Competition and Consumer (Class Exemption—Collective Bargaining) Determination 2020

This Determination, made under section 95AA of the Competition and Consumer Act 2010, creates a class exemption that automatically exempts certain collective bargaining conduct from key competition law prohibitions. Instead of requiring each group of businesses to apply individually for an authorisation or lodge a collective bargaining notice, the instrument provides a pre‑approved safe harbour for three categories of participants: eligible corporations (small businesses with aggregated turnover under $10 million in the previous financial year), franchisees bargaining with their common franchisor, and fuel retailers bargaining with their fuel wholesaler where those retailers are related under the same fuel‑reselling agreement and have the same system or marketing plan (ss 5, 7). If the conditions in Division 2 are satisfied, sections 45AF, 45AG, 45AJ, 45AK and 45 of the Act do not apply to the making of an initial contract, engaging in a concerted practice in relation to an initial contract, or giving effect to an initial contract (s 7(1)). The exemption operates mechanically: any corporation covered by the criteria can collectively negotiate terms of supply or acquisition with a target (typically a buyer or seller) without facing cartel or anti‑competitive contract liability. The instrument took effect on 3 June 2021 and is scheduled to remain in force until 30 June 2030, though the ACCC may revoke it sooner (s 4, note). This is a time‑limited, conditional immunity rather than a blanket permission, and the burden rests on the participants to ensure they satisfy every limitation.

The Determination introduces several concepts central to its operation. Eligible corporation means a corporation that reasonably believes its aggregated turnover in the previous financial year was less than $10 million, using the calculation method under section 328‑115 of the Income Tax Assessment Act 1997 (s 5). Initial contract is a contract or proposed contract between a corporation and one or more other persons (the contracting parties) about the supply or acquisition of particular goods or services to or from one or more other persons (the target or targets), made for the purpose of collectively negotiating one or more contracts with that target (s 6(1)). Critically, initial contracts cannot relate to goods or services for personal, domestic or household use by the target; supply to end consumers is excluded (s 6(2)). Contract is defined expansively to include any contract, arrangement or understanding (s 5). Collective bargaining class exemption notice is the notice that must be given to the ACCC within 14 days of engaging in the exempt conduct, in the form approved by the Commission and containing all required information (s 9). Franchisee collective bargaining conduct covers conduct by franchisees of a particular franchisor where the target is that franchisor and the other contracting parties are fellow franchisees (s 7(3)). Fuel retailer collective bargaining conduct covers conduct by a fuel retailer that has a fuel‑reselling agreement with a particular fuel wholesaler, where the target is that wholesaler and the other contracting parties are related fuel retailers (s 7(4)). Two fuel retailers are related fuel retailers if both have a fuel‑reselling agreement with the same fuel wholesaler and those elements of the system or marketing plan determined, controlled or suggested by the wholesaler are the same (s 5). Trade union is defined by reference to subsection 93AB(11) of the Act, and a trade union, its officers, or persons acting on its direction cannot give a collective bargaining class exemption notice on behalf of any party (s 9(2)(c)). Objection notice and collective bargaining notice are terms imported from the Act's Division 2 of Part VII (s 5). The class exemption overlays these existing concepts by providing an automatic pathway that bypasses the individual notification or authorisation process, but only while the conditions are maintained.

