a provision and, in particular, the mischief that it is intended to remedy...
119Following this approach, Kiefel J observed at [89]:
It is legitimate to resort to materials outside the statute, but it is necessary to bear in mind the purpose of doing so and the process of construction to which it is directed. That purpose is, generally speaking, to identify the policy of the statute in order to better understand the language and intended operation of the statute. An understanding of legislative policy by these means does not provide a warrant for departing from the process of statutory construction and attributing a wider operation to a statute than its language and evident operation permit.
120In Commission of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 293 ALR 257, the High Court (per French CJ, Hayne, Crennan, Bell and Gagelar JJ) identified the scope for the use of extrinsic materials in statutory construction as follows (at [39]):
"This court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text" [Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 ; 260 ALR 1 ; [2009] HCA 41 at [47]]. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.
121A Full Bench of the Commission in Zoological Parks considered whether the circumstances surrounding the making of an award may be used as an aid to its construction as follows, at [45] to [47]:
45 The principle of considering the surrounding circumstances in interpreting the words of a written instrument was discussed by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 348 in the following way:
On the other hand, it has frequently been acknowledged that there is more to the construction of the words of written instruments than merely assigning to them their plain and ordinary meaning - see, for example, the remarks of Knox C.J. in Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 at 69. This has led to a recognition that evidence of surrounding circumstances is admissible in aid of the construction of a contract. So Lord Wilberforce in L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 at 261 was able to state the broad thrust of the rule in this way:
The general rule is that extrinsic evidence is not admissible for the construction of a written contract; the parties' intentions must be ascertained, on legal principles of construction, from the words they have used. It is one and the same principle which excludes evidence of statements, or actions, during negotiations, at the time of the contract, or subsequent to the contract, any of which to the lay mind might at first sight seem to be proper to receive.
His Lordship noted that evidence of surrounding circumstances is an exception to the rule, but he had no occasion to discuss its scope for there it was not, as it is here, a critical question (at p 348).
46 This issue has also been referred to more recently by the High Court in Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 76ALJR 436 where Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJstated at [10]:
In Codelfa, Mason J (with whose judgment Stephen J and Wilson J agreed) referred to authorities (In particular, speeches of Lord Wilberforce in Prenn v Simmonds [1971] 1 WLR 1381 at 1383-1385; L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 at 261; and Reardon Smith Line v Hansen-Tangen [1976] 1 WLR 989 at 995-997) which indicated that, even in respect of agreements under seal, it is appropriate to have regard to more than internal linguistic considerations and to consider the circumstances with reference to which the words in question were used and, from those circumstances, to discern the objective which the parties had in view. ...
Such statements exemplify the point made by Brennan J in his judgment in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 401:
The meaning of a written contract may be illuminated by evidence of facts to which the writing refers, for the symbols of language convey meaning according to the circumstances in which they are used.
47 It is clear from the authorities that whilst it is permissible to have regard to the surrounding circumstances in construing a written document, it is impermissible to consider "evidence of user".
122These observations expressly drew on Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337 ('Codelfa'), where Mason J quoted Lord Wilberforce in Prenn v Simmonds [1971] 3 AII ER 237; [1971] 1 WLR 1381 at pp1383-1384 (at 348-349), as follows:
The time has long passed when agreements, even those under seal, were isolated from the matrix of facts in which they were set and interpreted purely on internal linguistic considerations. There is no need to appeal here to any modern, antiliteral, tendencies, for Lord Blackburn's well-known judgmentin River Wear Commissioners v. Adamson (63) provides ample warrant for a liberal approach. We must, as he said, inquire beyond the language and see what the circumstances were with reference to which the words were used, and the object, appearing from those circumstances, which the person using them had in view. Moreover, at any rate since 1859 (Macdonald v. Longbottom(64)) it has been clear enough evidence of mutually known facts may be admitted to identify the meaning of a descriptive term.
123Expanding upon the scope of the use of extrinsic materials in the interpretation of contracts, Mason J stated (at 352):
Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.
Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.
124Mason J observed that Lord Wilberforce returned to this theme in Reardon Smith Line v Hansen-Tangen [1976] 1 WLR989; [1976] 3 All ER 570:
In a speech concurred in by a majority of the members of the House of Lords he acknowledged that it is legitimate "to have regard to ... 'the surrounding circumstances'" (at 995). He went on to say (at 995-6):
In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating (at 350).
