The Australian Competition and Consumer Commission (ACCC) has made a class exemption, which allows eligible businesses to collectively bargain without breaching the competition laws.
The class exemption is available for businesses to use from 3 June 2021.
A class exemption is a way for the ACCC to grant businesses an exemption from competition law for certain types of conduct that may otherwise risk breaching competition laws, but that:
- do not substantially lessen competition, and/or
- are likely to result in overall public benefits.
Negotiating as a group can allow businesses to share the time and cost of negotiating contracts, and potentially give group members more input into contract terms and conditions. There are often time and cost savings for the suppliers or franchisor with which the group is bargaining.
Broadly, the class exemption enables:
- a business or independent contractor with aggregated turnover of less than $10 million in the preceding financial year, to form or join a collective bargaining group to negotiate with suppliers or customers about the supply or acquisition of goods or services
- franchisees who have franchise agreements with the same franchisor to collectively bargain with their franchisor regardless of their size or other characteristics
- fuel retailers who have fuel re-selling agreements with the same fuel wholesaler, and operate under the same system or marketing plan determined, controlled or suggested by the fuel wholesaler or an associate of the fuel wholesaler, to collectively bargain with their fuel wholesaler regardless of their size or other characteristics without the risk of breaching competition laws.
The class exemption does not force anyone to join a collective bargaining group, nor force a customer, supplier or franchisor to deal with the bargaining group if they do not want to. The target business will be free to continue to negotiate with each member of the group individually. The class exemption simply removes the risk that collective bargaining by eligible businesses will breach the competition law.
Dealers and dealer councils may wish to commence collective bargaining with a distributor. FCW Lawyers created a roadmap that dealers and dealer councils can use to improve their bargaining position.
VACC members should continue to reach out to their Industry Policy Advisors at VACC or their own legal advisors, for any issues relating to the collective bargaining exemption.
For more information:
VACC: Member Bulletin
ACCC: Collective bargaining by small business facilitated by class exemption