FARMERS, small businesses and franchisees can more easily collectively bargain with suppliers and processors with a class exemption announced by the Australian Competition and Consumer Commission today.

This class exemption, which is the first made by the ACCC, will allow collective negotiation without first having to seek ACCC approval.

Previously, exemptions were only available case-by-case, through an ACCC ‘authorisation’ or ‘notification’, the ACCC said. This new class exemption removes the need for most small businesses to use those processes.

The ACCC said the class exemption process is quicker and easier and allows eligible groups to obtain protection from competition law for bargaining free of charge, simply by providing a one-page notice to the commission.

The ACCC said the class exemption applies to businesses and independent contractors who form, or are members of, a bargaining group, and who each had turnover of less than $10 million in the financial year before the bargaining group was formed. This covers more than 98 percent of Australian businesses.

Under the arrangement, small businesses and farmers can bargain with their suppliers and processors, eligible franchisees will be able to collectively negotiate with a franchisor, and eligible fuel retailers will be able to collectively negotiate with a fuel wholesaler, the ACCC said.

ACCC deputy chair Mick Keogh said the class exemption will help the majority of small businesses and franchisees, including groups of farmers wanting to bargain with the companies who buy their produce, and small businesses wanting to jointly buy electricity.

“When they bargain collectively, businesses can share the time and cost of negotiating contracts, and have more say when negotiating.

“The counterparties that small business groups collectively bargain with can also benefit from time and cost savings, because they will not have to negotiate with each business individually,” he said.

The ACCC said while collective bargaining by small businesses does not generally harm competition, when competitors act together they require some form of exemption to avoid the risk of breaching competition laws.

The ACCC said the class exemption does not require anyone to join a collective bargaining group, or require a customer, supplier or franchisor to deal with the bargaining group if they do not want to. It simply means that the group can collectively bargain with the supplier or franchisor on a voluntary basis without needing to worry about a possible competition law breach. The other party would still be free to choose to continue to negotiate with each member of the group individually, the ACCC said.

Businesses that fall outside the scope of the class exemption (for example, larger businesses or those with more complex arrangements) are still be able to use the ACCC’s authorisation and notification processes to seek legal protection to collectively bargain on a case-by-case basis, the ACCC said.

All franchisees and fuel retailers governed by either the Franchising Code of Conduct or the Oil Code of Conduct can also use the class exemption to collectively negotiate with their franchisor, regardless of their aggregated turnover.

More information about the class exemption can be found at Collective bargaining class exemption.

Source – ACCC.