ACCC proposes collective bargaining plan for small businesses

The ACCC said on Thursday it is seeking views on its proposal to implement a class exemption that would allow small businesses to collectively negotiate with their suppliers and processors, without first having to seek ACCC approval.

The new collective bargaining ‘class exemption’ would give qualifying businesses the ability to collectively negotiate without the risk of breaching competition law.

In order to exercise the exemption, businesses and independent contractors would need to be part of a bargaining group, and each have an aggregated turnover of less than $10 million in the financial year before the bargaining group was formed.

According to ACCC, this would cover about 98.5 per cent of Australian businesses.

In addition, the ACCC is proposing that all franchisees and fuel retailers governed by either the Franchising Code of Conduct or the Oil Code of Conduct also be allowed to collectively negotiate with their franchisor, regardless of their aggregated turnover.  

“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.

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, welcomed the proposal shortly after ACCC’s announcement. 

“This proposal is good news for small business,” Ms Carnell said.

She noted that franchisees in particular will see tangible benefits as they band together to bargain for better outcomes on pricing and contract terms.

“This proposal makes it simpler and cheaper for eligible businesses and franchisees to collectively negotiate if they choose,” Ms Carnell said.

“It’s another important step towards levelling the playing field for small business.”

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

More information about how the ACCC is proposing that the class exemption will work can be found at here. Submissions close on 3 July 2019.