The Determination directly affects three groups of business participants. First, eligible corporations - any corporation with an aggregated turnover under $10 million in the previous financial year. This captures a broad range of small businesses, from sole traders up to firms with just under that turnover threshold, who wish to jointly negotiate supply terms from a common supplier or jointly negotiate to supply a common buyer. The exemption does not require the corporation to be a particular legal structure; the definition uses the Act’s definition of corporation which can extend to persons under the Competition Code (s 5, notes). Turnover is measured at the corporate entity level, not at group level unless the Income Tax Assessment Act calculation aggregates. A firm that slightly exceeds $10 million in one year must pay close attention to whether it reasonably believes it was under in the previous year - a forward‑looking test. Second, franchisees of the same franchisor. Any franchisee that is party to a franchise agreement as defined by the Franchising Code can participate in collective bargaining with that franchisor, provided the other contracting parties are also franchisees of that same franchisor (s 7(3)). Franchisees are often in a weak position vis‑à‑vis the franchisor’s standard terms, and this exemption allows them to coordinate without breaching cartel law. The exemption does not extend to franchisors bargaining collectively with franchisees, only the reverse. Third, fuel retailers who have a fuel‑reselling agreement with a fuel wholesaler and are related fuel retailers - that is, they share the same wholesaler and operate under the same system or marketing plan determined or controlled by that wholesaler (s 5). This is limited to fuel retailers as defined by the Oil Code (covering persons who are retailers under a fuel‑reselling agreement, but not all definitions of retailer in the Oil Code - see note to definition). The target in all three categories is the party with whom the group collectively negotiates - typically a supplier (for acquisition) or a buyer (for supply). The target is not exempt from competition law by this Determination; only the collective conduct of the group is exempt, and the target remains subject to the Act. The Determination also indirectly affects trade unions, because they cannot give the required notice to the ACCC on behalf of any contracting party (s 9(2)(c)), which may limit their role in facilitating collective bargaining under this instrument.

Participants who wish to rely on the class exemption must satisfy a set of affirmative duties and are subject to limitations that operate as conditions precedent to immunity. Duty to give a collective bargaining class exemption notice to the ACCC. Section 9(1) provides that the exemption applies to a particular initial contract only if a notice relating to that initial contract has been given to the Commission in the approved form containing all required information. The notice may be given by or on behalf of any contracting party, but not by a trade union, its officer, or a person acting on its direction (s 9(2)(c)). Section 9(3) creates a limited retrospective window: conduct engaged in no more than 14 days before the notice was given is covered, but anything earlier is not. This means participants cannot benefit from the exemption unless they notify promptly - effectively a 14‑day reporting deadline from the time collective conduct begins. Duty to give a copy of the notice to the target. Section 10 requires that a copy of the collective bargaining class exemption notice be given to the target before any negotiation, making, or giving effect to a contract with that target. This ensures transparency for the party on the other side of the bargaining table. Duty not to include a prohibited boycott provision. Section 8 flatly excludes from the exemption any initial contract that contains a provision with the purpose of preventing, restricting or limiting the supply to or acquisition from the target. Collective boycotts remain illegal even if the rest of the collective bargaining is otherwise within the exemption. Duty to have a reasonable expectation of contracting. Section 11 restricts the exemption for eligible corporations (only) to those that reasonably expect to make one or more contracts with the target about the goods or services to which the initial contract relates. This ensures the exemption is used for genuine commercial negotiations, not for mere discussion without a realistic prospect of a deal. Duty to limit information sharing. Section 13 permits information to be shared or used among contracting parties only if it is shared or used to engage in the exempt conduct and the corporation believes it is reasonably necessary to facilitate that conduct. This stops the exemption from becoming a cover for wider information exchanges that could facilitate price fixing or market sharing outside the collective bargaining context. Rights. The primary right conferred by the Determination is immunity from liability under sections 45AF, 45AG, 45AJ, 45AK and 45 of the Act for conduct that would otherwise be a cartel offence or a prohibited anti‑competitive contract. This right is conditional and can be lost if any limitation is breached. Participants also have a right to decide whether to use the class exemption or instead apply for individual authorisation or lodge a collective bargaining notice. Section 12 provides that if a person has applied for authorisation and it has been dismissed or revoked, or if a collective bargaining notice has been objected to and the objection stands, the class exemption cannot apply to that initial contract. In effect, choosing to go down a different regulatory path and failing forecloses the class exemption option.

