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WORKPLACE RELATIONS
From 3 June 2021 small businesses, which includes many medical practitioners, have available to them a Class Exemption to engage in collective negotiations with suppliers and customers.
What is it?
The collective bargaining class exemption is a determination by the Australian Competition and Consumer Commission (ACCC), which allows small, eligible businesses to negotiate with suppliers and customers as a group. Its operation removes the risk of those negotiating from breaching the Competition and Consumer Act 2010 (Cth). A collective bargaining class exemption will be permitted on two bases:
• that the creation of a bargaining group would not substantially lessen competition, or
• that the creation of a bargaining group would result in a public benefit.
What are the eligibility criteria?
For a business or independent contractor to be eligible for protection under the class exemption, their aggregated turnover in the preceding financial year must be less than $10 million. This amount is consistent with the ATO’s threshold for what constitutes ‘small business entities.’
An aggregated turnover is the sum of a businesses’ annual turnover and the annual turnover of any Australian or international business connected or affiliated with that business. If the aggregated turnover has not yet been confirmed, a business or individual may still rely on the exemption on the condition that it reasonably believes its turnover in the financial year prior to it joining the bargaining group, was less than $10 million.
How do I apply?
A one-page Collective bargaining class exemption notice form (the Notice) is to be provided to the ACCC, and any target business the group proposes to negotiate with, before collective bargaining commences or within 14 days of doing so.
You will be required to provide:
• details of the collective bargaining group,
• details of the target businesses,
• what the group proposes to bargain about, and
• details for a contact person.
The ACCC will place the Notice on their public register and provide bargaining groups with a letter confirming receipt.
Once the notice form is complete, the group will be legally permitted to bargain collectively.
Do I need to notify of changes to the bargaining group or targets?
If members of the bargaining group or targets change, a new Notice must be provided to the ACCC before new members of the group are covered by the exemption or negotiations with new target/s commences.
Further, each member of the group must reasonably expect to make at least one contract (either through collective or independent negotiation) with the target described on the Notice, for the class exemption to apply.
How does the class exemption differ from the existing Notification and Authorisation processes?
The class exemption provides bargaining groups with automatic and immediate protection from competition law. In comparison, legal protection through the Notification process commences 14 days after the notification is lodged. Legal protection granted by the ACCC through an Authorisation, may occur at any time within its discretion, provided that a final determination is made within 6 months of the application for Authorisation.
Is there a fee payable?
As opposed to the Notification and Authorisation process, the Class Exemption does not require the payment of a fee for providing the notice form.
Does this affect existing Authorisations or Notifications?
Where legal protection under an Authorisation or Notification already exists, that protection continues to apply until expiration. Upon expiry, businesses can either rely on a class exemption (provided they meet the eligibility criteria), seek re-authorisation or re-notify their arrangement.
Does the class exemption give protection in relation to collective boycotts?
The class exemption does not provide legal protection for collective boycotts. As such, as a part of, or in addition to, negotiations with one or more targets, the group cannot collectively decide not to provide or obtain goods or services from a target business.
There are penalties for engaging in collective boycott activity.
Does a target business have to negotiate with the group once a class exemption has been granted?
As the class exemption operates on a voluntary, mutual-benefit basis, no business is obliged to join a collective bargaining group.
Similarly, no target business is obliged to negotiate with a bargaining group.
The class exemption does not override any pre-existing legal or contractual obligations between parties.
If you require further information please visit the ACCC’s website or contact the AMA (NSW) Workplace Relations Team at workplace@amansw.com.au or by phone 02 9439 8822.
Article co-author, Cassandra Christopher, Paralegal