The Fair Work Act (2009) (the “FW Act”) prohibits a person from contravening a term of an enterprise agreement.

A recent decision of The Federal Court of Australia (the “FCA”) demonstrates how enterprise agreement interpretation will not always rely on a strict application of the language, and can be applied flexibly to account for the realities of the employer’s operations.

Background

The Applicant was a union representing tram drivers working for the First Respondent, a Victorian company which operates the tramway services in Melbourne. The Applicant brought an action in the FCA against the Respondent and its Chief Operations Officer (the “Second Respondent”) alleging that they had misrepresented the drivers’ rights to unpaid meal breaks under the enterprise agreement when they were running behind schedule.

The Second Respondent sent tram drivers an update in June outlining that they would not be able to seek their full meal breaks of 90 minutes when arriving late to the depot. The Second Respondent justified this as wanting to reduce tram cancellations and restore public confidence in light of COVID-19. The change was said to be in line with the enterprise agreement which afforded at least a 40-minute break if drivers worked through their designated break due to unforeseen circumstances such delays.

The Applicant contended that this was only permissible in instances of emergencies or wide-spread delay, and that such action would be in breach of the enterprise agreement and the FW Act which prevents an individual from contravening an enterprise agreement.

In correspondence between the Applicant and the First Respondent, the First Respondent contended that flexibility would still be given to drivers, and they would be subject to withheld pay if unable to take their full rostered meal break.

The outcome

The FCA held that the nature of the enterprise agreement “concerns running a tram network where late running is a normal everyday occurrence”. The FCA considered the balance between the clauses of the enterprise agreement which set out the flexible circumstances in which rostered meal breaks may be reduced to a minimum of 30 minutes, and another clause which created an obligation on the First Respondent to have break times specified within a range of time.

After conducting its enterprise agreement interpretation, the FCA held that the two clauses sought to balance the competing interests of the Applicant and the Respondent. The obligation of rostered meal breaks was seen to contain the flexibility to accommodate for shortened breaks due to the nature of running a tram network. The FCA ultimately held that the Respondent had not breached the agreement by altering entitlements to meal breaks.

Key takeaways

• Breaching the terms of an enterprise agreement can result in an order for civil remedies under the Fair Work Act.
• A key principle of enterprise agreement interpretation is considering the language of the instrument having regard to its industrial and statutory context.
• While some terms may be construed by a court in strict terms, in some instances a court will take a flexible approach to enterprise agreement interpretation.

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