The Determination itself does not create any penalties; it operates as an exemption from liability under specified provisions of the Competition and Consumer Act 2010. If a corporation engages in collective bargaining conduct that falls outside the scope of the class exemption or fails to comply with any of the limitations in Division 2, the protections disappear and the full force of the Act applies. Sections 45AF and 45AG are criminal cartel provisions carrying penalties of up to $10 million, three times the value of the benefit gained, or 10% of annual turnover (for bodies corporate), and imprisonment for individuals. Sections 45AJ and 45AK are civil penalty provisions for the same cartel conduct. Section 45 covers anti‑competitive contracts, arrangements or understandings and attracts civil penalties of the same magnitude. The ACCC is the enforcement body, and it monitors compliance with the notice requirements and the substantive conditions. If the ACCC identifies conduct purportedly relying on the class exemption that does not satisfy the conditions - for instance, a group of eligible corporations that are not eligible because their turnover exceeded $10 million, or a boycott provision hidden within an initial contract - it can investigate and take enforcement action. The ACCC may also issue infringement notices or seek court orders to restrain conduct. There is no requirement for pre‑approval; the exemption is self‑assessed. This places a premium on careful legal analysis by participants because getting it wrong means penalties apply from the time the conduct began. The ACCC could also, under section 95AA(4)(b)(i), revoke the Determination before its scheduled end date, which would remove the exemption prospectively. For corporations that have already engaged in conduct in reliance on the Determination before revocation, the exemption remains effective for conduct that occurred while it was in force, provided the conditions were met at that time (s 4 note). Tribunal review of ACCC determinations on authorisations or objection notices can also affect the availability of the class exemption for particular initial contracts (s 12). Overall, the enforcement risks are those of non‑compliance, not of a separate penalty regime in this instrument.

The Determination sits within a broader competition law framework and its interaction with other legal regimes is specified in the instrument. First, it overrides only the provisions listed in s 7(1): sections 45AF, 45AG, 45AJ, 45AK and 45 of the CCA. No other competition law provisions are affected, including misuse of market power (s 46), exclusive dealing (s 47, though some may overlap), resale price maintenance (s 48), or merger provisions (ss 50, 50A). A group that uses the class exemption to collectively negotiate must still ensure it does not mislead or engage in unconscionable conduct under the Australian Consumer Law. Second, the Determination interacts with the franchising and fuel industry codes. The definitions of franchise agreement, franchisee, franchisor, fuel re‑selling agreement, fuel retailer and fuel wholesaler are all drawn from the Franchising Code (Schedule 1 to the Competition and Consumer (Industry Codes,Franchising) Regulation 2014) and the Oil Code (Schedule 1 to the Competition and Consumer (Industry Codes,Oil) Regulations 2017). These codes impose their own obligations; the class exemption does not override them. A franchisee group relying on the exemption must still comply with the Franchising Code (e.g., disclosure, good faith). Third, the Determination does not replace the established authorisation and collective bargaining notice regimes under Part VII of the Act. Corporations can still apply for authorisation (Division 1) or give a collective bargaining notice (Division 2) if they prefer a bespoke review. Section 12 explicitly forbids use of the class exemption if an authorisation application has been made and finally refused (or revoked) and review rights exhausted, or if a collective bargaining notice has been objected to and that objection stands. The class exemption is thus a backstop that cannot be used to circumvent a negative determination under the other pathways. Fourth, the interplay with the Competition Code (Part XIA of the Act) is acknowledged: the Determination is also made under section 95AA of the Competition Code, extending its operation to persons who are not corporations, where the Code applies (s 5 notes). Fifth, the Determination does not affect state or territory fair trading laws, or industry‑specific regulations in sectors such as agriculture, transport or telecommunications that may impose additional rules on bargaining groups. Trade union involvement is specifically restricted in the notice‑giving process (s 9(2)(c)), which interacts with industrial relations laws that otherwise permit unions to engage in collective bargaining on behalf of workers. This Determination deals with commercial collective bargaining, not employment. The interaction is thus one of separation: the class exemption does not confer rights on unions to use the notice mechanism.