125His 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.
126In NSW Fire Brigades, the Full Bench cautioned as to the limits of the use of extrinsic materials in the construction of awards (at [44]) as follows:
Thirdly, extrinsic materials may be considered for certain specified purposes in ascertaining the meaning of legislation: see s 34 of the Interpretation Act. Again, however, the content of any extrinsic material cannot be used to simply rewrite the terms of the statutory provision. As McHugh J observed in Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 113:
Extrinsic material cannot be used to construe a legislative provision unless the construction of the provision suggested by that material is one that is "reasonably open". Even if extrinsic material convincingly indicates the evil at which a section was aimed, it does not follow that the language of the section will always permit a construction that will remedy that evil. If the legislature uses language which covers only one state of affairs, a court cannot legitimately construe the words of the section in a tortured and unrealistic manner to cover another set of circumstances.
127Understanding 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.
128In 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.
129Some further short reference should be given to the consideration of the history of a provision of an award. An examination of the actual history of the provisions of an award, the subject of an application for declaratory relief, may form part of the consideration of context.
130In Short (at 517-518), Burchett J (with whom Drummond J agreed) gave the following vivid description of the use of history in the interpretation of awards:
No one doubts you must read any expression in its context. And if, for example, an expression was first created by a particularly respected draftsman for the purpose of stating the substance of a suggested term of an award, was then adopted in a number of subsequent clauses of awards dealing with the same general subject, and finally was adopted as a clause dealing with that same general subject in the award to be construed, the circumstances of the origin and use of the clause are plainly relevant to an understanding of what is likely to have been intended by its use. It is in those circumstances that the author of the award has inserted this particular clause into it, and they may fairly be regarded as having shaped his decision to do so. The rules of construction, Mason and Wilson JJ said in Cooper Brookes(Wollongong) Ply Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 at 320, are really rules of common sense. Common sense would be much offended by a refusal to look at the facts I have summarised. As Isaacs J said in Australian Agricultural Co Ltd v Federated Engine-drivers' and Firemen's Association of Australasia (1913) 17 CLR 261 at 272, citing Lord Halsbury LC: "The time when, and the circumstances under which, an instrument is made, supply the best and surest mode of expounding it."
...
True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. Very frequently, perhaps mostoften, the immediate context is the clearest guide, but the court should not deny itself all other guidance in those cases where it can be seen that more is needed.
131In Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Department of Education and Communities at [26], the Full Bench observed:
In the same way that reference to legislative history is a factor relevant to the consideration of the context of a provision, we consider that it was open to his Honour, in the context of the present matter, to have regard to award history (or, as it were, the absence of award history).
132Finally, I return to the notion, drawn again from George A. Bond (at 503-504), reflected in the judgment of French J in City of Wanneroo at [57] and reaffirmed by the Full Bench in NSW Fire Brigades at [46], that awards should receive a generous construction.
133That further discussion should commence with the following passages from NSW Fire Brigades at [45] and [46]:
45 This takes us to the fourth principle. In an address to the Clarity and Statute Law Society at Cambridge University in July 2002 ("Towards a Grand Theory of Interpretation, The Case of Statutes and Contracts"), Kirby J identified a number of general features of statutes and contracts that "may make it dangerous to assume that exactly the same approach to interpretation will be apt for both". In particular, his Honour noted:
Whilst a written contract between private parties having large consequences may, on occasion, involve the need for great precision and go through many drafts, ordinarily there is less formality about most written contracts. At least this is so when compared to the preparation of legislation. In the nature of writing that expresses binding public law, legislation is addressed to the community at large and usually has no stated termination date. It is typically prepared by highly trained and expert parliamentary counsel. It is ordinarily accompanied by explanatory memoranda. It is introduced into the legislature with a ministerial second reading speech. Typically, this degree of formality is missing from private instruments...
46 Whilst awards are instruments to be construed according to the terms of the Interpretation Act, consideration should be given to the differences between statutes and awards. Some of these differences were referred to by Street J in Bond v McKenzie:
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.
134In Amcor at [96], Kirby J, albeit in the context of industrial agreements, gave the following explanation for a liberal construction of industrial instruments:
The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served
combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement (87). Approaching the interpretation of the clause in that way accords with the proper way, adopted by this Court (88), of interpreting industrial instruments and especially certified agreements (89).
