Australia’s competition watchdog wants to give small businesses the legal right to collectively bargain with suppliers and processors.

The ACCC has proposed issuing a ‘class exemption’ to the small business sector to allow it to collectively negotiate without the risk of breaching competition law.

“The proposed class exemption would apply to businesses and independent contractors which form, or are members of, a bargaining group, and each had an aggregated turnover of less than $10 million in the financial year before the bargaining group was formed,” the ACCC said.

“In addition, all franchisees and fuel retailers governed by either the Franchising Code of Conduct or the Oil Code of Conduct would also be able to collectively negotiate with their franchisor, regardless of their aggregated turnover.”

The ACCC’s class exemption would cover an estimated 98.5% of Australian businesses.

It might include small businesses wanting to jointly buy electricity, or groups of farmers wanting to bargain with the companies who buy their produce.

The ACCC is now seeking feedback on its proposal. Submissions close on 3 July 2019.

Australia’s small business ombudsman, Kate Carnell, said the proposal would help level the playing field for small business.

“This proposal makes it simpler and cheaper for eligible businesses and franchisees to collectively negotiate if they choose,” she said.

“The proposed exemption allows most small businesses to collectively negotiate with their suppliers and processors, without having to seek ACCC approval first.

“Franchisees in particular will see tangible benefits as they band together to bargain for better outcomes on pricing and contract terms.”