It has been possible, for many years, for people and companies
to apply for immunity from section 45 of the Trade Practices
Act 1974 (Cth) (the TPA) – and
immunity from the strict price-fixing prohibitions in particular -
to engage in 'collective bargaining'. Such conduct can have
detrimental effects on competition but where it can be demonstrated
that the public benefit from the arrangements will outweigh the
anticompetitive detriment, the conduct can be approved.
The collective bargaining authorisation regime that existed
until 21 months ago prescribed a lengthy, costly and often complex
process for obtaining immunity from contraventions of the TPA. As
such, collective bargaining was largely unavailable to small
commercial operators seeking to agree to negotiate terms and
conditions on a collective basis with a supplier or customer so
that they could supply or acquire goods or services on more
favourable terms. Paradoxically, these were often the types of
people who would have the most legitimate reason for engaging in
On 1 January 2007, the existing 'authorisation' process
was refined and, in parallel, a simpler 'notification'
regime introduced. It was anticipated that individuals and small
businesses seeking to engage in collective bargaining would take
advantage of the easier and faster notification process and, due to
the substantially reduced lodging fee ($1,000 as opposed to $7,500
for authorisations), be encouraged to come forward.
The notification process permits a party to lodge a collective
bargaining notice with the Australian Competition and Consumer
Commission (ACCC) of its intention to collectively
bargain with a named target. Unless the ACCC raises any objections
to the notification or revokes it, the notice comes into force and
protects the applicants from liability under the TPA after 28 days
of its lodgement.
The number of collective bargaining notifications lodged since 1
January 2007 is equivalent to one notification per quarter. In
comparison, there have been over 190 exclusive dealing
notifications (mostly third-line forcing notifications) lodged
since the beginning of 2008.
Some might conclude from these figures that the introduction of
the collective bargaining notification regime has not achieved its
intended goal of assisting small commercial operators to engage in
collective bargaining. However, it may be too early to make such an
assessment for the following reasons:
First, it is likely that it will take some time for small
businesses to understand the new notification process and compare
the respective advantages with the improved authorisation process
for collective bargaining. Unlike for exclusive dealing
arrangements, a culture of notification has yet to develop for
collective bargaining arrangements.
Second, some businesses have chosen to take advantage of the
streamlined authorisation processes (and applied for a reduction in
authorisation fees) rather than use the notification process.
Third, between 1999 and 2006, there were only approximately ten
substantive collective bargaining authorisations lodged with the
ACCC (all of which were granted but one). Statistically, therefore,
since its introduction, the number of immunity applications for
collective bargaining has increased.
Fourth, the lack of applications under both regimes may well be
attributable, not only to the process itself, but to a lack of
awareness by businesses that their conduct actually amounts to
collective bargaining and should be notified. Alternatively, those
businesses that are aware of the general prohibition against
collective bargaining (and so avoid such arrangements) might not be
aware that notification is an option to permit them to engage in
Compared with its predecessor, the new regime clearly makes the
collective bargaining approval process more accessible. However, it
is clear that there has not been an overwhelming response by small
businesses to its introduction as might have been expected. In
another 21 months, it may be possible to assess more definitively
the trends associated with the notification regime so as to better
assess its effectiveness.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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