135By way of further explanation for this approach, Kirby J observed the following at [94]:
...certified agreements such as this commonly lack the precise drafting of legislation. As appears from a scrutiny of the provisions of the Agreement, it bears the common hallmarks of colloquial language and a measure of imprecision. Doubtless this is a result of the background of the drafters, the circumstances and possibly the urging of the preparation, the process of negotiation and the omission to hammer out every detail - including possibly because such an endeavour would endanger the accord necessary to consensus and certification by the Commission.
136The principles, so stated in Amcor, are also applicable to the interpretation of awards. In particular, consent awards, such as the one presently under consideration, will often exhibit, by their nature, the context in which they operate, and their industrial purpose, similar features to those identified by his Honour regarding the interpretation of industrial agreements.
137It might be noted that Kirby J, at [96], agreed with the reasons of Madgwick J in Kucks v CSR Ltd (1996) 66 IR 182 at 184 (which were also referenced by Callinan J at [129]).
138The passage from Kucks v CSR Ltd cited with approval by his Honour is expressed, in part, as follows:
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.
139The applicant referred to the judgment of Macken J in San Remo (Southland) Pty Ltd v Farrell (1987) 22 IR 291 at 294-5, which extended these principles of construction by stating as follows:
...industrial tribunals have always tended to lean toward construction of awards and employment circumstances which would preserve the operation of instruments of regulation such as awards rather that against their operation.
140It was observed in Re State Rail Authority Firefighters Award 2001 that the veracity of this statement was doubted by Maidment J in Comdox (No 272) Pty Ltd (t/a Ronald Stead Golf) v Dawson (1993) 49 IR 458. However, the reasoning of Macken J was, nonetheless, followed in that case, less controversially, to the extent that it accorded with the principle of ut res magisvaleat quam pereat (at [27]).
141A core proposition that may be distilled from these approaches is that, within the constraints of the text and structure of an award, a "purposive approach" may be adopted. This phrase borrows from a different but instructive formulation of the modern English approach to the construction of a contract of employment made between workers and an employer (without the intervention of unions or collective agreements of awards). In the judgment of the Supreme Court of England and Wales delivered by Lord Clarke of Stone-cum-Ebony in Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] 4 All ER 745; [2011] I.C.R. 1157 he stated:
32 Aikens LJ stressed at paras 90-92 the importance of identifying what were the actual legal obligations of the parties. ... In addition, he correctly warned against focusing on the "true intentions" or "true expectations" of the parties because of the risk of concentrating too much on what were the private intentions of the parties. He added:
"What the parties privately intended or expected (either before or after the contract was agreed) may be evidence of what, objectively discerned, was actually agreed between the parties: see Lord Hoffmann's speech in the Chartbrook case [2009] AC 1101 , paras 64-65. But ultimately what matters is only what was agreed, either as set out in the written terms or, if it is alleged those terms are not accurate, what is proved to be their actual agreement at the time the contract was concluded. I accept, of course, that the agreement may not be express; it may be implied. But the court or tribunal's task is still to ascertain what was agreed."
I agree.
33 At para 103 Sedley LJ said that he was entirely content to adopt the reasoning of Aikens LJ:
"recognising as it does that while employment is a matter of contract, the factual matrix in which the contract is cast is not ordinarily the same as that of an arm's length commercial contract."
I agree.
34 The critical difference between this type of case and the ordinary commercial dispute is identified by Aikens LJ in para 92 as follows:
"I respectfully agree with the view, emphasised by both Smith and Sedley LJJ, that the circumstances in which contracts relating to work or services are concluded are often very different from those in which commercial contracts between parties of equal bargaining power are agreed. I accept that, frequently, organisations which are offering work or requiring services to be provided by individuals are in a position to dictate the written terms which the other party has to accept. In practice, in this area of the law, it may be more common for a court or tribunal to have to investigate allegations that the written contract does not represent the actual terms agreed and the court or tribunal must be realistic and worldly wise when it does so."
35 So the relative bargaining power of the parties must be taken into account in deciding whether the terms of any written agreement in truth represent what was agreed and the true agreement will often have to be gleaned from all the circumstances of the case, of which the written agreement is only a part. This may be described as a purposive approach to the problem. If so, I am content with that description.
