Collective bargaining notifications—
a summary
This summary guide provides a brief overview of the
collective bargaining notification process contained in
the Competition and Consumer Act 2010 (the Act) and
its potential benefit for small businesses.
What is collective bargaining?
Collective bargaining occurs when two or more
competitors in an industry agree to negotiate terms and
conditions (which can include price) with a supplier or a
customer (also known as the ‘target’).
In this context, a collective boycott occurs when a
group of competitors agrees not to acquire goods or
services from, or not to supply goods or services to, a
business with whom the group is negotiating, unless
the business accepts the terms and conditions offered
by the collective bargaining group.
www.accc.gov.au
Because collective bargaining and collective boycotts
can have a detrimental effect on competition and
consumers, they are ordinarily prohibited by the Act.
Seeking immunity for collective bargaining
arrangements
The Act allows businesses to apply for immunity from
legal action to collectively bargain and engage in
collective boycotts through the authorisation process.
Assessing a collective bargaining notification
Once a valid collective bargaining notification is
received, the ACCC will contact interested parties,
including the target, and invite submissions on the
proposed collective bargaining arrangement.
The ACCC will then assess the proposed collective
bargaining arrangements, weighing the public benefits
likely to result from the arrangement against the
potential public detriments.
The ACCC may ‘authorise’ businesses to collectively
bargain and engage in collective boycotts when it is
satisfied that the public benefit from the arrangements
outweighs any public detriment.
If the ACCC is satisfied that the public benefit will not
outweigh the potential detriment, it can remove the
immunity provided by the notification.
An alternative avenue for small businesses seeking
immunity to engage in collective bargaining and/or
collective boycotts is to lodge a collective bargaining
notification.
Objection process
Collective bargaining notifications
Notification offers small businesses a process
for obtaining immunity for collective bargaining
arrangements.
The immunity provided by a collective bargaining
notification arises automatically once 14 calendar days
has elapsed and lasts for three years from the date the
notification was validly lodged with the ACCC.
Who can notify?
Any business in the collective bargaining group, or a
representative of the group, may lodge a notification on
behalf of the businesses proposing to participate in the
collective bargaining arrangement.
A trade union, an officer of a trade union or a person
acting on the direction of a trade union cannot lodge a
collective bargaining notification.
To remove immunity from or prevent it being conferred
on a notified collective bargaining arrangement, the
ACCC is first required to issue a draft objection notice.
The draft objection notice outlines the ACCC’s reasons
for proposing to remove or prevent immunity.
If the ACCC issues a draft objection notice before
the expiration of the 14 day statutory period, then the
applicant and the members of the collective bargaining
group do not have protection from legal action
under the Act for the proposed collective bargaining
arrangement while the ACCC decides whether to issue
a final objection notice or to take no further action, in
which case immunity would commence at that time.
If the ACCC issues a draft objection notice after the
expiration of the 14 day statutory period, then the
applicant and members of the collective bargaining
group will continue to have protection from legal action
for the proposed arrangement while the ACCC decides
whether to issue a final objection notice or to allow the
notification to stand.
When the ACCC issues a draft objection notice it
will invite the notifying parties, the target and anyone
else with an interest in the arrangement to provide
comments on the draft objection notice.
Once the ACCC has all the relevant information it will
decide whether to issue a final objection notice. If the
ACCC decides to issue a final objection notice, any
immunity provided by the notification is removed 31
days after the ACCC gives the objection notice, or on a
later day specified by the ACCC.
What public benefits may arise from
collective bargaining arrangements?
Collective bargaining arrangements can lead to a range
of benefits for small businesses, their suppliers or
customers and the Australian public.
Examples may include:
When will the ACCC object to a collective
bargaining notice?
The ACCC may object to and revoke a collective
bargaining notice if it is satisfied that any public benefits
from the proposed collective bargaining arrangement
would not outweigh the public detriments (and, for
notices that do not concern price fixing or exclusionary
conduct, the arrangement would substantially lessen
competition).
If the ACCC is not satisfied, it will take no further action
at that stage and the applicant and all interested
parties (including the target) will be advised. In these
circumstances, once the statutory waiting period
has expired, the applicant and any other business
identified as a consenting participant in the proposed
collective arrangement can proceed with their notified
arrangement.
