Collective bargaining and collective boycotts: ACCC issues paper

An Australian Competition and Consumer Commission Issues Paper on collective bargaining and collective boycotts issued today will provide an insight to what the ACCC considers when businesses requests to engage in such activities, including when it is likely to look favourably on such requests.

"Many, particularly smaller businesses, use collective bargaining as a means of redressing an imbalance in bargaining power when negotiating with larger businesses and achieving, what they consider to be, more favourable commercial outcomes", ACCC Chairman, Mr Graeme Samuel, told the Council of Small Business Organisations of Australia's annual small business summit, today.

"Normally, where groups of competing businesses come together to collectively negotiate terms and conditions, and in particular, prices, this is likely to raise concerns under the Trade Practices Act. However, the ACCC is able to grant immunity from most of the competition provisions of the Act, including those relating to collective bargaining and collective boycotts through an 'authorisation' process. Before doing so, the ACCC must be satisfied that granting such immunity is in the public interest. This assessment is made on a case by case basis.

"Generally, particularly in relation to small businesses collectively bargaining with a larger business, the ACCC finds that such arrangements are likely to be fairly benign in terms of their effect on competition. In the overwhelming majority of cases, the ACCC finds these arrangements to be in the public interest and allows them to proceed. In recent years ACCC authorisation has enabled collective bargaining by chicken growers, dairy farmers, sugar cane growers, lorry owner-drivers, TAB agents, hotels, newsagents and small private hospitals amongst others.

"While each case raises its own issues, there are features in common to many collective bargaining arrangements. The paper provides a useful guide for businesses wishing to seek immunity in respect of collective bargaining and boycott activity to the way in which the ACCC considers these issues.

"Legislation recently introduced by the Federal Government in relation to collective bargaining also recognises that enabling small businesses to negotiate more effectively with big businesses through bargaining collectively is often found to be in the public interest. This legislation is designed to provide a speedier and simpler 'notification' process for small businesses to seek immunity from the Act to collectively bargain. 

"By lodging a notification small businesses will be afforded the same immunity from the Act to collectively bargain as the current authorisation process allows.  However, such immunity will be automatically conferred after 14 days and will remain in place unless and until the ACCC is satisfied that it is not in the public interest. Essentially, the onus will fall onto the ACCC to demonstrate that immunity is not justified, rather than, as is the case under the authorisation process, on applicants to demonstrate that it is".

The notification process will be available in respect of collective negotiation including associated collective boycotts.

"Importantly, the ACCC will still need to be satisfied that the arrangements are in the public interest. Seriously anti-competitive arrangements will not receive immunity under the notification process without significant benefits being demonstrated. In particular, the ACCC will require strong justification before granting immunity to any arrangements which involve collective boycott activity".

Copies of the issues paper will be available from the ACCC website.

In addition, in conjunction with the passage of the Bill enacting the collective bargaining notification process, the ACCC will be issuing public guidelines to assist small businesses in lodging collective bargaining notifications.