The Shell Company of Australia Limited has undertaken to the Federal Court to review the manner in which potential and current small business franchisees are advised of the tenure or extension of franchise agreements. The company will also give effect to oral representations once it has confirmed them in writing.
This follows an Australian Competition and Consumer Commission action in the Federal Court on behalf of two Gold Coast franchisees, John and Karen Bird.
The Birds have received substantial compensation from Shell after mediation between the ACCC and Shell.
The action alleged misleading representations and unconscionable conduct to the Birds in relation to their tenure at their Gold Coast service station.
The ACCC contended that certain representations had been made to the Birds about the length of the tenure of their franchise. In the ACCC's view, Shell's conduct in dealing with the Birds amounted to misleading and deceptive conduct, in breach of section 52 of the Trade Practices Act 1974 and unconscionable conduct within the meaning of section 51AA of the Act.
Shell firmly denied the allegations but after extensive discussions and mediation with the ACCC and the Birds has accepted that the franchisees hold a strong and genuine sense of grievance about their treatment. All parties accept that there is room for a difference of opinion about the understanding the franchisees were given about tenure.
In recognition of this and the undesirability of protracted litigation, Shell has agreed to make a payment to the franchisees and pay a contribution towards the ACCC's legal costs.
Shell's Chairman and Chief Executive of Oil Products, Mr Peter Duncan, has indicated that Shell has reviewed and is updating its trade practices compliance program to ensure similar misunderstandings do not recur.
"I am pleased this long running matter has been resolved," ACCC Chairman, Professor Allan Fels, said today. "I am pleased also that Shell has cooperated with the ACCC and that settlement of these proceedings will build upon the ACCC's longstanding relationship of close liaison, support and cooperation with Shell".
This follows an Australian Competition and Consumer Commission action in the Federal Court on behalf of two Gold Coast franchisees, John and Karen Bird.
The Birds have received substantial compensation from Shell after mediation between the ACCC and Shell.
The action alleged misleading representations and unconscionable conduct to the Birds in relation to their tenure at their Gold Coast service station.
The ACCC contended that certain representations had been made to the Birds about the length of the tenure of their franchise. In the ACCC's view, Shell's conduct in dealing with the Birds amounted to misleading and deceptive conduct, in breach of section 52 of the Trade Practices Act 1974 and unconscionable conduct within the meaning of section 51AA of the Act.
Shell firmly denied the allegations but after extensive discussions and mediation with the ACCC and the Birds has accepted that the franchisees hold a strong and genuine sense of grievance about their treatment. All parties accept that there is room for a difference of opinion about the understanding the franchisees were given about tenure.
In recognition of this and the undesirability of protracted litigation, Shell has agreed to make a payment to the franchisees and pay a contribution towards the ACCC's legal costs.
Shell's Chairman and Chief Executive of Oil Products, Mr Peter Duncan, has indicated that Shell has reviewed and is updating its trade practices compliance program to ensure similar misunderstandings do not recur.
"I am pleased this long running matter has been resolved," ACCC Chairman, Professor Allan Fels, said today. "I am pleased also that Shell has cooperated with the ACCC and that settlement of these proceedings will build upon the ACCC's longstanding relationship of close liaison, support and cooperation with Shell".