The Australian Competition and Consumer Commission has issued a draft decision proposing to allow dairy farmers to continue to collectively bargain with processors for a further 10 years.
Dairy farmers have been collectively bargaining with milk processors under an ACCC authorisation granted to Australian Dairy Farmers Ltd (ADF) since 2002. Currently approximately 500 farming families are registered under the ADF's collective bargaining arrangements, in 18 collective bargaining groups.
ACCC chairman Graeme Samuel said the ACCC has reviewed the ADF's arrangements on two occasions since 2002. "Feedback from the industry is that the collective bargaining arrangements are supported and well understood by dairy farmers and processors. As such the ACCC considers it is in a position to grant authorisation for ten years, rather than the five sought by the ADF."
The ADF has sought to continue the conditions of authorisation that currently apply and which broadly limit the membership of bargaining groups to farmers with a 'shared community interest' and prevent bargaining groups from using a common representative in negotiations with processors. The ACCC proposes to maintain the conditions, although it has provided clarification around the use of representatives in negotiations, to make it clear that third parties can provide legal or general advice, training and assistance to bargaining groups.
The ACCC now invites submissions from interested parties before making its final decision.
The ACCC may authorise collective bargaining arrangements when it is satisfied that the public benefit from the conduct outweighs any public detriment. Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Alternatively, small businesses can obtain immunity from legal action under the Act for such arrangements by lodging a collective bargaining notification.
"For many years the ACCC has provided an accessible authorisation process for small business collective bargaining," Mr Samuel said. "In 2011 five collective bargaining arrangements have been authorised by the ACCC, demonstrating the ongoing interest amongst small businesses to work collaboratively to achieve improved efficiencies."
In the ACCC's experience, collectively negotiated contracts are more likely to be entered into where both sides of the negotiation process consider it in their commercial interests to do so. Key benefits from collective bargaining include:
- improving access to information and resources
- improving the level of input into contract negotiations by providing an effective mechanism through which productive contractual discussions can be achieved.
Generally, in relation to small businesses collectively bargaining with a larger business, the ACCC allows them to proceed. Common features of collective bargaining arrangements approved by the ACCC have been (i) their voluntary nature and (ii) where the coverage of the bargaining groups is limited. Arrangements that have the support of the counterparty are also unlikely to be objected to.
The ACCC's draft determination in relation to the ADF's application will be available from the ACCC website, www.accc.gov.au/AuthorisationsRegister and by following the links to this matter. Parties wishing to make submissions should do so by 8 July 2011. Please refer to the website for further information about making a submission to the ACCC.