Collective bargaining and collective boycotts

  • Collective bargaining happens when competitors negotiate jointly with a supplier or a customer over terms, conditions or prices.
  • A collective boycott happens when a collective bargaining group agrees not to supply or buy from a particular business unless it accepts the group’s terms and conditions.
  • Unless covered by an exemption, collective bargaining and collective boycotts risk breaking competition law.

What the ACCC does

  • We enforce competition law. This includes the law on cartels and other types of cooperation among competitors.
  • When collective bargaining and collective boycotts are in the public interest, we grant an exemption. This gives businesses protection against legal action.

What the ACCC can't do

  • We don’t take part in collective bargaining negotiations.
  • We don’t decide or review contract terms.

About collective bargaining and collective boycotts

‘Collective bargaining’ is often used to refer to employees negotiating with their employer, while the word ‘boycott’ is often associated with consumer activism.

But these terms have special meanings in competition law.

Collective bargaining

Collective bargaining happens in business-to-business dealings when 2 or more competitors come together to negotiate with a supplier or a 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.

Collective boycott

When a collective bargaining group agrees not to supply or buy from a business unless that business accepts the group’s terms and conditions, this is called a collective boycott.

Another type of boycott is a secondary boycott. Secondary boycotts generally involve 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.

Requirements under competition law

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:

  • save time and money on negotiations
  • have more influence over terms and conditions
  • improve their efficiency.

The target business can also benefit from lower negotiating costs, better information and more certainty about supply.

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 breaking competition law.

Example of collective bargaining and competition

Scenario

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.

Relevant factors

  • 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.

Gaining an exemption for collective bargaining or a boycott

There are different processes for seeking an exemption depending on the type of businesses involved and the planned activity.

The small business collective bargaining class exemption

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:

  • businesses or independent contractors, each with a turnover under $10 million in the previous financial year
  • franchisees (regardless of turnover) negotiating with their franchisor
  • fuel retailers (regardless of turnover) negotiating with their fuel wholesaler.

This class exemption does not apply to collective boycotts. A different type of exemption is required from the ACCC.

For more information, see Collective bargaining class exemption guidelines ( PDF 294.33 KB ).

Submit a collective bargaining notice form

To be covered by this class exemption, the collective bargaining group must submit a Collective bargaining notice form (DOCX 63.46 KB) to the ACCC.

Email: exemptions@accc.gov.au
Mail: General Manager Competition Exemptions Branch
Australian Competition and Consumer Commission
GPO Box 3131 CANBERRA ACT 2601

    Other collective bargaining arrangements and collective boycotts

    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:

    • by businesses other than trade unions
    • for transactions below certain amounts.

    To decide whether notification or authorisation is right for you, read Small business collective bargaining notification and authorisation guidelines.

    See also

    Class exemptions

    Cartels

    Cooperation among businesses

    Anti-competitive behaviour

    Refusing to supply products or services

    Collective bargaining notifications register