This collective bargaining ‘class exemption’ allows eligible small business to collectively bargain without breaching competition laws.
The class exemption allows:
- businesses with an aggregated turnover of less than $10 million in the financial year prior to them forming or joining a bargaining group to collectively bargain with customers or suppliers, and
- franchisees and fuel retailers to collectively bargain with their franchisor or fuel wholesaler (respectively) regardless of their size.
The class exemption is available for businesses to use from 3 June 2021.
Groups wishing to rely on this class exemption must complete a one-page notice form (available below) and provide it to the ACCC when the group is formed and to each target business when the group seeks to negotiate with the target business.
Once the notice is lodged, legal protection from competition laws commences automatically. Instructions for filling out the notice are included in the form. There is no fee for lodging the notice.
Completed notices will be published on this public register page.
The class exemption will provide legal protection to eligible businesses who have lodged their one-page notice form until 30 June 2030. The ACCC will conduct a review in 2029 to decide whether to extend the class exemption.
What is a class exemption?
A class exemption is a way for the ACCC to grant businesses an exemption from competition law for certain type of conducts that may otherwise risk breaching competition laws, but that:
- do not substantially lessen competition, and/or
- are likely to result in overall public benefits.
This class exemption relates to collective bargaining: a process that allows groups of businesses to jointly negotiate with their customers or suppliers over common issues (e.g. terms, conditions and/or prices). Negotiating as a group can allow businesses to share the time and cost of negotiating contracts, and potentially give group members more input into contract terms and conditions. There are often also time and cost savings for the suppliers or franchisor the group is bargaining with.
Further background on the process the ACCC undertook in developing this class exemption is available here.
The ACCC’s Guidelines (available below) provide further detail about how this class exemption operates, including the criteria businesses must meet to be eligible for the class exemption.
The class exemption does not force anyone to join a collective bargaining group, or force a customer, supplier or franchisor to deal with the bargaining group if they do not want to. The target business will be free to continue to negotiate with each member of the group individually. The class exemption simply removes the risk that collective bargaining by eligible businesses will breach the competition law.