The instrument as originally made on 19 October 2020 has not been amended. The commencement table in section 2 provides that a single day was to be fixed by the Commission, with a default commencement after 12 months if not earlier set. That commencement date is noted as 3 June 2021 (F2021N00106). The Determination was made under section 95AA of the Competition and Consumer Act 2010, which was inserted by the Competition and Consumer Amendment (Exploitation of Market Power) Act 2017 (to authorise class exemptions by legislative instrument). There is no publicly recorded amendment to this Determination itself. The instrument expires on 30 June 2030 unless revoked earlier (s 4). The ACCC has the power under section 95AA(4) to revoke the Determination at any time by notifiable instrument, which would constitute an amendment of a kind (removal of the exemption). No such revocation has occurred. Given that class exemptions are relatively new in Australian competition law (the first such instrument was the small business collective bargaining class exemption, which this Determination appears to be), no further amendments have been necessary. However, the Commission could vary the instrument by making a new determination; any such variation would need to be published as a legislative instrument. Practitioners should check the Federal Register of Legislation for any future amendments or revocations. The current version as at the date of writing is the original version. Note that section 4’s sunset date of 30 June 2030 means that unless the instrument is re‑made, it will cease to have effect on that date.

There is no publicly reported litigation specifically concerning this Determination. As a relatively new and narrow class exemption, it is not yet the subject of judicial consideration in the Federal Court or the Australian Competition Tribunal. The instrument itself provides for Tribunal review as a fallback in certain circumstances: if an authorisation application is dismissed or revoked and the Tribunal upholds that decision, the class exemption cannot apply (s 12(2)); similarly, if an objection notice under the collective bargaining notice regime is affirmed by the Tribunal, the class exemption is unavailable (s 12(4)). Those provisions contemplate litigation as a pathway that may preclude the exemption. However, the class exemption is self‑executing; a court might become involved if the ACCC challenges a group’s reliance on the exemption, arguing that conditions were not met. For instance, a dispute could arise over whether a corporation’s turnover was under $10 million in the relevant year, whether a provision in an initial contract had a boycott purpose, or whether information sharing was reasonably necessary. The Federal Court would then decide the scope of the exemption. There is also scope for the Australian Competition Tribunal to review certain decisions under Part IX of the Act (s 12 cross-references), but no known cases. The definition of “related fuel retailers” and the condition that the target must not be supplying for personal, domestic or household use (s 6(2)) could also spawn interpretive litigation. For now, the litigation history is a blank slate. Lawyers advising clients should rely on the plain text of the Determination and the analogous case law under the Act on cartel provisions and anti‑competitive contracts, as those principles will inform any future disputes about the exemption.

Several provisions create traps for unwary users. The 14‑day notice window is not a grace period for late filers. Section 9(3) covers conduct engaged in on or after the date the notice is given, or no more than 14 days before that date. A corporation that engages in collective bargaining for 20 days before notifying will have the first 6 days of that conduct outside the exemption, exposing it to criminal and civil penalties for those earlier acts. The clock starts from the conduct, not from the making of the initial contract. Trade unions cannot give the notice on behalf of parties. A union or its officer or anyone acting on its direction may not give the collective bargaining class exemption notice (s 9(2)(c)). If a union facilitator inadvertently submits the notice, it is invalid and the exemption is lost. Participants must ensure a person who is not a union officer or direction‑taker lodges the notice. Initial contracts for personal, domestic or household use are excluded. Section 6(2) provides that a contract is not an initial contract if it is about the supply of goods or services to a target for personal, domestic or household use by that target. So small businesses supplying end consumers cannot use the exemption to collectively negotiate terms with those consumers. The prohibition on boycotts is absolute. Any provision with the purpose of preventing, restricting or limiting supply to or acquisition from the target, directly or indirectly, destroys the exemption entirely for that initial contract (s 8). Even if the boycott provision is ancillary, the entire conduct loses immunity. Authorisation or collective bargaining notice failure forecloses the class exemption. Section 12 prevents use of the exemption if an authorisation application has been made and finally refused (including after Tribunal review) or if a collective bargaining notice has been met with an objection notice that stands. This creates a sequencing risk: a party that explores a bespoke pathway and fails cannot fall back on the class exemption for that same initial contract. Information sharing must be reasonably necessary. Section 13 limits sharing to what the corporation believes is reasonably necessary to facilitate the exempt conduct. Sharing price lists, cost data, or future pricing intentions beyond what is needed to coordinate the negotiation could fall outside this limb, leading to a loss of protection and separate cartel exposure. Reasonable expectation of contracting applies only to eligible corporations, not franchisees or fuel retailers. Section 11 modifies only subsection 7(2) (eligible corporation collective bargaining conduct). Franchisees and fuel retailers do not need to demonstrate a reasonable expectation of contracting with the target - but they still must meet all other conditions. The method under section 328‑115 of the 1997 Act includes specific aggregation rules (e.g., connected entities, affiliates). A corporation that thinks it is under $10 million might fail if it is connected to a larger entity. The definition in s 6(1) requires the purpose of collectively negotiating one or more contracts with the target. If the group’s agreement goes beyond negotiating (for example, fixing prices for all contracts with the target), it may not be an initial contract. It only covers related fuel retailers as defined, not all retailers under the same wholesaler; the system or marketing plan must be the same (s 5 definition of related fuel retailers). Retailers using different plan elements under the same wholesaler cannot use the exemption.

