Short v FW Hercus Pty Ltd

The case of Short v FW Hercus Pty Ltd involves a dispute regarding the interpretation of a clause in an award that was amended by the insertion of new clauses. The specific issue at hand was the entitlement of an employee to severance pay upon redundancy. The matter was heard and decided by the Federal Court of Australia. The case required the court to interpret a clause in an order that varied the Metal Industry Award 1984, specifically the new clause 31, which provided for severance pay where the employer had made a definite decision that the employer no longer wished for the job the employee had been doing to be performed by anyone. The key legal question was whether the word "wishes" in this clause referred to the employer's subjective desire to retrench the employee or merely indicated an objective cessation of the employer's wish to have the job done by anyone. Additionally, the court had to determine if it was permissible to examine the history of the clause for the purpose of interpretation and if an ambiguity needed to appear on the face of the document before the history could be examined. The court also considered the effect of statements in the judgment leading to the adoption of the clause's form on its meaning and the scope of the context for the purpose of construction.

The Federal Court held that the term "wishes" in clause 31 was not limited to the employer's subjective desire but encompassed an objective cessation of the employer's wish to have the job done by anyone. The court found that it was permissible to examine the history of the clause for the purpose of interpretation. Furthermore, the court ruled that ambiguity did not need to be apparent on the face of the document before the history could be examined. The statements in the judgment leading to the adoption of the clause's form were considered indicative of its meaning, and the scope of the context for construction was appropriately defined by the court. The court found that the employee was entitled to severance pay on redundancy, as the employer had objectively ceased to wish for the job to be done by anyone.

The appeal was allowed by the Court, which set aside the orders made on 29 May 1992 and dismissed the appeal from the decision of the Industrial Court of South Australia made on 15 November 1991. The final orders included the allowance of the appeal and the dismissal of the earlier appeal, with settlement and entry of orders to be dealt with in accordance with Order 36 of the Federal Court rules.