- Collective bargaining happens when competitors negotiate jointly with a supplier or 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.
Collective bargaining and collective boycotts risk breaking competition law, unless covered by an exemption.
What the ACCC does
- We enforce competition law. This includes the law on cartels and other types of cooperation among competitors.
- We grant an exemption when a collective bargaining or boycott is in the public interest. This gives businesses protection against legal action.
- 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 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.
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 breaching competition law.
Example of collective bargaining and competition
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.
Gaining an exemption for collective bargaining or a boycott
There are different processes for seeking an exemption. The process to use depends 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.
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
- lodging a notification, or
- applying for authorisation.
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.
Refusing to supply products or services