ACCC considering collective bargaining exemption

THE ACCC is seeking feedback about a potential ‘class exemption’ to allow small businesses, agribusinesses and franchisees to negotiate collectively with their customers or suppliers, including franchisors.

The ACCC discussion paper published last week sets out how a collective bargaining class exemption could operate, who would qualify, and what conditions would apply. Collective bargaining by a group of businesses is currently not allowed under Australian competition law, unless the group first obtains formal approval from the ACCC.

A collective bargaining class exemption would provide a ‘safe harbour’, so businesses that qualify can collectively bargain without the risk of breaching competition law.

“Businesses can sometimes be better off negotiating with their customers or suppliers as a group. Working together, they may be able to negotiate more efficiently with larger businesses to achieve better terms and conditions than they can on their own,” ACCC deputy chair Mick Keogh said. “Businesses can already seek case-by-case legal protection to collectively bargain through an ACCC ‘authorisation’ or ‘notification’, but this requires the group to submit an application with supporting information and pay a lodgement fee.

"These processes are public and can take a number of months to finalise,” Mr Keogh said. “In contrast, once a collective bargaining class exemption is in place, eligible businesses would automatically get an exemption. This would allow those businesses to gain easier access to the benefits of collective bargaining and begin negotiating sooner.

"Over the years the ACCC has considered many collective bargaining arrangements. Most come from groups of primary producers or other small businesses wanting to collectively bargain with a larger business; for example, farmers wanting to bargain with the company who buys their produce.

“This has given us a good evidence base about the types of collective bargaining that produce public benefits and are unlikely to harm competition, and are therefore likely to be suitable for this exemption,” said Mr Keogh.

The discussion paper is available at: Collective bargaining class exemption

The ACCC is inviting feedback on these issues by 21 September 2018.

Background

From 6 November 2017, the ACCC has the power to make ‘class exemptions’ for specific types of business conduct. This new power is in addition the ACCC’s existing authorisation and notification processes that allow businesses to seek legal protection for arrangements that risk breaching competition law. Collective bargaining is the first type of class exemption the ACCC is considering under this new power.

www.accc.gov.au

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