The ACCC may review a collective bargaining
notification at any time.
What features of collective bargaining
arrangements are likely to lessen the
ACCC’s concerns?
Where proposed collective bargaining arrangements
involve only a small proportion of participants in relevant
markets, there is likely to be little risk of anticompetitive
detriment. Where this is not the case, the ACCC
considers the anti-competitive effects of collective
bargaining arrangements are likely to be limited when:
• the
current level of individual bargaining between
members of the bargaining group and the relevant
supplier or customer is low
• participation
in the arrangement is voluntary
• there
are restrictions on the coverage, composition
and representation of the bargaining group and/or
• there
is no collective boycott involved.
•
increased input into contracts—providing a
mechanism through which small businesses can
provide greater input into their contracts, leading to
improved efficiencies
•
transaction cost savings—where the cost of
negotiations, for both the members of the collective
bargaining group and the supplier or customer with
whom they propose to negotiate, may be reduced
• improvements
in information—providing a framework
in which the flow of relevant information to both sides
of the negotiation table is improved, leading to better
informed decisions being made
• facilitation
of market dynamics—enhancing the ability
of the members of the collective bargaining group to
supply new markets or increasing competition in their
existing market.
Further information about how the ACCC assesses
public benefit and public detriment in collective
bargaining arrangements is set out in the ACCC’s
Guide to collective bargaining notifications.
How do I lodge a valid collective
bargaining notification?
Important information on how to lodge a collective
bargaining notification is set out in the ACCC’s
publication Guide to collective bargaining notifications.
Key steps to lodging a collective bargaining
notification include:
1.Preliminary discussions. Parties considering
engaging in collective bargaining are encouraged
to discuss the arrangement with the supplier or
customer with whom they propose to bargain.
ACCC staff can also provide advice to small
businesses to help them prepare a notification;
for example, by explaining formal process
requirements and identifying information which
would assist in public consultation.
The collective bargaining group must obtain
immunity from the Act before commencing the
bargaining process.
2.Preparing your application. Form GA sets out
the formal lodgment requirements of a collective
bargaining notification. These include:
• obtaining
the consent of all businesses
proposing to participate in the collective
bargaining group
• ensuring
that each member of the collective
bargaining group reasonably expects that they
will make at least one contract with the target and
that the value of each member’s transactions with
the target will not exceed $3 million per year
• providing
submissions to the ACCC commenting
on the market(s) likely to be affected by the
proposal, the benefits and possible detriments to
the public of the proposal.
3.Lodging your application. Once you have filled
out your form you can lodge it with the ACCC. The
fee for lodging a collective bargaining notification
is $1000. No additional fee will apply to related
notifications lodged within 14 days of the first
notification.
ACCC staff can provide useful comments on draft
notifications to help small businesses satisfy the
technical requirements of the lodgment process.
ACCC contacts
Further information on collective bargaining can be
obtained from the ACCC’s Infocentre or by visiting
the ACCC’s website.
ACCC Infocentre: 1300 302 502
ACCC website: www.accc.gov.au
For other business information
go to www.business.gov.au
Australian Competition and Consumer Commission
23 Marcus Clarke Street, Canberra, Australian Capital Territory, 2601
© Commonwealth of Australia 2011
This work is copyright. Apart from any use as permitted under
the Copyright Act 1968, no part may be reproduced without prior
written permission from the Commonwealth available through the
Australian Competition and Consumer Commission. Requests and
inquiries concerning reproduction and rights should be addressed
to the Director Publishing, Australian Competition and Consumer
Commission, GPO Box 3131, Canberra ACT 2601 or by email to
[email protected].
Important notice
This publication has been updated to refer to the Competition and
Consumer Act 2010 which replaces the Trade Practices ACT 1974 on
1 January 2011. For more information on the Australian Consumer Law
changes see www.consumerlaw.gov.au
This publication gives you basic information. It does not cover the
whole of the Competition and Consumer Act, including the Franchising
Code of Conduct, and is not a substitute for professional advice.
Because it avoids legal language where possible, there may be some
generalisations about the application of the Act. Some of the provisions
referred to have exceptions or important qualifications. In most cases
the particular circumstances of the conduct need to be taken into
account when determining the application of the Act.
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ACCC 06/11_44048_312
www.accc.gov.au