Collective bargaining and collective boycotts risk breaking competition law, unless covered by an exemption.
‘Collective bargaining’ is a term that can refer to employees negotiating with their employer, while the word ‘boycott’ is often associated with consumer activism. But the terms 'collective bargaining' and 'boycott' have special meanings in competition law.
Collective bargaining happens when 2 or more competitors come together to negotiate with a supplier or customer (known as the target business) over terms, conditions and prices.
Sometimes the group appoints a representative, such as an industry association, to negotiate on its behalf.
When a collective bargaining group agrees not to supply or buy from a business unless it accepts the group’s terms and conditions, this is called a collective boycott.
Another type of boycott is a secondary boycott. This generally involves 2 people acting together to hinder or prevent a third person from supplying to, or buying goods from, a fourth person. Notification cannot provide protection for secondary boycott conduct, though authorisation may be available.
Competition law generally requires businesses to make independent decisions about pricing, terms and conditions, and who they do business with.
When competitors make these decisions jointly in a collective bargaining negotiation or a collective boycott, they risk breaking competition law.
Collective bargaining can sometimes benefit both the participating businesses and, ultimately, consumers. Businesses that bargain collectively can:
The target business can also benefit from lower negotiating costs, better information and more certainty about supply.
A group of 7 dairy farmers jointly approaches a large grocery chain with a proposal to promote the group’s milk in some of its local stores. Jointly negotiating prices, payment terms, and the amount and quality of milk supplied will save time and money.
The proposal will bring a new milk product onto the market, increasing consumer choice.
Because the group is small and the region has many other dairy farmers, competition is unlikely to be affected.
The ACCC can grant an exemption to specific collective bargaining and collective boycotts that are in the public interest. An exemption removes the risk of breaching competition law.
There are different processes for seeking an exemption. The process to use depends on the type of businesses involved and the planned activity.
Most collective bargaining by small business is covered by the collective bargaining class exemption. This means that small business collective bargaining arrangements don't need to be individually assessed.
Without some form of legal protection, this kind of joint bargaining would be at risk of breaching competition laws. This exemption allows eligible businesses to negotiate with their customers or suppliers as a group, without risking a breach of competition laws.
This collective bargaining class exemption applies to:
This class exemption does not apply to collective boycotts. A different type of exemption is required from the ACCC for collective boycotts.
For more information, read the Collective bargaining class exemption guidelines.
To be covered by this class exemption, the collective bargaining group must submit to the ACCC a Collective bargaining class exemption notice form ( DOCX 70.85 KB ) .
Email: exemptions@accc.gov.au
Mail: General Manager Competition Exemptions Branch
Australian Competition and Consumer Commission
GPO Box 3131 CANBERRA ACT 2601
Businesses and activities not covered by the collective bargaining class exemption can seek an exemption from the ACCC by:
Collective bargaining notification is a simpler process than authorisation, but it can only be used:
To decide whether notification or authorisation is right for you, read the Small business collective bargaining notification and authorisation guidelines.
Collective bargaining notifications lodged with the ACCC since 2007, when the process became available, are listed on the collective bargaining notifications register.
Entries include the status and outcome.