Collective bargaining class exemption

The ACCC is proposing to develop a ‘class exemption’ that would provide legal protection for:

• businesses with an annual turnover of less than $10 million in the preceding financial year to collectively bargain with customers or suppliers, and 
• all franchisees and fuel retailers to collectively bargain with their franchisor or fuel wholesaler respectively regardless of their size or other characteristics

without them having to apply to the ACCC.

A class exemption is a way for the ACCC to grant businesses an exemption from competition law for certain ‘classes of conduct’ that may otherwise carry a risk of breaching competition laws, but:

• do not substantially lessen competition, and/or
• are likely to result in overall public benefits.

This class exemption relates to collective bargaining, which is a process that allows competing businesses, such as farmers or retailers, to jointly negotiate with customers or suppliers over common issues (e.g. terms, conditions and/or prices). While collective bargaining may ordinarily breach competition laws, a class exemption would provide a ‘safe harbour’ for eligible businesses to collectively bargain without breaching the competition law. It would operate alongside the ACCC’s existing ‘authorisation’ and ‘notification’ processes, which a business that falls outside the class exemption could still use to seek legal protection on a case-by-case basis.

Next steps

The ACCC is currently finalising the class exemption and expects that its scope will be broadly as indicated in the ‘Consultation on draft legislative instrument’ documents below.

There are a number of procedural administrative steps that must now take place before the class exemption is finalised. The ACCC is currently working through these processes and will provide an update when the class exemption is finalised.