Fair Work Commission approach to interpreting agreements makes good drafting more important

Until recently, the 'first step' when interpreting an enterprise agreement has been for the Fair Work Commission to make an objective judgment about whether the wording of a provision is susceptible to more than one meaning.¹

The Commission has now adopted a new approach, which is to consider the surrounding circumstances at the time the agreement was made to determine whether it is ambiguous, and if so, to determine what was really meant by the parties.²

The Commission's principles are as follows:

1. The Acts Interpretation Act 1901 will not apply to the interpretation of an agreement.
2. It will first be necessary to determine whether an agreement has a plain meaning or contains an ambiguity.