Compliance requires a structured, documented approach. Step 1: Confirm eligibility. For eligible corporations, calculate aggregated turnover for the previous financial year using the method in section 328‑115 of the Income Tax Assessment Act 1997. Keep records of the calculation and the reasonable belief that it was under $10 million. For franchisees, confirm that each participant is a franchisee of the same franchisor within the Franchising Code. For fuel retailers, confirm each participant has a fuel‑reselling agreement with the same fuel wholesaler and that the system or marketing plan is identical among them (i.e., they are related fuel retailers). Step 2: Define the target and the goods or services. Ensure the initial contract relates to supply or acquisition between the group and the target, and that the target is not acquiring goods or services for personal, domestic or household use (s 6(2)). Step 3: Draft the initial contract. The contract should not contain any provision that has the purpose of preventing, restricting or limiting supply to or acquisition from the target (no boycott). Review s 4F of the Act for the meaning of purpose. The contract should be clearly described as being for the purpose of collectively negotiating one or more contracts with the target (s 6(1)). Step 4: Give the collective bargaining class exemption notice to the ACCC. Use the form approved by the Commission (available on the ACCC website). The notice must be given within 14 days of the earliest collective conduct. Ensure no trade union, its officer, or person acting on its direction gives the notice (s 9(2)(c)). Keep a copy of the notice and proof of lodgment. Step 5: Give a copy of the notice to the target. Before engaging in any negotiation, making a contract, or giving effect to a contract with the target, provide a copy of the ACCC notice to the target (s 10). A third party (including any contracting party) can do this. Step 6: Maintain reasonable expectation of contracting (eligible corporations only). At the time of engaging in conduct, the corporation must reasonably expect that it will make one or more contracts with the target about the relevant goods or services (s 11). Document the commercial rationale and any discussions with the target that support this expectation. Step 7: Limit information sharing. Share information with other contracting parties only to facilitate the collective negotiation, and only when the corporation believes it is reasonably necessary (s 13). Avoid exchanging competitively sensitive information (prices, costs, customers, margins) beyond what is needed to coordinate the group’s position. Implement internal protocols that restrict the type of data shared and ensure each party maintains its own independent decision‑making on final prices and terms. Check that no participant has applied for authorisation or given a collective bargaining notice that has been refused or objected to in relation to the same initial contract (s 12). If such a proceeding has occurred, the class exemption is not available. Document the eligibility of each participant, the turnover calculation, the date the notice was given, the date the copy was provided to the target, the basis for the reasonable expectation (if applicable), and the scope of information shared. These records will be critical if the ACCC later investigates whether the exemption was properly relied upon. The exemption for eligible corporations depends on the previous year’s turnover; if a corporation’s turnover exceeds $10 million in the current year, it may not be eligible in the next year for new initial contracts. Franchisee and fuel retailer exemptions do not depend on turnover, but the status under the Franchising Code or Oil Code may change. The exemption expires on 30 June 2030 (s 4). The ACCC may revoke it earlier. Monitor for any notices of revocation. Conduct engaged in after revocation will not be covered. If the group includes non‑corporations (e.g., partnerships or individuals), check whether the Competition Code applies and whether the Determination extends to them (s 5 notes). If there is any doubt about the boycott limitation, information sharing, or the reasonable expectation test, obtain external advice. Non‑compliance risks full penalties under the Act.