Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd

The dispute before the High Court of Australia concerned the interpretation of a clause in an enterprise agreement that provided for the payment of a redundancy allowance. The Construction, Forestry, Mining and Energy Union (CFMEU) brought proceedings against Boral Resources (Vic) Pty Ltd, alleging that Boral had breached the agreement by failing to pay the redundancy allowance to employees who had been made redundant. The primary judge found in favour of the CFMEU, but this decision was overturned by the Full Federal Court. The CFMEU then appealed to the High Court.

The central legal issue before the High Court was whether the redundancy allowance was payable to employees who were made redundant as a result of the cessation of a particular business operation, or whether it was only payable in circumstances where the employees' employment was terminated for reasons other than the cessation of that operation. This involved an examination of the precise wording of the relevant clause within the enterprise agreement and the application of principles of contractual interpretation.

The High Court, in allowing the appeal, held that the redundancy allowance was payable in the circumstances of the case. Their Honours reasoned that the plain language of the clause did not exclude redundancy payments simply because the redundancy arose from the cessation of a specific business operation. They emphasised that the agreement provided for redundancy payments upon termination of employment, and the cessation of the operation was the reason for the termination, not an exclusion from the entitlement. The court applied established principles of contractual interpretation, focusing on the ordinary meaning of the words used in the agreement and the context in which they appeared.

The High Court set aside the order of the Full Federal Court and reinstated the order of the primary judge, finding that Boral Resources (Vic) Pty Ltd had breached the enterprise agreement.