Safe haven for collective negotiation on the cards

The Australian Competition and Consumer Commission is proposing to implement a class exemption that would allow franchisees and fuel retailers to collectively negotiate with their franchisor or fuel wholesalers.

The ACCC is trying to gain support for this exemption that would also enable small businesses to collectively negotiate with their suppliers and processors without first having to seek commission approval.

No risk of competition law breach

If taken up, this exemption would give qualifying businesses the ability to collectively negotiate without the risk of breaching competition law.

The exemption would apply to 98.5 per cent of Australian businesses and independent contractors which form part of bargaining groups and have aggregated turnover of less than $10 million in the financial year before the bargaining group was formed.

All franchisees and fuel retailers governed by either the Franchising Code of Conduct or Oil Code of Conduct would also be able to collectively negotiate with their franchisor, regardless of turnover.

Key takeouts

“Collective bargaining allows businesses to share the time and cost of negotiating contracts and potentially gives them more of a say on contract terms and conditions,” ACCC Deputy Chair Mick Keogh said.

“These arrangements can also benefit the prospective business partner because it can result in more efficient scheduling or delivery arrangements.”

He adds that the proposal would make it much simpler and less costly for eligible businesses or franchisees to collectively negotiate and that no one would be forced to join a collective bargaining group or deal with it.

Currently groups of competitors who want to negotiate together must first obtain formal approval from the ACCC under its ‘authorisation’ or ‘notification’ processes.

Preliminary consultation by the ACCC on the exemption last year received positive feedback.

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