Handy Tips to Interpreting a Modern Award that Applies to Your Business
email@example.com | December 19, 2017
For most employers, it is likely that a Modern Award will apply to some or all of your employees at any given time. This is in the absence of an enterprise agreement having coverage and application.
Modern Awards can be complex. As a result, interpreting a Modern Award can often be a difficult task. Some of the difficulties faced with the task of interpretation are referred to by Justice Tracey in Transport Workers’ Union of Australia v Linfox Australia Pty Ltd  FCA 829:
“Industrial instruments such as awards and agreements have long been used in Australia to regulate terms and conditions of employment. More often than not they are drafted by non-lawyers. They frequently contain terms which carry a particular meaning to those involved in an industry but which do not have wider currency. Long standing awards and agreements commonly are subject to frequent amendment. Sometimes those amendments, whilst made to meet a particular exigency, have wider implications for the operation of the instrument although this may not be apparent to those responsible for drafting the amendments.”[i]
Case law provides principles that are handy to refer to when faced with the task of interpreting a clause from a Modern Award. Some of these are provided in summary form and on a general basis as follows:
- The starting point is to look at the natural and ordinary meaning of the words used in an award.[ii]
- If the words used in an award are unambiguous in their meaning, then that is the meaning they should have. A court should not consider the intention of those that drafted the award when the ordinary meaning is clear.[iii]
- Otherwise, the preferred approach is to search for the meaning intended by the framer(s) of the document, rather than adopting a “narrow or pedantic” approach.[iv]
- The words of an award are not to be construed “in a vacuum divorced from industrial realities” and it is necessary to consider the context in which the award came to be in its current form.[v]
- It is important to consider the context and purpose of an award provision being interpreted, and “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.”[vi]
- Finally, an award is an instrument made by an authority and it therefore attracts the application of the Acts Interpretation Act 1901 for the purpose of its interpretation. For example, section 15AB(1)(a) of the Acts Interpretation Act provides that consideration may be given to extrinsic materials “to confirm that the meaning of the provision of the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act…”[vii]
- Despite the ability to consider the industrial context in which an award is created, or the ability to look at the extrinsic material in interpreting the award, a court is still not free to read into an award a “notion of what be fair or just”.[viii]
The above are not intended to be an exhaustive list and the relevant award modernisation decisions which discuss the creation of the particular Modern Award under consideration is also a source to refer to if you are required to interpret any award provisions.
The approach taken to interpreting the Modern Award also depends on the particular Modern Award itself and whether it is an industry or occupation based award.
If you are faced with a Modern Award query from an employee, it is important to seek advice early, to assist with reducing the risk of a dispute occurring over a particular Modern Award clause and entitlement. HLS Legal is able to provide tailored advice to your business in respect of Modern Award coverage and compliance. Please do not hesitate to contact us on (08) 9322-5202.
* This article is intended to be informative only and does not constitute legal advice. If you are concerned about your individual circumstances, please contact a lawyer.
[i] At 
[ii] Veolia Transport Sydney Pty Ltd v Misfud  FCA 1472 ; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union  FCA 813 ; Re City of Wanneroo v Michael Lindsay Holmes  FCA 369 .
[iii] Veolia Transport Sydney Pty Ltd v Mifsud  FCA 1472 ; Manildra Flour Mills (Manufacturing) Pty Ltd v National Union of Workers  FCA 1010 .
[iv] Australian Workers’ Union v Cleanevent Australia Pty Ltd  FCA 1477 ; Kucks v CSR Ltd (1996) 66 IR 182 .
[v] City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union  FCA 813 ; Re City of Wanneroo v Michael Lindsay Holmes  FCA 369 .
[vi] City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union  FCA 813 ; Short v FW Hercus Pty Ltd  FCA 51  (Burchett J).
[vii] City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union  FCA 813 .
[viii] Australian Workers’ Union v Cleanevent Australia Pty Ltd  FCA 1477 ; Kucks v CSR Ltd (1996) 66 IR 182 .