Fonterra Brands (Australia) Pty Ltd v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU)

The decision in Fonterra Brands (Australia) Pty Ltd v AMWU involves a dispute between the employer, Fonterra Brands (Australia) Pty Ltd, and the union representing the employees, the Australian Manufacturing Workers' Union. The central issue in this case was the interpretation of the term ‘ordinary pay’ as it appeared in an enterprise agreement. The matter was initially heard and determined by Commissioner Ryan at Melbourne on 13 February 2015 in matter number C2014/1876. The union appealed the decision, leading to a review by a higher court.

The legal issues before the court centred on the precise meaning and scope of ‘ordinary pay’ in the context of the enterprise agreement. The court was required to determine whether ‘ordinary pay’ encompassed specific allowances or bonuses that were not typically part of the employees' standard remuneration. The interpretation of this term was crucial as it impacted the calculation of entitlements under the agreement, including annual leave loading and other benefits.

The court considered the ordinary principles of contractual interpretation, focusing on the language used in the agreement and the context in which it was made. It examined the ordinary meaning of the term ‘ordinary pay’ and the intention of the parties at the time of the agreement. The court concluded that ‘ordinary pay’ should be interpreted in its ordinary and natural meaning, excluding specific allowances that were not part of the employees' regular pay. This interpretation was consistent with the general understanding of the term and the context of the agreement. The appeal was dismissed, upholding the original decision of Commissioner Ryan.

As a result of the court's decision, the original determination that ‘ordinary pay’ did not include certain allowances or bonuses was upheld. This outcome ensures that the interpretation of the enterprise agreement aligns with the common understanding of the term ‘ordinary pay’, and it clarifies the scope of entitlements for the employees under the agreement.