Class exemption gives franchisees rein to collectively bargain with franchisors

By Sarah Stowe | 03 Jun 2021 View comments

Franchisees and fuel retailers can now engage in collective bargaining with franchisors and suppliers on a voluntary basis without needing to worry about a possible competition law breach.

It’s been made possible with a class exemption for small businesses, the first made by the Australian Competition and Consumer Commission, that will allow collective negotiation without first having to seek ACCC approval.

To be eligible the businesses must have a turnover of less than $10 million in the financial year before the bargaining group was formed (which is applicable to more than 98 per cent of Aussie firms).

Franchisees and fuel retailers can collectively bargain with their franchisor regardless of their aggregated turnover.

However, there is no requirement for any business to join a collective bargaining group, nor any obligation for a franchisor or supplier to deal with the bargaining group.

ACCC deputy chair Mick Keogh believes the new exemption will be a benefit to both franchisees and franchisors.

“The counterparties that small business groups collectively bargain with can also benefit from time and cost savings, because they will not have to negotiate with each business individually,” Keogh explained.

“This class exemption will help the majority of small businesses and franchisees. When they bargain collectively, businesses can share the time and cost of negotiating contracts, and have more say when negotiating.”

Now the class exemption process is quicker and easier and allows eligible groups to obtain protection from competition law for bargaining, free of charge, by providing a one-page notice to the ACCC.

More information about the class exemption can be found at Collective bargaining class exemption.