Australia: Binding aspirational statements in enterprise agreements

Last Updated: 13 November 2015

It is common to find aspirational statements in enterprise agreements. Often they are simply intended to extol organisational aims, rather than create binding obligations. Although permissible, the danger of such statements is that they might be construed as creating binding obligations, which carry with them penal consequences for non-compliance.

This is amply demonstrated by the decision of the majority of the Full Court of the Federal Court in National Tertiary Education Union v La Trobe University [2015] FCAFC 142 (8 October 2015).


The appellant (NTEU) and the respondent (La Trobe) were covered by an enterprise agreement known as the La Trobe University Collective Agreement 2014 (Agreement).

Clause 74 of the Agreement provided as follows:

The University is committed to job security. Wherever possible redundancies are to be avoided and compulsory retrenchment used as a last resort. The University reserves the right to use the agreed redundancy procedures and provisions set out in this Agreement when all reasonable attempts to mitigate against such action and to avoid job loss have been unsuccessful.

Section 50 of the Fair Work Act 2009 (Cth) (FW Act) prohibits a person from contravening a term of an enterprise agreement.

The NTEU alleged that (in breach of section 50) La Trobe had implemented a proposed restructure with the consequence that 280 employees of La Trobe would have their employment terminated for redundancy. The NTEU alleged that in the implementation of the proposed restructure La Trobe should have taken, but failed to take, specified action in contravention of cl 74 of the Agreement:

  • not to use compulsory redundancies other than as a last resort;
  • to ensure that redundancies were avoided wherever possible; and
  • to make reasonable attempts to mitigate against compulsory redundancies and to avoid job losses.


The key issue determined by the Federal Court was:

Whether, on its true construction, Clause 74 imposed any and, if so, what binding obligations on the University.1

It was not in dispute that the first sentence of cl 74 was aspirational. As to the remainder, Tracey J at first instance concluded that the second and third sentences of cl 74, either separately or collectively, did not impose obligations on La Trobe. The NTEU's application was, therefore, dismissed. The NTEU then appealed to a Full Court of the Federal Court.


A majority of the Full Court (Bromberg and White JJ, with Jessup J dissenting) allowed the NTEU's appeal.

In essence, Bromberg J allowed the appeal for the following reasons:

The second sentence [of cl 74] deals with method. It identifies the means or mechanism by which the overarching goal [in the aspirational first sentence] is to be effected or carried into practice ... The words specify what is to be done (redundancies are to be avoided) and what is not to be done (compulsory retrenchment is only to be used as a last resort) and when and in what circumstances that is to occur ("wherever possible"). In that context, there is nothing aspirational conveyed by the word "are" in the phrase "are to be avoided". Nor does a direction made in that context that something only be done as "a last resort" connote an aspiration ... It imposes a stringent limitation upon action otherwise available.
The ... reservation of La Trobe's rights in the third sentence would be unnecessary if the second sentence left those rights unaffected ... It would not have been necessary for La Trobe to have reserved its rights as against something that was merely aspirational. The qualified nature of the reservation in the third sentence [when all reasonable attempts to mitigate] is also couched in prescriptive rather than aspirational terms ... .2

Bromberg J rejected the contention that the expression 'wherever possible' in the second sentence of cl 74 of the Agreement was too vague and uncertain. Instead, the expression recognised that the content and extent of the limitation would shift with the prevailing circumstances.3

Bromberg J noted that a 'reasonable endeavours' or 'best endeavours' clause in a legal contract serves a similar purpose of conditioning the extent of an obligation to the prevailing circumstances; that reasonableness is often used as a standard or criterion to qualify a legal obligation; and that the FW Act is replete with examples of this, including provisions with penal consequences. For these reasons, his Honour also rejected the contention that the expression in the third sentence of cl 74, 'all reasonable attempts to mitigate', did not create any legal obligation.4

White J agreed with Bromberg J's overall conclusion that cl 74 of the Agreement imposed binding obligations on La Trobe.5

White J also emphasised the fact that it did not seem plausible that, by the third sentence of cl 74, La Trobe would have sought an express acknowledgment of its rights if the second sentence was purely aspirational.6


It is common for parties to include aspirational statements in an enterprise agreement that are intended to be enforceable obligations or entitlements. However, employers should carefully consider the ramifications of doing so.

As observed by White J:

It is in the very nature of these agreements that they are intended to establish binding obligations. The manner of making such agreements is subject to detailed prescription and their operation is contingent upon approval by the Fair Work Commission, the obtaining of which is itself a matter of detailed prescription. In my opinion, it is natural to suppose that parties engaging in this detailed process intend that the result should be a binding and enforceable agreement.7

With this in mind, care should be taken when drafting an agreement to make it evident that a statement that is intended to be aspirational is only that and nothing more. Express language could be used to make it clear that a statement is not intended to create any obligation, albeit that it is a term of the agreement. Also, consideration could be given to 'quarantining' aspirational statements in a preamble or recitals to the agreement rather than in the main body of the agreement.


1 National Tertiary Education Union v La Trobe University [2014] FCA 142 at [17].

2 National Tertiary Education Union v La Trobe University [2015] FCAFC 142 at [67]-[68].

3 Ibid at [71]-[74].

4 Ibid at [75]-[76].

5 Ibid at [102] et seq.

6 Ibid at [113].

7Ibid at [108].

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.