NEW PROTECTIONS WILL BLUNT ‘TOO SHARP BY HALF’ CONDUCT THAT HARMS SMALL BUSINESSES

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has enthusiastically welcomed the Australian Government’s commitment to introduce protections for small and family businesses harmed by unfair business trading practices. 

Mr Billson said this commitment will reassure small and family businesses that they can invest, innovate, take risks, compete and create jobs and opportunities without being unfairly ‘done over’ by a more powerful business because there is a ‘gaping hole in the law’.    

“Sadly, too many of the more than 50,000 small businesses ASBFEO has assisted with dispute resolution and business concerns have been real-life cases where another business with more power has done harmful things to a small business, simply because they could”, Mr Billson said.   

“Unfair contract terms protections have helped to stop small businesses being fitted up with harmful, appallingly one-sided contract terms a bigger, more powerful business insists upon to simply reinforce its commercial muscle. 

“What has been missing is a similar protection addressing harmful conduct and dealings which are all stacked against a small business, with no legitimate business justification, that amplify and exploit a power imbalance and harm the small business. 

“Dominant and powerful businesses know that if this kind of dodgy conduct was written into ‘a take it or leave it’ contract they would likely be in breach of the unfair contract terms laws. But by not writing it down, and behaving or conducting themselves in the same manner, this harmful conduct is outside the reach of the current law unless it reaches the very high bar of egregious conduct.   

“There is a lot of ‘too sharp by half’ conduct that falls between current unfair contract terms (UCT) protections and unconscionable conduct that can bring a small business to its knees. This commitment to introduce new protections for small businesses harmed by unfair business trading practices fills a gaping hole in the law. 

“We have pushed for action to address unfair business trading practices for 4 years and it is very encouraging that the Government has committed to progress this small business protection. 

“Beyond this important additional tool for the ACCC to support fair commercial conduct, ASIC needs similar powers to address appalling unregulated conduct in financial services. 

“We will continue to engage enthusiastically and collaboratively with industry stakeholders in the further rounds of consultation to make sure the unfair business trading practices prohibition is fit for purpose and right-sized for small business.  

“This is genuinely exciting and positive news. We have strongly advocated for this measure and it carries forward one of our 14 steps to energise enterprise by levelling the playing field”, Mr Billson said. 

“A complementary measure to support the effectiveness of fair trading protections, also set out in our 14 steps to energise enterprise, is providing an affordable, effective and timely alternative for small businesses to defend their economic interests by creating a Federal Small Business and Codes List in the Federal Circuit and Family Court of Australia”. Mr Billson added. 

More information about ASBFEO Policy and Advocacy is available on the ASBFEO website.  

MEDIA CONTACT: 0448 467 178 | media@asbfeo.gov.au