142Of course, a difference in the relative bargaining power of the parties is not relevant to the present matter but the requirement to have regard to all the circumstances of the case in which the actual words used are in harmony with the jurisprudence which I have reviewed above. In short, in the construction of an award, this methodology requires the Court to utilise a broad approach to the relevant words in their context, particularly their industrial context (and this may include relevant permissible extrinsic evidence but must disregard impermissible extrinsic evidence) in order to discern the meaning of those words which the drafters are properly taken to have intended.
143The adoption of these principles will result, in my view, in avoidance, in the construction of awards, of a strict but unintended technical meaning being attributed to the particular words of an award or too much attention being given to mere infelicitous expression or inconsistencies. The Court should not strive for the discernment of an absurdity. The Court should endeavour to give a provision of an award a meaning consistent with the intention of the parties gathered from the words of the provision and from the whole award, having regard to the industry and industrial relations environment in which the award came to be made. As Kirby J put it, the construction should be one which contributes to a sensible industrial outcome, provided, as discussed below (and earlier in relation to the extrapolation of principle), such an interpretation may reasonably be available from the language used in the provision (that is, from the text of an award).
144Ultimately, the adoption of such an approach to the construction of awards has limits. As I have mentioned, the principles of award interpretation cannot lead to an attempt to construe the terms of an award according to the subjective intention of the parties or result in an unreasonable or unnatural construction being placed on the words of an award. Attention must be fixed upon the ordinary meaning of the words used when read in context. As French J stated in City of Wanneroo at [57]:
...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.
145I propose to deal with one further matter for completeness.
146There are a variety of factors that have influenced the adoption of the aforementioned generous approach to the construction of awards. French J in City of Wanneroo concluded that the approach involves a contextual consideration, namely, the context of the industrial realities in which the award came into existence. In Amcor, Kirby J pointed to the nature of the instrument, its industrial purpose, and the manner of its expression (being the derivative of an industrial negotiation process ultimately resulting in ratification by the Commission). Madgwick J, in Kucks v CSR Ltd, referred to the framers of the award having a "practical bent of mind" with the award being expressed in terms of the relevant industrial environment.
147These approaches are predicated upon the notion that an award is typically derived from a process of negotiation and agreement in a particular industrial relations context leading to a form of words expressed in an agreement for ratification as a consent award (provided certain statutory minimums are met and the wage fixing principles satisfied). The provisions of an award are often reached without the benefit of formal drafting that may arise in a different context (such as a statute or commercial contract), or where any formal drafting is constrained by a process of compromise which may affect clarity.
148One question which arises is whether the process of award review, required under s 19 since the commencement of the Act on 2 September 1996, might warrant some different approach. For the reasons given below, I consider that this question should be answered in the negative.
149Whilst s 19(1) requires the Commission to conduct a review once every three years and the Commission may, for that purpose, initiate a review, the provisions of s 19 do not remove the requirement of the Act that awards will be constituted by the parties (s 12).
150Nothing in s 19 removes the burden falling upon parties to an award to participate in the normal way in such proceedings. The Commission is not a party to awards or proceedings concerning such awards. Section 19 proceedings are consistent with an adversarial model: Principles for Review of Award [1998] NSWIRComm 661; (1998) 85 IR 38 at 56.
151The Commission's role in the review of awards is limited to the function assigned under s 19(2) and, for present purposes, that is relevantly the 'modernisation' of awards. Modernisation simply means to bring up to date or make contemporary: Principles for Review of Award (at 44).
152Section 19(3) provides that the Commission must take account, inter alia, of "the ease of understanding of the awards" but the provision imposes no separate obligation on the Commission to make any particular change to the award with respect to such matters in the absence of a contention to that effect advanced by a party to such proceedings: see Principles for Review of Award (at 46).
153Section 19 does not impose upon the Commission an independent obligation to recast the provisions of awards in a manner consistent with formal legal drafting or resolve potential issues as to the construction of a provision, absent the initiative of the parties or proceedings specifically brought in that respect (see s 175 of the Act): Principles for Review of Award at 56. Even then the Commission has been careful to draw a distinction between matters appropriate for consideration under s 10 of the Act (by way of an award application to meet the needs of employers and employees in an industry) and the quite limited purposes of s 19 which may, when activated, result in the review of an award (s 19(6)): Principles for Review of Award (at 44). See also Re Poultry Industry Preparation (State) Award and other awards [2003] NSWIRComm 129 at [61], [64], [67] and [74].