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From the Desk of the Executive Director

Ken Phillips is co-founder and Executive Director of Independent Contractors of Australia. He is a published authority on independent contractor issues and directs research on related commercial and trade practices issues. Through his numerous articles in newspapers and think-tank and academic journals, Ken is known for approaching issues from outside normal perspectives and is frequently sought out for media comment.

The ACCC needs to try harder on collective bargaining

Thursday, December 17, 2015

It’s illegal to smoke marijuana but it’s okay to use a bong! That seems to be the type of message the Australian Consumer and Competition Commission is sending in its latest decision to allow the Transport Workers Union to collectively bargain with the giant Japanese-owned transport company Toll.

Collective bargaining under industrial relations laws gives unions the legal authority to bargain collectively for employees, frankly whether employees agree to that or not. It’s the union that owns and controls the process, not the employees.

We’ve seen the results of this through the Royal Commission into union corruption. Australian unions and their officials are accepting payments (bribes) from companies to do deals that shaft employees.

However, if a worker is not an employee, but self-employed, they come under commercial and competition law not industrial relations law. Owner-drivers fall into this category.

Because so many truck drivers are owner-drivers the TWU has to operate under competition law to leverage its power within transport. Hence the TWU regularly applies to the ACCC for authority to bargain collectively under competition rules.

The competition collective bargaining rules were made to allow, for example, small independent supermarkets to get together and negotiate bulk purchases.

What’s important in this principle is that the independent supermarkets themselves are given the authority. They control the process and if they break the law, they are responsible.

With unions the ACCC is breaching this important principle and, I argue, in breach of the intent of Parliament. The ACCC are well aware of our attitude on this because ICA keeps objecting to TWU applications and the ACCC keeps rejecting our objections.

The technical ‘game’ goes like this. The TWU claims to represent a group of owner-drivers. The drivers are not named or to our knowledge verified by the ACCC as wanting the TWU to negotiate their contract/s. The ACCC gives the TWU the authority to negotiate on behalf of unknown individuals. This turns the competition laws into de facto industrial relations processes.

The principle under competition law is that the parties to the commercial contracts, that is the owner-drivers and the transport company (Toll), should be the parties that have the legal authorization. They are responsible!

The TWU has no contract with anyone and bears no responsibility. Yet authorising the TWU effectively to control the contracts is a serious breach of the legal and moral principles of commercial transactions that actually make an economy function. ‘You’ have a contract. ‘You’ are responsible!

This was the sort of thinking expressed in Federal Parliament in 2006 when a new process for collective bargaining applications was created. The second reading speech to that provision (section 93AB(9)) “…makes a notification invalid if it is lodged on behalf of a small business by a trade union…”

The provision is clear that unions cannot and should not be allowed near ACCC authorised collective bargaining. But unions (TWU) use an old provision in the competition laws section 88 to make their application. The ACCC says that’s okay. We don’t think the lawmakers would agree with the ACCC.

In the 2006 Parliamentary debate the government speaker said, “Unions may appropriately continue to apply for authorisation of more complex arrangements (under s88)—for example, those involving multiple targets.” That is, unions can use s88 but not for collective bargaining. We argued this in our objection to the TWU application. The ACCC dismissed this in its decision.

So here we have it. It’s illegal to smoke marijuana (section 93AB(9) but it’s okay to use a bong (section 88).

Earlier this year we sought to test this in the Federal Court under another TWU-Toll application. We were denied ‘standing’ so we could not run the case and legally test the issue.

Here’s a challenge to the ACCC: Reject the TWU's application. Let the TWU challenge you in the Federal Court and you argue the case for proper application of these competition laws. It may be that a judge agrees with your lawyers that the technicalities of the Act allow the TWU to thwart parliament’s intention. But often in such case judges will express disquiet at the failure of the wording of the law giving impetus to change.

In August this year ACCC Chair Rod Sims said in relation to evidence of TWU-Toll collusion “It is possible that in the past the ACCC has not looked sufficiently into such additional restrictive behaviour …” We agree. The ACCC needs to try harder.

[First published in Business Spectator, December 2015]

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