The Problem of Uncertainty: An Empirical Analysis of Indeterminate Language and Ambiguous Provisions in Enterprise Agreements

Abstract

Australian enterprise agreements are intended to be simple documents that are easy for workers to understand and straightforward for businesses to apply. This article argues that simplicity is undermined when agreements contain indeterminate language and ambiguous provisions, since these features make it difficult to pin down the precise meaning of agreements. It presents findings from an empirical study that examines two forms of uncertainty in enterprise agreements: first, the use of vague, open-textured terms such as ‘reasonable’ and ‘practicable’; and, second, the inclusion of particular types of poorly drafted provisions that are difficult to interpret. The findings show that while the use of indeterminate terms increased over time, there was a substantial decline in the use of particular types of ambiguous provisions. The study also suggests that these outcomes have been influenced by two factors, legislative change and union involvement in bargaining. The findings add to our understanding of the nature of legal complexity and will provide the basis for a nuanced analysis of future proposals to reform the legislative framework for agreement-making.