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Collective Bargaining Rights under the Trade Practices Act

Overview

In October 2008, the construction union, the CFMEU, made application to the Australian Consumer and Competition Commission for approval to conduct collective bargaining for owner-drivers in Southern Queensland. The application was the first of its kind, and is precedent-setting. It potentially enabled the CFMEU, with ACCC approval, to fix the sale price of services under commercial contracts. Such a scenario would have been historic, potentially enabling unions to control prices across a broad range of the economy. ICA prepared a submission and comment to the ACCC in October last year.

March 2009 Update

The ACCC has made a determination which allays ICA's principal concerns with the application. Click here for:
Click here for

ACCC grants collective bargaining rights to owner drivers

ICA Commentary
March 2009 Update


In October 2008 the construction union, the CFMEU, made an application to the Australian Consumer and Competition Commission (ACCC) for the right to bargain collectively for owner-drivers in SE Queensland. This is an application under the Trade Practices Act (TPA) and is not an industrial relations matter, even though the CFMEU is involved. ICA made a submission to the ACCC's inquiry objecting to the application.

In early February 2009, the ACCC issued a Draft Determination granting the application for five years with conditions. In March, a Final Determination was issued.

ICA observations and comment
The summary of ICA's objection stated:
  • This application from the CFMEU should be rejected in the first instance because it is inappropriate for the CFMEU to make such an application.
  • It would be appropriate to consider a new application directly from named owner-drivers and in which the CFMEU was acting as an agent of the owner-drivers.
In late January 2008, the CFMEU amended its application, which effectively took on board ICA's objection. The amended application was for owner-drivers who have engaged the CFMEU to provide them with services to assist their collective bargaining.

ICA's reading of the Draft Determination is that the ACCC has substantially taken on board the concerns expressed by ICA and reflected in the CFMEU's amended application. The Draft Determination reads:
    'The ACCC proposes to grant conditional authorisation to owner drivers in south-east Queensland, who have engaged the ... (CFMEU) to provide them with services to support and facilitate collective bargaining...'
The ACCC's wording appears to be deliberate and specific.
  • The authorisation is to the owner-drivers. That is, the owner-drivers 'own', and are responsible for, the right to bargain collectively and will be held accountable for their actions.
  • The CFMEU is only authorised to provide support services to the owner drivers.
ICA's view is that this is the correct allocation of rights and responsibilities. There are certain conditions attached to the Draft Determination.
  1. Annually, the CFMEU must supply the ACCC with:
    • The number of participating owner-drivers;
    • Details of the collective bargaining group, including the group's current membership; and
    • Identity of the targets of the collective bargaining group.
  2. Collective boycott activities are prohibited.
  3. The identity of the members of the bargaining group must be disclosed to the target businesses.
ICA believes an additional condition should be attached for the purposes of full transparency. The names of the targeted companies have and are being made public and for reasons of consistency so should the names of the participating owner-drivers. To fail to have full public transparency increases the prospect of inappropriate collusive activity.

Note: The Final ACCC Determination requires the CFMEU to provide an annual public report including details of the outcomes of any collective negotiations. ICA believes this assists the objective of transparency.

Conclusion
The Draft Determination grants an authorisation based on the CFMEU's amended application. That is, the authorisation is to the owner-drivers not the CFMEU. The conditions attached ensure measures of transparency which have been strengthened in the Final Determination.

It is most important to understand and not confuse this authorisation with industrial relations law. This is an authorisation under the Trade Practices Act and subject to TPA rules policed by the ACCC.

ICA wishes the owner-drivers and the companies who engage them commercial success in their collective bargaining endeavours. The process can only be successful if parties can find outcomes that enable everyone a fair chance to make money.